Our primary focus is on consumer and antitrust issues where local action in support of consumers can be relevant and effective. To offer comments, or receive our weekly newsletter, contact the editor at donresnikoff@donresnikofflaw.com
Tim Wu: Competition policy as politics
Tim Wu’s Op-ed in Sunday’s NY Times anticipates his forthcoming book “The Curse of Bigness: Antitrust in the New Gilded Age.” Wu presents competition policy as a political issue. The dominance of big companies leads to totalitarianism. Former FTC Commissioner Robert Pitofsky warned in 1979 that “massively concentrated economic power, or state intervention induced by that level of concentration, is incompatible with liberal, constitutional democracy.” Antitrust has more than an economic goal. It is a check against the political dangers of unaccountable private power.
Tim Wu’s book, which will be available shortly (I do not have access to a preview copy), is likely to discuss details of how government should enforce the antitrust laws. In earlier writing, Wu has argued for antitrust enforcement that reaches beyond the current “consumer welfare” standard. He argues for post-consumer welfare antitrust that will be practical and predictable. (See https://www.competitionpolicyinternational.com/wp-content/uploads/2018/04/CPI-Wu.pdf)
Wu’s new book comes at a moment when it has become plain that the political importance of antitrust is known not only to devotees of Brandeis and Pitofsky, but also to Donald Trump.
President Donald Trump recently said that his administration is looking into antitrust violations by Amazon, Facebook and Google parent Alphabet.
In a video interview with Axios' Jonathan Swan and Jim VandeHei, Trump said he's "not looking to hurt" the U.S. tech giants but is considering action.
"We are looking at [antitrust] very seriously," Trump said. "Look, that doesn't mean we're doing it, but we're certainly looking and I think most people surmise that, I would imagine."
Trump says administration is looking into antitrust violations by Amazon, other tech giants
- President Donald Trump says his administration is looking into antitrust violations by Amazon, Facebook and Google parent Alphabet.
- In an interview with Axios, Trump says he's "not looking to hurt" the U.S. tech giants but is considering action.
Berkeley Lovelace Jr. | @BerkeleyJr
Published 7:02 AM ET Mon, 5 Nov 2018 Updated 2:20 PM ET Mon, 5 Nov 2018 CNBC.com
Rex Curry | Reuters
Jeff Bezos, Chairman and CEO of Amazon, speaks at the George W. Bush Presidential Center's Forum on Leadership in Dallas, Texas, U.S., April 20, 2018.
President Donald Trump said his administration is looking into antitrust violations by Amazon, Facebook and Google parent Alphabet.
In a video interview with Axios' Jonathan Swan and Jim VandeHei that aired on Sunday, Trump said he's "not looking to hurt" the U.S. tech giants but is considering action.
"We are looking at [antitrust] very seriously," Trump said. "Look, that doesn't mean we're doing it, but we're certainly looking and I think most people surmise that, I would imagine."
Trump said others have also considered action against tech companies but a "previous administration" stopped that. "They were talking about this years ago. You know they were actually talking about this same subject — monopoly."
Shares of the three tech companies were essentially flat in premarket trading on Monday.
The president has repeatedly attacked Amazon, saying without evidence that package deliveries by the U.S. Postal Service for Amazon were costing the service money.
Trump has also been critical of Amazon CEO Jeff Bezos, who owns The Washington Post.
Mike Allen, co-founder and executive editor of Axios, told CNBC on Monday he thinks Trump was being serious about this inquiry into big tech.
"The president has been talking about this for a long time," Allen said in a "Squawk Box" interview. He also mentioned Trump's "obsession" with Amazon.
Tech companies have been under the microscope in Washington recently on efforts to prevent foreign meddling in U.S. elections.
Source: https://www.cnbc.com/2018/11/05/trump-looking-into-antitrust-violations-against-amazon-other-tech-giants.html
Watch: CNBC's Is Google a monopoly?
Is Google a monopoly? https://www.cnbc.com/video/2018/11/01/is-google-a-monopoly.html
Tim Wu's "told you so" on AT&T --Time Warner
From his NYT Op-Ed:
Last week, HBO went dark for both DISH and DISH-Sling, the main competitors to DirecTV and DirecTV Now, AT&T’s television services. This brazenly anticompetitive strategy does not portend a happy future for the viewing public, or for HBO itself.
At the risk of saying “we told you so,” it was widely predicted before the merger that AT&T would use HBO and other Time Warner media properties in just this way. When the Justice Department sued (unsuccessfully) to block the merger last year, its case was premised on the idea that AT&T would use its ownership of such properties to hurt its rivals in telecommunications. And now it is doing so.
Post-merger, AT&T has the means and the incentive to raise prices on valuable content (like HBO or the coverage of the N.C.A.A. “March Madness” basketball tournament) for cheaper, “unintegrated” telecom competitors that have been saving consumers money. If its rivals refuse to pay up, it can withhold the content entirely, diminishing them as competitors.
Full Op-ed: https://www.nytimes.com/2018/11/07/opinion/att-hbo-antitrust.html?action=click&module=Opinion&pgtype=Homepagewww.nytimes.com/2018/11/07/opinion/att-hbo-antitrust.html?action=click&module=Opinion&pgtype=Homepage
NYT: A strike by antiquarian booksellers against Amazon succeedsIt was a rare concerted uprising against any part of Amazon by any of its millions of suppliers, leading to an even rarer capitulation. Even the book dealers said they were surprised at the sudden reversal by AbeBooks, the company’s secondhand and rare bookselling network.
The uprising, which involved nearly 600 booksellers in 27 countries removing about four million books, was set off by the retailer’s decision to cut off stores in five countries: the Czech Republic, Poland, Hungary, South Korea and Russia. AbeBooks never explained its actions beyond saying it was related to payment processing.
“[Amazon sub] AbeBooks was saying entire countries were expendable to its plans,” said Scott Brown, a Eureka, Calif., bookseller who was an organizer of the strike. “Booksellers everywhere felt they might be next.”
The matter was apparently resolved when Sally Burdon, an Australian bookseller who is president of the International League of Antiquarian Booksellers, spoke with Arkady Vitrouk, chief executive of AbeBooks. In a Wednesday email to her members after their talk, Ms. Burdon said Mr. Vitrouk apologized for the platform’s behavior “a number of times” and said booksellers in the affected countries would not be dropped as scheduled on Nov. 30.
From: https://www.nytimes.com/2018/11/07/technology/amazon-bookseller-protest-strike.html?rref=collection%2Fsectioncollection%2Fbusiness&action=click&contentCollection=business®ion=stream&module=stream_unit&version=latest&contentPlacement=9&pgtype=sectionfront
The uprising, which involved nearly 600 booksellers in 27 countries removing about four million books, was set off by the retailer’s decision to cut off stores in five countries: the Czech Republic, Poland, Hungary, South Korea and Russia. AbeBooks never explained its actions beyond saying it was related to payment processing.
“[Amazon sub] AbeBooks was saying entire countries were expendable to its plans,” said Scott Brown, a Eureka, Calif., bookseller who was an organizer of the strike. “Booksellers everywhere felt they might be next.”
The matter was apparently resolved when Sally Burdon, an Australian bookseller who is president of the International League of Antiquarian Booksellers, spoke with Arkady Vitrouk, chief executive of AbeBooks. In a Wednesday email to her members after their talk, Ms. Burdon said Mr. Vitrouk apologized for the platform’s behavior “a number of times” and said booksellers in the affected countries would not be dropped as scheduled on Nov. 30.
From: https://www.nytimes.com/2018/11/07/technology/amazon-bookseller-protest-strike.html?rref=collection%2Fsectioncollection%2Fbusiness&action=click&contentCollection=business®ion=stream&module=stream_unit&version=latest&contentPlacement=9&pgtype=sectionfront
After mid-terms, MD Consumer Rights Coalition is cautiously optimistic about what the future holds in both Maryland and in Congress.
From a recent email letter to supporters:
In Congress, a number of candidates who support economic rights, affordable healthcare, and consumer protections won their elections. Deb Haaland, a Native American woman, was elected to Congress from New Mexico on a platform of economic fairness and immigration rights. Haaland and Sharice Davids (D-KS) are the first two Native American women elected to Congress. Ilhan Omar, the first Somali-American woman (and one of the first Muslim women) elected to Congress, won her race in Minnesota on a detailed economic rights platform including a federal jobs guarantee and increasing taxes on the wealthy. Alexandria Ocasio-Cortez (D-NY) became the youngest woman elected to Congress and ran a strong campaign centered on strong proposals for economic equity.
Shared themes of economic justice, Medicare for All, debt-free college,and reducing income inequality and the racial wealth gap vaulted Rashida Talib (D-MI), a Muslim woman, Ayanna Pressely (D-MA), an African-American former City Councilwoman, and Veronica Escobar (D-TX), a Latina former county judge, to Congress.
In January, there will be 223 Democrats and 197 Republicans in the House of Representatives. As Democrats ascend to leadership in House Congressional committees, several economic rights and consumer protection champions will chair committees including Maxine Waters (D-CA), who will chair the House Financial Services Committee, and Maryland’s own Elijah Cummings (D-MD), who will helm the House Oversight Committee. This means that it will be far more difficult for Members of Congress who oppose economic rights and consumer protections to attempt to overturn Obama-era regulations.
In the U.S. Senate, there will be 51 Republicans and 46 Democrats. This means that there may be strong differences between the Senate and House as they work towards passage of consumer protection legislation.
The Maryland Consumer Rights Coalition believes that consumer protection is a bipartisan issue: regulations help businesses and consumers both know the rules and operate from the same rule book in the marketplace. We look forward to working with members of Congress on both sides of the aisle to pass strong consumer protection legislation.
In Maryland, Governor Larry Hogan was re-elected, becoming only the second Republican governor to win a second term in Maryland. In the State House, Democrats held onto a super-majority in the House and Senate-meaning they can override a veto by the Governor. A number of new legislators elected to both the House and Senate ran on campaigns highlighting economic equity and inclusion issues.
Governor Hogan has already laid out his agenda highlighting tax cuts and greater accountability and oversight of schools, among other issues. What does these policies mean for public education and for low-income and working families?
What do these elections mean for us – and for the issues we care about – in Congress and in Annapolis? How can we take the energy and enthusiasm that so many individuals demonstrated in their work around the midterm elections and translate that momentum into the legislative session and federal advocacy?
Step one: join us at our Economic Summit & Consumer Celebration on November 15th when Congressman Jamie Raskin will share his thoughts on are his thoughts on how we should move forward and articulate, expand, and deepen the movement for economic rights in Maryland and Congress in this new political landscape. Congressman Raskin is one of the nation’s strongest progressive voices and strategists, and we’re delighted to present him with our Federal Champion of the Year award. You can buy tickets by clicking here.
From a recent email letter to supporters:
In Congress, a number of candidates who support economic rights, affordable healthcare, and consumer protections won their elections. Deb Haaland, a Native American woman, was elected to Congress from New Mexico on a platform of economic fairness and immigration rights. Haaland and Sharice Davids (D-KS) are the first two Native American women elected to Congress. Ilhan Omar, the first Somali-American woman (and one of the first Muslim women) elected to Congress, won her race in Minnesota on a detailed economic rights platform including a federal jobs guarantee and increasing taxes on the wealthy. Alexandria Ocasio-Cortez (D-NY) became the youngest woman elected to Congress and ran a strong campaign centered on strong proposals for economic equity.
Shared themes of economic justice, Medicare for All, debt-free college,and reducing income inequality and the racial wealth gap vaulted Rashida Talib (D-MI), a Muslim woman, Ayanna Pressely (D-MA), an African-American former City Councilwoman, and Veronica Escobar (D-TX), a Latina former county judge, to Congress.
In January, there will be 223 Democrats and 197 Republicans in the House of Representatives. As Democrats ascend to leadership in House Congressional committees, several economic rights and consumer protection champions will chair committees including Maxine Waters (D-CA), who will chair the House Financial Services Committee, and Maryland’s own Elijah Cummings (D-MD), who will helm the House Oversight Committee. This means that it will be far more difficult for Members of Congress who oppose economic rights and consumer protections to attempt to overturn Obama-era regulations.
In the U.S. Senate, there will be 51 Republicans and 46 Democrats. This means that there may be strong differences between the Senate and House as they work towards passage of consumer protection legislation.
The Maryland Consumer Rights Coalition believes that consumer protection is a bipartisan issue: regulations help businesses and consumers both know the rules and operate from the same rule book in the marketplace. We look forward to working with members of Congress on both sides of the aisle to pass strong consumer protection legislation.
In Maryland, Governor Larry Hogan was re-elected, becoming only the second Republican governor to win a second term in Maryland. In the State House, Democrats held onto a super-majority in the House and Senate-meaning they can override a veto by the Governor. A number of new legislators elected to both the House and Senate ran on campaigns highlighting economic equity and inclusion issues.
Governor Hogan has already laid out his agenda highlighting tax cuts and greater accountability and oversight of schools, among other issues. What does these policies mean for public education and for low-income and working families?
What do these elections mean for us – and for the issues we care about – in Congress and in Annapolis? How can we take the energy and enthusiasm that so many individuals demonstrated in their work around the midterm elections and translate that momentum into the legislative session and federal advocacy?
Step one: join us at our Economic Summit & Consumer Celebration on November 15th when Congressman Jamie Raskin will share his thoughts on are his thoughts on how we should move forward and articulate, expand, and deepen the movement for economic rights in Maryland and Congress in this new political landscape. Congressman Raskin is one of the nation’s strongest progressive voices and strategists, and we’re delighted to present him with our Federal Champion of the Year award. You can buy tickets by clicking here.
Grass-roots campaigner Desmond Meade on the successful Florida ballot initiative on ex-felons' right to vote
For those engaged in local campaigns concerning consumer and other citizen rights, there is encouragement in the success of the grass roots campaign to restore voting rights to ex-felons in the state of Florida. At least 1.4 million people have regained the right to vote in Florida, following the passage of Amendment 4, a statewide initiative to re-enfranchise people with felony convictions who have completed their sentences, excluding people convicted of murder or sex offenses. The amendment passed with 64.5 percent of the vote. It needed 60 percent to pass.
There has been a lot of media coverage, but left-leaning Democracy Now's reporting includes a touching video interview with Desmond Meade, a convicted felon who spearheaded the fight for Amendment 4. Desmond Meade is the president of the Florida Rights Restoration Coalition. He’s also chair of Floridians for a Fair Democracy. DAR
The Democracy Now video, including the interview with Desmond Meade, is here: https://www.democracynow.org/2018/11/7/love_prevails_floridians_celebrate_massive_restoration
Posting by Don Allen Resnikoff, who is responsible for the content
For those engaged in local campaigns concerning consumer and other citizen rights, there is encouragement in the success of the grass roots campaign to restore voting rights to ex-felons in the state of Florida. At least 1.4 million people have regained the right to vote in Florida, following the passage of Amendment 4, a statewide initiative to re-enfranchise people with felony convictions who have completed their sentences, excluding people convicted of murder or sex offenses. The amendment passed with 64.5 percent of the vote. It needed 60 percent to pass.
There has been a lot of media coverage, but left-leaning Democracy Now's reporting includes a touching video interview with Desmond Meade, a convicted felon who spearheaded the fight for Amendment 4. Desmond Meade is the president of the Florida Rights Restoration Coalition. He’s also chair of Floridians for a Fair Democracy. DAR
The Democracy Now video, including the interview with Desmond Meade, is here: https://www.democracynow.org/2018/11/7/love_prevails_floridians_celebrate_massive_restoration
Posting by Don Allen Resnikoff, who is responsible for the content
Medicaid expansion scores election wins and losses across the country
By Harris Meyer | November 7, 2018
Updated at 2:40 a.m. ET
From the Rocky Mountains to the Great Plains to New England, Medicaid expansion got a big boost Tuesday from ballot initiatives that appeared headed for passage and from gubernatorial victories by Democrats in several states who made expansion a central issue.
Vvoters in Nebraska and Utah approved mandatory ballot initiatives to extend Medicaid coverage under the Affordable Care Act to adults with incomes under 138% of the federal poverty level. Republican governors and lawmakers in those states had repeatedly refused to pass it.
Democratic gubernatorial candidates who campaigned on expansion won contests in Kansas and Maine, both states where Republican governors have rejected it. Those victories made expansion much more likely.
On the other hand, a Republican who either oppose expansion or favor imposing limits on eligibility, such as work requirements, won in Florida, and a Republican may win in Georgia. Their Democratic opponents had made Medicaid expansion central to their campaigns.
In Michigan, a state that already expanded Medicaid, the Democratic gubernatorial candidate prevailed against a GOP opponent who favored work requirements. Gretchen Whitmer now will have to convince GOP lawmakers not to move forward with those eligibility limits, which likely would reduce enrollment.
But in Ohio, former U.S. Senator and current Attorney General Mike DeWine, who supported work requirements for the state's expansion program, beat the Democrat, Richard Cordray, who opposed a work mandate.
From: https://www.modernhealthcare.com/article/20181107/NEWS/181109942?utm_source=modernhealthcare&utm_campaign=am&utm_medium=email&utm_content=20181107-NEWS-181109942
DAR comment: The outcome of Tuesday's Medicaid ballot initiatives and some of the governor and Senate races underlines the obvious point that health care and other consumer advocacy points require buy-in of voters; there are many voters who would seem to be helped by expanded government support for health care and other government benefits who vote against because of other issues, such as those emphacized in the rhetoric of Donald Trump. Obviously, consumer benefit policy advocacy and political advocacy are linked.
Policy as politics: McCaskill's focus on health care and wage issues did not carry the day in Missouri
McCaskill's campaign focused primarily on pocketbook issues, like health care. She backed a ballot initiative raising Missouri's minimum wage and a union-led referendum on the Republican-backed right to work law passed by the Missouri General Assembly.
In Kansas City, voters turned out overwhelmingly for McCaskill, but it wasn't enough to carry her to victory. And while Greene County, which contains Springfield, turned out for Hawley, McCaskill fared better than Hillary Clinton did in the 2016 presidential election.
While McCaskill insisted she's a moderate, Hawley sought to tie her to national Democratic leaders, including U.S. Senate Minority Leader Chuck Schumer, D-N.Y., and House Minority Leader Nancy Pelosi, D-Calif.
During the campaign, McCaskill said she supported increased border security and she touted an endorsement by the union that represents Border Patrol agents, while Hawley accused her of supporting a "radical" immigration bill. The bill McCaskill is co-sponsoring would halt family separations at the border.
McCaskill tried to focus the race on protecting parts of former President Barack Obama's Affordable Care Act -- the same one Trump campaigned on repealing. Hawley is part of a Republican lawsuit that would undo the health care law.
Hawley, in response, said he supported a stand-alone law requiring that insurance companies provide coverage for those with pre-existing conditions. His campaign released an ad featuring his son, who he said has a rare chronic bone condition.
https://www.msn.com/en-us/news/politics/republican-hawley-beats-mccaskill-to-capture-us-senate-seat-in-missouri/ar-BBPqKtI?ocid=spartandhp
McCaskill's campaign focused primarily on pocketbook issues, like health care. She backed a ballot initiative raising Missouri's minimum wage and a union-led referendum on the Republican-backed right to work law passed by the Missouri General Assembly.
In Kansas City, voters turned out overwhelmingly for McCaskill, but it wasn't enough to carry her to victory. And while Greene County, which contains Springfield, turned out for Hawley, McCaskill fared better than Hillary Clinton did in the 2016 presidential election.
While McCaskill insisted she's a moderate, Hawley sought to tie her to national Democratic leaders, including U.S. Senate Minority Leader Chuck Schumer, D-N.Y., and House Minority Leader Nancy Pelosi, D-Calif.
During the campaign, McCaskill said she supported increased border security and she touted an endorsement by the union that represents Border Patrol agents, while Hawley accused her of supporting a "radical" immigration bill. The bill McCaskill is co-sponsoring would halt family separations at the border.
McCaskill tried to focus the race on protecting parts of former President Barack Obama's Affordable Care Act -- the same one Trump campaigned on repealing. Hawley is part of a Republican lawsuit that would undo the health care law.
Hawley, in response, said he supported a stand-alone law requiring that insurance companies provide coverage for those with pre-existing conditions. His campaign released an ad featuring his son, who he said has a rare chronic bone condition.
https://www.msn.com/en-us/news/politics/republican-hawley-beats-mccaskill-to-capture-us-senate-seat-in-missouri/ar-BBPqKtI?ocid=spartandhp
"Trump Administration Spares Corporate Wrongdoers Billions in Penalties"
The New York Times reports:
Across the corporate landscape, the Trump administration has presided over a sharp decline in financial penalties against banks and big companies accused of malfeasance, according to analyses of government data and interviews with more than 60 former and current federal officials. The approach mirrors the administration’s aggressive deregulatory agenda throughout the federal government.
The New York Times and outside experts tallied enforcement activity at the S.E.C. and the Justice Department, the two most powerful agencies policing the corporate and financial sectors. Comparing cases filed during the first 20 months of the Trump presidency with the final 20 months of the Obama administration, the review found:
• A 62 percent drop in penalties imposed and illicit profits ordered returned by the S.E.C., to $1.9 billion under the Trump administration from $5 billion under the Obama administration;
• A 72 percent decline in corporate penalties from the Justice Department’s criminal prosecutions, to $3.93 billion from $14.15 billion, and a similar percent drop in civil penalties against financial institutions, to $7.4 billion;
• A lighter touch toward the banking industry, with the S.E.C. ordering banks to pay $1.7 billion during the Obama period, nearly four times as much as in the Trump era, and Mr. Trump’s Justice Department bringing 17 such cases, compared with 71.
The full article is here. https://www.nytimes.com/2018/11/03/us/trump-sec-doj-corporate-penalties.html
The New York Times reports:
Across the corporate landscape, the Trump administration has presided over a sharp decline in financial penalties against banks and big companies accused of malfeasance, according to analyses of government data and interviews with more than 60 former and current federal officials. The approach mirrors the administration’s aggressive deregulatory agenda throughout the federal government.
The New York Times and outside experts tallied enforcement activity at the S.E.C. and the Justice Department, the two most powerful agencies policing the corporate and financial sectors. Comparing cases filed during the first 20 months of the Trump presidency with the final 20 months of the Obama administration, the review found:
• A 62 percent drop in penalties imposed and illicit profits ordered returned by the S.E.C., to $1.9 billion under the Trump administration from $5 billion under the Obama administration;
• A 72 percent decline in corporate penalties from the Justice Department’s criminal prosecutions, to $3.93 billion from $14.15 billion, and a similar percent drop in civil penalties against financial institutions, to $7.4 billion;
• A lighter touch toward the banking industry, with the S.E.C. ordering banks to pay $1.7 billion during the Obama period, nearly four times as much as in the Trump era, and Mr. Trump’s Justice Department bringing 17 such cases, compared with 71.
The full article is here. https://www.nytimes.com/2018/11/03/us/trump-sec-doj-corporate-penalties.html
AAI Asks Seventh Circuit for Better Monopolization Standards (Viamedia v. Comcast)
The American Antitrust Institute (AAI) and Public Knowledge have filed an amicus brief in the Seventh Circuit Court of Appeals (Link: https://www.antitrustinstitute.org/wp-content/uploads/2018/11/Viamedia-v.-Comcast-11.1.18.pdf) urging the court to reverse a district court's dismissal of refusal-to-deal and tying claims based on overly demanding monopolization standards.
Among other things, the brief argues that the district court improperly extended the defendant-friendly Trinko decision to mean that a refusal-to-deal claim can only be brought if a plaintiff shows that the monopolist's conduct had no potential rational purpose. And it improperly extended the defendant-friendly Masushita decision to mean that a plaintiff cannot avoid summary judgment unless it presents evidence that "tends to exclude" the possibility that the monopolist's conduct was lawful.
Read More - URL https://www.antitrustinstitute.org/work-product/aai-asks-seventh-circuit-for-better-monopolization-standards-viamedia-v-comcast/
The American Antitrust Institute (AAI) and Public Knowledge have filed an amicus brief in the Seventh Circuit Court of Appeals (Link: https://www.antitrustinstitute.org/wp-content/uploads/2018/11/Viamedia-v.-Comcast-11.1.18.pdf) urging the court to reverse a district court's dismissal of refusal-to-deal and tying claims based on overly demanding monopolization standards.
Among other things, the brief argues that the district court improperly extended the defendant-friendly Trinko decision to mean that a refusal-to-deal claim can only be brought if a plaintiff shows that the monopolist's conduct had no potential rational purpose. And it improperly extended the defendant-friendly Masushita decision to mean that a plaintiff cannot avoid summary judgment unless it presents evidence that "tends to exclude" the possibility that the monopolist's conduct was lawful.
Read More - URL https://www.antitrustinstitute.org/work-product/aai-asks-seventh-circuit-for-better-monopolization-standards-viamedia-v-comcast/
20 minutes of John Oliver on State Attorneys General
Many State AGs are elected, and if that is true in your state then John Oliver wants you to do some research and vote. Many State AGs, Republican and Democrat are highly partisan, and spend great effort challenging the federal government, for better or worse. Oliver seems able to focus on worse.
The YouTube video URL follows. WARNING: Oliver uses profanity, and jokes.
https://www.youtube.com/watch?v=UpdMYOtAmKY
Many State AGs are elected, and if that is true in your state then John Oliver wants you to do some research and vote. Many State AGs, Republican and Democrat are highly partisan, and spend great effort challenging the federal government, for better or worse. Oliver seems able to focus on worse.
The YouTube video URL follows. WARNING: Oliver uses profanity, and jokes.
https://www.youtube.com/watch?v=UpdMYOtAmKY
From NYT:
Letitia James and Keith H. Wofford faced off on Tuesday in their only debate for New York attorney general
Mr. Wofford, a Republican, had called for multiple debates, but Ms. James, a Democrat who is handily leading in public polls, agreed to just this debate at the Manhattan studios of Spectrum NY1 — and it nearly did not happen.
The New York attorney general’s office currently has dozens of actions against Mr. Trump and his administration, including a lawsuit against the president’s charitable foundation and another challenging efforts to ask a citizenship question on the census.
Ms. James has vowed to continue the efforts against Mr. Trump and his policies, and she continued to embrace that role on Tuesday. “Attorneys general across this country have been the firmest pillars of our democracy,” she said.
Her one question to Mr. Wofford was why he had voted for Mr. Trump for president in 2016.
From: https://www.nytimes.com/2018/10/31/nyregion/letitia-james-keith-wofford-debate.html?fallback=0&recId=1CLKskjlCJ60b6AUG479Co1il2n&locked=0&geoContinent=NA&geoRegion=DC&recAlloc=contextual-bandit-home-geo&geoCountry=US&blockId=midterm-elections&imp_id=267963940&action=click&module=Election%202018&pgtype=Homepage
Christy McDonald of Detroit Public Television shares a look at a close Attorney General race in Michigan, where Democratic candidate Dana Nessel is running against Republican candidate Tom Leonard.
The video is here: https://www.youtube.com/watch?v=uhCb11aq3RI
Pence speech suggests full bore US government conflict with China -- so resolution of trade and tariff issues affecting US consumers may be difficult
Vice President Mike Pence's speech blasting China was a "wake up call," according to CNBC's Jim Cramer.
Pence's Oct. 4 address at Washington's Hudson Institute accused China of "malign" efforts to undermine President Donald Trump and sway the November midterm elections from Republicans — a charge China has denied.
Cramer described the tone of the Pence speech as not just hawkish but a "declaration of economic war."
Cramer said: "It was a recognition that it's a communist country" and not really an ally of the U.S. because it "has none of the protections that democracies afford," he added.The U.S. and China are currently locked in a trade war that's seen each side imposing tariffs on each other's products.
However, Cramer said the divide between the world's two largest economic superpowers is bigger than trade.
Source: https://www.cnbc.com/2018/10/24/cramer-pence-speech-on-china-most-important-of-trump-administration.html
The Pence speech is here: https://www.whitehouse.gov/briefings-statements/remarks-vice-president-pence-administrations-policy-toward-china/
Excerpt from Pence speech:
But I come before you today because the American people deserve to know that, as we speak, Beijing is employing a whole-of-government approach, using political, economic, and military tools, as well as propaganda, to advance its influence and benefit its interests in the United States.
China is also applying this power in more proactive ways than ever before, to exert influence and interfere in the domestic policy and politics of this country.
Under President Trump’s leadership, the United States has taken decisive action to respond to China with American action, applying the principles and the policies long advocated in these halls.
In our National Security Strategy that the President Trump released last December, he described a new era of “great power competition.” Foreign nations have begun to, as we wrote, “reassert their influence regionally and globally,” and they are “contesting [America’s] geopolitical advantages and trying [in essence] to change the international order in their favor.”
Vice President Mike Pence's speech blasting China was a "wake up call," according to CNBC's Jim Cramer.
Pence's Oct. 4 address at Washington's Hudson Institute accused China of "malign" efforts to undermine President Donald Trump and sway the November midterm elections from Republicans — a charge China has denied.
Cramer described the tone of the Pence speech as not just hawkish but a "declaration of economic war."
Cramer said: "It was a recognition that it's a communist country" and not really an ally of the U.S. because it "has none of the protections that democracies afford," he added.The U.S. and China are currently locked in a trade war that's seen each side imposing tariffs on each other's products.
However, Cramer said the divide between the world's two largest economic superpowers is bigger than trade.
Source: https://www.cnbc.com/2018/10/24/cramer-pence-speech-on-china-most-important-of-trump-administration.html
The Pence speech is here: https://www.whitehouse.gov/briefings-statements/remarks-vice-president-pence-administrations-policy-toward-china/
Excerpt from Pence speech:
But I come before you today because the American people deserve to know that, as we speak, Beijing is employing a whole-of-government approach, using political, economic, and military tools, as well as propaganda, to advance its influence and benefit its interests in the United States.
China is also applying this power in more proactive ways than ever before, to exert influence and interfere in the domestic policy and politics of this country.
Under President Trump’s leadership, the United States has taken decisive action to respond to China with American action, applying the principles and the policies long advocated in these halls.
In our National Security Strategy that the President Trump released last December, he described a new era of “great power competition.” Foreign nations have begun to, as we wrote, “reassert their influence regionally and globally,” and they are “contesting [America’s] geopolitical advantages and trying [in essence] to change the international order in their favor.”
NY Judge says fantasy sports is gambling
The opinion is here:
https://dlbjbjzgnk95t.cloudfront.net/1096000/1096870/fantasyruling-2-29.pdf
White, et al. v. Cuomo
IndexNo.: 5851-16
Excerpt:
Accordingly, it is hereby
ORDERED,ADJUDGED AND DECLARED that Plaintiff's motion for Summary Judgment is granted herein (and Defendant's cross-motion denied) as follows: that Chapter 237 of the Laws of the State of N ew York, to the extent that it authorizes and regulates IFS within the State of New York, is found null arid void as in violation of Article I, §9 of the New York State Constitution; and it is further
ORDERED, ADIDDGED and DECLARED that Defendant's cross-motion for summary judgment granting dismissal of the within action is granted herein (and plaintiffs motion denied) as follows; Chapter 237 of the Laws of the State of New York, to the extent that it excludes IFS from the scope of the New York State Penal Law definition of "gambling" at Article 225, is not in violation of Article I, §9 of the New York State Constitution,
The opinion is here:
https://dlbjbjzgnk95t.cloudfront.net/1096000/1096870/fantasyruling-2-29.pdf
White, et al. v. Cuomo
IndexNo.: 5851-16
Excerpt:
Accordingly, it is hereby
ORDERED,ADJUDGED AND DECLARED that Plaintiff's motion for Summary Judgment is granted herein (and Defendant's cross-motion denied) as follows: that Chapter 237 of the Laws of the State of N ew York, to the extent that it authorizes and regulates IFS within the State of New York, is found null arid void as in violation of Article I, §9 of the New York State Constitution; and it is further
ORDERED, ADIDDGED and DECLARED that Defendant's cross-motion for summary judgment granting dismissal of the within action is granted herein (and plaintiffs motion denied) as follows; Chapter 237 of the Laws of the State of New York, to the extent that it excludes IFS from the scope of the New York State Penal Law definition of "gambling" at Article 225, is not in violation of Article I, §9 of the New York State Constitution,
Following is the study that is the source for many media articles:
Advertising in Young Children's Apps: A Content Analysis
Meyer, Marisa*; Adkins, Victoria, MSW†; Yuan, Nalingna, MS*; Weeks, Heidi M., PhD‡; Chang, Yung-Ju, PhD§; Radesky, Jenny, MD*
Journal of Developmental & Behavioral Pediatrics: October 26, 2018 - Volume Publish Ahead of Print - Issue - p
Objective: Young children use mobile devices on average 1 hour/day, but no studies have examined the prevalence of advertising in children's apps. The objective of this study was to describe the advertising content of popular children's apps.
Methods: To create a coding scheme, we downloaded and played 39 apps played by children aged 12 months to 5 years in a pilot study of a mobile sensing app; 2 researchers played each app, took detailed notes on the design of advertisements, and iteratively refined the codebook (interrater reliability 0.96). Codes were then applied to the 96 most downloaded free and paid apps in the 5 And Under category on the Google Play app store.
Results: Of the 135 apps reviewed, 129 (95%) contained at least 1 type of advertising. These included use of commercial characters (42%); full-app teasers (46%); advertising videos interrupting play (e.g., pop-ups [35%] or to unlock play items [16%]); in-app purchases (30%); prompts to rate the app (28%) or share on social media (14%); distracting ads such as banners across the screen (17%) or hidden ads with misleading symbols such as “$” or camouflaged as gameplay items (7%). Advertising was significantly more prevalent in free apps (100% vs 88% of paid apps), but occurred at similar rates in apps labeled as “educational” versus other categories.
Conclusion: In this exploratory study, we found high rates of mobile advertising through manipulative and disruptive methods. These results have implications for advertising regulation, parent media choices, and apps' educational value.
Advertising in Young Children's Apps: A Content Analysis
Meyer, Marisa*; Adkins, Victoria, MSW†; Yuan, Nalingna, MS*; Weeks, Heidi M., PhD‡; Chang, Yung-Ju, PhD§; Radesky, Jenny, MD*
Journal of Developmental & Behavioral Pediatrics: October 26, 2018 - Volume Publish Ahead of Print - Issue - p
- Abstract -https://journals.lww.com/jrnldbp/Abstract/publishahead/Advertising_in_Young_Children_s_Apps___A_Content.99257.aspx#article-abstract-content1
Objective: Young children use mobile devices on average 1 hour/day, but no studies have examined the prevalence of advertising in children's apps. The objective of this study was to describe the advertising content of popular children's apps.
Methods: To create a coding scheme, we downloaded and played 39 apps played by children aged 12 months to 5 years in a pilot study of a mobile sensing app; 2 researchers played each app, took detailed notes on the design of advertisements, and iteratively refined the codebook (interrater reliability 0.96). Codes were then applied to the 96 most downloaded free and paid apps in the 5 And Under category on the Google Play app store.
Results: Of the 135 apps reviewed, 129 (95%) contained at least 1 type of advertising. These included use of commercial characters (42%); full-app teasers (46%); advertising videos interrupting play (e.g., pop-ups [35%] or to unlock play items [16%]); in-app purchases (30%); prompts to rate the app (28%) or share on social media (14%); distracting ads such as banners across the screen (17%) or hidden ads with misleading symbols such as “$” or camouflaged as gameplay items (7%). Advertising was significantly more prevalent in free apps (100% vs 88% of paid apps), but occurred at similar rates in apps labeled as “educational” versus other categories.
Conclusion: In this exploratory study, we found high rates of mobile advertising through manipulative and disruptive methods. These results have implications for advertising regulation, parent media choices, and apps' educational value.
NYT: Rural Hospitals are closing: State Medicaid expansion choices have an effect
In its June report to Congress, the Medicare Payment Advisory Commission found that of the 67 rural hospitals that closed since 2013, about one-third were more than 20 miles from the next closest hospital.
A study published last year in Health Affairs by researchers from the University of Minnesota found that over half of rural counties now lack obstetric services. Another study, published in Health Services Research, showed that such closures increase the distance pregnant women must travel for delivery.
And another published earlier this year in JAMA found that higher-risk, preterm births are more likely in counties without obstetric units. (Some hospitals close obstetric units without closing the entire hospital.)
Ms. Kozhimannil, a co-author of all three studies, said, “What’s left are maternity care deserts in some of the most vulnerable communities, putting pregnant women and their babies at risk.”
Many factors can underlie the financial decision to close a hospital. Rural populations are shrinking, and the trend of hospital mergers and acquisitions can contribute to closures as services are consolidated.
Another factor: Over the long term, we are using less hospital care as more services are shifted to outpatient settings and as inpatient care is performed more rapidly. In 1960, an average appendectomy required over six days in the hospital; today one to two days is the norm.
Part of the story is political: the decision by many red states not to take advantage of federal funding to expand Medicaid as part of the Affordable Care Act. Some states cited fiscal concerns for their decisions, but ideological opposition to Obamacare was another factor.
In rural areas, lower incomes and higher rates of uninsured people contribute to higher levels of uncompensated hospital care — meaning many people are unable to pay their hospital bills. Uncompensated care became less of a problem in hospitals in states that expanded Medicaid.
In a Commonwealth Fund Issue Brief, researchers from Northwestern Kellogg School of Management found that hospitals in Medicaid expansion states saved $6.2 billion in uncompensated care, with the largest reductions in states with the highest proportion of low-income and uninsured patients. Consistent with these findings, the vast majority of recent hospital closings have been in states that have not expanded Medicaid.
Richard Lindrooth, a professor at the University of Colorado School of Public Health, led a study in Health Affairs on the relationship between Medicaid expansion and hospitals’ financial health. Hospitals in nonexpansion states took a financial hit and were far more likely to close. In the continuing battle within some states about whether or not to expand Medicaid, “hospitals’ futures hang in the balance,” he said.
Excerpts are from: https://www.nytimes.com/2018/10/29/upshot/a-sense-of-alarm-as-rural-hospitals-keep-closing.html?rref=collection%2Fsectioncollection%2Fbusiness&action=click&contentCollection=business®ion=rank&module=package&version=highlights&contentPlacement=6&pgtype=sectionfront
Objecting class members' counsel's petition to U.S. Supreme Court in opposition to "cy pres" remedies; Public Citizen response
The introduction of the Petition follows:
INTRODUCTION
Petitioners, as class members, challenge an $8.5 million class settlement negotiated between class counsel and the defendant that pays the class no money, but instead directs millions to class counsel and funnels the remainder to third parties, including class counsel's alma maters and nonprofits to which the defendant already contributes. This is a clear abuse and must be curtailed.
This Court has long recognized that Rule 23(b)(3) opt-out class actions are an "adventuresome" innova tion fraught with potential conflicts. E.g., Amchem Prods., Inc. v. Windsor, 521 U.S. 591, 614, 625-26 (1997). Rule 23 must be "applied with the interests of absent class members in close view." Id. at 629. The Court has consistently rejected the use of proce dural tactics by plaintiffs or defendants to game class actions. E.g., China Agritech, Inc. v. Resh, 138 S. Ct. 1800 (2018); Microsoft Corp. v. Baker, 137 S. Ct. 1702 (2017); Campbell-Ewald Co. v. Gomez, 136 S. Ct. 663 (2016); Standard Fire Ins. Co. v. Knowles, 568 U.S. 588 (2013).
Because of conflicts of interest inherent in the class-action process-especially with regard to settlements-careful judicial scrutiny is necessary lest class counsel and the defendant bargain away the rights of the class members on terms that minimize payoff by the defendant, maximize benefit to class counsel, and leave injured class members out in the cold. Yet the Ninth Circuit below took the opposite approach, declaring that close scrutiny of the terms of a cy pres settlement would be "an intrusion into the private parties' negotiations" and therefore "improper and disruptive to the settlement process." Pet. App. 15.
The majority of class actions that survive motions to dismiss are resolved by settlement. As one court has noted, "Inequitable settlements are an unfortunate recurring bug in our system of class litigation." Pearson v. Target Corp., - F.3d -, 2018 WL 3117848, at *1 (7th Cir. Jun. 26, 2018) (Wood, C.J.) ("Pearson II"). In the absence oflegal rules providing proper incentives, the negotiating parties' preferences readily achieved even in the absence of explicit collusion-are to structure a settlement that maximizes the class attorneys' share of the settlement value of the case while minimizing cost to the defendant, all at the expense of absent class members. In re Dry Max Pampers Litig., 724 F.3d 713, 717-18 (6th Cir. 2013) (Kethledge, J.); see generally Howard M. Erichson, Aggregation as Disempowerment: Red Flags in Class Action Settlements, 92 Notre Dame L. Rev. 859, 874-903 (2016) ("Erichson"). Parties structure settlements to hide the economic reality, create the appearance of a larger recovery, and thus support a larger claim for attorneys' fees. This case involves one of the most notorious devices used to create the "illusion of compensation," so-called cy pres recovery. Martin H. Redish et al., Cy Pres Relief and the Pathologies of the Modern Class Action: A Normative and Empirical Analysis, 62 Fla. L. Rev. 617 (2010) ("Redish").
The Ninth Circuit treated the cy pres arrangement here as equivalent to a class settlement paying $8.5 million to class members. In fact they got zero. All the money went to class counsel and to favored non profit organizations affiliated with class counsel and the defendant. It is not fair or reasonable under Rule 23(e) for class attorneys to arrogate millions for themselves and nothing for their clients. In ratifying the district court's approval of this settlement, the Ninth Circuit adopted several holdings that create perverse incentives that encourage both gamesman ship at the expense of absent class members and meritless class actions designed to benefit only attor neys. If this Court affirms the Ninth Circuit's approach, cy pres settlements like this one, previously substantially deterred by other appellate courts' re fusal to endorse them, will become dramatically more common, even supplanting settlements that currently directly pay class members tens of millions of dollars. The Court should reverse the judgment below, thereby making clear that class counsel has a fiduciary duty to class members, and that Rule 23(e) requires courts to align the interests of class counsel with the interests of their clients.
From https://www.supremecourt.gov/DocketPDF/17/17-961/52594/20180709130345481_17-961BriefForPetitioners.pdf
Public Citizen's brief is here:
- Amicus Curiae Brief (09/05/2018) https://www.citizen.org/system/files/case_documents/frank_v_gaos_amicus_curiae.pdf
Following is a Case Description posted by Public Citizen:
The plaintiffs in this case brought a class action against Google for violating users’ privacy by disclosing their Internet search terms to third-party websites. The complaint alleged claims for violation of the Stored Communications Act and several state-law causes of action. The class includes approximately 129 million people. Following mediation, the parties entered into a settlement providing for injunctive relief, an $8.5 million settlement fund, and attorney’s fees. Because distribution to the individual class members was infeasible, the settlement provided for cy pres distribution of the fund to organizations dedicated to protecting Internet privacy. In accordance with federal Rule of Civl Procedure 23(e), the district court then evaluated the settlement to assess whether it was fair, reasonable, and adequate, and held that it was. Two objectors to the settlement appealed and, after losing the appeal, petitioned for Supreme Court review. The Court accepted the case to consider whether distributing the settlement fund as cy pres rather than directly to class members complies with Rule 23(e).
Public Citizen filed an amicus brief in support of the settling parties. The brief explained that, to allow appropriate use of cy pres settlements while preventing their misuse, the federal appellate courts have articulated a consistent set of standards to assess cy pres awards. The courts allow settlements involving cy pres payments when distributions to individual class members are impracticable or when class members to whom distributions are practicable have been fully compensated for their losses. And the courts agree that proposed cy pres awards must be carefully scrutinized to ensure that they adequately benefit class members in ways that have a sufficient relationship to the claims asserted by the class.
In this case, the courts properly applied these broadly accepted standards. The brief also explained that, contrary to the suggestion in the amicus brief of the Solicitor General, Article III neither limits the ability of parties to settle a case nor addresses the form of distribution of compensatory relief.
California Net Neutrality Law Put on Hold Until Federal Lawsuit Is ResolvedBy Ted Johnson
WASHINGTON — California’s net neutrality law, signed last month by Gov. Jerry Brown, will be put on hold until federal litigation over the FCC’s role is resolved.
The state’s attorney general, Xavier Becerra, agreed to pause the implementation of the law, which includes the strongest net neutrality protections of any state measure that has passed recently. The same day that Brown signed the law, the Justice Department sued to stop it, arguing that only the federal government can regulate interstate commerce.
California’s passage of the law was in response to the FCC’s decision late last year to repeal many of the net neutrality rules it had in place, including ones that ban internet providers from blocking or throttling traffic, or engaging in paid privatization.
After that action, a number of public interest groups and state attorneys general sued to challenge the FCC’s action, including a provision to preempt any state-level attempts to implement their own net neutrality rules. Oral arguments in the D.C. Circuit Court of Appeals case are scheduled for Feb. 1.
FCC chairman Ajit Pai called California’s agreement to pause its law a “substantial concession” that “reflects the strength of the case made by the United States earlier this month. It also demonstrates, contrary to the claims of the law’s supporters, that there is no urgent problem that these regulations are needed to address.”
State Sen. Scott Wiener, who authored California’s law, said, “of course, I very much want to see California’s net neutrality law go into effect immediately, in order to protect access to the internet. Yet I also understand and support the Attorney General’s rationale for allowing the DC circuit appeal to be resolved before we move forward to defend our net neutrality law in court.”
California’s law was due to go into effect on Jan. 1.
From: https://variety.com/2018/politics/politics/california-net-neutrality-law-on-hold-1202999031/
WASHINGTON — California’s net neutrality law, signed last month by Gov. Jerry Brown, will be put on hold until federal litigation over the FCC’s role is resolved.
The state’s attorney general, Xavier Becerra, agreed to pause the implementation of the law, which includes the strongest net neutrality protections of any state measure that has passed recently. The same day that Brown signed the law, the Justice Department sued to stop it, arguing that only the federal government can regulate interstate commerce.
California’s passage of the law was in response to the FCC’s decision late last year to repeal many of the net neutrality rules it had in place, including ones that ban internet providers from blocking or throttling traffic, or engaging in paid privatization.
After that action, a number of public interest groups and state attorneys general sued to challenge the FCC’s action, including a provision to preempt any state-level attempts to implement their own net neutrality rules. Oral arguments in the D.C. Circuit Court of Appeals case are scheduled for Feb. 1.
FCC chairman Ajit Pai called California’s agreement to pause its law a “substantial concession” that “reflects the strength of the case made by the United States earlier this month. It also demonstrates, contrary to the claims of the law’s supporters, that there is no urgent problem that these regulations are needed to address.”
State Sen. Scott Wiener, who authored California’s law, said, “of course, I very much want to see California’s net neutrality law go into effect immediately, in order to protect access to the internet. Yet I also understand and support the Attorney General’s rationale for allowing the DC circuit appeal to be resolved before we move forward to defend our net neutrality law in court.”
California’s law was due to go into effect on Jan. 1.
From: https://variety.com/2018/politics/politics/california-net-neutrality-law-on-hold-1202999031/
NYT: Service providers drop Gab
Pittsburgh shooter Bowers’s affiliation with Gab has already cost the company dearly. On Saturday, the company’s web hosting provider, Joyent, said it would stop hosting the site, according to an email posted by Gab on Twitter. Gab’s website went offline Sunday night and was replaced with a statement saying that its service would be temporarily inaccessible while it switched to a new hosting provider.
In addition, GoDaddy, the domain name provider, told Gab it had 24 hours to move its domain name to another service, after finding content on the site that promoted violence.
The payment processing platform Stripe, which Gab has used to receive fees for its paid Gab Pro membership level, and which froze Gab’s account this month for violating its terms of service, said it was suspending transfers to the company’s bank account pending an investigation, according to another email posted to Twitter by Gab. PayPal, another payment processor, canceled Gab’s account, saying it had been closely monitoring the site even before Saturday’s massacre.
Source: https://www.nytimes.com/2018/10/28/us/gab-robert-bowers-pittsburgh-synagogue-shootings.html?rref=collection%2Fsectioncollection%2Fbusiness&action=click&contentCollection=business®ion=rank&module=package&version=highlights&contentPlacement=2&pgtype=sectionfront
Pittsburgh shooter Bowers’s affiliation with Gab has already cost the company dearly. On Saturday, the company’s web hosting provider, Joyent, said it would stop hosting the site, according to an email posted by Gab on Twitter. Gab’s website went offline Sunday night and was replaced with a statement saying that its service would be temporarily inaccessible while it switched to a new hosting provider.
In addition, GoDaddy, the domain name provider, told Gab it had 24 hours to move its domain name to another service, after finding content on the site that promoted violence.
The payment processing platform Stripe, which Gab has used to receive fees for its paid Gab Pro membership level, and which froze Gab’s account this month for violating its terms of service, said it was suspending transfers to the company’s bank account pending an investigation, according to another email posted to Twitter by Gab. PayPal, another payment processor, canceled Gab’s account, saying it had been closely monitoring the site even before Saturday’s massacre.
Source: https://www.nytimes.com/2018/10/28/us/gab-robert-bowers-pittsburgh-synagogue-shootings.html?rref=collection%2Fsectioncollection%2Fbusiness&action=click&contentCollection=business®ion=rank&module=package&version=highlights&contentPlacement=2&pgtype=sectionfront
Kavanaugh, Gorsuch, and Thomas v FDR New Deal style regulation?
The early phase of the Congressional hearings for Justice Kavanaugh involved some focus on his views about the power of administrative agencies. Democratic Senators in particular worried that Kavanaugh's judicial opinions were restrictive of the power of administrative agencies that carry out various government regulatory functions. Op-ed writer Eric Posner shares that concern, worrying that a conservative U.S. Supreme Court could bring us back to the kind of judicial thinking that prevailed prior to the FDR New Deal.
We recall that antipathy to regulations intended to protect workers and consumers dates back to at least 1905. Lochner v. New York was a 1905 Supreme Court case that blocked legislation limiting working hours for bakers. The theory of the Court involved support for freedom of contract. The years 1905 to 1936 have been called the “Lochner era,” ending with a partisan battle by Democrat President Franklin Delano Roosevelt.
Roosevelt wanted to stop the U.S. Supreme Court from blocking his regulatory efforts, so he threatened to use his popularity and power with Congress to increase the number of Justices. Such “court packing” would give Roosevelt the power to appoint sympathetic judges and change case decision outcomes. Faced with that challenge, the nine sitting Justices became more inclined to see things Roosevelt’s way. Case decisions on regulatory issues began to go Roosevelt’s way, and court packing was not pursued.
But Eric Posner is worried that a new Lochner era may soon be upon us. Following is an excerpt from his Op-Ed. DAR
The conservative assault on the administrative state has four elements.
First, Justices Gorsuch and Thomas want to revive a discredited legal rule that was invoked by the Supreme Court in 1935 and then abandoned. The “nondelegation doctrine” says that Congress may not “delegate” its legislative power to administrative agencies — in other words, authorize agencies to make policy through regulation. That doctrine is at issue again in the Gundy case, where the challengers argue that Congress gave the attorney general too much discretion to set the rules for sex offenders.
Second, Justices Gorsuch, Kavanaugh and Thomas want to undermine a rule called the Chevron doctrine, after a 1984 Supreme Court case. That rule says that when an agency regulation is based on a reasonable interpretation of a statute, courts should “defer” to the agency. The Chevron rule codified existing judicial recognition of the core idea of the administrative state. Specialists — in environmental hazards, in credit markets, in workplace safety — should regulate. Generalist judges, who end up disagreeing with one another and causing administrative confusion, should keep their hands off. The Chevron doctrine is at issue in the Nielsen case, where the challengers have urged the court not to defer to the government’s interpretation of the immigration statute.
Third, the conservative justices dislike the principle of agency autonomy and have looked askance at job protections for agency officials.
Fourth, the conservative justices have endorsed a novel interpretation of the First Amendment that protects businesses from regulation — from campaign finance regulation, labor regulation and even regulations that require them to disclose information to consumers.
What is the basis for this radical change in the law? Justices Kavanaugh, Gorsuch and Thomas claim to be “originalists,” who believe that the court should strike down laws that violate the original understanding of the Constitution. But the founders did not bar Congress from creating administrative agencies or think that the First Amendment protected businesses from commercial regulation.
Many liberals think that the conservative justices are cat’s paws of business. But their claims to the contrary, businesses do not oppose regulation. Businesses constantly beseech the agencies to regulate — not themselves, but the other businesses that they compete with or depend on, and are harmed by. The new conservative jurisprudence may help some businesses in the short run but ultimately will undermine the legal structure in which they flourish.
The answer is both obvious and depressing. The modern conservative jurisprudence is an exercise in nostalgia, a yearning for pre-New Deal America when, supposedly, government was less oppressive and people were freer than they are today. You can see this nostalgia in the homilies to olden times in Justices Gorsuch’s and Kavanaugh’s lectures — and their insistence that answers to today’s challenges can be found in a theory of government invented in the 18th century by men wearing breeches and powdered wigs.
https://www.nytimes.com/2018/10/23/opinion/supreme-court-brett-kavanaugh-trump-.html?action=click&module=Opinion&pgtype=Homepage
The early phase of the Congressional hearings for Justice Kavanaugh involved some focus on his views about the power of administrative agencies. Democratic Senators in particular worried that Kavanaugh's judicial opinions were restrictive of the power of administrative agencies that carry out various government regulatory functions. Op-ed writer Eric Posner shares that concern, worrying that a conservative U.S. Supreme Court could bring us back to the kind of judicial thinking that prevailed prior to the FDR New Deal.
We recall that antipathy to regulations intended to protect workers and consumers dates back to at least 1905. Lochner v. New York was a 1905 Supreme Court case that blocked legislation limiting working hours for bakers. The theory of the Court involved support for freedom of contract. The years 1905 to 1936 have been called the “Lochner era,” ending with a partisan battle by Democrat President Franklin Delano Roosevelt.
Roosevelt wanted to stop the U.S. Supreme Court from blocking his regulatory efforts, so he threatened to use his popularity and power with Congress to increase the number of Justices. Such “court packing” would give Roosevelt the power to appoint sympathetic judges and change case decision outcomes. Faced with that challenge, the nine sitting Justices became more inclined to see things Roosevelt’s way. Case decisions on regulatory issues began to go Roosevelt’s way, and court packing was not pursued.
But Eric Posner is worried that a new Lochner era may soon be upon us. Following is an excerpt from his Op-Ed. DAR
The conservative assault on the administrative state has four elements.
First, Justices Gorsuch and Thomas want to revive a discredited legal rule that was invoked by the Supreme Court in 1935 and then abandoned. The “nondelegation doctrine” says that Congress may not “delegate” its legislative power to administrative agencies — in other words, authorize agencies to make policy through regulation. That doctrine is at issue again in the Gundy case, where the challengers argue that Congress gave the attorney general too much discretion to set the rules for sex offenders.
Second, Justices Gorsuch, Kavanaugh and Thomas want to undermine a rule called the Chevron doctrine, after a 1984 Supreme Court case. That rule says that when an agency regulation is based on a reasonable interpretation of a statute, courts should “defer” to the agency. The Chevron rule codified existing judicial recognition of the core idea of the administrative state. Specialists — in environmental hazards, in credit markets, in workplace safety — should regulate. Generalist judges, who end up disagreeing with one another and causing administrative confusion, should keep their hands off. The Chevron doctrine is at issue in the Nielsen case, where the challengers have urged the court not to defer to the government’s interpretation of the immigration statute.
Third, the conservative justices dislike the principle of agency autonomy and have looked askance at job protections for agency officials.
Fourth, the conservative justices have endorsed a novel interpretation of the First Amendment that protects businesses from regulation — from campaign finance regulation, labor regulation and even regulations that require them to disclose information to consumers.
What is the basis for this radical change in the law? Justices Kavanaugh, Gorsuch and Thomas claim to be “originalists,” who believe that the court should strike down laws that violate the original understanding of the Constitution. But the founders did not bar Congress from creating administrative agencies or think that the First Amendment protected businesses from commercial regulation.
Many liberals think that the conservative justices are cat’s paws of business. But their claims to the contrary, businesses do not oppose regulation. Businesses constantly beseech the agencies to regulate — not themselves, but the other businesses that they compete with or depend on, and are harmed by. The new conservative jurisprudence may help some businesses in the short run but ultimately will undermine the legal structure in which they flourish.
The answer is both obvious and depressing. The modern conservative jurisprudence is an exercise in nostalgia, a yearning for pre-New Deal America when, supposedly, government was less oppressive and people were freer than they are today. You can see this nostalgia in the homilies to olden times in Justices Gorsuch’s and Kavanaugh’s lectures — and their insistence that answers to today’s challenges can be found in a theory of government invented in the 18th century by men wearing breeches and powdered wigs.
https://www.nytimes.com/2018/10/23/opinion/supreme-court-brett-kavanaugh-trump-.html?action=click&module=Opinion&pgtype=Homepage
From Public Citizen
Sant'Ambrogio: Federal government filed only eight consumer protection cases in federal court in a recent year (click title for Public Citizen website)
Posted: 27 Oct 2018 09:58 AM PDT
by Jeff Sovern
According to Private Enforcement in Administrative Courts, 72 Vanderbilt Law Review, (Forthcoming), [https://papers.ssrn.com/sol3/papers.cfm?abstract_id=3246738] by Michael Sant'Ambrogio of Michigan State, in the year ending March 31, 2017, the government filed only eight consumer protection cases in federal court, which contrasts with the 9,706 cases filed by private plaintiffs. Sometimes we see the argument that we don't need private enforcement of consumer laws because public enforcement is sufficient. If the numbers Sant'Ambrogio reports are accurate, they make that claim harder to make; indeed, they make it ludicrous. To be sure, many government cases are resolved short of filing in federal court, some government cases are resolved in internal administrative proceedings, and state agencies--especially AG's offices--also file consumer protection cases, but those categories are unlikely to come close to solving underenforcement problems.
Opinion: Patent Thickets Blocks More Affordable Drugs: The Case of Humira
October 23, 2018
From: https://www.thecppc.com/single-post/2018/10/23/How-Patent-Thickets-Blocks-More-Affordable-Drugs-The-Case-of-Humira?utm_campaign=06332353-a8ee-4aba-b739-ad057a76f56a&utm_source=so
The drug manufacturer AbbieVie Inc. has thrown up a formidable shield of patents around its drug Humira, preventing cheaper versions of the medicine from coming to market. This patent abuse should not be allowed to stand, and Congress, the Department of Health and Human Services, and the Food and Drug Administration should stop this manipulation and enact reforms to combat further abuses.
Humira has been around for over fifteen years and is one of the world's best selling drugs, with over $18 billion in global sales. It is used to treat inflammatory diseases-everything from rheumatoid arthritis to gut disorders-and it is extremely expensive, with a list price of over $50,000 per patient. Humira is also a biologic medicine, meaning it is made from living cells in a process similar to brewing. It accounts for over 60% of AbbieVie's revenue.
The main patent for Humira (which gives the drug manufacturer a monopoly on the drug) expired in 2016, so you would think that consumers could now benefit from biosimilars (cheaper versions of this medicine analogous to generic drugs). But AbbieVie has obtained over one hundred additional patents for Humira, an incredibly number for a single drug, and these patents extend into the 2020s and 2030s. They have 22 patents for various treatments, 14 patents for the drug's formulation, 24 patents on its manufacturing practices, and 15 other patents. Moreover, the company has filed suit to block two biosimilar versions approved by the FDA.
This is a prime example of what FDA Commissioner Scott Gottlieb criticized as "patent thickets" that block biosimilars and generic drugs and thwart competition, making consumers pay much higher prices. The biosimilar versions of Humira would sell at a 10% to 25% discount, which could help a lot of people struggling to afford their medicines.
As a result, AbbieVie still has a monopoly on Humira, and its price has risen to over $60,000 annually for some patients, and that earns over $12 billion in sales in the United States. And they are not the only company doing this. The drug company Johnson & Johnson has also created a thicket of over 100 patents around the anti-inflammatory drug Remicade to block cheaper generic drugs and increase its profits. Evidence shows that patent abuse, where companies file many different patents and make small changes to drugs to extend their exclusivity, is a serious and growing problem.
In Europe, where the legal environment is more friendly to patent challenges, over 20 biosimilar drugs have been approved since 2006, with immense benefits for patients. In the United States, these "patent thickets" have choked off much of the market, and only five versions are available.
One way to reduce patent abuse would be to pass the CREATES Act, a bipartisan bill that would make it easier for medicines whose patents have expired to be sold as cheaper generic versions. It allows generic drug companies to sue patented drug companies to compel them to provide samples they need to make these cheaper versions.
Patents should be used to reward substantive research and real innovation, not to maintain a monopoly and force consumers to pay skyrocketing prices.
October 23, 2018
From: https://www.thecppc.com/single-post/2018/10/23/How-Patent-Thickets-Blocks-More-Affordable-Drugs-The-Case-of-Humira?utm_campaign=06332353-a8ee-4aba-b739-ad057a76f56a&utm_source=so
The drug manufacturer AbbieVie Inc. has thrown up a formidable shield of patents around its drug Humira, preventing cheaper versions of the medicine from coming to market. This patent abuse should not be allowed to stand, and Congress, the Department of Health and Human Services, and the Food and Drug Administration should stop this manipulation and enact reforms to combat further abuses.
Humira has been around for over fifteen years and is one of the world's best selling drugs, with over $18 billion in global sales. It is used to treat inflammatory diseases-everything from rheumatoid arthritis to gut disorders-and it is extremely expensive, with a list price of over $50,000 per patient. Humira is also a biologic medicine, meaning it is made from living cells in a process similar to brewing. It accounts for over 60% of AbbieVie's revenue.
The main patent for Humira (which gives the drug manufacturer a monopoly on the drug) expired in 2016, so you would think that consumers could now benefit from biosimilars (cheaper versions of this medicine analogous to generic drugs). But AbbieVie has obtained over one hundred additional patents for Humira, an incredibly number for a single drug, and these patents extend into the 2020s and 2030s. They have 22 patents for various treatments, 14 patents for the drug's formulation, 24 patents on its manufacturing practices, and 15 other patents. Moreover, the company has filed suit to block two biosimilar versions approved by the FDA.
This is a prime example of what FDA Commissioner Scott Gottlieb criticized as "patent thickets" that block biosimilars and generic drugs and thwart competition, making consumers pay much higher prices. The biosimilar versions of Humira would sell at a 10% to 25% discount, which could help a lot of people struggling to afford their medicines.
As a result, AbbieVie still has a monopoly on Humira, and its price has risen to over $60,000 annually for some patients, and that earns over $12 billion in sales in the United States. And they are not the only company doing this. The drug company Johnson & Johnson has also created a thicket of over 100 patents around the anti-inflammatory drug Remicade to block cheaper generic drugs and increase its profits. Evidence shows that patent abuse, where companies file many different patents and make small changes to drugs to extend their exclusivity, is a serious and growing problem.
In Europe, where the legal environment is more friendly to patent challenges, over 20 biosimilar drugs have been approved since 2006, with immense benefits for patients. In the United States, these "patent thickets" have choked off much of the market, and only five versions are available.
One way to reduce patent abuse would be to pass the CREATES Act, a bipartisan bill that would make it easier for medicines whose patents have expired to be sold as cheaper generic versions. It allows generic drug companies to sue patented drug companies to compel them to provide samples they need to make these cheaper versions.
Patents should be used to reward substantive research and real innovation, not to maintain a monopoly and force consumers to pay skyrocketing prices.
From The ABA
DoNotPay app aims to help users sue anyone in small claims court--without a lawyer
By Jason Tashea
A new update to an existing chatbot app promises to allow users to "sue anyone in small claims court for up to $25,000 without the help of a lawyer," though early users warn of technical bugs and legal and ethical concerns.
Launched Wednesday, new updates to DoNotPay, a company that first made a splash by automating challenges to parking tickets in court without an attorney, will allow a user to sue anyone in small claims court in any county in all 50 states—without the need for retaining a lawyer. Previously only a web tool, the new product is also available for iPhone and will also include new features allowing users to find deals on prescription and over-the-counter drugs; make an appointment at the California Department of Motor Vehicles; and see if they are eligible to opt-in to various class-action settlements. The app also aims to fight unfair bank fees; earn refunds from ride-hailing companies; fix errors in a credit report; and dispute bank transactions.
An Android version is in the works.
“I want people to be addicted to fighting for their rights,” says Josh Browder, CEO of DoNotPay, who hopes his revamped app will be a one-stop shop for consumer protection issues.
The idea for the new app was born out of a project the company released last year, which helped people sue Equifax for up to $25,000 after the credit company’s 2017 data breach affecting 143 million people.
“Although lots of lawyers said it wasn’t possible,” said Browder in a statement reported by Yahoo Finance, “I was shocked when people won $9,000, $10,000 and $11,000 judgments. Even when Equifax appealed, the average person still prevailed.”
The new small claims suit feature, which Browder demoed at the Clio Cloud Conference last week in New Orleans, asks a user for their name and address and what the claim size is to determine whether it complies with a state’s limit, among other factors. It then generates a demand letter, creates a filing, helps serve notice of the suit and provides other support to usher users through the trial process. The app even generates suggested scripts and questions pro se litigants can use when they go to court. Parties are often not represented by an attorney in a small claim proceeding because it is either not permitted by law or because the amount in controversy is too low to justify the cost of an attorney.
Browder says the new application has three goals: Getting users what’s owed, fighting corporations and fighting bureaucracy.
Not just a small claims app, DoNotPay acquired Visabot to assist in the application of green cards and other visa applications. Previously, Visabot charged for many of its services (a green card application was $150, for example). All features on DoNotPay, including immigration, are free to users.
This isn’t to say that the new app won’t make money. While the revenue model is still a work in progress, Browder sees a future where after helping someone challenge a cellphone bill, they offer deals to switch carriers and take a commission based on conversions. While the app will require extensive user data to function, Browder says the venture-backed DoNotPay will not store or sell user data.
Of course, many of these features raise the specter of the unlicensed practice of law, a criminal offense in California, where Browder is based.
For his part, Browder is “a bit worried” about potential challenges. However, he believes that he can avoid some of these issues since his product is free to users. Further, he argues that the app is a free speech issue because its underlying code is speech. Code has been found to be speech on issues as broad as publishing encryption source code to the sharing of digital blueprints of 3-D printed guns.
“If you can 3-D print a gun,” he says, “you should be able to print a few documents.”
The legal profession is only one possible group to take issue with the new tool—the other are the users themselves. While the automated process was set up with the assistance of lawyers and paralegals, there’s no lawyer oversight of the app’s final products.
Asked how users should manage their dissatisfaction towards the product, Browder says it’s easy. “They can sue us with the app.”
In the day after the app’s release, several Twitter users took issue with technical and legal aspects of the tool. Nicole Bradick, a 2012 ABA Journal Legal Rebel, noted that the tool did not work properly. Gabriel Teninbaum, director of Suffolk University Law School’s Institute on Legal Innovation & Technology in Boston, said that he was given bad, inaccurate advice on Massachusetts law. Chase Hertel, counsel and deputy director for the ABA Center for Innovation, expressed concerns that the immigration feature did not fully inform people of various ongoing and evolving issues.
For his part, Browder says DoNotPay has pushed numerous updates to handle some of the technical issues.
Regarding the immigration feature, Browder defends it as the same tool it was before acquisition, which had “extremely positive reviews.” He adds that “we not only plan to maintain it, but also expand it.”
“While I can understand the skepticism of the legal establishment, I worked with public defenders in [Massachusetts] in detail to ensure it’s accurate,” says Browder over email regarding criticisms coming from Massachusetts. “Accuracy is an objective term and not opinion. Unless they can point to a precise and specific contradiction between the demand letter [DoNotPay] provides and [Massachusetts] law, it is false and defamatory to suggest it’s inaccurate.”
Updated on Oct. 11 after the app’s launch to add details about the issues users were reporting and Browder’s response.
Source: http://www.abajournal.com/news/article/file_a_smalls_claims_suit_anywhere_in_the_country_through_an_app
DoNotPay app aims to help users sue anyone in small claims court--without a lawyer
By Jason Tashea
A new update to an existing chatbot app promises to allow users to "sue anyone in small claims court for up to $25,000 without the help of a lawyer," though early users warn of technical bugs and legal and ethical concerns.
Launched Wednesday, new updates to DoNotPay, a company that first made a splash by automating challenges to parking tickets in court without an attorney, will allow a user to sue anyone in small claims court in any county in all 50 states—without the need for retaining a lawyer. Previously only a web tool, the new product is also available for iPhone and will also include new features allowing users to find deals on prescription and over-the-counter drugs; make an appointment at the California Department of Motor Vehicles; and see if they are eligible to opt-in to various class-action settlements. The app also aims to fight unfair bank fees; earn refunds from ride-hailing companies; fix errors in a credit report; and dispute bank transactions.
An Android version is in the works.
“I want people to be addicted to fighting for their rights,” says Josh Browder, CEO of DoNotPay, who hopes his revamped app will be a one-stop shop for consumer protection issues.
The idea for the new app was born out of a project the company released last year, which helped people sue Equifax for up to $25,000 after the credit company’s 2017 data breach affecting 143 million people.
“Although lots of lawyers said it wasn’t possible,” said Browder in a statement reported by Yahoo Finance, “I was shocked when people won $9,000, $10,000 and $11,000 judgments. Even when Equifax appealed, the average person still prevailed.”
The new small claims suit feature, which Browder demoed at the Clio Cloud Conference last week in New Orleans, asks a user for their name and address and what the claim size is to determine whether it complies with a state’s limit, among other factors. It then generates a demand letter, creates a filing, helps serve notice of the suit and provides other support to usher users through the trial process. The app even generates suggested scripts and questions pro se litigants can use when they go to court. Parties are often not represented by an attorney in a small claim proceeding because it is either not permitted by law or because the amount in controversy is too low to justify the cost of an attorney.
Browder says the new application has three goals: Getting users what’s owed, fighting corporations and fighting bureaucracy.
Not just a small claims app, DoNotPay acquired Visabot to assist in the application of green cards and other visa applications. Previously, Visabot charged for many of its services (a green card application was $150, for example). All features on DoNotPay, including immigration, are free to users.
This isn’t to say that the new app won’t make money. While the revenue model is still a work in progress, Browder sees a future where after helping someone challenge a cellphone bill, they offer deals to switch carriers and take a commission based on conversions. While the app will require extensive user data to function, Browder says the venture-backed DoNotPay will not store or sell user data.
Of course, many of these features raise the specter of the unlicensed practice of law, a criminal offense in California, where Browder is based.
For his part, Browder is “a bit worried” about potential challenges. However, he believes that he can avoid some of these issues since his product is free to users. Further, he argues that the app is a free speech issue because its underlying code is speech. Code has been found to be speech on issues as broad as publishing encryption source code to the sharing of digital blueprints of 3-D printed guns.
“If you can 3-D print a gun,” he says, “you should be able to print a few documents.”
The legal profession is only one possible group to take issue with the new tool—the other are the users themselves. While the automated process was set up with the assistance of lawyers and paralegals, there’s no lawyer oversight of the app’s final products.
Asked how users should manage their dissatisfaction towards the product, Browder says it’s easy. “They can sue us with the app.”
In the day after the app’s release, several Twitter users took issue with technical and legal aspects of the tool. Nicole Bradick, a 2012 ABA Journal Legal Rebel, noted that the tool did not work properly. Gabriel Teninbaum, director of Suffolk University Law School’s Institute on Legal Innovation & Technology in Boston, said that he was given bad, inaccurate advice on Massachusetts law. Chase Hertel, counsel and deputy director for the ABA Center for Innovation, expressed concerns that the immigration feature did not fully inform people of various ongoing and evolving issues.
For his part, Browder says DoNotPay has pushed numerous updates to handle some of the technical issues.
Regarding the immigration feature, Browder defends it as the same tool it was before acquisition, which had “extremely positive reviews.” He adds that “we not only plan to maintain it, but also expand it.”
“While I can understand the skepticism of the legal establishment, I worked with public defenders in [Massachusetts] in detail to ensure it’s accurate,” says Browder over email regarding criticisms coming from Massachusetts. “Accuracy is an objective term and not opinion. Unless they can point to a precise and specific contradiction between the demand letter [DoNotPay] provides and [Massachusetts] law, it is false and defamatory to suggest it’s inaccurate.”
Updated on Oct. 11 after the app’s launch to add details about the issues users were reporting and Browder’s response.
Source: http://www.abajournal.com/news/article/file_a_smalls_claims_suit_anywhere_in_the_country_through_an_app
Restaurants, food allergies, and the law
For some, food allergies can mean that a take-out restaurant meal is a killer. Web-MD advises that people with serious food allergies should pick large corporate restaurants that are systematic about choosing food ingredients and providing information to customers. Small mom-and-pop operations have legal responsibilities to be careful, but are less likely to be systematic about knowing their ingredients and communicating with vulnerable customers. A recent prosecution for criminal negligence in the UK illustrates the problem. Owners of a small Indian-food carry out were convicted of criminally negligent manslaughter after the tragic death of a 15 year old customer with a serious peanut allergy.
Sources:
https://www.webmd.com/allergies/features/food-allergies-tips-for-eating-out#4
https://nam02.safelinks.protection.outlook.com/?url=https%3A%2F%2Fwww.itv.com%2Fnews%2F2018-10-26%2Ftakeaway-bosses-guilty-of-manslaughter-by-gross-negligence-after-nut-allergy-death-of-15-year-old-megan-lee%2F&data=02%7C01%7C%7C589861fef4f44c85de5f08d63cc610ce%7C84df9e7fe9f640afb435aaaaaaaaaaaa%7C1%7C0%7C636763218705484378&sdata=oFXNuFG8U9aqiobR8Ct7g3yBRBaUfnTu1ZJVL8n90Hk%3D&reserved=0
Posted by Don Allen Resnikoff
For some, food allergies can mean that a take-out restaurant meal is a killer. Web-MD advises that people with serious food allergies should pick large corporate restaurants that are systematic about choosing food ingredients and providing information to customers. Small mom-and-pop operations have legal responsibilities to be careful, but are less likely to be systematic about knowing their ingredients and communicating with vulnerable customers. A recent prosecution for criminal negligence in the UK illustrates the problem. Owners of a small Indian-food carry out were convicted of criminally negligent manslaughter after the tragic death of a 15 year old customer with a serious peanut allergy.
Sources:
https://www.webmd.com/allergies/features/food-allergies-tips-for-eating-out#4
https://nam02.safelinks.protection.outlook.com/?url=https%3A%2F%2Fwww.itv.com%2Fnews%2F2018-10-26%2Ftakeaway-bosses-guilty-of-manslaughter-by-gross-negligence-after-nut-allergy-death-of-15-year-old-megan-lee%2F&data=02%7C01%7C%7C589861fef4f44c85de5f08d63cc610ce%7C84df9e7fe9f640afb435aaaaaaaaaaaa%7C1%7C0%7C636763218705484378&sdata=oFXNuFG8U9aqiobR8Ct7g3yBRBaUfnTu1ZJVL8n90Hk%3D&reserved=0
Posted by Don Allen Resnikoff
David Boies, attorney for Elizabeth Holmes and her company Theranos: information on aggressive lawyering that you won’t learn in a law school
In his book Bad Blood: Secrets and Lies in a Silicon Valley Startup (Knopf), Wall Street Journal reporter John Carreyrou reviews his investigative reporting about the bad behavior of Elizabeth Holmes and her company Theranos. It was Carreyrou who broke the story in the Wall Street Journal that Theranos was essentially a scam, falsely promising new technology that yielded valuable analytical results from a pin prick of blood. In fact the new technique was not reliable. Elizabeth Holmes ended up being charged by the SEC with defrauding investors.
Theranos board members included some famous people, such as Henry Kissinger and George Shultz. When Theranos needed legal counsel, Elizabeth Holmes hired the well known firm of Boies, Schiller, and Flexner, led by David Boies.
An interesting aspect of the Carreyrou book is its focus on the tactics of David Boies and his firm. Author Carreyrou, who apparently is not a lawyer himself, expresses surprise and dismay about aggressive tactics used by the Boies firm.
What Carreyrou seems to find most upsetting is the Boies firm’s aggressive behavior toward whistle-blowers who exposed Theranos, including Tyler Shultz, the grandson of George Shultz. Tyler was an important early source for Carreyrou’s investigative reporting.
In a book chapter called “The Ambush,” Carreyrou recounts how Tyler visited his grandfather to discuss the grandfather’s concern that Tyler was speaking to the press and saying unflattering things about Theranos. Tyler had specifically asked that no lawyers be present for the meeting, but grandfather George Shultz had two Boies partners waiting out of sight in an upstairs room.
After some conversation with Tyler that George Shultz found unsatisfactory, the grandfather brought the lawyers downstairs. The lawyers told Tyler that they had identified him as the person who had leaked Theranos information to the Wall Street Journal. The lawyers handed Tyler a temporary restraining order, a notice to appear in court, and a letter saying that Theranos believed Tyler had violated confidentiality obligations. The lawyers communicated that Theranos was prepared to file a law suit.
The next day Tyler met again with a Boies firm lawyer, who asked Tyler to sign an affidavit swearing he had not spoken to a reporter, and to name anyone he knew who did. Tyler did not sign. Instead he ended the meeting and consulted with a lawyer of his own.
Tyler then engaged in some days of lawyer-led negotiations. The topics were the affidavit the Boies firm asked for, and the threats of litigation. Tyler eventually agreed to sign an affidavit saying he had spoken to the press, but he refused to include any information about other press sources.
What happened next, says Carreyrou, is that Boies Schiller resorted to the “bare-knuckles tactics it had become notorious for. Brille [the Boies firm attorney] let it be known that if Tyler didn’t sign the affidavit and name the Journal’s sources, the firm would make sure to bankrupt his entire family when it took him to court. Tyler also received a tip that he was being surveilled by private investigators.”
Boies Schiller also put pressure on other sources for Carreyrou’s reporting about Theranos: “Boies Schiller’s Mike Brille sent a letter to Rochelle Gibbons threatening to sue her if she didn’t cease making what he termed ‘false and defamatory’ statements” about Theranos.
The Wall Street Journal itself was the target of legal hardball. The Journal received a formal letter from David Boies: “Citing several California statutes, the letter sternly demanded that the Journal 'destroy or return all Theranos trade secrets and confidential information in its possession.’” That was followed a few days later by a 23 page letter from Boies to the Journal threatening a lawsuit.
The day came when David Boies met with Wall Street Journal people in an effort to squelch publication of Carreyrou’s investigative article about Theranos. The Boies effort was unsuccessful. The Carreyrou article on Theranos’ bad behavior ran on October 15, 2015.
For Tyler Shultz, the price for being a whistle blower included $400,000 in legal bills, estrangement from his famous grandfather, and much personal anguish.
What lessons can be drawn from Carreyrou’s description of the Boies firm’s practices? Not that Boies or his firm’s lawyers necessarily did anything illegal or unethical. The Carreyrou book does not provide enough information to justify that conclusion. It may be, for example, that David Boies and his firm had great faith in Theranos technology.
But even in the absence of clear evidence of illegality or unethical lawyer behavior there is significance in Carreyrou’s sense of outrage. Careyrou feels that “bare-knuckles” lawyering was used on behalf of Theranos in an effort to suppress information from Tyler Shultz and Carreyrou’s other sources of information. Also, that aggressive lawyering was used in an effort to squelch publication of his reporting. A main element of the bare-knuckles lawyering described by Carreyrou is the threat of legal liability and litigation expense.
Even where it is legal and ethical, such aggressive lawyer behavior should be examined further by those interested in legal policy. The behavior suggests a problem: that the complexity of laws and legal proceedings may have the unintended side effect of facilitating bullying by parties with deep legal resources. The targets of such bullying may be individuals like Tyler Shultz, or small companies. Bullying based on unmatched deep resources can occur, for example, in the context of landlord-tenant disputes involving small commercial tenants, and franchisor-franchisee disputes where the franchisees have limited resources.
Bare-knuckles bullying by lawyers that is within the bounds of legality and permissible ethics is nevertheless concerning. Among other bad effects, bullying may result in information about wrongdoing being suppressed, inappropriate financial burdens being imposed on targets of bullying, and failure to fairly resolve disputes among parties.
This posting is by Don Allen Resnikoff, who takes full responsibility for its contents
In his book Bad Blood: Secrets and Lies in a Silicon Valley Startup (Knopf), Wall Street Journal reporter John Carreyrou reviews his investigative reporting about the bad behavior of Elizabeth Holmes and her company Theranos. It was Carreyrou who broke the story in the Wall Street Journal that Theranos was essentially a scam, falsely promising new technology that yielded valuable analytical results from a pin prick of blood. In fact the new technique was not reliable. Elizabeth Holmes ended up being charged by the SEC with defrauding investors.
Theranos board members included some famous people, such as Henry Kissinger and George Shultz. When Theranos needed legal counsel, Elizabeth Holmes hired the well known firm of Boies, Schiller, and Flexner, led by David Boies.
An interesting aspect of the Carreyrou book is its focus on the tactics of David Boies and his firm. Author Carreyrou, who apparently is not a lawyer himself, expresses surprise and dismay about aggressive tactics used by the Boies firm.
What Carreyrou seems to find most upsetting is the Boies firm’s aggressive behavior toward whistle-blowers who exposed Theranos, including Tyler Shultz, the grandson of George Shultz. Tyler was an important early source for Carreyrou’s investigative reporting.
In a book chapter called “The Ambush,” Carreyrou recounts how Tyler visited his grandfather to discuss the grandfather’s concern that Tyler was speaking to the press and saying unflattering things about Theranos. Tyler had specifically asked that no lawyers be present for the meeting, but grandfather George Shultz had two Boies partners waiting out of sight in an upstairs room.
After some conversation with Tyler that George Shultz found unsatisfactory, the grandfather brought the lawyers downstairs. The lawyers told Tyler that they had identified him as the person who had leaked Theranos information to the Wall Street Journal. The lawyers handed Tyler a temporary restraining order, a notice to appear in court, and a letter saying that Theranos believed Tyler had violated confidentiality obligations. The lawyers communicated that Theranos was prepared to file a law suit.
The next day Tyler met again with a Boies firm lawyer, who asked Tyler to sign an affidavit swearing he had not spoken to a reporter, and to name anyone he knew who did. Tyler did not sign. Instead he ended the meeting and consulted with a lawyer of his own.
Tyler then engaged in some days of lawyer-led negotiations. The topics were the affidavit the Boies firm asked for, and the threats of litigation. Tyler eventually agreed to sign an affidavit saying he had spoken to the press, but he refused to include any information about other press sources.
What happened next, says Carreyrou, is that Boies Schiller resorted to the “bare-knuckles tactics it had become notorious for. Brille [the Boies firm attorney] let it be known that if Tyler didn’t sign the affidavit and name the Journal’s sources, the firm would make sure to bankrupt his entire family when it took him to court. Tyler also received a tip that he was being surveilled by private investigators.”
Boies Schiller also put pressure on other sources for Carreyrou’s reporting about Theranos: “Boies Schiller’s Mike Brille sent a letter to Rochelle Gibbons threatening to sue her if she didn’t cease making what he termed ‘false and defamatory’ statements” about Theranos.
The Wall Street Journal itself was the target of legal hardball. The Journal received a formal letter from David Boies: “Citing several California statutes, the letter sternly demanded that the Journal 'destroy or return all Theranos trade secrets and confidential information in its possession.’” That was followed a few days later by a 23 page letter from Boies to the Journal threatening a lawsuit.
The day came when David Boies met with Wall Street Journal people in an effort to squelch publication of Carreyrou’s investigative article about Theranos. The Boies effort was unsuccessful. The Carreyrou article on Theranos’ bad behavior ran on October 15, 2015.
For Tyler Shultz, the price for being a whistle blower included $400,000 in legal bills, estrangement from his famous grandfather, and much personal anguish.
What lessons can be drawn from Carreyrou’s description of the Boies firm’s practices? Not that Boies or his firm’s lawyers necessarily did anything illegal or unethical. The Carreyrou book does not provide enough information to justify that conclusion. It may be, for example, that David Boies and his firm had great faith in Theranos technology.
But even in the absence of clear evidence of illegality or unethical lawyer behavior there is significance in Carreyrou’s sense of outrage. Careyrou feels that “bare-knuckles” lawyering was used on behalf of Theranos in an effort to suppress information from Tyler Shultz and Carreyrou’s other sources of information. Also, that aggressive lawyering was used in an effort to squelch publication of his reporting. A main element of the bare-knuckles lawyering described by Carreyrou is the threat of legal liability and litigation expense.
Even where it is legal and ethical, such aggressive lawyer behavior should be examined further by those interested in legal policy. The behavior suggests a problem: that the complexity of laws and legal proceedings may have the unintended side effect of facilitating bullying by parties with deep legal resources. The targets of such bullying may be individuals like Tyler Shultz, or small companies. Bullying based on unmatched deep resources can occur, for example, in the context of landlord-tenant disputes involving small commercial tenants, and franchisor-franchisee disputes where the franchisees have limited resources.
Bare-knuckles bullying by lawyers that is within the bounds of legality and permissible ethics is nevertheless concerning. Among other bad effects, bullying may result in information about wrongdoing being suppressed, inappropriate financial burdens being imposed on targets of bullying, and failure to fairly resolve disputes among parties.
This posting is by Don Allen Resnikoff, who takes full responsibility for its contents
Theodore Frank, professional class action settlement objector
On October 31, attorney Theodore Frank will argue his own case before the U.S. Supreme Court. The case concerns objection by Mr. Frank and the non-profit he heads, Center for Class Action Fairness, to a class action settlement involving Google as Defendant.
The Google class action settlement is one of many class action settlements Mr. Frank has objected to. Objecting to class action settlements is Mr. Frank’s profession.
Mr. Frank’s Google class action settlement case arises from an $8.5 million settlement between Google and class action lawyers. The class action complaint says that Google violated users’ privacy rights.
Under the settlement, the lawyers are to be paid more than $2 million, but members of the class they represented get nothing. Instead Google agreed to make contributions to institutions concerned with privacy on the internet, including centers at Harvard, Stanford and Chicago-Kent College of Law.
A divided three-judge panel of the United States Court of Appeals for the Ninth Circuit, in San Francisco, upheld the settlement. The opinion can be found at http://www.scotusblog.com/wp-content/uploads/2018/04/17-961-opinion-below.pdf In dissent, Judge J.Clifford Wallace expressed concerns about the payments.
Google’s position is that while class action settlements can be bad, the particular settlement is good. The Google brief on the Writ of Certiorari to the Supreme Court is at https://www.supremecourt.gov/DocketPDF/17/17-961/61166/20180829194522714_17-961%20bs.pdf
The story of Mr. Frank as objector to the Google settlement draws attention to the role that professional class action settlement objectors play as class action spoilers. Not surprisingly, there are those who are highly critical of the objectors’ spoiler role, and others who see at least some objectors as a force for good, limiting class actions that lack social value.
Commenters have observed that there is a cottage industry of professional objectors: attorneys who earn a livelihood by opposing settlements on behalf of unnamed class members. Professional objectors may threaten to file meritless appeals of final judgments merely to extract a payoff. Class attorneys have a strong incentive to pay objectors to withdraw their appeal to avoid the cost of delay.
Professional objectors are widely unpopular, “perhaps the least popular parties in the history of civil procedure,” according to one observer. A judge has observed that “[f]ederal courts are increasingly weary of professional objectors.”
Theodore Frank’s legal practice is unusual in that he and the non-profit he heads do not take payments from Plaintiffs’ counsel. A Bloomberg-BNA article explains that he does not accept “green mail,” a name for payments demanded by, and made to, an objector to drop an objection to a settlement.
“That’s always been the position of the Center for Class Action Fairness,” Frank said to Bloomberg-BNA about his organization. “Not only is that the position, but we’re looking for opportunities for courts to order divestments of green mail payments.”
“We lose money on every objection,” Frank told Bloomberg BNA. “If we weren’t doing it as a non-profit, we couldn’t do it. And if we didn’t have generous donors, and attorneys taking 50-, 60- and 70-percent pay cuts, we couldn’t do what we do.”
The bottom line point is that there can be great value in legitimate and well grounded objections to class action settlements made in good faith. It polices the settlement process. The policy challenge is to allow such beneficial objections while suppressing extortionate green mail objections made in bad faith.
Credits: Much of the content of this comment is drawn from The New York Times story at https://www.nytimes.com/2018/10/15/us/politics/theodore-frank-supreme-court.html Also, the article by Lopatka-Smith, which is at https://judicialstudies.duke.edu/sites/default/files/centers/judicialstudies/class-action_objectors_0.pdf Also, The Bloomberg-BNA article at https://www.bna.com/ted-frank-lightning-n57982069046/
This comment is posted by Don Allen Resnikoff, who takes full responsibility for its content
On October 31, attorney Theodore Frank will argue his own case before the U.S. Supreme Court. The case concerns objection by Mr. Frank and the non-profit he heads, Center for Class Action Fairness, to a class action settlement involving Google as Defendant.
The Google class action settlement is one of many class action settlements Mr. Frank has objected to. Objecting to class action settlements is Mr. Frank’s profession.
Mr. Frank’s Google class action settlement case arises from an $8.5 million settlement between Google and class action lawyers. The class action complaint says that Google violated users’ privacy rights.
Under the settlement, the lawyers are to be paid more than $2 million, but members of the class they represented get nothing. Instead Google agreed to make contributions to institutions concerned with privacy on the internet, including centers at Harvard, Stanford and Chicago-Kent College of Law.
A divided three-judge panel of the United States Court of Appeals for the Ninth Circuit, in San Francisco, upheld the settlement. The opinion can be found at http://www.scotusblog.com/wp-content/uploads/2018/04/17-961-opinion-below.pdf In dissent, Judge J.Clifford Wallace expressed concerns about the payments.
Google’s position is that while class action settlements can be bad, the particular settlement is good. The Google brief on the Writ of Certiorari to the Supreme Court is at https://www.supremecourt.gov/DocketPDF/17/17-961/61166/20180829194522714_17-961%20bs.pdf
The story of Mr. Frank as objector to the Google settlement draws attention to the role that professional class action settlement objectors play as class action spoilers. Not surprisingly, there are those who are highly critical of the objectors’ spoiler role, and others who see at least some objectors as a force for good, limiting class actions that lack social value.
Commenters have observed that there is a cottage industry of professional objectors: attorneys who earn a livelihood by opposing settlements on behalf of unnamed class members. Professional objectors may threaten to file meritless appeals of final judgments merely to extract a payoff. Class attorneys have a strong incentive to pay objectors to withdraw their appeal to avoid the cost of delay.
Professional objectors are widely unpopular, “perhaps the least popular parties in the history of civil procedure,” according to one observer. A judge has observed that “[f]ederal courts are increasingly weary of professional objectors.”
Theodore Frank’s legal practice is unusual in that he and the non-profit he heads do not take payments from Plaintiffs’ counsel. A Bloomberg-BNA article explains that he does not accept “green mail,” a name for payments demanded by, and made to, an objector to drop an objection to a settlement.
“That’s always been the position of the Center for Class Action Fairness,” Frank said to Bloomberg-BNA about his organization. “Not only is that the position, but we’re looking for opportunities for courts to order divestments of green mail payments.”
“We lose money on every objection,” Frank told Bloomberg BNA. “If we weren’t doing it as a non-profit, we couldn’t do it. And if we didn’t have generous donors, and attorneys taking 50-, 60- and 70-percent pay cuts, we couldn’t do what we do.”
The bottom line point is that there can be great value in legitimate and well grounded objections to class action settlements made in good faith. It polices the settlement process. The policy challenge is to allow such beneficial objections while suppressing extortionate green mail objections made in bad faith.
Credits: Much of the content of this comment is drawn from The New York Times story at https://www.nytimes.com/2018/10/15/us/politics/theodore-frank-supreme-court.html Also, the article by Lopatka-Smith, which is at https://judicialstudies.duke.edu/sites/default/files/centers/judicialstudies/class-action_objectors_0.pdf Also, The Bloomberg-BNA article at https://www.bna.com/ted-frank-lightning-n57982069046/
This comment is posted by Don Allen Resnikoff, who takes full responsibility for its content
An Interview with Diana Moss (American Antitrust Institute)
by Jon Baker (American University)
Ahead of the inaugural conference on Challenges to Antitrust in a Changing Economy, at Harvard Law School on November 9th, CPI reached out to Jon Baker (Professor, American University) and Diana Moss (President, American Antitrust Institute). They will participate in “The Consumer Welfare Standard” panel, together with Rob Atkinson (President, Information Technology and Innovation Foundation), Renata Hesse (Partner, Sullivan & Cromwell), and Einer Elhauge (Professor, Harvard Law School).
In this exclusive interview, Diana Moss has responded to three questions asked by Professor Baker on the consumer welfare standard and its current application in US antitrust law.
This conference is co-organized by CPI and CCIA. To see the full program and register free, please click here.
Following is Q and A # 1. For the other 2, see
https://www.competitionpolicyinternational.com/cpi-talks-on-the-consumer-welfare-standard/?utm_source=CPI+Subscribers&utm_campaign=b47147cbd9-EMAIL_CAMPAIGN_2018_10_20_07_01&utm_medium=email&utm_term=0_0ea61134a5-b47147cbd9-236508653
Some progressives say that antitrust rules pay insufficient attention to harms to suppliers, including workers; harms along competitive dimensions other than price and output, such as quality or innovation; and the ways that the exercise of market power may undermine non-economic values, as by creating anti-democratic political pressures or limiting the opportunity of small businesses to compete. To what extent are these concerns justified?
Today’s debate over the role of antitrust has generated a lot of blue sky thinking about the state of U.S. antitrust. I think of this debate as a very different process from that of crafting constructive reform proposals. Actual reform requires knowledge of how the laws and standard have been and can be applied by enforcers and the courts. For example, we know that the consumer welfare standard can address the price and non-price dimensions (e.g., quality and innovation) of competition. The standard also reaches to the harms resulting from the exercise of market power anywhere along the supply chain (e.g., consumers and workers). The control of economic power serves to limit barriers to entry and exclusionary conduct that targets smaller innovative rivals and in stemming the growth of political power.
In sum, if enforcers and courts used the full scope of the law and standard, antitrust would today be more effective in defending and promoting our markets. The reality has been different, namely, a narrow interpretation of the consumer welfare standard under the conservative ideology has held sway for decades. In response to this, some proposals advocate for wholesale reforms that would essentially do away with any standard. This risks reforms that divert the antitrust laws to purposes for which they are not designed and could exacerbate the current state of under-enforcement.
As a progressive (as I will articulate more in my panel remarks), I think of constructive reform as including a more nuanced approach through a package of complementary proposals. These include: (1) legislative clarification of the full scope of the law and increased appropriations for the agencies for enforcement; (2) guidance from the agencies that articulates a “dynamic and symmetric” consumer welfare standard (describes in #2 below) and requirements for implementing it; and (3) efforts to strengthen or introduce presumptions of illegality in mergers and some forms of conduct.
by Jon Baker (American University)
Ahead of the inaugural conference on Challenges to Antitrust in a Changing Economy, at Harvard Law School on November 9th, CPI reached out to Jon Baker (Professor, American University) and Diana Moss (President, American Antitrust Institute). They will participate in “The Consumer Welfare Standard” panel, together with Rob Atkinson (President, Information Technology and Innovation Foundation), Renata Hesse (Partner, Sullivan & Cromwell), and Einer Elhauge (Professor, Harvard Law School).
In this exclusive interview, Diana Moss has responded to three questions asked by Professor Baker on the consumer welfare standard and its current application in US antitrust law.
This conference is co-organized by CPI and CCIA. To see the full program and register free, please click here.
Following is Q and A # 1. For the other 2, see
https://www.competitionpolicyinternational.com/cpi-talks-on-the-consumer-welfare-standard/?utm_source=CPI+Subscribers&utm_campaign=b47147cbd9-EMAIL_CAMPAIGN_2018_10_20_07_01&utm_medium=email&utm_term=0_0ea61134a5-b47147cbd9-236508653
Some progressives say that antitrust rules pay insufficient attention to harms to suppliers, including workers; harms along competitive dimensions other than price and output, such as quality or innovation; and the ways that the exercise of market power may undermine non-economic values, as by creating anti-democratic political pressures or limiting the opportunity of small businesses to compete. To what extent are these concerns justified?
Today’s debate over the role of antitrust has generated a lot of blue sky thinking about the state of U.S. antitrust. I think of this debate as a very different process from that of crafting constructive reform proposals. Actual reform requires knowledge of how the laws and standard have been and can be applied by enforcers and the courts. For example, we know that the consumer welfare standard can address the price and non-price dimensions (e.g., quality and innovation) of competition. The standard also reaches to the harms resulting from the exercise of market power anywhere along the supply chain (e.g., consumers and workers). The control of economic power serves to limit barriers to entry and exclusionary conduct that targets smaller innovative rivals and in stemming the growth of political power.
In sum, if enforcers and courts used the full scope of the law and standard, antitrust would today be more effective in defending and promoting our markets. The reality has been different, namely, a narrow interpretation of the consumer welfare standard under the conservative ideology has held sway for decades. In response to this, some proposals advocate for wholesale reforms that would essentially do away with any standard. This risks reforms that divert the antitrust laws to purposes for which they are not designed and could exacerbate the current state of under-enforcement.
As a progressive (as I will articulate more in my panel remarks), I think of constructive reform as including a more nuanced approach through a package of complementary proposals. These include: (1) legislative clarification of the full scope of the law and increased appropriations for the agencies for enforcement; (2) guidance from the agencies that articulates a “dynamic and symmetric” consumer welfare standard (describes in #2 below) and requirements for implementing it; and (3) efforts to strengthen or introduce presumptions of illegality in mergers and some forms of conduct.
DC public restrooms legislation proposed
Marcy Bernbaum, a retired USAID official, and a D.C. resident, has a mission of providing help to the most disadvantaged citizens. A particular campaign she has focused on is providing access to public toilets in the District of Columbia.
Her efforts, and the efforts of many others, have now resulted in a legislative proposal: D.C. Council Bill 22-0223 has the goal of installing and maintaining clean, safe, and available public restrooms. Support has come from churches, advocacy organizations, community associations and others.
Here is an excerpt from Marcy Bernbaum’s op-ed in the Washington Post. https://www.washingtonpost.com/opinions/why-does-dc-have-so-few-public-restrooms/2017/12/15/951e3fde-cfcf-11e7-9d3a-bcbe2af58c3a_story.html?utm_term=.33069c2c8867
We did an inventory of restrooms in private facilities in five D.C. neighborhoods: Gallery Place, Dupont Circle, Georgetown, the K Street corridor and Columbia Heights. And we carried out a comprehensive search to identify public restrooms open during the day as well as those open 24/7.
To our amazement, we found that there are only three public restrooms in all of the District that are open 24/7: those at Union Station, the Lincoln Memorial and the Jefferson Memorial — and there are no signs telling you how to get to them. Imagine it is late at night. You are walking down the street and urgently have to go to the bathroom. If you can't make it and experience the misfortune of having no choice but to "go" outside and are caught by a police officer, you risk receiving a fine of up to $500, up to 90 days in jail or both. During the day, off the Mall there are only six public restrooms in downtown Washington, their hours are limited, and there are no signs to tell you where they are.
The situation isn't much better when it comes to finding private facilities with restroom access. Forty-two of the 85 private facilities we visited in early 2015 permitted people who weren't patrons to use their restrooms. When we visited the same facilities in early 2016, the number had dwindled to 28. And when we returned to the same facilities in mid-2017, only 11 (or 13 percent) permitted entry to non-patrons.
In April, D.C. Council members Brianne K. Nadeau (D-Ward 1), David Grosso (I-At Large), Elissa Silverman (I-At Large) and Robert C. White Jr. (D-At Large) introduced Bill 22-0223, the Public Restroom Facilities Installation and Promotion Act of 2017.
The bill would work toward creating public restrooms and establish an incentive for private businesses to make their restrooms available to the public.
Marcy Bernbaum, a retired USAID official, and a D.C. resident, has a mission of providing help to the most disadvantaged citizens. A particular campaign she has focused on is providing access to public toilets in the District of Columbia.
Her efforts, and the efforts of many others, have now resulted in a legislative proposal: D.C. Council Bill 22-0223 has the goal of installing and maintaining clean, safe, and available public restrooms. Support has come from churches, advocacy organizations, community associations and others.
Here is an excerpt from Marcy Bernbaum’s op-ed in the Washington Post. https://www.washingtonpost.com/opinions/why-does-dc-have-so-few-public-restrooms/2017/12/15/951e3fde-cfcf-11e7-9d3a-bcbe2af58c3a_story.html?utm_term=.33069c2c8867
We did an inventory of restrooms in private facilities in five D.C. neighborhoods: Gallery Place, Dupont Circle, Georgetown, the K Street corridor and Columbia Heights. And we carried out a comprehensive search to identify public restrooms open during the day as well as those open 24/7.
To our amazement, we found that there are only three public restrooms in all of the District that are open 24/7: those at Union Station, the Lincoln Memorial and the Jefferson Memorial — and there are no signs telling you how to get to them. Imagine it is late at night. You are walking down the street and urgently have to go to the bathroom. If you can't make it and experience the misfortune of having no choice but to "go" outside and are caught by a police officer, you risk receiving a fine of up to $500, up to 90 days in jail or both. During the day, off the Mall there are only six public restrooms in downtown Washington, their hours are limited, and there are no signs to tell you where they are.
The situation isn't much better when it comes to finding private facilities with restroom access. Forty-two of the 85 private facilities we visited in early 2015 permitted people who weren't patrons to use their restrooms. When we visited the same facilities in early 2016, the number had dwindled to 28. And when we returned to the same facilities in mid-2017, only 11 (or 13 percent) permitted entry to non-patrons.
In April, D.C. Council members Brianne K. Nadeau (D-Ward 1), David Grosso (I-At Large), Elissa Silverman (I-At Large) and Robert C. White Jr. (D-At Large) introduced Bill 22-0223, the Public Restroom Facilities Installation and Promotion Act of 2017.
The bill would work toward creating public restrooms and establish an incentive for private businesses to make their restrooms available to the public.
A business tax measure to fund homelessness services
is on the ballot for San Francisco voters in San Francisco County, California, on November 6, 2018.
A yes vote is a vote in favor of authorizing the city and county of San Francisco to fund housing and homelessness services by taxing certain businesses at the following rates:
A no vote is a vote against authorizing the city and county of San Francisco to tax businesses at the above rates to fund housing and homelessness services.
Credit: balletopedia.org
Not all businesses support the San Francisco tax proposal. See https://www.google.com/url?sa=t&rct=j&q=&esrc=s&source=web&cd=6&cad=rja&uact=8&ved=2ahUKEwiClq2V9pPeAhXSwFkKHfoWCqEQFjAFegQIBRAB&url=https%3A%2F%2Fwww.businessinsider.com%2Fmarc-benioff-and-jack-dorsey-clash-over-san-francisco-homeless-measure-prop-c-2018-10&usg=AOvVaw0j7wtU1oE5T-AnRBnwaD3Q
is on the ballot for San Francisco voters in San Francisco County, California, on November 6, 2018.
A yes vote is a vote in favor of authorizing the city and county of San Francisco to fund housing and homelessness services by taxing certain businesses at the following rates:
- 0.175 percent to 0.69 percent on gross receipts for businesses with over $50 million in gross annual receipts, or
- 1.5 percent of payroll expenses for certain businesses with over $1 billion in gross annual receipts and administrative offices in San Francisco.
A no vote is a vote against authorizing the city and county of San Francisco to tax businesses at the above rates to fund housing and homelessness services.
Credit: balletopedia.org
Not all businesses support the San Francisco tax proposal. See https://www.google.com/url?sa=t&rct=j&q=&esrc=s&source=web&cd=6&cad=rja&uact=8&ved=2ahUKEwiClq2V9pPeAhXSwFkKHfoWCqEQFjAFegQIBRAB&url=https%3A%2F%2Fwww.businessinsider.com%2Fmarc-benioff-and-jack-dorsey-clash-over-san-francisco-homeless-measure-prop-c-2018-10&usg=AOvVaw0j7wtU1oE5T-AnRBnwaD3Q
Regulators have been cracking down on abusive rent-to-own deals
offered by operators of manufactured home communities, otherwise known as trailer parks, in which people shell out thousands of dollars for run-down homes that they never actually get to buy
The New York attorney general’s office is expected to announce a settlement that could give hundreds of people who signed rent-to-own leases with a trailer park the right to tear up those deals and recoup any deposits they paid, according to two people briefed on the matter who were not authorized to speak publicly.
The settlement is with eight trailer park operators, including two publicly traded “real estate investment trusts,” that run more than 100 parks from Long Island to upstate New York. The settlement would end a yearlong investigation by the attorney general’s office, which had received dozens of complaints from renters about misleading sales pitches by park operators, the people said.
Private equity firms and large real estate investors have been looking to buy trailer parks and combine them into larger companies. They are attractive investments because prefabricated homes are relatively cheap to produce and maintain. New manufactured homes often sell for as little as $70,000.
One of the companies settling with New York is Sun Communities, which has a market value of $9 billion and whose shares have soared nearly a thousand percent in the last decade. Sun operates more than 300 parks for manufactured homes and recreational vehicles.
Sun representatives didn’t respond to a phone message seeking comment.
The contracts, which typically last seven to 10 years, sometimes referred to rent payments as “mortgage payments,” even though the tenants would take possession of the property only if they made a large payment at the end of the contract.
The state negotiated some of the settlement terms with the New York Housing Association, which represents manufactured home parks in New York. Mark Glaser, a lawyer for the association, said the group had “cooperated with the attorney general’s office and was pleased to help facilitate a resolution of the issues under review.”
The terms are similar to ones that led a number of state attorneys general, including those in Wisconsin and Pennsylvania, to sue rent-to-own housing firms. Regulators in those states have said the rent-to-own contracts were deceptive.
From https://www.nytimes.com/2018/10/18/business/trailer-park-rent-settlement.html?rref=collection%2Fsectioncollection%2Fbusiness&action=click&contentCollection=business®ion=rank&module=package&version=highlights&contentPlacement=2&pgtype=sectionfront
offered by operators of manufactured home communities, otherwise known as trailer parks, in which people shell out thousands of dollars for run-down homes that they never actually get to buy
The New York attorney general’s office is expected to announce a settlement that could give hundreds of people who signed rent-to-own leases with a trailer park the right to tear up those deals and recoup any deposits they paid, according to two people briefed on the matter who were not authorized to speak publicly.
The settlement is with eight trailer park operators, including two publicly traded “real estate investment trusts,” that run more than 100 parks from Long Island to upstate New York. The settlement would end a yearlong investigation by the attorney general’s office, which had received dozens of complaints from renters about misleading sales pitches by park operators, the people said.
Private equity firms and large real estate investors have been looking to buy trailer parks and combine them into larger companies. They are attractive investments because prefabricated homes are relatively cheap to produce and maintain. New manufactured homes often sell for as little as $70,000.
One of the companies settling with New York is Sun Communities, which has a market value of $9 billion and whose shares have soared nearly a thousand percent in the last decade. Sun operates more than 300 parks for manufactured homes and recreational vehicles.
Sun representatives didn’t respond to a phone message seeking comment.
The contracts, which typically last seven to 10 years, sometimes referred to rent payments as “mortgage payments,” even though the tenants would take possession of the property only if they made a large payment at the end of the contract.
The state negotiated some of the settlement terms with the New York Housing Association, which represents manufactured home parks in New York. Mark Glaser, a lawyer for the association, said the group had “cooperated with the attorney general’s office and was pleased to help facilitate a resolution of the issues under review.”
The terms are similar to ones that led a number of state attorneys general, including those in Wisconsin and Pennsylvania, to sue rent-to-own housing firms. Regulators in those states have said the rent-to-own contracts were deceptive.
From https://www.nytimes.com/2018/10/18/business/trailer-park-rent-settlement.html?rref=collection%2Fsectioncollection%2Fbusiness&action=click&contentCollection=business®ion=rank&module=package&version=highlights&contentPlacement=2&pgtype=sectionfront
The campaign for Proposition 10, a ballot initiative that would loosen California state restraints on local rent control laws.
The effort has stoked a battle that has already consumed close to $60 million in political spending, a sizable figure even in a state known for heavily funded campaigns.
Depending on which side is talking, Proposition 10 is either a much-needed tool to help cities solve a housing crisis or a radically misguided idea that will only make things worse. Specifically, it would repeal the Costa-Hawkins Rental Housing Act, which prevents cities from applying rent control laws to single-family homes and apartments built after 1995.
The initiative drive builds on the growing momentum of local efforts to expand tenant protections.
From: https://www.nytimes.com/2018/10/12/business/economy/california-rent-control-tenants.html?rref=collection%2Fsectioncollection%2Fbusiness&action=click&contentCollection=business®ion=rank&module=package&version=highlights&contentPlacement=2&pgtype=sectionfront
The effort has stoked a battle that has already consumed close to $60 million in political spending, a sizable figure even in a state known for heavily funded campaigns.
Depending on which side is talking, Proposition 10 is either a much-needed tool to help cities solve a housing crisis or a radically misguided idea that will only make things worse. Specifically, it would repeal the Costa-Hawkins Rental Housing Act, which prevents cities from applying rent control laws to single-family homes and apartments built after 1995.
The initiative drive builds on the growing momentum of local efforts to expand tenant protections.
From: https://www.nytimes.com/2018/10/12/business/economy/california-rent-control-tenants.html?rref=collection%2Fsectioncollection%2Fbusiness&action=click&contentCollection=business®ion=rank&module=package&version=highlights&contentPlacement=2&pgtype=sectionfront
Washington Post says dark money from both left and right groups participated in Kavanaugh public advocacy campaigns
From the Post article:
Judicial Crisis Network is a 501(c)(4) advocacy organization — a “dark money” group that is not required to disclose the sources of its funding, regardless of the industry groups or individual donors behind them. It poured at least $5.3 million into its pro-Kavanaugh advertising campaign, much of it targeting vulnerable Senate Democrats in red and swing states. At least $1.5 million of that was spent defending Kavanaugh after Christine Blasey Ford went public with her allegation of sexual assault against him.
A liberal group of a similar stripe, Demand Justice, spent at least $700,000 of a planned $5 million campaign trying to scuttle Kavanaugh’s nomination.
https://www.msn.com/en-us/news/politics/collins-blasted-‘dark-money’-groups-in-kavanaugh-fight-one-just-paid-to-thank-her-for-her-vote/ar-BBOkLwr?ocid=spartandhp
From the Post article:
Judicial Crisis Network is a 501(c)(4) advocacy organization — a “dark money” group that is not required to disclose the sources of its funding, regardless of the industry groups or individual donors behind them. It poured at least $5.3 million into its pro-Kavanaugh advertising campaign, much of it targeting vulnerable Senate Democrats in red and swing states. At least $1.5 million of that was spent defending Kavanaugh after Christine Blasey Ford went public with her allegation of sexual assault against him.
A liberal group of a similar stripe, Demand Justice, spent at least $700,000 of a planned $5 million campaign trying to scuttle Kavanaugh’s nomination.
https://www.msn.com/en-us/news/politics/collins-blasted-‘dark-money’-groups-in-kavanaugh-fight-one-just-paid-to-thank-her-for-her-vote/ar-BBOkLwr?ocid=spartandhp
From DC AG Racine: OAG's "Cure the Streets" program
Earlier this summer, the District saw a tragic spike in violence where 13 people were shot in 11 separate incidents over Memorial Day weekend. In response, the Council gave OAG funds to set up a pilot program for violence interruption. In just four months, OAG has launched “Cure the Streets” in the District and it’s already showing some signs of progress.
Cure the Streets is operating in two pilot sites in Wards 5 and 8, which have some of the highest rates of gun violence in the city. This pilot program uses a proven, public-health approach to treat violence as a disease, focusing on three main actions:
Interrupt: Interrupt potentially violent conflicts by preventing retaliation and mediating simmering disputes;
- Treat: Identify and treat individuals at the highest risk for conflict by providing support services and changing behavior; and
- Change: Engage communities in changing norms around violence.
Although Cure the Streets is just getting started, it’s already making a positive difference in these communities. We must continue investing in these data-driven, proven solutions to stop violence before it happens and save lives in the District.
Karl A. Racine
Attorney General
AAI Statement: DOJ's Approval of CVS-Aetna Merger Imperils Competition and Consumers in Critical Parts of Healthcare Supply Chain
Today [10/10/2018] , the U.S. Department of Justice (DOJ) approved the vertical merger of leading retail pharmacy and pharmacy benefits manager (PBM) CVS with major health insurer Aetna. "While the DOJ obtained divestitures to address the horizontal overlap in CVS's and Aetna's Medicare Part D individual prescription drug plans, it did nothing to address the significant vertical competitive problems raised by the combination," said AAI President Diana Moss.
The approval of CVS-Aetna comes on the heels of the DOJ's recent approval of a similar vertical merger of PBM Express Scripts and heath insurer Cigna.
"Within a short period of time, antitrust enforcers have green-lighted a fundamental restructuring of important segments of the healthcare industry in the U.S.," said Moss. "Competition now depends almost entirely on having 'enough' rivalry between integrated PBM-insurers. This 'roll-the-dice' model of competition stands in stark contrast to a model of standalone PBMs competing hard to gain insurers' drug plan business and insurers aggressively seeking out competitive PBM services."
In a March 26, 2018 letter to the DOJ, AAI raised serious concerns about the competitive effects of the proposed merger. The deal creates a large, vertically integrated PBM-insurer that operates in upstream and downstream markets featuring only a few rivals. AAI also provided testimony at the California Department of Insurance hearings on the proposed merger.
"We are disappointed that the DOJ did not address a merged CVS-Aetna's enhanced incentives to use their market positions to disadvantage rival PBMs, independent pharmacies, and rival health insurers," said Moss. "Competition will undoubtedly suffer, as will consumers through higher prices, lower quality, less innovation, and less choice," Moss added, noting that any efficiencies claims would have to be monumentally large to overcome significant competitive concerns. AAI says the DOJ's decision highlights the need for new guidelines on vertical mergers.
AAI's advocacy against the CVS-Aetna merger explains that giant PBM-insurer organizations created by the recent swath of merger approvals will make it harder for companies with more innovative business models to enter markets. Because of widespread vertical integration, new entrants will be forced to enter at both the PBM and insurer levels to be viable competitors.
"If ever there were a vertical merger that should have been challenged by antitrust enforcers, this would be it," said Moss. High levels of concentration in the PBM and insurer markets, demonstrated exclusionary conduct by one of the merging parties, and past enforcement actions involving consolidation in these important markets are all powerful indicators that the deal should have been deemed illegal.
Wash Post Op-Ed on Pay to Protest
By Mara Verheyden-Hilliard and
Carl Messineo
September 11
Mara Verheyden-Hilliard is executive director of the Partnership for Civil Justice Fund. Carl Messineo is the group’s legal director.
For the first time, the U.S. government wants demonstrators to pay to use our parks, sidewalks and streets to engage in free speech in the nation’s capital. This should be called what it is: a protest tax.
This is a bold effort by the Trump administration to burden and restrict access to public spaces for First Amendment activities in Washington. If enacted, it would fundamentally alter participatory democracy in the United States.
Last month, Interior Secretary Ryan Zinke announced the administration’s radical, anti-democratic rewriting of regulations governing free speech and demonstrations on public lands under federal jurisdiction in Washington. Under the proposal, which is open to public comment, the National Park Service (NPS) would charge protesters “event management” costs. This would include the cost of barricades and fencing erected at the discretion of police, the salaries of personnel deployed to monitor the protest, trash removal and sanitation charges, permit application charges and costs assessed on “harm to turf” — the effects of engaging in free speech on grass, as if our public green spaces are for ornamental viewing.
And it goes beyond just the Mall. Want to protest in front of the Trump hotel on Pennsylvania Avenue? Under this proposal, you’ll have to take out your checkbook, because the NPS maintains control over the broad sidewalks of Pennsylvania Avenue. In addition to the upfront costs to even request a permit, you may be billed for the cost of barricades erected around the hotel — fencing you didn’t ask for but that the hotel wants.
Such a “pay to protest” plan will probably be challenged in court. The right to petition the government for a redress of grievances cannot be burdened by such charges. And discretionary fees or measures that can serve as a proxy for content-based discrimination are unconstitutional.
This is just one element of a larger initiative to close off public space to silence dissent by both financial and physical restriction. The NPS has, at the same time, quietly sneaked into its new regulatory proposal a plan to essentially close the iconic White House sidewalk to protest, leaving only five feet for a narrow pedestrian walkway.
During the Vietnam War, the Nixon White House was surrounded by buses to block protesters from approaching the sidewalk. Now, the government seeks to remove the protests by taking the public spaces out from under our feet. What’s next, closing Lafayette Square?
The NPS describes our democratic rights as too costly for our democracy. An NPS spokeswoman justified the measure as cost recovery, pointing to last year’s Women’s March as having imposed “a pretty heavy cost” on the government.
Free speech is not a cost. It is a value. It is a fundamental pillar of democracy.
For the full op-ed, see https://www.washingtonpost.com/opinions/the-trump-administration-wants-to-tax-protests-what-happened-to-free-speech/2018/09/11/70f08bfa-b5e1-11e8-b79f-f6e31e555258_story.html?noredirect=on&utm_term=.8d0af0c6ddc1
By Mara Verheyden-Hilliard and
Carl Messineo
September 11
Mara Verheyden-Hilliard is executive director of the Partnership for Civil Justice Fund. Carl Messineo is the group’s legal director.
For the first time, the U.S. government wants demonstrators to pay to use our parks, sidewalks and streets to engage in free speech in the nation’s capital. This should be called what it is: a protest tax.
This is a bold effort by the Trump administration to burden and restrict access to public spaces for First Amendment activities in Washington. If enacted, it would fundamentally alter participatory democracy in the United States.
Last month, Interior Secretary Ryan Zinke announced the administration’s radical, anti-democratic rewriting of regulations governing free speech and demonstrations on public lands under federal jurisdiction in Washington. Under the proposal, which is open to public comment, the National Park Service (NPS) would charge protesters “event management” costs. This would include the cost of barricades and fencing erected at the discretion of police, the salaries of personnel deployed to monitor the protest, trash removal and sanitation charges, permit application charges and costs assessed on “harm to turf” — the effects of engaging in free speech on grass, as if our public green spaces are for ornamental viewing.
And it goes beyond just the Mall. Want to protest in front of the Trump hotel on Pennsylvania Avenue? Under this proposal, you’ll have to take out your checkbook, because the NPS maintains control over the broad sidewalks of Pennsylvania Avenue. In addition to the upfront costs to even request a permit, you may be billed for the cost of barricades erected around the hotel — fencing you didn’t ask for but that the hotel wants.
Such a “pay to protest” plan will probably be challenged in court. The right to petition the government for a redress of grievances cannot be burdened by such charges. And discretionary fees or measures that can serve as a proxy for content-based discrimination are unconstitutional.
This is just one element of a larger initiative to close off public space to silence dissent by both financial and physical restriction. The NPS has, at the same time, quietly sneaked into its new regulatory proposal a plan to essentially close the iconic White House sidewalk to protest, leaving only five feet for a narrow pedestrian walkway.
During the Vietnam War, the Nixon White House was surrounded by buses to block protesters from approaching the sidewalk. Now, the government seeks to remove the protests by taking the public spaces out from under our feet. What’s next, closing Lafayette Square?
The NPS describes our democratic rights as too costly for our democracy. An NPS spokeswoman justified the measure as cost recovery, pointing to last year’s Women’s March as having imposed “a pretty heavy cost” on the government.
Free speech is not a cost. It is a value. It is a fundamental pillar of democracy.
For the full op-ed, see https://www.washingtonpost.com/opinions/the-trump-administration-wants-to-tax-protests-what-happened-to-free-speech/2018/09/11/70f08bfa-b5e1-11e8-b79f-f6e31e555258_story.html?noredirect=on&utm_term=.8d0af0c6ddc1
A second look at The Case Against the Supreme Court, the 2014 book by Erwin Chemerinsky
This seems like a good moment to take down from the bookshelf Erwin Chemerinsky’s 2014 book, The Case Against the Supreme Court (Viking, 386 pages).
The book argues that over time the U.S. Supreme Court’s decisions have frequently been wrong. The wrong case decisions are often a product of the ideology of the Justices who decide the cases. For Chemerinsky, ideology means the “values, views, and prejudices” of the Justices. Those values, views and prejudices are not necessarily the same as those of a particular political party, but often overlap. There have been some moments when the Court’s wrong decisions were partisan in the sense of favoring a particular political party’s agenda.
The author’s suggestions for structural reform of the Court are mild. He does not, for example, advocate doing away with the Court's power to review laws for their constitutionality. He would have Congress impose term limits, perhaps 18 years, so that the prevailing ideologies of a particular moment in history are less likely to persist for decades.
But Chemerinsky would like to see Justices appointed who share his own strongly felt ideological views, which he is not reluctant to express. He believes, for example, that the Justices should permit latitude so the government can use regulations to aid workers and consumers. He believes the Justices should allow the government to protect ethnic minorities. He opposes “originalist” approaches to construing the Constitution.
Chemerinsky is not recommending that operatives for a particular political party he favors be appointed as Justices – very few people have that point. But it seems likely that he would subscribe to the popular observation that elections matter.
Turning to some of the history recounted by the author, one point of ideology that has caused harm concerns race. The “separate but equal” doctrine justifying racial separation was the law of the land for many decades. The doctrine was abandoned by the U.S. Supreme Court only in 1954, in Brown v. Board of Education, which Chemerinsky hails as a high point of good Supreme Court decision making. But it took the Court a long time to get there -- decades. And Chemerinsky finds the Court’s follow-up on the Brown decision to be less than perfect.
And, Chemerinsky points out, the ideology of the judges deciding Brown was crucial. The deciding judges believed in racial equality and were not “originalists.” They did not limit interpretation of the Constitution to what the framers originally intended. Recall that framer Thomas Jefferson (who wrote "all men are created equal") owned slaves, and engaged in sexual predation.
Among other points of ideology that have caused harm is hostility to ethnic minorities such as the Japanese. In Korematsu v. United States, the Court, in a 6-3 decision, upheld evacuation and internment of Japanese-American citizens. Chemerinsky points out that the decision was highly offensive in its reliance on ethnicity alone to decide who is a threat to national security.
Another important point of ideology is antipathy to regulations intended to protect workers and consumers. Lochner v. New York was a 1905 Supreme Court case that blocked legislation limiting working hours for bakers. The theory of the Court involved support for freedom of contract. The years 1905 to 1936 have been called the “Lochner era,” ending with a partisan battle by Democrat President Franklin Delano Roosevelt.
Roosevelt wanted to stop the U.S. Supreme Court from blocking his regulatory efforts, so he threatened to use his popularity and power with Congress to increase the number of Justices. Such “court packing” would give Roosevelt the power to appoint sympathetic judges and change case decision outcomes. Faced with that challenge, the nine sitting Justices became more inclined to see things Roosevelt’s way. Case decisions on regulatory issues began to go Roosevelt’s way, and court packing was not pursued.
This article is posted by Don Allen Resnikoff, who takes entire responsibility for the views expressed.
This seems like a good moment to take down from the bookshelf Erwin Chemerinsky’s 2014 book, The Case Against the Supreme Court (Viking, 386 pages).
The book argues that over time the U.S. Supreme Court’s decisions have frequently been wrong. The wrong case decisions are often a product of the ideology of the Justices who decide the cases. For Chemerinsky, ideology means the “values, views, and prejudices” of the Justices. Those values, views and prejudices are not necessarily the same as those of a particular political party, but often overlap. There have been some moments when the Court’s wrong decisions were partisan in the sense of favoring a particular political party’s agenda.
The author’s suggestions for structural reform of the Court are mild. He does not, for example, advocate doing away with the Court's power to review laws for their constitutionality. He would have Congress impose term limits, perhaps 18 years, so that the prevailing ideologies of a particular moment in history are less likely to persist for decades.
But Chemerinsky would like to see Justices appointed who share his own strongly felt ideological views, which he is not reluctant to express. He believes, for example, that the Justices should permit latitude so the government can use regulations to aid workers and consumers. He believes the Justices should allow the government to protect ethnic minorities. He opposes “originalist” approaches to construing the Constitution.
Chemerinsky is not recommending that operatives for a particular political party he favors be appointed as Justices – very few people have that point. But it seems likely that he would subscribe to the popular observation that elections matter.
Turning to some of the history recounted by the author, one point of ideology that has caused harm concerns race. The “separate but equal” doctrine justifying racial separation was the law of the land for many decades. The doctrine was abandoned by the U.S. Supreme Court only in 1954, in Brown v. Board of Education, which Chemerinsky hails as a high point of good Supreme Court decision making. But it took the Court a long time to get there -- decades. And Chemerinsky finds the Court’s follow-up on the Brown decision to be less than perfect.
And, Chemerinsky points out, the ideology of the judges deciding Brown was crucial. The deciding judges believed in racial equality and were not “originalists.” They did not limit interpretation of the Constitution to what the framers originally intended. Recall that framer Thomas Jefferson (who wrote "all men are created equal") owned slaves, and engaged in sexual predation.
Among other points of ideology that have caused harm is hostility to ethnic minorities such as the Japanese. In Korematsu v. United States, the Court, in a 6-3 decision, upheld evacuation and internment of Japanese-American citizens. Chemerinsky points out that the decision was highly offensive in its reliance on ethnicity alone to decide who is a threat to national security.
Another important point of ideology is antipathy to regulations intended to protect workers and consumers. Lochner v. New York was a 1905 Supreme Court case that blocked legislation limiting working hours for bakers. The theory of the Court involved support for freedom of contract. The years 1905 to 1936 have been called the “Lochner era,” ending with a partisan battle by Democrat President Franklin Delano Roosevelt.
Roosevelt wanted to stop the U.S. Supreme Court from blocking his regulatory efforts, so he threatened to use his popularity and power with Congress to increase the number of Justices. Such “court packing” would give Roosevelt the power to appoint sympathetic judges and change case decision outcomes. Faced with that challenge, the nine sitting Justices became more inclined to see things Roosevelt’s way. Case decisions on regulatory issues began to go Roosevelt’s way, and court packing was not pursued.
This article is posted by Don Allen Resnikoff, who takes entire responsibility for the views expressed.
- States have important role in CFPB suit against student lender Navient
The states’ lawsuits will take on increased importance if the federal consumer bureau pursues its case in a weak manner, or drops its case against Navient.
See: https://www.nytimes.com/2018/10/07/business/student-loans-navient.html
From: DMN:
Ticketmaster Is Now In the Crosshairs of the U.S. Federal Trade Commission
Weeks after an explosive undercover report revealed that Ticketmaster works closely with scalpers to sell their second-hand tickets; the FTC has announced a workshop to investigate how online ticketing is handled.
Ticketmaster parent company Live Nation witnessed its stock price drop as much as 5.5% after the report of the workshop. But a little damage control helped to recover some of those losses.
So what’s the FTC doing, exactly?
The story continues here. -- https://www.digitalmusicnews.com/2018/10/05/ticketmaster-scalper-federal-trade-commission-ftc/
Ticketmaster Is Now In the Crosshairs of the U.S. Federal Trade Commission
Weeks after an explosive undercover report revealed that Ticketmaster works closely with scalpers to sell their second-hand tickets; the FTC has announced a workshop to investigate how online ticketing is handled.
Ticketmaster parent company Live Nation witnessed its stock price drop as much as 5.5% after the report of the workshop. But a little damage control helped to recover some of those losses.
So what’s the FTC doing, exactly?
The story continues here. -- https://www.digitalmusicnews.com/2018/10/05/ticketmaster-scalper-federal-trade-commission-ftc/
Chinese ride-share company Didi is at the center of the ride-hailing web that it and its investor SoftBank have spun.
Truces and alliances between regional players may follow.
Didi has invested in Lyft, Uber through the deal they cut in August 2016, Southeast Asia’s Grab, India’s Ola, and the Middle East’s Careem. It put $100 million into and later acquired Brazil’s 99. Didi was last valued at $57 billion during its $4.6 billion financing in December 2017, and is reportedly in talks with South Korea’s Mirae Asset Financial Group to raise an additional $263 million.
SoftBank also has a stake in most of these ride-hailing companies, positioning it to broker truces and alliances between regional players, like Uber’s recent sale of its Southeast Asia operations to Grab. According to data from industry research firm PitchBook, SoftBank has invested five times in Ola, four times in Didi, four times in Grab, once in Uber, and once in 99. It’s unclear how much these investments total, but they are well into the billions. SoftBank is playing the ride-hailing version of Risk, but it also owns a piece of all the players. So long as a single company controls a country or region, so that it’s not burning money to compete, SoftBank seems likely to be happy with the outcome.
That said, insofar as SoftBank has picked a single winner, it seems like Didi. It’s notable that Didi has continued to expand globally even as Uber has now repeatedly withdrawn from key international markets, first in China, then Russia and most recently in Southeast Asia. SoftBank has also not-so-subtly hinted that it would like to see Uber retreat. Rajeev Misra, a SoftBank board director who also sits on Uber’s board, told the Financial Times in January that Uber should focus on its core markets, which he identified as the US, Europe, Latin America, and Australia. Uber CEO Dara Khosrowshahi said Uber would “invest aggressively” in the Southeast Asia business about a month before it sold to Grab.
From https://qz.com/1261177/softbanks-winner-in-ride-hailing-is-chinas-didi-chuxing-not-uber/
Truces and alliances between regional players may follow.
Didi has invested in Lyft, Uber through the deal they cut in August 2016, Southeast Asia’s Grab, India’s Ola, and the Middle East’s Careem. It put $100 million into and later acquired Brazil’s 99. Didi was last valued at $57 billion during its $4.6 billion financing in December 2017, and is reportedly in talks with South Korea’s Mirae Asset Financial Group to raise an additional $263 million.
SoftBank also has a stake in most of these ride-hailing companies, positioning it to broker truces and alliances between regional players, like Uber’s recent sale of its Southeast Asia operations to Grab. According to data from industry research firm PitchBook, SoftBank has invested five times in Ola, four times in Didi, four times in Grab, once in Uber, and once in 99. It’s unclear how much these investments total, but they are well into the billions. SoftBank is playing the ride-hailing version of Risk, but it also owns a piece of all the players. So long as a single company controls a country or region, so that it’s not burning money to compete, SoftBank seems likely to be happy with the outcome.
That said, insofar as SoftBank has picked a single winner, it seems like Didi. It’s notable that Didi has continued to expand globally even as Uber has now repeatedly withdrawn from key international markets, first in China, then Russia and most recently in Southeast Asia. SoftBank has also not-so-subtly hinted that it would like to see Uber retreat. Rajeev Misra, a SoftBank board director who also sits on Uber’s board, told the Financial Times in January that Uber should focus on its core markets, which he identified as the US, Europe, Latin America, and Australia. Uber CEO Dara Khosrowshahi said Uber would “invest aggressively” in the Southeast Asia business about a month before it sold to Grab.
From https://qz.com/1261177/softbanks-winner-in-ride-hailing-is-chinas-didi-chuxing-not-uber/
States Urge Justices To Flip Illinois Brick In Apple Case -- See briefs below:
Brief for states:
https://dlbjbjzgnk95t.cloudfront.net/1088000/1088314/states.pdf
Excerpt:
This case presents a rare opportunity to revisit the controversial holding in Illinois Brick Co. v. Illinois, 431 U.S. 720 (1977). The Court can overrule its precedents based on briefing by amici, and it has done so before. The Court should do so again here.
I. Section 4 of the Clayton Act directs that “any person who shall be injured in his business or property by reason of anything forbidden in the antitrust laws may sue therefor . . . and shall recover threefold the damages by him sustained.” 15 U.S.C. § 15(a). It is widely accepted that consumers can be injured when manufacturers take concerted action to fix supracompetitive prices and distributors of the overpriced products pass on some or all of the overcharges to end users.
Before 1977, when this Court decided Illinois Brick, lower courts generally allowed consumers who purchased goods made by an antitrust violator to prove that they had been harmed by overcharges passed on to them by intermediaries in the distribution chain. Illinois Brick, however, held that an “indirect purchaser” is categorically forbidden from attempting to prove damages from an antitrust violation. 431 U.S. at 726. Instead, “the overcharged direct purchaser should be deemed for purposes of section 4 to have suffered the full injury from the overcharge.” Id.
The Court admitted that this conclusive presumption “denies recovery to those indirect purchasers who may have been actually injured by antitrust violations.” Id. at 746. The Court did not identify any statutory text denying recovery to “any person who shall be injured,” 15 U.S.C. § 15(a), by an antitrust violation. Instead, the Court reasoned that “the legislative purpose” of “encouraging vigorous private enforcement of the antitrust laws” was “better served” by a ban on “attempting to apportion the overcharge among all that may have absorbed a part of it.” Ill. Brick, 431 U.S. at 745-46.
Brief for AAI:
https://dlbjbjzgnk95t.cloudfront.net/1088000/1088314/americanantitrust.pdf
Brief for Open Markets:
https://dlbjbjzgnk95t.cloudfront.net/1088000/1088314/http-www-supremecourt-gov-docketpdf-17-17-204-65344-20181001145735965_17-204-20amicus-20bom-pdfa-pdf.pdf
Brief for states:
https://dlbjbjzgnk95t.cloudfront.net/1088000/1088314/states.pdf
Excerpt:
This case presents a rare opportunity to revisit the controversial holding in Illinois Brick Co. v. Illinois, 431 U.S. 720 (1977). The Court can overrule its precedents based on briefing by amici, and it has done so before. The Court should do so again here.
I. Section 4 of the Clayton Act directs that “any person who shall be injured in his business or property by reason of anything forbidden in the antitrust laws may sue therefor . . . and shall recover threefold the damages by him sustained.” 15 U.S.C. § 15(a). It is widely accepted that consumers can be injured when manufacturers take concerted action to fix supracompetitive prices and distributors of the overpriced products pass on some or all of the overcharges to end users.
Before 1977, when this Court decided Illinois Brick, lower courts generally allowed consumers who purchased goods made by an antitrust violator to prove that they had been harmed by overcharges passed on to them by intermediaries in the distribution chain. Illinois Brick, however, held that an “indirect purchaser” is categorically forbidden from attempting to prove damages from an antitrust violation. 431 U.S. at 726. Instead, “the overcharged direct purchaser should be deemed for purposes of section 4 to have suffered the full injury from the overcharge.” Id.
The Court admitted that this conclusive presumption “denies recovery to those indirect purchasers who may have been actually injured by antitrust violations.” Id. at 746. The Court did not identify any statutory text denying recovery to “any person who shall be injured,” 15 U.S.C. § 15(a), by an antitrust violation. Instead, the Court reasoned that “the legislative purpose” of “encouraging vigorous private enforcement of the antitrust laws” was “better served” by a ban on “attempting to apportion the overcharge among all that may have absorbed a part of it.” Ill. Brick, 431 U.S. at 745-46.
Brief for AAI:
https://dlbjbjzgnk95t.cloudfront.net/1088000/1088314/americanantitrust.pdf
Brief for Open Markets:
https://dlbjbjzgnk95t.cloudfront.net/1088000/1088314/http-www-supremecourt-gov-docketpdf-17-17-204-65344-20181001145735965_17-204-20amicus-20bom-pdfa-pdf.pdf
Could you be seated next to someone's service horse on your next Alaska Airlines flight?
Alaska Airlines News release
The updated policy aligns with recent airline industry changes and provides clear guidance and a consistent and safe travel experience for guests and employees. This change is being made to protect the health and safety of passengers and crew while maintaining a safe and orderly operation.
Summary of the new policy, which goes into effect for all travel occurring on or after Oct. 1, 2018, regardless of when booked:
Customers traveling with one or more emotional support animals after Oct. 1 have the option to limit their travel to only one emotional support animal, to travel without their animal, or to receive a full refund if they no longer wish to travel.
Learn more about the support animal policy at alaskaair.com.
CONTACT: Media Relations, (206) 304-0008, newsroom@alaskaair.com
URL: https://newsroom.alaskaair.com/news-releases?item=123851
Alaska Airlines News release
The updated policy aligns with recent airline industry changes and provides clear guidance and a consistent and safe travel experience for guests and employees. This change is being made to protect the health and safety of passengers and crew while maintaining a safe and orderly operation.
Summary of the new policy, which goes into effect for all travel occurring on or after Oct. 1, 2018, regardless of when booked:
- May bring only one emotional support animal on the flight.
- Emotional support animals will be limited to either a dog or cat. No other species of animal will be permitted.
- For the safety of other passengers, all emotional support animals must be in a carrier or leashed at all times.
- Must provide appropriate documentation and 48-hours advance notice, per our existing policy.uests traveling with an emotional support animal:
- Guests traveling with a trained service animal:
- Service animals (now includes psychiatric service animals) will be limited to either a dog, cat or miniature horse.
- Service animals must be under the control of their owner at all times.
- Alaska Airlines accepts fully trained psychiatric service animals as trained service animals—no documentation is required for service animals.
Customers traveling with one or more emotional support animals after Oct. 1 have the option to limit their travel to only one emotional support animal, to travel without their animal, or to receive a full refund if they no longer wish to travel.
Learn more about the support animal policy at alaskaair.com.
CONTACT: Media Relations, (206) 304-0008, newsroom@alaskaair.com
URL: https://newsroom.alaskaair.com/news-releases?item=123851
- From Health Affairs Blog
September 13, 2018
URL: 10.1377/hblog20180907.685440
- erpt from article:
Limited access to reliable transportation causes millions of Americans to forgo important medical care every year. Transportation barriers are most prominent among the poor, elderly, and chronically ill—populations for whom routine access to ambulatory and preventive care is most important.
Payers that focus on vulnerable populations have taken steps to address transportation barriers by providing non-emergency medical transportation (NEMT) benefits to select beneficiaries. A majority of Medicare Advantage (MA) plans and state Medicaid programs currently provide NEMT benefits.
NEMT benefits are typically administered by specialized brokers that coordinate and dispatch private cars, taxis, or specialized vehicles to bring patients to medical appointments. Multiple reports have highlighted challenges with traditional approaches to NEMT delivery, including poor customer service, inadequate responsiveness, and fraud and abuse. In the face of these challenges, payers and health care delivery organizations have been experimenting with new strategies for delivering NEMT.
An approach that has attracted considerable attention is the use of transportation network companies (TNCs)—such as Uber or Lyft—to provide NEMT services. NEMT brokers such as such as American Logistics Corporation, National MedTrans, American Medical Response, and Access2Care are all now piloting TNC-based rides. New companies, such as Circulation and RoundTrip, have emerged to help hospitals and health plans offer TNC-based rides. And both Lyft and Uber are contracting directly with health plans and delivery organizations to provide NEMT services.
Despite the proliferation of these programs, there is scant data regarding their impact. Here we report the results from a large-scale, system-wide implementation of Lyft-based NEMT services at CareMore Health.
As is typical for MA plans, CareMore contracts with brokers to administer its NEMT benefits. Historically, these NEMT brokers arranged for rides using private car services. In 2016, CareMore launched a pilot program to evaluate the impact of Lyft-based C2C rides on patient experience and costs. The pilot ran for two months at select CareMore locations in Southern California, during which a total of 479 rides were provided. Results were encouraging: wait times decreased by 30 percent and per-ride costs decreased by 32 percent, and satisfaction rates were 80 percent.
California just passed its net neutrality law. The DOJ is already suing
https://money.cnn.com/2018/09/30/technology/california-net-neutrality-law/index.html
by Heather Kelly @heatherkellySeptember 30, 2018: 11:58 PM ET
The Department of Justice said it is filing a lawsuit against the state of California over its new net neutrality protections, hours after Gov. Jerry Brown signed the bill into law on Sunday.The California law would be the strictest net neutrality protections in the country, and could serve as a blueprint for other states. Under the law, internet service providers will not be allowed to block or slow specific types of content or applications, or charge apps or companies fees for faster access to customers.
The Department of Justice says the California law is illegal and that the state is "attempting to subvert the Federal Government's deregulatory approach" to the internet.
"Under the Constitution, states do not regulate interstate commerce—the federal government does," Attorney General Jeff Sessions said in a statement. "Once again the California legislature has enacted an extreme and illegal state law attempting to frustrate federal policy. The Justice Department should not have to spend valuable time and resources to file this suit today, but we have a duty to defend the prerogatives of the federal government and protect our Constitutional order."
As the largest economy in the United States and the fifth largest economy in the world, California has significant influence over how other states regulate businesses and even federal laws and regulations. That power is being tested under the Trump administration, which is currently battling the state in court over multiple issues, including emissions standards, immigration laws and the sale of federal lands..
"It's critically important for states to step in," state senator Scott Wiener, who co-authored the bill, told CNNMoney. "What California does definitely impacts the national conversation. I do believe that this bill ... will move us in a positive direction nationally on net neutrality."
For that to happen, the law will likely have to survive a legal battle. In addition to the lawsuit from the Department of Justice, ISPs may sue California over the bill. Major broadband companies, including AT&T and Comcast, have lobbied heavily against the California bill. (AT&T is the parent company of CNN.) They say the new rules will result in higher prices for consumers.
Jonathan Spalter, president of USTelecom -- a trade group representing broadband providers -- said while the group supports "strong and enforceable net neutrality protections for every American," the bill was "neither the way to get there nor will it help advance the promise and potential of California's innovation DNA."
"Rather than 50 states stepping in with their own conflicting open internet solutions, we need Congress to step up with a national framework for the whole internet ecosystem and resolve this issue once and for all," Spalter said.
Broadband providers lobbied against the California law, but were also for the repeal of the most recent federal regulations.
"The broadband providers say they don't want state laws, they want federal laws," said Gigi Sohn, a fellow at the Georgetown Law Institute for Technology and a former lawyer at the FCC, in an interview. "But they were the driving force behind the federal rules being repealed ... The federal solution they want is nothing, or extremely weak."
The FCC is fighting California over a pre-exemption clause included in its 2017 order repealing net neutrality protections. The FCC holds that it can preempt state-level laws because broadband service crosses state lines. Legal experts are split over whether or not the FCC can challenge a state net neutrality law, but Wiener believes the clause is unenforceable.
"We don't think the FCC has the power to preempt state action," said Wiener. "We are prepared to defend this law. We believe that California has the power to protect the internet and to protect our residents and businesses."
Barbara van Schewick, a professor at Stanford Law School, says the California bill is on solid legal ground and that California is within its legal rights.
"An agency that has no power to regulate has no power to preempt the states, according to case law. When the FCC repealed the 2015 Open Internet Order, it said it had no power to regulate broadband internet access providers. That means the FCC cannot prevent the states from adopting net neutrality protections because the FCC's repeal order removed its authority to adopt such protections," said van Schewick.
The bill was approved by lawmakers in early September, but it had been unclear if Brown would veto or approve the comprehensive measure, even though it had broad support from state Democrats.
California is the third state to pass its own net neutrality regulations, following Washington and Oregon. However, it is the first to match the thorough level of protections that had been provided by the Obama-era federal net neutrality regulations repealed by the Federal Communications Commission in June. At least some other states are expected to model future net neutrality laws on California's.
The original FCC rules included a two page summary and more than 300 additional pages with additional protections and clarifications on how they worked. While other states mostly replicated the two-page summary, California took longer crafting its law in order to match the details in the hundreds of supporting pages, said van Schewick.
"Most people don't understand how hard it is to do a solid net neutrality law," said van Schewick. "What's so special about California is that it includes not just two pages of rules, but all of the important protections from the text of the order and as a result closes the loopholes."
Loopholes addressed in California's new law include a prohibition on "zero rating," which allows carriers to exempt content from certain companies (like their own streaming services) from counting against a customer's data usage. The prohibition would not apply if a carrier wanted to exempt an entire category of content, like all streaming services. It also bans interconnection fees, which are charges a company pays when its data enters the internet provider's network.
The FCC says those rules will hurt consumers.
"The law prohibits many free-data plans, which allow consumers to stream video, music, and the like exempt from any data limits. They have proven enormously popular in the marketplace, especially among lower-income Americans. But notwithstanding the consumer benefits, this state law bans them," said Ajit Pai, chairman of the FCC, in a statement.
The authors of the bill did have support from consumer and labor groups, grassroots activists, and small and mid-sized tech companies including Twilio, Etsy and Sonos. Larger technology companies, like Apple, Google, and Facebook, have stayed quietly on the sidelines.
Sohn and van Schewick believe states with legislatures controlled by Democrats are the ones most likely to pass strong net neutrality protections. Other states have already started working on similar bills, including New York and New Mexico.
From DMN:
California Passes Its Strict Net Neutrality Bill Into Law
— Setting the Stage for a Fight Against Trump’s FCC
California’s tough net neutrality bill is now state law, thanks to a signature from governor Jerry Brown on Sunday (September 30th).
It’s easily the toughest net neutrality measure in the nation. Now, it’s the law in the country’s most populous and economically powerful state, thanks to a signature from governor Jerry Brown.
The ratification happened late Sunday (September 30th), with Brown approving SB 822, which was simply titled ‘Communications: broadband Internet access service.’ The bill, which places strict limitations on ISPs like Verizon, AT&T, and Comcast, was led by California Senator Scott Wiener (D-San Francisco).
The story continues here: https://www.digitalmusicnews.com/2018/09/30/california-net-neutrality-law/
https://money.cnn.com/2018/09/30/technology/california-net-neutrality-law/index.html
by Heather Kelly @heatherkellySeptember 30, 2018: 11:58 PM ET
The Department of Justice said it is filing a lawsuit against the state of California over its new net neutrality protections, hours after Gov. Jerry Brown signed the bill into law on Sunday.The California law would be the strictest net neutrality protections in the country, and could serve as a blueprint for other states. Under the law, internet service providers will not be allowed to block or slow specific types of content or applications, or charge apps or companies fees for faster access to customers.
The Department of Justice says the California law is illegal and that the state is "attempting to subvert the Federal Government's deregulatory approach" to the internet.
"Under the Constitution, states do not regulate interstate commerce—the federal government does," Attorney General Jeff Sessions said in a statement. "Once again the California legislature has enacted an extreme and illegal state law attempting to frustrate federal policy. The Justice Department should not have to spend valuable time and resources to file this suit today, but we have a duty to defend the prerogatives of the federal government and protect our Constitutional order."
As the largest economy in the United States and the fifth largest economy in the world, California has significant influence over how other states regulate businesses and even federal laws and regulations. That power is being tested under the Trump administration, which is currently battling the state in court over multiple issues, including emissions standards, immigration laws and the sale of federal lands..
"It's critically important for states to step in," state senator Scott Wiener, who co-authored the bill, told CNNMoney. "What California does definitely impacts the national conversation. I do believe that this bill ... will move us in a positive direction nationally on net neutrality."
For that to happen, the law will likely have to survive a legal battle. In addition to the lawsuit from the Department of Justice, ISPs may sue California over the bill. Major broadband companies, including AT&T and Comcast, have lobbied heavily against the California bill. (AT&T is the parent company of CNN.) They say the new rules will result in higher prices for consumers.
Jonathan Spalter, president of USTelecom -- a trade group representing broadband providers -- said while the group supports "strong and enforceable net neutrality protections for every American," the bill was "neither the way to get there nor will it help advance the promise and potential of California's innovation DNA."
"Rather than 50 states stepping in with their own conflicting open internet solutions, we need Congress to step up with a national framework for the whole internet ecosystem and resolve this issue once and for all," Spalter said.
Broadband providers lobbied against the California law, but were also for the repeal of the most recent federal regulations.
"The broadband providers say they don't want state laws, they want federal laws," said Gigi Sohn, a fellow at the Georgetown Law Institute for Technology and a former lawyer at the FCC, in an interview. "But they were the driving force behind the federal rules being repealed ... The federal solution they want is nothing, or extremely weak."
The FCC is fighting California over a pre-exemption clause included in its 2017 order repealing net neutrality protections. The FCC holds that it can preempt state-level laws because broadband service crosses state lines. Legal experts are split over whether or not the FCC can challenge a state net neutrality law, but Wiener believes the clause is unenforceable.
"We don't think the FCC has the power to preempt state action," said Wiener. "We are prepared to defend this law. We believe that California has the power to protect the internet and to protect our residents and businesses."
Barbara van Schewick, a professor at Stanford Law School, says the California bill is on solid legal ground and that California is within its legal rights.
"An agency that has no power to regulate has no power to preempt the states, according to case law. When the FCC repealed the 2015 Open Internet Order, it said it had no power to regulate broadband internet access providers. That means the FCC cannot prevent the states from adopting net neutrality protections because the FCC's repeal order removed its authority to adopt such protections," said van Schewick.
The bill was approved by lawmakers in early September, but it had been unclear if Brown would veto or approve the comprehensive measure, even though it had broad support from state Democrats.
California is the third state to pass its own net neutrality regulations, following Washington and Oregon. However, it is the first to match the thorough level of protections that had been provided by the Obama-era federal net neutrality regulations repealed by the Federal Communications Commission in June. At least some other states are expected to model future net neutrality laws on California's.
The original FCC rules included a two page summary and more than 300 additional pages with additional protections and clarifications on how they worked. While other states mostly replicated the two-page summary, California took longer crafting its law in order to match the details in the hundreds of supporting pages, said van Schewick.
"Most people don't understand how hard it is to do a solid net neutrality law," said van Schewick. "What's so special about California is that it includes not just two pages of rules, but all of the important protections from the text of the order and as a result closes the loopholes."
Loopholes addressed in California's new law include a prohibition on "zero rating," which allows carriers to exempt content from certain companies (like their own streaming services) from counting against a customer's data usage. The prohibition would not apply if a carrier wanted to exempt an entire category of content, like all streaming services. It also bans interconnection fees, which are charges a company pays when its data enters the internet provider's network.
The FCC says those rules will hurt consumers.
"The law prohibits many free-data plans, which allow consumers to stream video, music, and the like exempt from any data limits. They have proven enormously popular in the marketplace, especially among lower-income Americans. But notwithstanding the consumer benefits, this state law bans them," said Ajit Pai, chairman of the FCC, in a statement.
The authors of the bill did have support from consumer and labor groups, grassroots activists, and small and mid-sized tech companies including Twilio, Etsy and Sonos. Larger technology companies, like Apple, Google, and Facebook, have stayed quietly on the sidelines.
Sohn and van Schewick believe states with legislatures controlled by Democrats are the ones most likely to pass strong net neutrality protections. Other states have already started working on similar bills, including New York and New Mexico.
From DMN:
California Passes Its Strict Net Neutrality Bill Into Law
— Setting the Stage for a Fight Against Trump’s FCC
California’s tough net neutrality bill is now state law, thanks to a signature from governor Jerry Brown on Sunday (September 30th).
It’s easily the toughest net neutrality measure in the nation. Now, it’s the law in the country’s most populous and economically powerful state, thanks to a signature from governor Jerry Brown.
The ratification happened late Sunday (September 30th), with Brown approving SB 822, which was simply titled ‘Communications: broadband Internet access service.’ The bill, which places strict limitations on ISPs like Verizon, AT&T, and Comcast, was led by California Senator Scott Wiener (D-San Francisco).
The story continues here: https://www.digitalmusicnews.com/2018/09/30/california-net-neutrality-law/
Nobel Prize-winning economist Joseph Stiglitz says it’s time for the US to update its antitrust laws
Nobel Prize-winning economist Joseph Stiglitz says it’s time for the US to update its antitrust laws
By Richard Feloni & Andy Kiersz
There are plenty of companies that may feel too big to you, whether it’s trillion-dollar monoliths Apple and Amazon, or even the cable company you’re forced to deal with every day.
But the question of whether they’ve got so much power that they’re harming the economy is the subject of a debate in the spotlight once again.
For Nobel Prize-winning economist Joseph Stiglitz of Columbia University, there is indeed a monopoly and monopsony problem in the United States, and it’s high time to address it with new antitrust laws.
At a recent Federal Trade Commission hearing on the subject, Stiglitz said, “The point is, if our standard competitive analysis tools don’t show that there is a problem, it suggests something may be wrong with the tools themselves.”
The bedrock of America’s antitrust law was primarily built in the late 19th and early 20th century, during the democratic and reform-minded Progressive Era that followed the Gilded Age’s reign of robber barons and progression of inequality.
Even Adam Smith, the father of capitalism himself, warned in “The Wealth of Nations” against the consolidation of market power in the hands of a few. This is represented on the selling side by monopoly and on the buying side by monopsony, a term coined in the 20th century that refers to firms using their size to push down suppliers’ prices (Walmart is arguably an example).
Years of economic research has found that when market power is highly concentrated, barriers to entry prevent new competitors from building businesses, consumers have fewer options, and employees receive lower wages. This in turn slows overall economic growth.
Even before data on market power was routinely gathered, the federal government established the definition for an illegal monopoly and an illegal merger with the Sherman Act of 1890 and the Clayton Act of 1914. It also created the FTC in 1914 to enforce these rules.
Continue reading…https://www.businessinsider.com/economist-joseph-stiglitz-us-must-update-antitrust-laws-2018-9
Nobel Prize-winning economist Joseph Stiglitz says it’s time for the US to update its antitrust laws
By Richard Feloni & Andy Kiersz
There are plenty of companies that may feel too big to you, whether it’s trillion-dollar monoliths Apple and Amazon, or even the cable company you’re forced to deal with every day.
But the question of whether they’ve got so much power that they’re harming the economy is the subject of a debate in the spotlight once again.
For Nobel Prize-winning economist Joseph Stiglitz of Columbia University, there is indeed a monopoly and monopsony problem in the United States, and it’s high time to address it with new antitrust laws.
At a recent Federal Trade Commission hearing on the subject, Stiglitz said, “The point is, if our standard competitive analysis tools don’t show that there is a problem, it suggests something may be wrong with the tools themselves.”
The bedrock of America’s antitrust law was primarily built in the late 19th and early 20th century, during the democratic and reform-minded Progressive Era that followed the Gilded Age’s reign of robber barons and progression of inequality.
Even Adam Smith, the father of capitalism himself, warned in “The Wealth of Nations” against the consolidation of market power in the hands of a few. This is represented on the selling side by monopoly and on the buying side by monopsony, a term coined in the 20th century that refers to firms using their size to push down suppliers’ prices (Walmart is arguably an example).
Years of economic research has found that when market power is highly concentrated, barriers to entry prevent new competitors from building businesses, consumers have fewer options, and employees receive lower wages. This in turn slows overall economic growth.
Even before data on market power was routinely gathered, the federal government established the definition for an illegal monopoly and an illegal merger with the Sherman Act of 1890 and the Clayton Act of 1914. It also created the FTC in 1914 to enforce these rules.
Continue reading…https://www.businessinsider.com/economist-joseph-stiglitz-us-must-update-antitrust-laws-2018-9
Website USAReally is based in Moscow and has received funding from the Federal News Agency, a Russian media conglomerate with ties to the Internet Research Agency, the “troll farm” whose employees were indicted by the special counsel, Robert S. Mueller III, for interfering in the 2016 presidential election.
Caught flat-footed by the influence campaigns of 2016, intelligence agencies and tech companies in the United States have spent months looking for hidden Russian footprints ahead of the midterm elections.
USAReally’s website, which began publishing in May, does not advertise its Russian roots. But in many ways, it is operating in plain sight.
Its founder, Alexander Malkevich, is a Russian journalist with little previous experience in American media. Its domain was registered through a Russian company, and its formation was announced in a news release on the Federal News Agency’s website. The project, originally known as “USAReally, Wake Up Americans,” was intended to promote “information and problems that are hushed up by major American publications controlled by the political elite of the United States,” according to the release.
Today, USAReally’s website depicts the United States as a democracy in decline, riddled with crime and divided by partisan rancor.
Full article: https://www.nytimes.com/2018/09/25/technology/usareally-russian-news-site-propaganda.html?rref=collection%2Fsectioncollection%2Fbusiness&action=click&contentCollection=business®ion=rank&module=package&version=highlights&contentPlacement=2&pgtype=sectionfront
Caught flat-footed by the influence campaigns of 2016, intelligence agencies and tech companies in the United States have spent months looking for hidden Russian footprints ahead of the midterm elections.
USAReally’s website, which began publishing in May, does not advertise its Russian roots. But in many ways, it is operating in plain sight.
Its founder, Alexander Malkevich, is a Russian journalist with little previous experience in American media. Its domain was registered through a Russian company, and its formation was announced in a news release on the Federal News Agency’s website. The project, originally known as “USAReally, Wake Up Americans,” was intended to promote “information and problems that are hushed up by major American publications controlled by the political elite of the United States,” according to the release.
Today, USAReally’s website depicts the United States as a democracy in decline, riddled with crime and divided by partisan rancor.
Full article: https://www.nytimes.com/2018/09/25/technology/usareally-russian-news-site-propaganda.html?rref=collection%2Fsectioncollection%2Fbusiness&action=click&contentCollection=business®ion=rank&module=package&version=highlights&contentPlacement=2&pgtype=sectionfront
Russia-sponsored US TV
Clandestine Russian government efforts to spread disruptive information in the US have gotten great attention, but other Russian government sponsored efforts are in plain sight. One example is website USAReally, as discussed in the NY Times article above. The NY Times says that USAReally’s website depicts the United States as a democracy in decline, riddled with crime and divided by partisan rancor.
Another Russian government sponsored media outlet in plain site is RT. Wikipedia says that RT is a Russian international television network funded by the Russian government. It operates cable and satellite television channels directed to audiences outside of Russia, as well as providing Internet content in English, Spanish, French, German, Arabic and Russian.
Here is an interesting example of RT content, a segment explaining how US voting machines can be hacked. See https://www.youtube.com/watch?v=fmM2xkeyPI0
In some ways the RT segment resembles the NY Times discussion of vulnerable US voting machines that appears below, but the RT piece is different. It is more alarmist in tone, and arguably exaggerates the likelihood of people physically engaging with voting machines to insert compromising devices.
The RT voting machine story reflects a propaganda strategy of some interest and complexity. The story suggests that the US government is fumbling in its efforts to protect voting rights, which has the ring of a Russian propaganda point. But the story is not stupid, working from concerns that have a basis in a reality of voting machine problems, as discussed by the New York Times article that follows.
Posting by Don Allen Resnikoff, who is entirely responsible for the content
Clandestine Russian government efforts to spread disruptive information in the US have gotten great attention, but other Russian government sponsored efforts are in plain sight. One example is website USAReally, as discussed in the NY Times article above. The NY Times says that USAReally’s website depicts the United States as a democracy in decline, riddled with crime and divided by partisan rancor.
Another Russian government sponsored media outlet in plain site is RT. Wikipedia says that RT is a Russian international television network funded by the Russian government. It operates cable and satellite television channels directed to audiences outside of Russia, as well as providing Internet content in English, Spanish, French, German, Arabic and Russian.
Here is an interesting example of RT content, a segment explaining how US voting machines can be hacked. See https://www.youtube.com/watch?v=fmM2xkeyPI0
In some ways the RT segment resembles the NY Times discussion of vulnerable US voting machines that appears below, but the RT piece is different. It is more alarmist in tone, and arguably exaggerates the likelihood of people physically engaging with voting machines to insert compromising devices.
The RT voting machine story reflects a propaganda strategy of some interest and complexity. The story suggests that the US government is fumbling in its efforts to protect voting rights, which has the ring of a Russian propaganda point. But the story is not stupid, working from concerns that have a basis in a reality of voting machine problems, as discussed by the New York Times article that follows.
Posting by Don Allen Resnikoff, who is entirely responsible for the content
NYT: Vulnerable US voting machines
There are roughly 350,000 voting machines in use in the country today, all of which fall into one of two categories: optical-scan machines or direct-recording electronic machines. Each of them suffers from significant security problems.
With optical-scan machines, voters fill out paper ballots and feed them into a scanner, which stores a digital image of the ballot and records the votes on a removable memory card. The paper ballot, in theory, provides an audit trail that can be used to verify digital tallies. But not all states perform audits, and many that do simply run the paper ballots through a scanner a second time. Fewer than half the states do manual audits, and they typically examine ballots from randomly chosen precincts in a county, instead of a percentage of ballots from all precincts. If the randomly chosen precincts aren’t ones where hacking occurred or where machines failed to accurately record votes, an audit won’t reveal anything — nor will it always catch problems with early-voting, overseas or absentee ballots, all of which are often scanned in county election offices, not in precincts.
Direct-recording electronic machines, or D.R.E.s, present even more auditing problems. Voters use touch screens or other input devices to make selections on digital-only ballots, and votes are stored electronically. Many D.R.E.s have printers that produce what’s known as a voter-verifiable paper audit trail — a scroll of paper, behind a window, that voters can review before casting their ballots. But the paper trail doesn’t provide the same integrity as full-size ballots and optical-scan machines, because a hacker could conceivably rig the machine to print a voter’s selections correctly on the paper while recording something else on the memory card. About 80 percent of voters today cast ballots either on D.R.E.s that produce a paper trail or on scanned paper ballots. But five states still use paperless D.R.E.s exclusively, and an additional 10 states use paperless D.R.E.s in some jurisdictions.
The voting-machine industry — an estimated $300-million-a-year business — has long been as troubling as the machines it makes, known for its secrecy, close political ties (overwhelmingly to the Republican Party) and a revolving door between vendors and election offices. More than a dozen companies currently sell voting equipment, but a majority of machines used today come from just four — Diebold Election Systems, Election Systems & Software (ES&S), Hart InterCivic and Sequoia Voting Systems. Diebold (later renamed Premier) and Sequoia are now out of business. Diebold’s machines and customer contracts were sold to ES&S and a Canadian company called Dominion, and Dominion also acquired Sequoia. This means that more than 80 percent of the machines in use today are under the purview of three companies — Dominion, ES&S and Hart InterCivic.
Many of the products they make have documented vulnerabilities and can be subverted in multiple ways. Hackers can access voting machines via the cellular modems used to transmit unofficial results at the end of an election, or subvert back-end election-management systems — used to program the voting machines and tally votes — and spread malicious code to voting machines through them. Attackers could design their code to bypass pre-election testing and kick in only at the end of an election or under specific conditions — say, when a certain candidate appears to be losing — and erase itself afterward to avoid detection. And they could make it produce election results with wide margins to avoid triggering automatic manual recounts in states that require them when results are close.
From: https://www.nytimes.com/2018/09/26/magazine/election-security-crisis-midterms.html?action=click&module=Top%20Stories&pgtype=Homepage
There are roughly 350,000 voting machines in use in the country today, all of which fall into one of two categories: optical-scan machines or direct-recording electronic machines. Each of them suffers from significant security problems.
With optical-scan machines, voters fill out paper ballots and feed them into a scanner, which stores a digital image of the ballot and records the votes on a removable memory card. The paper ballot, in theory, provides an audit trail that can be used to verify digital tallies. But not all states perform audits, and many that do simply run the paper ballots through a scanner a second time. Fewer than half the states do manual audits, and they typically examine ballots from randomly chosen precincts in a county, instead of a percentage of ballots from all precincts. If the randomly chosen precincts aren’t ones where hacking occurred or where machines failed to accurately record votes, an audit won’t reveal anything — nor will it always catch problems with early-voting, overseas or absentee ballots, all of which are often scanned in county election offices, not in precincts.
Direct-recording electronic machines, or D.R.E.s, present even more auditing problems. Voters use touch screens or other input devices to make selections on digital-only ballots, and votes are stored electronically. Many D.R.E.s have printers that produce what’s known as a voter-verifiable paper audit trail — a scroll of paper, behind a window, that voters can review before casting their ballots. But the paper trail doesn’t provide the same integrity as full-size ballots and optical-scan machines, because a hacker could conceivably rig the machine to print a voter’s selections correctly on the paper while recording something else on the memory card. About 80 percent of voters today cast ballots either on D.R.E.s that produce a paper trail or on scanned paper ballots. But five states still use paperless D.R.E.s exclusively, and an additional 10 states use paperless D.R.E.s in some jurisdictions.
The voting-machine industry — an estimated $300-million-a-year business — has long been as troubling as the machines it makes, known for its secrecy, close political ties (overwhelmingly to the Republican Party) and a revolving door between vendors and election offices. More than a dozen companies currently sell voting equipment, but a majority of machines used today come from just four — Diebold Election Systems, Election Systems & Software (ES&S), Hart InterCivic and Sequoia Voting Systems. Diebold (later renamed Premier) and Sequoia are now out of business. Diebold’s machines and customer contracts were sold to ES&S and a Canadian company called Dominion, and Dominion also acquired Sequoia. This means that more than 80 percent of the machines in use today are under the purview of three companies — Dominion, ES&S and Hart InterCivic.
Many of the products they make have documented vulnerabilities and can be subverted in multiple ways. Hackers can access voting machines via the cellular modems used to transmit unofficial results at the end of an election, or subvert back-end election-management systems — used to program the voting machines and tally votes — and spread malicious code to voting machines through them. Attackers could design their code to bypass pre-election testing and kick in only at the end of an election or under specific conditions — say, when a certain candidate appears to be losing — and erase itself afterward to avoid detection. And they could make it produce election results with wide margins to avoid triggering automatic manual recounts in states that require them when results are close.
From: https://www.nytimes.com/2018/09/26/magazine/election-security-crisis-midterms.html?action=click&module=Top%20Stories&pgtype=Homepage
Low price association health plans spark tussle between state regulators, business groups
By Harris Meyer | September 27, 2018
Some business associations and insurers are plunging ahead in launching a cheaper type of health plan newly permitted by the Trump administration, while others are holding back due to big regulatory and legal uncertainties about the future of these products.
Since the U.S. Department of Labor issued a final rule in June allowing small employers and self-employers to band together across state lines and form to association health plans (AHPs), there have been intensive discussions between business groups, state insurance commissioners and Labor Department officials about how states can regulate these plans.
Pennsylvania Insurance Commissioner Jessica Altman has taken the position that AHPs must comply with state laws and Affordable Care Act provisions governing individual and small group plans. The Labor Department wrote to Altman last month to say the rule "does not modify the states' existing authority to regulate AHPs under state insurance laws."
She and other state insurance regulators fret that the growth of AHPs will destabilize their ACA-regulated individual and small-group markets, leave consumers uncovered for healthcare services they need and lead to a spike in insurance fraud and insolvencies associated with lightly regulated AHPs in the past.
But a coalition of 10 business associations, including the National Federation of Independent Business, argue that federal law does not allow states to bar groups of employers from forming association health plans together.
Association plans are deemed large-group plans exempt from state regulation under the federal Employee Retirement Income Security Act.
Earlier this month, the Nebraska Farm Bureau and Medica announced they were teaming up to offer a menu of association health plans in 2019 for individual farmers, ranchers and small agriculture-related businesses. The plans will have essentially the same benefits as ACA market plans with premium savings of up to 25%, they say. Rates will vary based on age, geographic location, and type of business.
"We hear stories every day about how farmers and ranchers are struggling to provide affordable coverage for their families," said Steve Nelson, president of the Nebraska Farm Bureau. "That's what drove us to put this together."
The Nebraska Department of Insurance said other business groups also have applied to start AHPs.
In August, three chambers of commerce in Nevada announced they would offer an association health plan through UnitedHealth Group that will aggregate small firms into one large-group plan, though they initially aren't making it available to sole proprietor businesses.
But other associations say they're taking a wait-and-see stance, citing resistance to the AHP rule from many state insurance commissioners, combined with a federal lawsuit filed in July by 12 Democratic attorneys general to block the rule.
"We wanted to jump on it fast, and then the states sued," said Chris Paulitz, senior vice president of membership and marketing for the Financial Services Institute, an association representing nearly 30,000 self-employed individual financial advisers. "There's too much up in the air from a legal standpoint."
Since the rule was issued, a number of state insurance departments have issued emergency rules and bulletins limiting AHPs or highlighting existing state laws that prohibit key features of plans allowed under the new federal rule.
Several states, including Connecticut, Massachusetts, New York, Oregon and Pennsylvania, have said they will look at the small employers and individuals signing up for AHPs and apply state and ACA rules for small-group and individual coverage to them, essentially nullifying the AHP structure.
In a Sept. 10 bulletin, the Oregon Division of Financial Regulation said it would follow more demanding federal guidelines issued in 2011 for determining bona fide association plans that qualify for an ERISA exemption from state insurance requirements.
Regulators in Connecticut, Maryland, Massachusetts and New York are taking an even harder line. They say their state laws permit no exception for bona fide association plans, meaning that none qualify for an ERISA exemption.
In contrast, the Nebraska Department of Insurance fully recognizes the Trump administration's new AHP rule, including allowing sole proprietors to join association plans. Its officials say they aren't worried about AHPs drawing younger and healthier people out of the Affordable Care Act market and driving up premiums because the new plans likely will attract mostly consumers who already have dropped out of the ACA market due to high premiums.
Laura Arp, the department's life and health administrator, noted that consumer protection provisions in the Affordable Care Act and state law still apply to AHPs, including rules prohibiting annual and lifetime benefit caps and discrimination against people with pre-existing medical conditions.
From: http://www.modernhealthcare.com/article/20180927/NEWS/180929912?utm_source=modernhealthcare&utm_medium=email&utm_content=20180927-NEWS-180929912&utm_campaign=am
From: Department of Justice
U.S. Attorney’s Office
Eastern District of New York
FOR IMMEDIATE RELEASE
Tuesday, September 25, 2018
Queens Attorney and Second Individual Indicted For Scheme to Bribe a Witness in Double Homicide Trial on Long Island
A superseding indictment was unsealed today in federal court in Brooklyn charging Queens-based criminal defense attorney John Scarpa, Jr., and Charles Gallman, also known as “T.A.,” with violating the Travel Act by bribing a witness who testified in a double-homicide trial in Suffolk County Supreme Court. Scarpa was arrested earlier today and will be arraigned this afternoon in federal court in Brooklyn before United States Magistrate Judge Steven L. Tiscione. Gallman will be arraigned at a later date.
Richard P. Donoghue, United States Attorney for the Eastern District of New York, William F. Sweeney, Jr., Assistant Director-in-Charge, Federal Bureau of Investigation, New York Field Office (FBI), and Richard A. Brown, District Attorney of Queens County, announced the charges.
“As alleged, the defendants bribed a witness to commit perjury in an effort to help Scarpa’s client, who had committed two execution-style murders, escape justice,” stated United States Attorney Donoghue. “This Office and our law enforcement partners will never tolerate the rigging of a trial and will vigorously prosecute attorneys or anyone else who seeks to undermine the integrity of the judicial process by witness tampering.” Mr. Donoghue also expressed his grateful appreciation to the Office of the Suffolk County District Attorney for its assistance during the investigation.
“Defense attorneys do all they can to help their clients fight criminal charges, which is everyone’s right by law,” stated FBI Assistant Director-in-Charge Sweeney. “However, Mr. Scarpa allegedly broke the law trying to get his client off the hook for murder charges by bribing a witness. Everyone accused deserves the best defense, but attorneys cannot use illegal methods to win in court.”
“We will continue to work with our federal partners to root out corruption in the criminal justice system wherever it is found,” stated Queens District Attorney Brown. “I will say again that integrity is the foundation of our criminal justice system. These allegations go to the core of that foundation and are prejudicial to the administration of justice. The charges today send a strong message to those who would undermine that integrity that they will be held accountable. I commend the United States Attorney’s Office for the Eastern District and the Federal Bureau of Investigation, the Suffolk County District Attorney’s Office and my Rackets, Special Victims and District Attorney’s Detective Bureaus for their vigorous pursuit of justice in this matter.”
As alleged in the indictment and detailed in court filings, the charges stem from an investigation conducted by the Queens County District Attorney’s Office. Court-authorized intercepted communication between Scarpa and Gallman showed how the two men plotted to bribe a witness, Luis Cherry, in a Suffolk County criminal trial against Reginald Ross. Scarpa represented Ross, who was ultimately convicted of the unrelated murders of two men: Raymond Hirt, a road crew flagman killed at his jobsite in May 2010 because Ross was upset about traffic, and John Williams, whom he shot to death in October 2010 as Williams was going to work, mistaking Williams for his brother. Cherry participated in the Williams murder, and had pleaded guilty to that murder as well as another.
On January 13, 2015, Gallman visited Cherry at Downstate Correctional Facility and spoke to him about testifying at Ross’s trial. Thereafter, Gallman reported to Scarpa: “Anything we need, he’s willing. Whichever way you wanna play it, he’s willing.” Later in the conversation Scarpa asked, “So this guy is willing to do whatever?” And Gallman confirmed, “Whatever you need, John. Whatever you need.” Gallman added that there was a “bunch of stuff I wrote down that [Cherry] wants.”
Scarpa called Cherry as a defense witness at trial and led Cherry through perjurious testimony relevant to the Williams murder. For example, Cherry claimed that he had committed the murder alone after he crawled from the driver’s seat and exited through the passenger side of his vehicle with firearms in both hands despite physical evidence that clearly indicated two gunmen were involved. When asked on cross-examination about meeting Gallman, Cherry falsely denied that they had talked about the murder case.
The charges in the superseding indictment are allegations, and the defendants are presumed innocent unless and until proven guilty. If convicted, Scarpa and Gallman face up to five years’ imprisonment on each count.
The government’s case is being handled by the Office’s Organized Crime and Gangs Section. Assistant United States Attorneys Lindsay K. Gerdes and Andrey Spektor are in charge of the prosecution.
from https://www.justice.gov/usao-edny/pr/queens-attorney-and-second-individual-indicted-scheme-bribe-witness-double-homicide
U.S. Attorney’s Office
Eastern District of New York
FOR IMMEDIATE RELEASE
Tuesday, September 25, 2018
Queens Attorney and Second Individual Indicted For Scheme to Bribe a Witness in Double Homicide Trial on Long Island
A superseding indictment was unsealed today in federal court in Brooklyn charging Queens-based criminal defense attorney John Scarpa, Jr., and Charles Gallman, also known as “T.A.,” with violating the Travel Act by bribing a witness who testified in a double-homicide trial in Suffolk County Supreme Court. Scarpa was arrested earlier today and will be arraigned this afternoon in federal court in Brooklyn before United States Magistrate Judge Steven L. Tiscione. Gallman will be arraigned at a later date.
Richard P. Donoghue, United States Attorney for the Eastern District of New York, William F. Sweeney, Jr., Assistant Director-in-Charge, Federal Bureau of Investigation, New York Field Office (FBI), and Richard A. Brown, District Attorney of Queens County, announced the charges.
“As alleged, the defendants bribed a witness to commit perjury in an effort to help Scarpa’s client, who had committed two execution-style murders, escape justice,” stated United States Attorney Donoghue. “This Office and our law enforcement partners will never tolerate the rigging of a trial and will vigorously prosecute attorneys or anyone else who seeks to undermine the integrity of the judicial process by witness tampering.” Mr. Donoghue also expressed his grateful appreciation to the Office of the Suffolk County District Attorney for its assistance during the investigation.
“Defense attorneys do all they can to help their clients fight criminal charges, which is everyone’s right by law,” stated FBI Assistant Director-in-Charge Sweeney. “However, Mr. Scarpa allegedly broke the law trying to get his client off the hook for murder charges by bribing a witness. Everyone accused deserves the best defense, but attorneys cannot use illegal methods to win in court.”
“We will continue to work with our federal partners to root out corruption in the criminal justice system wherever it is found,” stated Queens District Attorney Brown. “I will say again that integrity is the foundation of our criminal justice system. These allegations go to the core of that foundation and are prejudicial to the administration of justice. The charges today send a strong message to those who would undermine that integrity that they will be held accountable. I commend the United States Attorney’s Office for the Eastern District and the Federal Bureau of Investigation, the Suffolk County District Attorney’s Office and my Rackets, Special Victims and District Attorney’s Detective Bureaus for their vigorous pursuit of justice in this matter.”
As alleged in the indictment and detailed in court filings, the charges stem from an investigation conducted by the Queens County District Attorney’s Office. Court-authorized intercepted communication between Scarpa and Gallman showed how the two men plotted to bribe a witness, Luis Cherry, in a Suffolk County criminal trial against Reginald Ross. Scarpa represented Ross, who was ultimately convicted of the unrelated murders of two men: Raymond Hirt, a road crew flagman killed at his jobsite in May 2010 because Ross was upset about traffic, and John Williams, whom he shot to death in October 2010 as Williams was going to work, mistaking Williams for his brother. Cherry participated in the Williams murder, and had pleaded guilty to that murder as well as another.
On January 13, 2015, Gallman visited Cherry at Downstate Correctional Facility and spoke to him about testifying at Ross’s trial. Thereafter, Gallman reported to Scarpa: “Anything we need, he’s willing. Whichever way you wanna play it, he’s willing.” Later in the conversation Scarpa asked, “So this guy is willing to do whatever?” And Gallman confirmed, “Whatever you need, John. Whatever you need.” Gallman added that there was a “bunch of stuff I wrote down that [Cherry] wants.”
Scarpa called Cherry as a defense witness at trial and led Cherry through perjurious testimony relevant to the Williams murder. For example, Cherry claimed that he had committed the murder alone after he crawled from the driver’s seat and exited through the passenger side of his vehicle with firearms in both hands despite physical evidence that clearly indicated two gunmen were involved. When asked on cross-examination about meeting Gallman, Cherry falsely denied that they had talked about the murder case.
The charges in the superseding indictment are allegations, and the defendants are presumed innocent unless and until proven guilty. If convicted, Scarpa and Gallman face up to five years’ imprisonment on each count.
The government’s case is being handled by the Office’s Organized Crime and Gangs Section. Assistant United States Attorneys Lindsay K. Gerdes and Andrey Spektor are in charge of the prosecution.
from https://www.justice.gov/usao-edny/pr/queens-attorney-and-second-individual-indicted-scheme-bribe-witness-double-homicide
Proposal to Limit the Anti-Competitive Power of Institutional Investors
Last revised: 1 Nov 2017
Eric A. Posner University of Chicago - Law School
Fiona M. Scott Morton Yale School of Management; National Bureau of Economic Research (NBER)
E. Glen Weyl Microsoft Research New York City; Princeton University - Julis Rabinowitz Center for Public Policy and Finance
Abstract
Recent scholarship has shown that institutional investors may cause softer competition among product market rivals because of their significant ownership stakes in competing firms in concentrated industries. However, while calls for litigation against them under Section 7 of the Clayton Act are understandable, private or indiscriminate government litigation could also cause significant disruption to equity markets because of its inherent unpredictability and would fail to eliminate most of the harms from common ownership.
To minimize this disruption while achieving competitive conditions in oligopolistic markets, the Department of Justice and the Federal Trade Commission should take the lead by adopting a public enforcement policy of the Clayton Act against institutional investors. Investors in firms in well-defined oligopolistic industries would benefit from a safe harbor from government enforcement of the Clayton Act if they either limit their holdings of an industry to a small stake (no more than 1% of the total size of the industry) or hold the shares of only a single “effective firm” per industry. Free-standing index funds that commit to pure passivity would not be limited in size.
Using simulations based on empirical evidence, we show that under broad assumptions this policy would generate many times larger competitive gains than harms to diversification and other values. The policy would also improve corporate governance by institutional investors.
Citation:
Posner, Eric A. and Scott Morton, Fiona M. and Weyl, E. Glen, A Proposal to Limit the Anti-Competitive Power of Institutional Investors (March 22, 2017). Antitrust Law Journal, Forthcoming. Available at SSRN: https://ssrn.com/abstract=2872754 or http://dx.doi.org/10.2139/ssrn.2872754
Last revised: 1 Nov 2017
Eric A. Posner University of Chicago - Law School
Fiona M. Scott Morton Yale School of Management; National Bureau of Economic Research (NBER)
E. Glen Weyl Microsoft Research New York City; Princeton University - Julis Rabinowitz Center for Public Policy and Finance
Abstract
Recent scholarship has shown that institutional investors may cause softer competition among product market rivals because of their significant ownership stakes in competing firms in concentrated industries. However, while calls for litigation against them under Section 7 of the Clayton Act are understandable, private or indiscriminate government litigation could also cause significant disruption to equity markets because of its inherent unpredictability and would fail to eliminate most of the harms from common ownership.
To minimize this disruption while achieving competitive conditions in oligopolistic markets, the Department of Justice and the Federal Trade Commission should take the lead by adopting a public enforcement policy of the Clayton Act against institutional investors. Investors in firms in well-defined oligopolistic industries would benefit from a safe harbor from government enforcement of the Clayton Act if they either limit their holdings of an industry to a small stake (no more than 1% of the total size of the industry) or hold the shares of only a single “effective firm” per industry. Free-standing index funds that commit to pure passivity would not be limited in size.
Using simulations based on empirical evidence, we show that under broad assumptions this policy would generate many times larger competitive gains than harms to diversification and other values. The policy would also improve corporate governance by institutional investors.
Citation:
Posner, Eric A. and Scott Morton, Fiona M. and Weyl, E. Glen, A Proposal to Limit the Anti-Competitive Power of Institutional Investors (March 22, 2017). Antitrust Law Journal, Forthcoming. Available at SSRN: https://ssrn.com/abstract=2872754 or http://dx.doi.org/10.2139/ssrn.2872754
Do Institutional Investors Suppress Competition?
By Vito J. Racanelli
Can institutional investing have anticompetitive effects? I’m still not convinced.
The idea, known as the common-ownership theory, received another airing at a panel debate at the Harvard Club Monday. As Barron’s recently wrote, the model is based on studies of airlines and banks that suggest when groups of big investors such as index or mutual funds hold material equity stakes in several companies in the same industry, they can foster behavior such as consumer price increases that improves the profits of the companies they own.
Panelist Douglas H. Ginsburg, a judge on the District of Columbia US Court of Appeals and a well-known critic of the theory, said that those who argue common ownership runs afoul of antitrust regulation are “opportunistically naïve” to believe laws such as the Sherman Ant-Trust Act and the Clayton Act are aimed at ownership by large asset managers. Those who argue the contrary, he said, aren’t interpreting the law consistently with what it intends.
Continue reading…https://www.barrons.com/articles/do-big-investors-push-the-antitrust-envelope-1537220418
By Vito J. Racanelli
Can institutional investing have anticompetitive effects? I’m still not convinced.
The idea, known as the common-ownership theory, received another airing at a panel debate at the Harvard Club Monday. As Barron’s recently wrote, the model is based on studies of airlines and banks that suggest when groups of big investors such as index or mutual funds hold material equity stakes in several companies in the same industry, they can foster behavior such as consumer price increases that improves the profits of the companies they own.
Panelist Douglas H. Ginsburg, a judge on the District of Columbia US Court of Appeals and a well-known critic of the theory, said that those who argue common ownership runs afoul of antitrust regulation are “opportunistically naïve” to believe laws such as the Sherman Ant-Trust Act and the Clayton Act are aimed at ownership by large asset managers. Those who argue the contrary, he said, aren’t interpreting the law consistently with what it intends.
Continue reading…https://www.barrons.com/articles/do-big-investors-push-the-antitrust-envelope-1537220418
From NYT and ProPublica:
Sloan Kettering’s Cozy Deal With Start-Up
At Memorial Sloan Kettering Cancer Center in Manhattan, doctors and staff objected to a for-profit venture that could be lucrative for a few leading researchers and board members
The company, Paige.AI, is one in a burgeoning field of start-ups that are applying artificial intelligence to health care, yet it has an advantage over many competitors: The company has an exclusive deal to use the cancer center’s vast archive of 25 million patient tissue slides, along with decades of work by its world-renowned pathologists.
Memorial Sloan Kettering holds an equity stake in Paige.AI, as does a member of the cancer center’s executive board, the chairman of its pathology department and the head of one of its research laboratories. Three other board members are investors.
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The arrangement has sparked considerable turmoil among doctors and scientists at Memorial Sloan Kettering, which has intensified in the wake of an investigation by ProPublica and The New York Times into the failures of its chief medical officer, Dr. José Baselga, to disclose some of his financial ties to the health and drug industries in dozens of research articles. He resigned last week, and Memorial Sloan Kettering’s chief executive, Dr. Craig B. Thompson, announced a new task force on Monday to review the center’s conflict-of-interest policies.
Article at https://www.nytimes.com/2018/09/20/health/memorial-sloan-kettering-cancer-paige-ai.html?action=click&module=Top%20Stories&pgtype=Homepage
Sloan Kettering’s Cozy Deal With Start-Up
At Memorial Sloan Kettering Cancer Center in Manhattan, doctors and staff objected to a for-profit venture that could be lucrative for a few leading researchers and board members
- An artificial intelligence start-up founded by three insiders at Memorial Sloan Kettering Cancer Center debuted with great fanfare in February, with $25 million in venture capital and the promise that it might one day transform how cancer is diagnosed.
The company, Paige.AI, is one in a burgeoning field of start-ups that are applying artificial intelligence to health care, yet it has an advantage over many competitors: The company has an exclusive deal to use the cancer center’s vast archive of 25 million patient tissue slides, along with decades of work by its world-renowned pathologists.
Memorial Sloan Kettering holds an equity stake in Paige.AI, as does a member of the cancer center’s executive board, the chairman of its pathology department and the head of one of its research laboratories. Three other board members are investors.
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The arrangement has sparked considerable turmoil among doctors and scientists at Memorial Sloan Kettering, which has intensified in the wake of an investigation by ProPublica and The New York Times into the failures of its chief medical officer, Dr. José Baselga, to disclose some of his financial ties to the health and drug industries in dozens of research articles. He resigned last week, and Memorial Sloan Kettering’s chief executive, Dr. Craig B. Thompson, announced a new task force on Monday to review the center’s conflict-of-interest policies.
Article at https://www.nytimes.com/2018/09/20/health/memorial-sloan-kettering-cancer-paige-ai.html?action=click&module=Top%20Stories&pgtype=Homepage
The EU is checking how Amazon gathers information on sales made by competitors on Amazon Marketplace
The concern is that the information gives Amazon an edge when it sells to customers, EU Competition Commissioner Margrethe Vestager told reporters at a press conference in Brussels.
While she stressed that the EU investigation of Amazon is at a very early stage, she said her team is “trying to understand this issue in full."
“The question here is about the data” Amazon collects from smaller merchants on its site, Vestager said. “Do you then also use this data to do your own calculations, as to what is the new big thing, what is it that people want, what kind of offers do they like to receive, what makes them buy things? That has made us start a preliminary” investigation, she said.
From https://www.bloomberg.com/news/articles/2018-09-19/amazon-probed-by-eu-on-data-collection-from-rival-retailers
From DMN:
Ticketmaster Is Working Hand-In-Hand With Scalpers, Undercover Investigation Reveals
A new undercover investigation from CBC News and the Toronto Star has revealed what customers have long-suspected: Ticketmaster is working hand-in-hand with scalpers.
Back in July, the CBC sent reporters undercover to Ticket Summit 2018 in Las Vegas, which is a convention designed for live entertainment industry executives. The reporters posed as scalpers with hidden cameras attached to their bodies while recording themselves being pitched on Ticketmaster’s professional reseller program.
That members-only program is called TradeDesk, billed as ‘The Most Power Ticket Sales Tool. Ever.”
The story continues here: .https://www.digitalmusicnews.com/2018/09/19/ticketmaster-supports-scalpers/
Ticketmaster Is Working Hand-In-Hand With Scalpers, Undercover Investigation Reveals
A new undercover investigation from CBC News and the Toronto Star has revealed what customers have long-suspected: Ticketmaster is working hand-in-hand with scalpers.
Back in July, the CBC sent reporters undercover to Ticket Summit 2018 in Las Vegas, which is a convention designed for live entertainment industry executives. The reporters posed as scalpers with hidden cameras attached to their bodies while recording themselves being pitched on Ticketmaster’s professional reseller program.
That members-only program is called TradeDesk, billed as ‘The Most Power Ticket Sales Tool. Ever.”
The story continues here: .https://www.digitalmusicnews.com/2018/09/19/ticketmaster-supports-scalpers/
Statement of the Department of Justice Antitrust Division on the Closing of Its Investigation of the Cigna–Express Scripts Merger
September 17, 2018
Assistant Attorney General Makan Delrahim of the Antitrust Division of the U.S. Department of Justice issued the following statement today in connection with the closing of the Division’s investigation into Cigna Corporation’s $67 billion proposed acquisition of Express Scripts Holding Co. (“ESI”):
“Quality healthcare and competitive pricing for healthcare services and pharmaceutical drugs is critical to U.S. consumers. After a thorough review of the proposed transaction, the Antitrust Division has determined that the combination of Cigna, a health insurance company, and ESI, a pharmacy benefit management (“PBM”) company, is unlikely to result in harm to competition or consumers.”
During the Antitrust Division’s comprehensive, six-month investigation, it received over two million documents, analyzed transactional data from the merging companies and other industry firms, and interviewed over 100 knowledgeable industry participants.
In particular, the Division analyzed whether the merger would: (1) substantially lessen competition in the sale of PBM services or (2) raise the cost of PBM services to Cigna’s health insurance rivals. PBM services are sold to employers and health insurance companies to manage their pharmacy benefits, which can include designing formularies, processing prescription claims, and providing access to pharmacy networks and pharmaceutical rebates.
The merger is unlikely to lessen competition substantially in the sale of PBM services because Cigna’s PBM business nationwide is small. The Division also determined that the proposed transaction is unlikely to lessen competition substantially in markets for customers because at least two other large PBM companies and several smaller PBM companies will remain in the market post-merger.
In evaluating whether the merger may harm competition for the sale of PBM services, the Division understands that Cigna intends to use ESI for PBM services and that Cigna’s current PBM services provider, UnitedHealthcare’s subsidiary Optum, will be free to compete for PBM customers that purchase medical insurance from Cigna upon closing of the transaction.
The Division also considered how the merger would affect ESI’s incentives to provide competitive PBM services to Cigna’s health insurance rivals. ESI currently sells PBM services to some of Cigna’s rivals. The merger is unlikely to enable Cigna to increase costs to Cigna’s health insurance rivals due to competition from vertically-integrated and other PBMs. The merger is unlikely to lead ESI to raise PBM prices to Cigna’s rivals because that likely would result in the merged company losing PBM customers and not result in Cigna’s gaining a sufficient volume of additional health insurance business to offset the loss of PBM customers.
Updated September 17, 2018
https://www.justice.gov/atr/closing-statement
September 17, 2018
Assistant Attorney General Makan Delrahim of the Antitrust Division of the U.S. Department of Justice issued the following statement today in connection with the closing of the Division’s investigation into Cigna Corporation’s $67 billion proposed acquisition of Express Scripts Holding Co. (“ESI”):
“Quality healthcare and competitive pricing for healthcare services and pharmaceutical drugs is critical to U.S. consumers. After a thorough review of the proposed transaction, the Antitrust Division has determined that the combination of Cigna, a health insurance company, and ESI, a pharmacy benefit management (“PBM”) company, is unlikely to result in harm to competition or consumers.”
During the Antitrust Division’s comprehensive, six-month investigation, it received over two million documents, analyzed transactional data from the merging companies and other industry firms, and interviewed over 100 knowledgeable industry participants.
In particular, the Division analyzed whether the merger would: (1) substantially lessen competition in the sale of PBM services or (2) raise the cost of PBM services to Cigna’s health insurance rivals. PBM services are sold to employers and health insurance companies to manage their pharmacy benefits, which can include designing formularies, processing prescription claims, and providing access to pharmacy networks and pharmaceutical rebates.
The merger is unlikely to lessen competition substantially in the sale of PBM services because Cigna’s PBM business nationwide is small. The Division also determined that the proposed transaction is unlikely to lessen competition substantially in markets for customers because at least two other large PBM companies and several smaller PBM companies will remain in the market post-merger.
In evaluating whether the merger may harm competition for the sale of PBM services, the Division understands that Cigna intends to use ESI for PBM services and that Cigna’s current PBM services provider, UnitedHealthcare’s subsidiary Optum, will be free to compete for PBM customers that purchase medical insurance from Cigna upon closing of the transaction.
The Division also considered how the merger would affect ESI’s incentives to provide competitive PBM services to Cigna’s health insurance rivals. ESI currently sells PBM services to some of Cigna’s rivals. The merger is unlikely to enable Cigna to increase costs to Cigna’s health insurance rivals due to competition from vertically-integrated and other PBMs. The merger is unlikely to lead ESI to raise PBM prices to Cigna’s rivals because that likely would result in the merged company losing PBM customers and not result in Cigna’s gaining a sufficient volume of additional health insurance business to offset the loss of PBM customers.
Updated September 17, 2018
https://www.justice.gov/atr/closing-statement
What makes a monopoly in the age of Amazon?
By Lydia DePillis
It’s not often that a government agency decides to do a wholesale rethink of how to do its job. But that’s what’s happening at the Federal Trade Commission.
On Thursday, the federal watchdog tasked with protecting consumers from fraud and anti-competitive behavior kicked off a months-long series of hearings. The goal: Figuring out whether regulators need to be tougher on companies that have staked out ever-larger chunks of the markets they serve.
+ READ MORE at https://nam03.safelinks.protection.outlook.com/?url=https%3A%2F%2Fcompetitionpolicyinternational.us2.list-manage.com%2Ftrack%2Fclick%3Fu%3D66710f1b2f6afb55512135556%26id%3D620bb40a4f%26e%3Dc9725fdc15&data=02%7C01%7C%7C00eb2b99a2af4b41a8ca08d61c8f0e41%7C84df9e7fe9f640afb435aaaaaaaaaaaa%7C1%7C0%7C636727798071942816&sdata=3Oz8xE%2B0X8d1FIb2IbSWJrlHgWu1SS8xjsbaCN9r2lE%3D&reserved=0
Investor expert Ray Dalio traces connection between government policies to fix the 2008 financial crash and resulting wealth disparities and political unrest that will complicate government strategies for future debt crises
In an interesting interview for Bloomberg TV, Dalio explains that recovery from the 2008 crisis involved such government policies as low interest rates and "quantitative easing," asset buying, that increase wealth disparities between rich and poor, and create political discord. That discord may interfere with government efforts to deal with a future economic crisis. Needless to say, not all experts agree with Dalio's analysis, but it is thought provoking. The URL for the interview follows.
Posted by Don Allen Resnikoff
https://www.bloomberg.com/view/articles/2018-09-12/ray-dalio-spells-out-america-s-worst-nightmare
In an interesting interview for Bloomberg TV, Dalio explains that recovery from the 2008 crisis involved such government policies as low interest rates and "quantitative easing," asset buying, that increase wealth disparities between rich and poor, and create political discord. That discord may interfere with government efforts to deal with a future economic crisis. Needless to say, not all experts agree with Dalio's analysis, but it is thought provoking. The URL for the interview follows.
Posted by Don Allen Resnikoff
https://www.bloomberg.com/view/articles/2018-09-12/ray-dalio-spells-out-america-s-worst-nightmare
The FTC is holding hearings of great interest to antitrust and consumer advocates. Here is what the FTC says it is interested in:
The Commission is especially interested in new empirical research that indicates (or contraindicates) a causal relationship with respect to any of the topics identified for comment. Upon review and consideration of a public comment highlighting such research, the Commission may request the voluntary sharing of the data and models underlying the comment, in accordance with general principles of peer review of social scientific inquiry, and consistent with confidentiality or other limitations on the sharing of such data.
Commenters are invited to address one or more of the following topics generally, or with respect to a specific industry, such as the health care,5 high-tech6, or energy7 industries.
1) The state of antitrust and consumer protection law and enforcement, and their development, since the Pitofsky hearings. Of particular interest to the Commission: (a) the continued viability of the consumer welfare standard for antitrust law enforcement and policy; (b) economic analysis and evidence on market competitiveness, enforcement policy, and the effects of past FTC enforcement decisions; (c) the identification of new developments in markets and in business-to-business or business-to-consumer relationships; (d) the benefits and costs associated with the growth of international competition and consumer protection enforcement regimes; and (e) the advisory and advocacy role of the FTC regarding enforcement efforts by competition and consumer protection
agencies outside the United States, when such efforts have a direct effect on important U.S. interests. Comments filed in electronic form should be submitted using this link.
2) Competition and consumer protection issues in communication, information, and media technology networks. FTC staff’s 1996 Competition Policy in the New High-Tech Global Marketplace report8 discussed the competitive analysis of both unilateral and joint conduct in industries subject to network effects; and FTC staff’s 2007 Broadband Connectivity and Competition Policy report9 addressed similar issues in the broadband internet access service market. Of particular interest to the Commission: (a) whether contemporary industry practices in networked industries continue to present competition and consumer protection concerns like those discussed in the prior reports; (b) the welfare effects of regulatory intervention to promote standardization and interoperability; (c) the application of the FTC’s Section 5 authority to the broadband internet access service business; and (d) unique competition and consumer protection issues associated with internet and online commerce. Comments filed in electronic form should be submitted using this link.
3) The identification and measurement of market power and entry barriers, and the evaluation of collusive, exclusionary, or predatory conduct or conduct that violates the consumer protection statutes enforced by the FTC, in markets featuring “platform” businesses.10 Of particular interest to the Commission: (a) whether the platform business model has unique implications for antitrust and consumer protection law enforcement and policy; and (b) whether and how the presence of “network effects” should affect the Commission’s analysis of competition and consumer protection issues in these markets. Comments filed in electronic form should be submitted using this link.
4) The intersection between privacy, big data, and competition.11 Of particular interest to the Commission: (a) data as a dimension of competition, and/or as an impediment to entry into or expansion within a relevant market; (b) competition on privacy and data security attributes (between, for example, social media companies or app developers), and the importance of this competition to consumers and users; (c) whether consumers prefer free/ad-supported products to products offering similar services or capabilities but that are neither free nor adsupported; (d) the benefits and costs of privacy laws and regulations, including the effect of such regulations on innovation, product offerings, and other dimensions of competition and consumer protection; (e) the benefits and costs of varying state, federal and international privacy laws and regulations, including the conflicts associated with those standards; and (f) competition and consumer protection implications of use and location tracking mechanisms. Comments filed in electronic form should be submitted using this link.
5) The Commission’s remedial authority to deter unfair and deceptive conduct in privacy and data security matters. Of particular interest to the Commission: (a) the efficacy of the Commission’s use of its current remedial authority; and (b) the identification of any additional tools or authorities the Commission may need to adequately deter unfair and deceptive conduct related to privacy and data security. Comments filed in electronic form should be submitted using this link.
6) Evaluating the competitive effects of corporate acquisitions and mergers. Of particular interest to the Commission: (a) the economic and legal analysis of vertical and conglomerate mergers; (b) whether the doctrine of potential competition is sufficient to identify and analyze the competitive effects (if any) associated with the acquisition of a firm that may be a nascent competitive threat; (c) the analysis of acquisitions and holding of a non-controlling ownership interest in competing companies; (d) the identification and evaluation of the exercise of monopsony power and buyer-power as arising from consolidation; (e) the identification and evaluation of differentiated but potentially competing technologies, and of disruptive or generational changes in technology, and how such technologies affect competitive effects analysis; and (f) empirical validation of the analytical tools used to evaluate acquisitions and mergers (e.g., models of upward pricing pressure, gross upward pricing pressure, net innovation pressure, critical loss analysis, compensating marginal cost reduction, merger simulation, natural experiments, and empirical estimation of demand systems). Comments filed in electronic form should be submitted using this link.
7) The evidence and analysis of monopsony power, including but not limited to, in labor markets. Of particular interest to the Commission: (a) the analytic framework applied to conduct and transactions that negatively or positively affect competition between employers as buyers in labor markets; (b) evidence regarding the existence and exercise of buyer monopsony or market power in properly defined markets, including by employers in labor markets; (c) the exercise of monopsony power through collusion, including in labor markets through employer collusion; and (d) the use of non-competition agreements and the conditions under which their use may be inconsistent with the antitrust laws. Comments filed in electronic form should be submitted using this link.
8) The role of intellectual property and competition policy in promoting innovation. The Commission has taken a dual-pronged approach to issues arising at the intersection of intellectual property and antitrust law: (1) antitrust enforcement against harmful business conduct involving intellectual property; and (2) competition advocacy regarding the development of intellectual property law. The Commission has articulated its enforcement positions in a number of public documents, including the joint Commission and Department of Justice 2017 Antitrust Guidelines for the Licensing of Intellectual Property12 and 2007 Antitrust Enforcement and Intellectual Property Rights report.13 The Commission has engaged in substantial competition advocacy with respect to the legal and policy regime related to intellectual property rights, including its three “IP” reports: the 2003 To Promote Innovation14 report, the 2011 Evolving IP Marketplace15 report, and the 2016 Patent Assertion Entity Activity16 report. Of particular interest to the Commission: (a) the adoption and utilization of novel business practices (beyond those addressed in the Commission’s prior guidance and actions)17 with respect to obtaining or enforcing intellectual property rights, where such practices may be inconsistent with the antitrust laws; (b) identification of contemporary patent doctrine that substantially affects innovation and raises the greatest challenges for competition policy; (c) evaluation of intellectual property litigation in competitive effects analysis; and (d) evaluation of efficiencies and entry considerations in technology markets in merger analysis. Comments filed in electronic form should be submitted using this link.
9) The consumer welfare implications associated with the use of algorithmic decision tools, artificial intelligence, and predictive analytics. Of particular interest to the Commission: (a) the welfare effects and privacy implications associated with the application of these technologies to consumer advertising and marketing campaigns; (b) the welfare implications associated with use of these technologies in the determination of a firm’s pricing and output decisions; and (c) whether restrictions on the use of computer and machine learning and data analytics affect innovation or consumer rights and opportunities in existing or future markets, or in the development of new business models. Comments filed in electronic form should be submitted using this link.
10) The interpretation and harmonization of state and federal statutes and regulations that prohibit unfair and deceptive acts and practices. Of particular interest to the Commission: (a) whether and to what extent other enforcement entities authorized to prosecute unfair or deceptive acts and practices apply FTC precedent in their enforcement efforts; and (b) whether the Commission can, and to what extent it should, take steps to promote harmonization between the FTC Act and similar statutes. Comments filed in electronic form should be submitted using this link.
11) The agency’s investigation, enforcement and remedial processes. Of particular interest to the Commission: (a) whether the agency’s investigative process can be improved without diminishing the ability of the Commission to identify and prosecute prohibited conduct; (b) the extent to which the Commission’s Part 3 process facilitates timely and efficient administrative litigation; (c) the efficacy of the Commission’s current use of its remedial authority; and (d) willingness of affected parties to cooperate with the Commission in conducting postinvestigation and enforcement retrospectives. Comments filed in electronic form should be submitted using this link.
From:https://www.ftc.gov/system/files/attachments/hearings-competition-consumer-protection-21st-century/hearings-announcement_0.pdf
Broadcast email from DC AG Racine: student loan litigation
Last year, I sued the U.S. Department of Education for delaying a rule that would make it easier for students to get their loans forgiven when their school is proven to have defrauded students. This week, a federal judge ruled that the Trump administration’s move to delay this student protection was illegal.
This ruling is a victory for student borrowers, especially here in the District which has the highest student debts in the nation. On average, District borrowers owe more than $46,000 in federal student loans and more than 1-in-4 student borrowers owe over $80,000. With soaring debt here and across the nation, our struggling borrowers need robust protections against predatory schools that try to cheat them.
To preserve another critical student borrower protection, I’m also suing the Department of Education for delaying the Gainful Employment Rule. This rule would require for-profit schools to disclose to students the costs, average debt load, and job prospects of their programs. Enacting this rule is important because predatory schools commonly exaggerate job placement rates to prospective students.
When the federal government fails to do its job, I believe we have a responsibility to step up to protect our residents. I won’t stand idly by while the Trump Administration slashes student borrower protections.
Karl A. Racine
Attorney General
Last year, I sued the U.S. Department of Education for delaying a rule that would make it easier for students to get their loans forgiven when their school is proven to have defrauded students. This week, a federal judge ruled that the Trump administration’s move to delay this student protection was illegal.
This ruling is a victory for student borrowers, especially here in the District which has the highest student debts in the nation. On average, District borrowers owe more than $46,000 in federal student loans and more than 1-in-4 student borrowers owe over $80,000. With soaring debt here and across the nation, our struggling borrowers need robust protections against predatory schools that try to cheat them.
To preserve another critical student borrower protection, I’m also suing the Department of Education for delaying the Gainful Employment Rule. This rule would require for-profit schools to disclose to students the costs, average debt load, and job prospects of their programs. Enacting this rule is important because predatory schools commonly exaggerate job placement rates to prospective students.
When the federal government fails to do its job, I believe we have a responsibility to step up to protect our residents. I won’t stand idly by while the Trump Administration slashes student borrower protections.
Karl A. Racine
Attorney General
Prosecutors from the US Department of Justice (DOJ) have asked a California judge to delay a grocery wholesaler's lawsuit against former Bumble Bee Foods CEO Chris Lischewski over concerns that it could complicate the criminal case against him.
Lischewski, who was indicted on criminal price-fixing charges in May 2018 and subsequently stepped down to focus on his defense, is also the defendant in a civil lawsuit from Associated Wholesale Grocers (AWG) that claims the company was harmed by the tuna canner's price-fixing.
Prosecutor Leslie Wulff wrote in a filing that allowing the AWG lawsuit to proceed, which could involve depositions of witnesses including Lischewski, could potentially interfere with the prosecution and run the risk of violating the former CEO's fifth amendment right prohibiting self-incrimination.
From the filing:
"The government’s proposed stay balances the government’s interest in protecting the integrity of the criminal proceedings, Mr. Lischewski’s fifth amendment rights, and the victims’ interest in conducting discovery and seeking restitution for the price-fixing scheme."
From: https://www.undercurrentnews.com/2018/09/10/prosecutors-want-suit-against-lischewski-stalled-due-to-criminal-case/
A bill, introduced by Rep. Darrell Issa, proposes dividing the Ninth Circuit into three regionally based divisions
—The text of the bill is at https://judiciary.house.gov/wp-content/uploads/2018/09/HR-6730.pdf
The three divisions would be a Northern Division composed of the district courts in Alaska, Idaho, Montana, Oregon and Washington’s Eastern and Western districts of Washington; a Middle Division made up of the courts in Guam, Hawaii, Nevada and the Northern Mariana Islands, as well as California’s Eastern and Northern districts; and a Southern Division including Arizona and the Southern and Central districts of California.
Ross Todd of Law.com's Recorder periodical reports that Brian Fitzpatrick of Vanderbilt University Law School, who advocated splitting the Ninth Circuit at a subcommittee hearing chaired by Issa last year [see https://www.law.com/therecorder/almID/1202781463210/house-panel-restarts-debate-on-splitting-ninth-circuit/], said that he wasn’t sure that the representative’s proposal would address his central concern—that the size of the circuit leads to three-judge panels that are more likely to be made up of ideological outliers: “I think we would expect fewer outliers within each of the three regional divisions relative to the makeup of the divisions because each division will have only 11 judges,” he said. “I am not sure if that conclusion carries over to the ‘circuit’ division, however,” said Fitzpatrick, noting that the ratio of judges on the circuit division compared to the court’s total—13 of 24—closely mirrors the makeup of current Ninth Circuit en banc panels—11 of the court’s 29 current active judges.
Todd's full article is at https://www.law.com/therecorder/2018/09/12/house-committee-to-take-up-measure-to-reconfigure-the-ninth-circuit/?kw=House%20Committee%20to%20Take%20Up%20Measure%20to%20Reconfigure%20the%20Ninth%20Circuit&et=editorial&bu=TheRecorder&cn=20180912&src=EMC-Email&pt=AfternoonUpdate
The DCist: These Are Some Of The Areas Most Susceptible To Flooding In D.C.
While it may be that the worst effects of Hurricane Florence will have stayed south of D.C., the storm provided an occasion for reporter by Natalie Delgadillo to review areas in DC most susceptible to flooding. Here are some excerpts from her suggestions:
The National Mall
Areas around the National Mall are some of the lowest points in the city. Flooding from the Potomac River in 1936 and 1942 overwhelmed the National Mall, stranding the Jefferson Memorial like an island. In 2006, persistent rain flooded the National Archives building, the Internal Revenue Service, the Commerce Department, the Justice Department, and several museums on the mall.
That's why the Army Corp of Engineers installed a levee across 17th Street in 2014. It's meant to keep all of downtown D.C. safe from flooding off the Potomac—though it wouldn't be much help if, as in the 2006 storm, the rainwater just became too much for the city's storm drains to bear.
The Wharf
The new businesses on the Wharf have been there open for less than a year, and already they're facing the test of floods. Back in 2003, when rains from Hurricane Isabel hit the District, the Southwest waterfront was inundated.
The Capitol Riverfront/Yards Park
Hurricane Isabel also caused major tidal flooding in Navy Yard in 2003, and too much water this weekend could cause flooding again.
Georgetown Harbour
In 2011, Georgetown Harbour officials failed to deploy a levee to protect the area from flooding, and the boardwalk area was inundated. Restaurants and businesses had to be evacuated, the gas and water turned off.
Rock Creek Park
Here's one everybody knows: Rock Creek Park is always flooding. The trails running along the creek often become unusable for bikers during heavy or persistent rains.
Alexandria
Alexandria has already been dealing with a lot of flooding this week from high tide conditions and lots of rain.
The city has been giving out sand bags since Monday.
DAR comment: It seems an obvious question whether global warming and rising sea levels are relevant to hurricane Florence and the flooding travails of DC, as is also true in Miami and other near sea level cities, although that isn't discussed in the DCist story.
Expert Marshall Shepherd recently addressed that point in an article that appears in The Verge:
We do have higher sea level because of climate change. So whenever we have these types of storms, you’re probably dealing with a more significant storm surge because of that than you would perhaps 100 years ago. The literature certainly suggests that on a global, average sense, we would start to see more intense storms because of the warming oceans perhaps, and changing upper level wind patterns. The jury is still out on whether you’re going to see more or less of them.
In fact, most of the literature I have seen has suggested that you might not see them as frequently — but when you do they’ll be stronger. Yes there’s likely some connection between climate change and hurricanes, but I think it’s irresponsible to conclusively start linking individual storms to climate change, particularly as the storm is unfolding. I’m more concerned about the immediate impacts of the hazard.
See https://www.theverge.com/2018/9/10/17844258/hurricane-florence-atlantic-storm-category-four-intensity-unusual
Posting by Don Allen Resnikoff
Four national healthcare organizations sue HHS over delay of its final rule on price ceilings in the 340B drug discount program.
The 340B program is intended to help hospitals to provide pharmaceuticals to needy patients. The expected rule would set price ceilings and impose civil penalties on pharmaceutical companies that knowingly overcharge hospitals in the program. The Department of Health and Human Services delayed the rule for a fifth time in June, [see https://www.fiercehealthcare.com/payer/for-fifth-time-hhs-delays-340b-drug-ceiling-prices-and-penalitiesafter it was initially issued in January 2017.]
The American Hospital Association, America’s Essential Hospitals, 340B Health and the Association of American Medical Colleges are signed on to the lawsuit (PDF). The lawsuit Complaint can be viewed at https://www.aha.org/system/files/2018-09/180911-340b-delay-suit-complaint.pdf In it, they argue that the nearly two-year delay is unlawful under the Administration Procedure Act.
The 340B program is intended to help hospitals to provide pharmaceuticals to needy patients. The expected rule would set price ceilings and impose civil penalties on pharmaceutical companies that knowingly overcharge hospitals in the program. The Department of Health and Human Services delayed the rule for a fifth time in June, [see https://www.fiercehealthcare.com/payer/for-fifth-time-hhs-delays-340b-drug-ceiling-prices-and-penalitiesafter it was initially issued in January 2017.]
The American Hospital Association, America’s Essential Hospitals, 340B Health and the Association of American Medical Colleges are signed on to the lawsuit (PDF). The lawsuit Complaint can be viewed at https://www.aha.org/system/files/2018-09/180911-340b-delay-suit-complaint.pdf In it, they argue that the nearly two-year delay is unlawful under the Administration Procedure Act.
The Economics Of Amateurism: Breaking Down The Latest Lawsuit Against The NCAA
By Thomas Baker In what could prove to be a battle of economic experts, the NCAA is back in court and must once again defend its amateurism regulations from its own student-athletes. The current case is In Re: Grant-in-Aid Cap Antitrust Litigation and was initiated in the United States District Court for the Northern District of California by former NCAA student-athletes Shawne Alston and Justine Hartman.
Read the article at
https://competitionpolicyinternational.us2.list-manage.com/track/click?u=66710f1b2f6afb55512135556&id=0a7c194709&e=b23ef9e519
FTC Commissioner proposes FTC rule making as supplement to antitrust litigation
From: https://www.ftc.gov/system/files/documents/public_statements/1408196/chopra_-_comment_to_hearing_1_9-6-18.pdf
Excerpt of statement by FTC Commissioner Chopra, who credits Lina Kahn for her help
I see three major benefits to the FTC engaging in rulemaking under “unfair methods of competition,” even if the conduct could be condemned under predecessor antitrust laws. As I describe above, the current approach generates ambiguity, is unduly burdensome, and suffers from a democratic participation deficit. Rulemaking can create value for the marketplace and benefit the public on all of these fronts.
First, rulemaking would enable the Commission to issue clear rules to give market participants sufficient notice about what the law is and is not, helping ensure that enforcement is predictable.30 The APA requires agencies engaging in rulemaking to provide the public with adequate notice of a proposed rule. The notice must include the substance of the rule, the legal authority under which the agency has proposed the rule, and the date the rule will come into effect.31 An agency must publish the final rule in the Federal Register, at least 30 days before the rule becomes effective.
These procedural requirements promote clear rules and clear notice. As the Supreme Court has stated, a “fundamental principle” in our legal system is that “laws which regulate persons or entities must give fair notice of conduct that is forbidden or required.”32 Clear rules also help deliver consistent enforcement and predictable results. Reducing ambiguity about what the law is will enable market participants to channel their resources and behavior more productively, and will allow market entrants and entrepreneurs to compete on more of a level playing field. Second, establishing rules could help relieve antitrust enforcement of steep costs and prolonged trials. Establishing through rulemaking that certain conduct constitutes an “unfair method of competition” would obviate the need to establish the same through adjudication. Targeting conduct through rulemaking, rather than adjudication, might lessen the burden of expert fees or protracted litigation, potentially saving significant resources on a present-value basis.33 Moreover, establishing a rule through APA rulemaking can be faster than litigating multiple cases on a similar subject matter. For taxpayers and market participants, the present value of net benefits through the promulgation of a clear rule that reduces the need for litigation is higher than pursuing multiple, protracted matters through litigation.
At the same time, rulemaking is not
so fast that it surprises market participants. Establishing a rule through participatory rulemaking can often be far more efficient. This is particularly important in the context of declining government enforcement relative to economic activity, as documented by the American Bar Association.34
And third, rulemaking would enable the Commission to establish rules through a transparent and participatory process, ensuring that everyone who may be affected by a new rule has the opportunity to weigh in on it. APA procedures require that an agency provide the public with meaningful opportunity to comment on the rule’s content through the submission of written “data, views, or arguments.”35 The agency must then consider and address all submitted comments before issuing the final rule. If an agency adopts a rule without observing these procedures, a court may strike down the rule.36
This process is far more participatory than adjudication. Unlike judges, who are confined to the trial record when developing precedent-setting rules and standards, the Commission can put forth rules after considering a comprehensive set of information and analysis.37 Notably, this would also allow the FTC to draw on its own informational advantage – namely, its ability to collect and aggregate information and to study market trends and industry practices over the long term and outside the context of litigation.38 Drawing on this expertise to develop standards will help antitrust enforcement and policymaking better reflect empirical realities and better keep pace with evolving business practices.
From: https://www.ftc.gov/system/files/documents/public_statements/1408196/chopra_-_comment_to_hearing_1_9-6-18.pdf
Excerpt of statement by FTC Commissioner Chopra, who credits Lina Kahn for her help
I see three major benefits to the FTC engaging in rulemaking under “unfair methods of competition,” even if the conduct could be condemned under predecessor antitrust laws. As I describe above, the current approach generates ambiguity, is unduly burdensome, and suffers from a democratic participation deficit. Rulemaking can create value for the marketplace and benefit the public on all of these fronts.
First, rulemaking would enable the Commission to issue clear rules to give market participants sufficient notice about what the law is and is not, helping ensure that enforcement is predictable.30 The APA requires agencies engaging in rulemaking to provide the public with adequate notice of a proposed rule. The notice must include the substance of the rule, the legal authority under which the agency has proposed the rule, and the date the rule will come into effect.31 An agency must publish the final rule in the Federal Register, at least 30 days before the rule becomes effective.
These procedural requirements promote clear rules and clear notice. As the Supreme Court has stated, a “fundamental principle” in our legal system is that “laws which regulate persons or entities must give fair notice of conduct that is forbidden or required.”32 Clear rules also help deliver consistent enforcement and predictable results. Reducing ambiguity about what the law is will enable market participants to channel their resources and behavior more productively, and will allow market entrants and entrepreneurs to compete on more of a level playing field. Second, establishing rules could help relieve antitrust enforcement of steep costs and prolonged trials. Establishing through rulemaking that certain conduct constitutes an “unfair method of competition” would obviate the need to establish the same through adjudication. Targeting conduct through rulemaking, rather than adjudication, might lessen the burden of expert fees or protracted litigation, potentially saving significant resources on a present-value basis.33 Moreover, establishing a rule through APA rulemaking can be faster than litigating multiple cases on a similar subject matter. For taxpayers and market participants, the present value of net benefits through the promulgation of a clear rule that reduces the need for litigation is higher than pursuing multiple, protracted matters through litigation.
At the same time, rulemaking is not
so fast that it surprises market participants. Establishing a rule through participatory rulemaking can often be far more efficient. This is particularly important in the context of declining government enforcement relative to economic activity, as documented by the American Bar Association.34
And third, rulemaking would enable the Commission to establish rules through a transparent and participatory process, ensuring that everyone who may be affected by a new rule has the opportunity to weigh in on it. APA procedures require that an agency provide the public with meaningful opportunity to comment on the rule’s content through the submission of written “data, views, or arguments.”35 The agency must then consider and address all submitted comments before issuing the final rule. If an agency adopts a rule without observing these procedures, a court may strike down the rule.36
This process is far more participatory than adjudication. Unlike judges, who are confined to the trial record when developing precedent-setting rules and standards, the Commission can put forth rules after considering a comprehensive set of information and analysis.37 Notably, this would also allow the FTC to draw on its own informational advantage – namely, its ability to collect and aggregate information and to study market trends and industry practices over the long term and outside the context of litigation.38 Drawing on this expertise to develop standards will help antitrust enforcement and policymaking better reflect empirical realities and better keep pace with evolving business practices.
The New York Times:
Amazon’s Antitrust Antagonist Has a Breakthrough Idea
By David Streitfeld
The dead books are on the top floor of Southern Methodist University’s law library.
“Antitrust Dilemma.” “The Antitrust Impulse.” “Antitrust in an Expanding Economy.” Shelf after shelf of volumes ignored for decades. There are a dozen fat tomes with transcripts of the congressional hearings on monopoly power in 1949, when the world was in ruins and the Soviets on the march. Lawmakers believed economic concentration would make America more vulnerable.
At the end of the antitrust stacks is a table near the window. “This is my command post,” said Lina Khan.
It’s nothing, really. A few books are piled up haphazardly next to a bottle with water and another with tea. Ms. Khan was in Dallas quite a bit over the last year, refining an argument about monopoly power that takes aim at one of the most admired, secretive and feared companies of our era: Amazon.
The retailer overwhelmingly dominates online commerce, employs more than half a million people and powers much of the internet itself through its cloud computing division. On Tuesday, it briefly became the second company to be worth a trillion dollars.
If competitors tremble at Amazon’s ambitions, consumers are mostly delighted by its speedy delivery and low prices. They stream its Oscar-winning movies and clamor for the company to build a second headquarters in their hometowns. Few of Amazon’s customers, it is safe to say, spend much time thinking they need to be protected from it.
But then, until recently, no one worried about Facebook, Google or Twitter either. Now politicians, the media, academics and regulators are kicking around ideas that would, metaphorically or literally, cut them down to size. Members of Congress grilled social media executives on Wednesday in yet another round of hearings on Capitol Hill. Not since the Department of Justice took on Microsoft in the mid-1990s has Big Tech been scrutinized like this.
Amazon has more revenue than Facebook, Google and Twitter put together, but it has largely escaped sustained examination. That is beginning to change, and one significant reason is Ms. Khan.
In early 2017, when she was an unknown law student, Ms. Khan published “Amazon’s Antitrust Paradox” in the Yale Law Journal. Her argument went against a consensus in antitrust circles that dates back to the 1970s — the moment when regulation was redefined to focus on consumer welfare, which is to say price. Since Amazon is renowned for its cut-rate deals, it would seem safe from federal intervention.
Continue reading…https://www.nytimes.com/2018/09/07/technology/monopoly-antitrust-lina-khan-amazon.html
Klobuchar questions Kavanaugh on antitrust
By CPI on September 6, 2018No Comment
Senator Amy Klobuchar (D – MN) joined fellow Democrats Wednesday in grilling Supreme Court nominee Brett Kavanaugh over his views on antitrust issues.
Klobuchar, ranking member on the Senate Judiciary Antitrust Subcommittee, said that Supreme Court decisions on antitrust issues in recent years, including the decisions in Ohio v. American Express, Leegin Creative Leather Products v. PSKS and Bell Atlantic v. Twombly, have made it harder to enforce our antitrust laws.
Klobuchar: “Senator Lee and I run the Antitrust Subcommittee…and in recent years…the Supreme Court has made it harder to enforce our antitrust laws in cases like Trinco, Twombly, Leegin, and most recently Ohio v. American Express. This could not be happening at a more troubling time. We’re experiencing a wave of industry consolidation. Annual merger filings increased by more than 50% between 2010 and 2016. I’m concerned that the Court, the Roberts Court, is going down the wrong path and your major antitrust opinions would have rejected challenges to mergers that majorities found to be anticompetitive. I’m afraid you’re going to move it even further down the path. Starting with 2008, in the Whole Foods case, where Whole Foods attempted to buy Wild Oats Market. Very complicated. I’m going to go to the guts of it from my opinion. The majority of courts and…what happened is the Republican majority FTC challenges a deal, and you dissent and you apply your own pricing test to the merger. My simple question is: where did you get this pricing test?”
Kavanaugh: “I would have affirmed the decision by the district judge in that case which allowed the merger and the district judge is Judge Friedman, an appointee of President Clinton’s to the district court. I was following his analysis of the merger. The case is very fact specific…it really turns on whether the larger supermarket sells organic food or not.”
Klobuchar: “Where did you get the pricing test…? You used different tests. I’m trying to figure that out. What legal authority actually requires a government to satisfy your standard to block a merger? …I remember in our discussion you cited these non-binding horizontal merger guidelines that you used to come up with this test.”
Kavanaugh: “You’re looking at the effect on competition and what the Supreme Court has told us, at least from the late 1970s, is to look at the effect on consumers and what’s the effect on the prices for consumers and the theory of the district court and Judge Friedman in this case was that the merger would not cause an increase in prices because they were competing in a broader market that included larger supermarkets that also sold organic food. The question is whether there an organic food market solely or a broader supermarket market.”
Klobuchar also asked Kavanaugh questions about net neutrality, consumer regulation and other issues. She suggested that the public may be focused more on economic issues than the Supreme Court, but “it’s our case to make that it does matter.”
Klobuchar: “Or in another case you wrote a dissent against the rules [that] protect net neutrality, rules that help all citizens, and small businesses have an even playing field when it comes to accessing the Internet. Another example that seems mired in legalese, but is critical for Americans, antitrust law. In recent years the conservative majority on the Supreme Court has made it harder and harder to enforce the nation’s antitrust laws, ruling in favor of consolidation and market dominance. Yet two of Judge Kavanaugh’s major antitrust opinions suggest that he would push the court even further down this pro-merger path. We should have more competition and not less.”
From: https://www.competitionpolicyinternational.com/us-sen-klobuchar-questions-kavanaugh-on-antitrust/?utm_source=CPI+Subscribers&utm_campaign=ac38616102-EMAIL_CAMPAIGN_2018_09_07_06_39&utm_medium=email&utm_term=0_0ea61134a5-ac38616102-236474137
By CPI on September 6, 2018No Comment
Senator Amy Klobuchar (D – MN) joined fellow Democrats Wednesday in grilling Supreme Court nominee Brett Kavanaugh over his views on antitrust issues.
Klobuchar, ranking member on the Senate Judiciary Antitrust Subcommittee, said that Supreme Court decisions on antitrust issues in recent years, including the decisions in Ohio v. American Express, Leegin Creative Leather Products v. PSKS and Bell Atlantic v. Twombly, have made it harder to enforce our antitrust laws.
Klobuchar: “Senator Lee and I run the Antitrust Subcommittee…and in recent years…the Supreme Court has made it harder to enforce our antitrust laws in cases like Trinco, Twombly, Leegin, and most recently Ohio v. American Express. This could not be happening at a more troubling time. We’re experiencing a wave of industry consolidation. Annual merger filings increased by more than 50% between 2010 and 2016. I’m concerned that the Court, the Roberts Court, is going down the wrong path and your major antitrust opinions would have rejected challenges to mergers that majorities found to be anticompetitive. I’m afraid you’re going to move it even further down the path. Starting with 2008, in the Whole Foods case, where Whole Foods attempted to buy Wild Oats Market. Very complicated. I’m going to go to the guts of it from my opinion. The majority of courts and…what happened is the Republican majority FTC challenges a deal, and you dissent and you apply your own pricing test to the merger. My simple question is: where did you get this pricing test?”
Kavanaugh: “I would have affirmed the decision by the district judge in that case which allowed the merger and the district judge is Judge Friedman, an appointee of President Clinton’s to the district court. I was following his analysis of the merger. The case is very fact specific…it really turns on whether the larger supermarket sells organic food or not.”
Klobuchar: “Where did you get the pricing test…? You used different tests. I’m trying to figure that out. What legal authority actually requires a government to satisfy your standard to block a merger? …I remember in our discussion you cited these non-binding horizontal merger guidelines that you used to come up with this test.”
Kavanaugh: “You’re looking at the effect on competition and what the Supreme Court has told us, at least from the late 1970s, is to look at the effect on consumers and what’s the effect on the prices for consumers and the theory of the district court and Judge Friedman in this case was that the merger would not cause an increase in prices because they were competing in a broader market that included larger supermarkets that also sold organic food. The question is whether there an organic food market solely or a broader supermarket market.”
Klobuchar also asked Kavanaugh questions about net neutrality, consumer regulation and other issues. She suggested that the public may be focused more on economic issues than the Supreme Court, but “it’s our case to make that it does matter.”
Klobuchar: “Or in another case you wrote a dissent against the rules [that] protect net neutrality, rules that help all citizens, and small businesses have an even playing field when it comes to accessing the Internet. Another example that seems mired in legalese, but is critical for Americans, antitrust law. In recent years the conservative majority on the Supreme Court has made it harder and harder to enforce the nation’s antitrust laws, ruling in favor of consolidation and market dominance. Yet two of Judge Kavanaugh’s major antitrust opinions suggest that he would push the court even further down this pro-merger path. We should have more competition and not less.”
From: https://www.competitionpolicyinternational.com/us-sen-klobuchar-questions-kavanaugh-on-antitrust/?utm_source=CPI+Subscribers&utm_campaign=ac38616102-EMAIL_CAMPAIGN_2018_09_07_06_39&utm_medium=email&utm_term=0_0ea61134a5-ac38616102-236474137
U.S. is expected to let lapse $600 million in funding to combat global disease outbreaks
From: http://centerforpolicyimpact.org/2018/02/09/penny-wise-pandemic-foolish/
The money was appropriated in 2014 at the height of a catastrophic Ebola outbreak in West Africa. Yet there is considerable evidence that this emergency funding worked. In West Africa and other parts of the world, the CDC has trained disease detectives to diagnose, prevent and contain outbreaks.
When Ebola again began to spread in the Democratic Republic of the Congo last year, health officials, including those trained and supported by the CDC, were able to act swiftly to contain the virus, saving lives and preventing what could have been a massive disaster.
To end this funding now would be like a homeowner, having just been spared from a fire by a smoke alarm, deciding to disconnect the alarm.
We’ve made this mistake before. It’s relatively easy to garner support to fight infectious diseases when they are rampant and capturing our attention, but too often the motivation to sustain funding wanes when the infection appears to be under control. Peter Sands, executive director of The Global Fund, argues that our approach to fighting infections is characterized by “cycles of panic followed by neglect.”
Global health history is full of such examples. In a study that I co-authored, we found 75 episodes of malaria resurgence, where in most cases countries had successfully controlled malaria, only to have it come roaring back once they cut their malaria programs.
This is why the findings by Summers and colleagues are so urgent. When economic losses from a pandemic are expected to exceed $500 billon per year, penny-pinching on our funding to prevent outbreaks is glaringly short-sighted.
Perhaps most curious is the CDC’s reported plan to deal with dwindling resources by downscaling efforts in 39 of the 49 countries where this funding is currently deployed. Most pandemics begin with a spark — a pathogen jumps from domesticated or wild animals to humans. And yet the CDC plans to lessen its vigilance in some of the most likely places in the world for that spark to occur, countries such as China, Pakistan, Haiti, Rwanda and the Congo.
Pandemics know no boundaries. That is especially true now, when factors such as international travel, climate change, deforestation and human-animal interactions are accelerating the spread of infectious diseases. In our modern age, when an outbreak in a far-off land can quickly reach our backyard, there is no room for territorial thinking. Like ships on an ocean, we rise and fall together.
We cannot make the world safe from pandemic diseases by looking away after an emergency fades, nor by hoping that infectious diseases stay within the borders of far-away nations. It is time for us to end the cycles of panic and neglect and invest reasonably and rationally in outbreak preparedness every day and everywhere. The human and economic costs of inaction are intolerable.
From: http://centerforpolicyimpact.org/2018/02/09/penny-wise-pandemic-foolish/
The money was appropriated in 2014 at the height of a catastrophic Ebola outbreak in West Africa. Yet there is considerable evidence that this emergency funding worked. In West Africa and other parts of the world, the CDC has trained disease detectives to diagnose, prevent and contain outbreaks.
When Ebola again began to spread in the Democratic Republic of the Congo last year, health officials, including those trained and supported by the CDC, were able to act swiftly to contain the virus, saving lives and preventing what could have been a massive disaster.
To end this funding now would be like a homeowner, having just been spared from a fire by a smoke alarm, deciding to disconnect the alarm.
We’ve made this mistake before. It’s relatively easy to garner support to fight infectious diseases when they are rampant and capturing our attention, but too often the motivation to sustain funding wanes when the infection appears to be under control. Peter Sands, executive director of The Global Fund, argues that our approach to fighting infections is characterized by “cycles of panic followed by neglect.”
Global health history is full of such examples. In a study that I co-authored, we found 75 episodes of malaria resurgence, where in most cases countries had successfully controlled malaria, only to have it come roaring back once they cut their malaria programs.
This is why the findings by Summers and colleagues are so urgent. When economic losses from a pandemic are expected to exceed $500 billon per year, penny-pinching on our funding to prevent outbreaks is glaringly short-sighted.
Perhaps most curious is the CDC’s reported plan to deal with dwindling resources by downscaling efforts in 39 of the 49 countries where this funding is currently deployed. Most pandemics begin with a spark — a pathogen jumps from domesticated or wild animals to humans. And yet the CDC plans to lessen its vigilance in some of the most likely places in the world for that spark to occur, countries such as China, Pakistan, Haiti, Rwanda and the Congo.
Pandemics know no boundaries. That is especially true now, when factors such as international travel, climate change, deforestation and human-animal interactions are accelerating the spread of infectious diseases. In our modern age, when an outbreak in a far-off land can quickly reach our backyard, there is no room for territorial thinking. Like ships on an ocean, we rise and fall together.
We cannot make the world safe from pandemic diseases by looking away after an emergency fades, nor by hoping that infectious diseases stay within the borders of far-away nations. It is time for us to end the cycles of panic and neglect and invest reasonably and rationally in outbreak preparedness every day and everywhere. The human and economic costs of inaction are intolerable.
Creating Effective Health Care Markets
September 7, 2018
by David Blumenthal, M.D.
Toplines:
The conditions underlying the effective functioning of market economies do not currently exist in health care
Supporters of market-based approaches to health care should seek to promote competition and develop better information on provider prices and quality
Article intro:
Disagreement about the role of markets lies at the root of many of our fiercest health care controversies. One side believes that unleashing market forces will rescue our health care system. From this viewpoint, government involvement is inherently destructive, except in rare circumstances. Many opponents of the Affordable Care Act share this opinion.
The other side believes that health care markets are deeply flawed and that government must play a major role in achieving a higher-performing health system. These people point out that markets make no claim to ensuring equity in the use of health care resources, only improved efficiency. Supporters of the ACA tend to hold this view.
Given this fundamental divide, it’s worth considering the conditions underlying the effective functioning of market economies, whether those conditions currently prevail in health care and, if not, what changes would be required to establish them.
www.commonwealthfund.org/blog/2018/creating-effective-health-care-markets?omnicid
What can the Trump Administration do to rein in Google, Twitter, and Facebook?
Wired has some ideas. It asked some antitrust experts for their thoughts. A main theme is that the government's options are limited, but antitrust enforcers could do more to stop mergers with anti-competitive potential. DR
https://www.wired.com/story/how-to-curb-silicon-valley-power-even-with-weak-antitrust-laws/
Is Apple-Shazam an example of a tech merger that should be blocked? Did the EU get it wrong?Or are the findings of no likely harm to competition well founded?
European Commission - Press release
http://europa.eu/rapid/press-release_IP-18-5662_en.htm
Mergers: Commission clears Apple's acquisition of ShazamBrussels, 6 September 2018
The European Commission has approved under the EU Merger Regulation the proposed acquisition of Shazam by Apple. The Commission concluded that the merger would not adversely affect competition in the European Economic Area or any substantial part of it.
Commissioner Margrethe Vestager, in charge of competition policy, said: "Data is key in the digital economy. We must therefore carefully review transactions which lead to the acquisition of important sets of data, including potentially commercially sensitive ones, to ensure they do not restrict competition. After thoroughly analysing Shazam's user and music data, we found that their acquisition by Apple would not reduce competition in the digital music streaming market."
Today's decision follows an in-depth [http://europa.eu/rapid/press-release_IP-18-3505_en.htm] investigation of Apple's proposed acquisition of Shazam. Apple operates "Apple Music", which is the second largest music streaming service in Europe, after Spotify. Shazam offers a leading music recognition application ("app") in the European Economic Area (EEA) and worldwide.
The Commission's investigation
Apple and Shazam mainly offer complementary services and do not compete with each other. The Commission opened an in-depth investigation to assess:
- whether Apple would obtain access to commercially sensitive data about customers of its competitors for the provision of music streaming services in the EEA, and whether such data could allow Apple to directly target its competitors' customers and encourage them to switch to Apple Music. As a result, competing music streaming services could have been put at a competitive disadvantage.
- considering Shazam's strong position in the market for music recognition apps, whether Apple Music's competitors would be harmed if Apple, after the transaction, were to discontinue referrals from the Shazam app to them.
The Commission found that:
- the merged entity would not be able to shut out competing providers of digital music streaming services by accessing commercially sensitive information about their customers. In particular, access to Shazam's data would not materially increase Apple's ability to target music enthusiasts and any conduct aimed at making customers switch would only have a negligible impact. As a result, competing providers of digital music streaming services would not be shut out of the market;
- the merged entity would not be able to shut out competing providers of digital music streaming services by restricting access to the Shazam app. This reflects the fact the app has a limited importance as an entry point to the music streaming services of Apple Music's competitors; and
- the integration of Shazam's and Apple's datasets on user data would not confer a unique advantage to the merged entity in the markets on which it operates. Any concerns in that respect were dismissed because Shazam's data is not unique and Apple's competitors would still have the opportunity to access and use similar databases.
Companies and products
Apple is a US based global technology company which designs, manufactures and sells mobile communication, media devices, portable digital music players and personal computers. It also sells and delivers digital content online and offers the music and video streaming service ''Apple Music''.
Shazam is a UK based developer and distributor of music recognition applications for smartphones, tablets and PCs. It mainly generates revenues from online advertising, and commissions earned on referrals of users to digital music streaming and download services, such as Apple Music, Spotify and Deezer.
__._,_.___
9th Circuit: "We consider whether the Eighth Amendment’s prohibition on cruel and unusual punishment bars a city from prosecuting people criminally for sleeping outside on public property when those people have no home or other shelter to go to. We conclude that it does."
http://cdn.ca9.uscourts.gov/datastore/opinions/2018/09/04/15-35845.pdf
http://cdn.ca9.uscourts.gov/datastore/opinions/2018/09/04/15-35845.pdf
NYT: The Government’s New Strategy to Crack Down on ‘Stock Trader Spoofing’
The Justice Department charged two former Deutsche Bank traders late last month with wire fraud for placing and quickly canceling orders to move markets.
By Peter J. Henning
The Justice Department has tried to crack down on traders who try to move markets by entering and quickly canceling orders, conduct that goes by the catchy moniker “spoofing.”
But the government’s early prosecution of the crime has faced a big setback. In just the second trial for spoofing, which the Dodd-Frank Act outlawed, a Connecticut jury acquitted a former trader at UBS of spoofing this spring. That raised questions about whether prosecutors can pursue these cases.
Late July the Justice Department took a new tack. Rather than use the spoofing law, prosecutors charged two former Deutsche Bank traders, James Vorley and Cedric Chanu, with wire fraud. The government claims the pair placed and quickly canceled orders for precious metals futures contracts to create the impression that there was greater supply or demand.
https://www.nytimes.com/2018/09/04/business/dealbook/government-strategy-crack-down-on-spoofing.html?rref=collection%2Fsectioncollection%2Fbusiness&action=click&contentCollection=business®ion=stream&module=stream_unit&version=latest&contentPlacement=4&pgtype=sectionfront
The Justice Department charged two former Deutsche Bank traders late last month with wire fraud for placing and quickly canceling orders to move markets.
By Peter J. Henning
The Justice Department has tried to crack down on traders who try to move markets by entering and quickly canceling orders, conduct that goes by the catchy moniker “spoofing.”
But the government’s early prosecution of the crime has faced a big setback. In just the second trial for spoofing, which the Dodd-Frank Act outlawed, a Connecticut jury acquitted a former trader at UBS of spoofing this spring. That raised questions about whether prosecutors can pursue these cases.
Late July the Justice Department took a new tack. Rather than use the spoofing law, prosecutors charged two former Deutsche Bank traders, James Vorley and Cedric Chanu, with wire fraud. The government claims the pair placed and quickly canceled orders for precious metals futures contracts to create the impression that there was greater supply or demand.
https://www.nytimes.com/2018/09/04/business/dealbook/government-strategy-crack-down-on-spoofing.html?rref=collection%2Fsectioncollection%2Fbusiness&action=click&contentCollection=business®ion=stream&module=stream_unit&version=latest&contentPlacement=4&pgtype=sectionfront
President Trump says tech firms may be in a “very antitrust situation”
Referring to Google, Amazon, and Facebook, he repeatedly said he can’t comment publicly on whether they should be broken up.
“I won’t comment on the breaking up, of whether it’s that or Amazon or Facebook,” Trump said in an Oval Office interview Thursday with Bloomberg News. “As you know, many people think it is a very antitrust situation, the three of them [including Google]. But I just, I won’t comment on that.”
Note: Our angry comment translator is unavailable to explain Trump's antitrust thinking. DR
https://www.bloomberg.com/news/articles/2018-08-30/google-under-fire-again-on-search-as-hatch-calls-for-ftc-probe
Referring to Google, Amazon, and Facebook, he repeatedly said he can’t comment publicly on whether they should be broken up.
“I won’t comment on the breaking up, of whether it’s that or Amazon or Facebook,” Trump said in an Oval Office interview Thursday with Bloomberg News. “As you know, many people think it is a very antitrust situation, the three of them [including Google]. But I just, I won’t comment on that.”
Note: Our angry comment translator is unavailable to explain Trump's antitrust thinking. DR
https://www.bloomberg.com/news/articles/2018-08-30/google-under-fire-again-on-search-as-hatch-calls-for-ftc-probe
California abolishes cash bail, aiming to treat rich and poor defendants equally
SMARTINEZ, Calif. —California has abolished bail as a condition of pretrial release, a controversial move to address inequities in the justice system that have often allowed those with personal wealth to walk free while poor defendants, unable to pay, have been incarcerated.
The measure, signed into law by Gov. Jerry Brown (D) on Tuesday, puts California at the head of a small group of states that have made bail reform a priority amid rising incarceration rates and increasing concerns about the justice system’s economic and racial biases.
From https://www.msn.com/en-us/news/crime/california-abolishes-cash-bail-aiming-to-treat-rich-and-poor-defendants-equally/ar-BBMDdn3?ocid=spartandhp
SMARTINEZ, Calif. —California has abolished bail as a condition of pretrial release, a controversial move to address inequities in the justice system that have often allowed those with personal wealth to walk free while poor defendants, unable to pay, have been incarcerated.
The measure, signed into law by Gov. Jerry Brown (D) on Tuesday, puts California at the head of a small group of states that have made bail reform a priority amid rising incarceration rates and increasing concerns about the justice system’s economic and racial biases.
From https://www.msn.com/en-us/news/crime/california-abolishes-cash-bail-aiming-to-treat-rich-and-poor-defendants-equally/ar-BBMDdn3?ocid=spartandhp
DMN: California’s ‘Gold Standard’ Net Neutrality Bill Moves Towards a Final Vote
California’s stringent net neutrality bill, SB 822, has been overwhelmingly approved by the State Assembly.
The California State Assembly has overwhelmingly passed net neutrality bill SB 822, 58-17. The lopsided decision, issued Thursday (August 30th), will send the tough provision to the California Senate before it hits the desk of state governor Jerry Brown.
Both are widely expected to pass the measure.
The story continues here. https://www.digitalmusicnews.com/2018/08/30/california-net-neutrality-final-vote/
Copy of Statement of Arbitrator -- Kaepernick:
The Justice Department's filed "statement of interest" that sides with a group of students rejected for admission by Harvard University who allege the school discriminates against Asian-American applicants.
The URL for the filing appears below. In the "statement of interest" the Justice Department says that Harvard can't show it is following legal restrictions established to limit how race is used as a factor in admissions, essentially agreeing with the plaintiffs in the case, Students for Fair Admissions.
https://www.justice.gov/opa/press-release/file/1090856/download?utm_medium=email&utm_source=govdelivery
The University responded Thursday.
"We are deeply disappointed that the Department of Justice has taken the side of Edward Blum and Students for Fair Admissions, recycling the same misleading and hollow arguments that prove nothing more than the emptiness of the case against Harvard. This decision is not surprising given the highly irregular investigation the DOJ has engaged in thus far, and its recent action to repeal Obama-era guidelines on the consideration of race in admission," the Harvard statement said.
"Harvard does not discriminate against applicants from any group, and will continue to vigorously defend the legal right of every college and university to consider race as one factor among many in college admissions, which the Supreme Court has consistently upheld for more than 40 years. Colleges and universities must have the freedom and flexibility to create the diverse communities that are vital to the learning experience of every student, and Harvard is proud to stand with the many organizations and individuals who are filing briefs in support of this position today," the statement continued.
The URL for Harvard's 8/27/2018 filed Reply is here: https://admissionscase.harvard.edu/files/adm-case/files/harvards_reply_brief_iso_summary_judgment.pdf
A number of amicus briefs have been filed in support of Harvard. URLs can be found at https://admissionscase.harvard.edu/supporting-documents
The initial Kaepernick grievance filing by the Geragos firm is here: http://a.espncdn.com/pdf/2017/1015/KaepernickGrievance_r.pdf
From DC AG Racine's recent newsletter-- short term residential rentals (like Air BnB):
Last week, I demanded landlords at 33 apartment buildings detail how their commercial short-term rentals work. This action was in response to residents who claim they were not informed about hotel-like businesses operating in their apartment buildings and worry that the rowdy guests pose safety concerns. Under the law, landlords must disclose their operation of these hotel-like units to their residents. These requests for information will help us determine if the landlords misled their long-standing residents about the short-term rentals and if they violated District consumer protection or rent control laws.
I will continue to use all the tools at my disposal to ensure that commercialized short-term apartment rentals do not endanger District residents or our supply of affordable housing.
Last week, I demanded landlords at 33 apartment buildings detail how their commercial short-term rentals work. This action was in response to residents who claim they were not informed about hotel-like businesses operating in their apartment buildings and worry that the rowdy guests pose safety concerns. Under the law, landlords must disclose their operation of these hotel-like units to their residents. These requests for information will help us determine if the landlords misled their long-standing residents about the short-term rentals and if they violated District consumer protection or rent control laws.
I will continue to use all the tools at my disposal to ensure that commercialized short-term apartment rentals do not endanger District residents or our supply of affordable housing.
In July The New York City Council voted in favor of a new law requiring Airbnb and similar home-share companies to share data on their users with NYC government
The law was characterized by the council as one that would “provide the City with an additional tool to enforce the laws against illegal short term rentals.” “This bill is about transparency and bringing accountability to billion-dollar companies who are not being good neighbors,” explained NYC Councilwoman Carlina Rivera.
You can read the text here --legistar.council.nyc.gov/ViewReport.ashx?M=R&N=Text&GID=61&ID=3143400&GUID=AB36F650-AAE2-444B-A300-8CF56C056E99&Title=Legislation+Text
The law was characterized by the council as one that would “provide the City with an additional tool to enforce the laws against illegal short term rentals.” “This bill is about transparency and bringing accountability to billion-dollar companies who are not being good neighbors,” explained NYC Councilwoman Carlina Rivera.
You can read the text here --legistar.council.nyc.gov/ViewReport.ashx?M=R&N=Text&GID=61&ID=3143400&GUID=AB36F650-AAE2-444B-A300-8CF56C056E99&Title=Legislation+Text
Three editorials (pointed out by Consumer Law and Policy Blog)
The Washington Post, addressing the current work of the CFPB and the Department of Education, had editorials yesterday and today pertinent to student loans and higher education: Read "The Trump administration’s scandalous handling of student loans," here. Read "How Betsy DeVos could trigger another financial meltdown," here.
The New York Times, addressing proposed changes by the Office of the Comptroller of the Currency to the rules for banks compliance with the Community Reinvestment Act, writes "A Green Light for Banks to Start ‘Redlining’ Again," here.
The Washington Post, addressing the current work of the CFPB and the Department of Education, had editorials yesterday and today pertinent to student loans and higher education: Read "The Trump administration’s scandalous handling of student loans," here. Read "How Betsy DeVos could trigger another financial meltdown," here.
The New York Times, addressing proposed changes by the Office of the Comptroller of the Currency to the rules for banks compliance with the Community Reinvestment Act, writes "A Green Light for Banks to Start ‘Redlining’ Again," here.
Email from Solar United Neighbors (excerpt): As part of a settlement agreement with Solar United Neighbors, the DC government, Pepco, and other stakeholders, last week the DC Public Service Commission (PSC) rejected Pepco’s proposal to increase residential demand charges in our electric bills.
Residential demand charges are a particularly unfair, confusing, and unpredictable rate increase because of how they are calculated and how they can impact your bill for the rest of the year. Typically, demand charges have been applied to large commercial operations, where the impact of the energy use—say to run a factory full of equipment—would materially impact the amount of energy the grid needed to supply. Residential demand charges, on the other hand, make no sense and are punitive to those who try to lower their bills by using less energy and installing solar panels on their roofs.One of the important factors in the settlement was the strong public outcry against the rate increase.
Residential demand charges are a particularly unfair, confusing, and unpredictable rate increase because of how they are calculated and how they can impact your bill for the rest of the year. Typically, demand charges have been applied to large commercial operations, where the impact of the energy use—say to run a factory full of equipment—would materially impact the amount of energy the grid needed to supply. Residential demand charges, on the other hand, make no sense and are punitive to those who try to lower their bills by using less energy and installing solar panels on their roofs.One of the important factors in the settlement was the strong public outcry against the rate increase.
A U.S. federal judge authorizes the seizure of Citgo Petroleum Corp. to satisfy a Venezuelan government debt
The ruling that could set off a scramble among Venezuela’s many unpaid creditors to wrest control of its only obviously seizable U.S. asset.
Judge Leonard P. Stark of the U.S. District Court in Wilmington, Del., issued the ruling.
The court order raises the likelihood that Venezuela’s state oil company, Petróleos de Venezuela SA, will lose control of a valuable external asset amid the country’s deepening economic and political crisis. The decision could still be appealed to a higher, federal court.
Excerpts from https://www.wsj.com/articles/u-s-judge-authorizes-seizure-of-venezuelas-citgo-1533853734 (paywall)
The ruling that could set off a scramble among Venezuela’s many unpaid creditors to wrest control of its only obviously seizable U.S. asset.
Judge Leonard P. Stark of the U.S. District Court in Wilmington, Del., issued the ruling.
The court order raises the likelihood that Venezuela’s state oil company, Petróleos de Venezuela SA, will lose control of a valuable external asset amid the country’s deepening economic and political crisis. The decision could still be appealed to a higher, federal court.
Excerpts from https://www.wsj.com/articles/u-s-judge-authorizes-seizure-of-venezuelas-citgo-1533853734 (paywall)
What is the effect on US automobile consumers of the Trump Administration's new trade deal with Mexico? Not much, according to Bloomberg -- Washington selling tweaks to existing treaties as historic victories
By
David Fickling
and
Anjani Trivedi
August 28, 2018, 3:20 AM
A car can look like a fantastic bargain on the lot, only to reveal itself as a lemon when you drive it away. It’s not so different with trade agreements.
Take the deal hammered out Monday between the U.S. and Mexico on automotive imports, which the two countries hope to extend to Canada, the third member of the North American Free Trade Agreement.
The key elements certainly look dramatic: lifting rules-of-origin requirements to 75 percent to avoid import tariffs, and a separate rule that 40 percent to 45 percent of content come from factories paying more than $16 an hour. The wage rule in particular is about twice what Mexican assembly-line workers make, and four times the average at parts companies there.
When you take a look under the hood, though, there’s a lot less than meets the eye.
Take those rules-of-origin requirments. These specify the share of a car’s content that must be made within Nafta, and have been at 62.5 percent for 16 years. Usefully, the National Highway Traffic Safety Administration already produces data on rules of origin so that U.S. consumers can buy local, and these show which cars would be affected by the change.
Big Deal
Just three Mexican-made cars that don't currently attract Nafta tariffs will do so under the revised agreement, according to NHTSA data
Based on the NHTSA’s data, there are just three models made in Mexico that are currently exempt but would attract tariffs under the new regime: Nissan Motor Co.’s Versa Sedan, Audi AG’s SQ5, and Fiat Chrysler Automobiles NV’s Fiat 500. Of these, only the Versa sells more than a handful of models in the U.S., with 106,772 vehicles shipped in 2017.
The wage rules are likely to be tougher, though even there the devil is in the detail. Almost all non-Nafta content in Mexican-made cars sold in the U.S. comes from Germany, Japan or South Korea, where total compensation typically takes pay well above $16 an hour. So unless the requirement relates solely to Nafta workers earning at least $16 per hour (full details haven’t been released yet), the rules will only really affect vehicles that are at least 55 percent made in Mexico.
That’s a similarly small group. Excluding Ford Motor Co.’s Fusion and Fiesta, General Motors Co.’s Chevrolet City Express, and Mazda Motor Corp.’s Mazda2 — which are already off the U.S. market or heading that way — they sold a collective 658,640 units in 2017, according to our calculations. That compares with total imports from Mexico of about 2.44 million cars.
There’s still likely to be some pain at the margins. The impact of the rules on parts supply chains could reduce earnings at Mazda and Nissan by 5 billion yen ($45 million) and 15 billion yen, respectively, or 4 percent and 2 percent of operating profits, according to Nomura Holdings Inc.’s estimates. With automakers continuing to battle rising costs from President Donald Trump’s other tariffs, any additional pressure won’t help.
Still, the small list of affected vehicles chimes with the equanimity with which the agreement is being greeted in Mexico.
About 70 percent of the country’s light-vehicle exports to the U.S. would be compliant under the new rules, with the remaining 30 percent getting a five-year phase-in period running through 2024, Economy Minister Ildefonso Guajardo told a press conference Monday. Even those that fall short would only receive the usual tariff of 2.5 percent for cars and 25 percent for trucks — levels that Volkswagen AG, Hyundai Motor Co., Kia Motors Corp. and others consider worth paying on swathes of models in return for Mexico’s drastically cheaper labor costs.
It’s likely to be a similar story with Canada, which shouldn’t be affected at all by the wage rules. “Canada should find it relatively simple to join the U.S.-Mexico consensus” and the agreement is a “fundamentally positive development” that should reduce perceptions of risks around Nafta, Brett House, deputy chief economist at Bank of Nova Scotia, wrote in a note after the announcement.
The Honda CR-V and two-door Civic, the Ford Flex, and three Lincoln and Cadillac models are the only Canada-produced cars that would be swept up in an extended version of the U.S-Mexico deal
It shouldn’t be all that surprising that this deal is more limited than it first appears. Mexico is scarcely going to agree to devastate its domestic industry to please President Trump.
Indeed, its modest nature should be considered a virtue, and global equity markets are quite right to be rallying in relief that this element of uncertainty has been lifted.
If Washington can sell tweaks to existing treaties as historic victories that merit a ratcheting-down of global tensions, that’s good news for the other seemingly intractable trade disputes rumbling around the world.
https://www.bloomberg.com/view/articles/2018-08-28/trump-s-mexico-trade-deal-looks-like-a-lemon?cmpid=BBD082818_BIZ&utm_medium=email&utm_source=newsletter&utm_term=180828&utm_campaign=bloombergdaily
A slightly different take on trade deal and auto prices from CBS News:
Maybe higher wage requirements and higher local content requirements (aluminum and steel) will cause auto prices to rise
https://www.msn.com/en-us/money/markets/if-trump-slaps-auto-tariffs-on-canada-heres-what-itll-cost-the-us/ar-BBMDZO3?ocid=spartandhp
Maybe higher wage requirements and higher local content requirements (aluminum and steel) will cause auto prices to rise
https://www.msn.com/en-us/money/markets/if-trump-slaps-auto-tariffs-on-canada-heres-what-itll-cost-the-us/ar-BBMDZO3?ocid=spartandhp
WSJ Editors worry that "Half-Nafta" means higher auto prices
Excerpt:
The deal also imposes new red tape and costs on the auto industry to punish
imports. The deal says that to get tariff-free treatment cars sold in North
America must have 75% of their content made here, up from 62.5%, and at
least 40% of the content must be made with workers who earn $16 an hour.
This is politically managed trade, and its economic logic is the opposite of Mr.
Trump’s domestic deregulation agenda. Ford and GM seem to have made
their peace with this intrusion into their management, but car makers with
assembly plants in Tennessee, Alabama and other GOP-leaning U.S. states
could suffer if they import more than 25% of their parts.
This auto gambit is part of the Trump-Lighthizer strategy to blow up global
supply chains, and it is a political strategy to get a revised deal through
Congress. That also explains the deal’s new labor provisions that go far to
imposing U.S.-style labor laws on Mexico. The details still aren’t clear, but Mr.
Lighthizer said Monday those rules will be “enforceable” on Mexico as part of
the new deal.
https://www.wsj.com/articles/half-a-nafta-1535413208?mod=searchresults&page=1&pos=9 (pay wall)
Excerpt:
The deal also imposes new red tape and costs on the auto industry to punish
imports. The deal says that to get tariff-free treatment cars sold in North
America must have 75% of their content made here, up from 62.5%, and at
least 40% of the content must be made with workers who earn $16 an hour.
This is politically managed trade, and its economic logic is the opposite of Mr.
Trump’s domestic deregulation agenda. Ford and GM seem to have made
their peace with this intrusion into their management, but car makers with
assembly plants in Tennessee, Alabama and other GOP-leaning U.S. states
could suffer if they import more than 25% of their parts.
This auto gambit is part of the Trump-Lighthizer strategy to blow up global
supply chains, and it is a political strategy to get a revised deal through
Congress. That also explains the deal’s new labor provisions that go far to
imposing U.S.-style labor laws on Mexico. The details still aren’t clear, but Mr.
Lighthizer said Monday those rules will be “enforceable” on Mexico as part of
the new deal.
https://www.wsj.com/articles/half-a-nafta-1535413208?mod=searchresults&page=1&pos=9 (pay wall)
Is Judge Kavanaugh a Fan of Antitrust Laws?
By CPI on August 27, 2018
Posted by The Legal Intelligencer
By Carl W. Hittinger and Tyson Y. Herrold
We know Judge Brett Kavanaugh is a fan of the Washington Nationals. But is he also a fan of the antitrust laws? On July 9, 2018, President Donald Trump nominated Kavanaugh, who currently sits on the U.S. Court of Appeals for the District of Columbia Circuit, to replace retiring justice and long-time swing voter Anthony Kennedy. Judge Kavanaugh is sure to be the subject of exacting congressional scrutiny on any number of topics. But the Senate Judiciary Committee should not overlook Kavanuagh’s antitrust jurisprudence. As of this writing, Kavanaugh’s Senate Judiciary Committee hearing is scheduled to begin on Sept. 4.
Unlike Justice Neil Gorsuch, who practiced antitrust law in the private sector and authored three unanimous antitrust opinions while on the U.S. Court of Appeals for the Tenth Circuit, Judge Kavanaugh has no private antitrust experience. Kavanaugh has authored two antitrust dissents while on the D.C. Circuit, both of which drew sharp criticism from fellow judicial panel members. Despite his limited antitrust experience, these dissents shed some light on Kavanaugh’s antitrust and economic persuasion and provide fertile ground for congressional examination.
‘FTC v. Whole Foods Market’
In the 2008 case of FTC v. Whole Foods, the FTC filed a motion for preliminary injunction challenging Whole Foods’ merger with Wild Oats, which the district court denied. The ensuing appeal to the D.C. Circuit turned on the appropriate definition of the relevant product market. The FTC defined the market as “premium, natural, and organic supermarkets,” called “PNOS” for short. According to the FTC, these stores “focus on high-quality perishables,” “generally have high levels of customer services,” “target affluent and well educated customers,” and “emphasi[ze] … social and environmental responsibility.”
D.C. Circuit Judge Janice Brown, with Judge David Tatel concurring in the judgement, agreed with the FTC’s narrow PNOS market definition and rejected Whole Foods’ proposed alternative market, which included so-called “conventional” supermarkets. In support, Judge Brown pointed to evidence of lower profits on “high-quality perishables” where Whole Foods and Wild Oats competed, compared to where they did not. Further economic data from the FTC showed that, although PNOSs competed with conventional supermarkets for “dry grocery” goods, conventional supermarkets had little to no effect on margins for the “high-quality perishables” sold by PNOSs. Judge Brown also relied on Whole Foods’ proprietary “internal projections” that a majority of Wild Oats’ consumers would switch to Whole Foods if the former chain closed, as well as “pseudonymous blog postings” by Whole Foods’ CEO that conventional supermarkets were “unable to compete” with PNOSs.
Dissenting, Kavanaugh branded the FTC’s case “weak” and, by extension, the court’s decision to preliminarily enjoin the merger (according to him), “a relic of a bygone era when antitrust law was divorced from basic economic principles.”
First, Kavanaugh criticized the court for “diluting the standard for preliminary injunction relief.” He argued that its purportedly lenient application of that standard allowed the “FTC to just snap its fingers and temporarily block a merger.” Citing Robert Bork’s famous (or infamous) book “The Antitrust Paradox,” Kavanaugh explained, “the FTC’s position … calls to mind the bad old days when mergers were viewed with suspicion regardless of their economic benefits.”
In turn, in his concurrence, Judge Tatel called Kavanaugh’s criticism “baffling” and noted that the court “scrupulously followed … the likelihood of success standard.” He rebuked Kavanaugh for his “zeal to reach the merits and preempt the FTC” and reminded him that the preliminary injunction standard was designed by Congress to maintain the status quo pending the FTC’s administrative review of mergers within its jurisdiction.
Second, throwing binding case authority to the winds (not to mention stare decisis), Kavanaugh criticized the court for relying too heavily on the Supreme Court’s Brown Shoe v. United States decision, which framed “practical indicia,” or factors, used to identify discrete product submarkets in merger cases. He called that binding decision “free-wheeling,” and commented that it “has not stood the test of time.” Kavanaugh again approvingly quoted a passage from Bork’s “Antitrust Paradox,” contending that, while it would be “overhasty to say that the Brown Shoe opinion is the worst antitrust essay ever written, … [it] has considerable claim to the title.”
Third, Kavanaugh rejected the court’s PNOS product market, citing Whole Foods’ economic expert. Kavanaugh applauded that expert for relying on “all-but-dispositive price evidence” that prices were uniform across Whole Foods’ stores, regardless of whether there was a competing PNOS like Wild Oats in the area. This observation drew further sharp criticism from Judge Tatel who, calling Kavanaugh’s “all-but-dispositive” price evidence “all-but-meaningless,” pointed out that Whole Foods’ expert testimony only showed pricing on a single day and only after “Whole Foods announced its intent to acquire Wild Oats.” This made the data susceptible, according to Judge Tatel, to “manipulation” and “gave Whole Foods every incentive to eliminate any price differences that may have previously existed between its stores … not only to avoid antitrust liability, but also because the company was no longer competing with Wild Oats.”
Continue reading…https://www.law.com/thelegalintelligencer/2018/08/24/is-judge-kavanaugh-a-fan-of-antitrust-laws-lets-take-a-look/
By CPI on August 27, 2018
Posted by The Legal Intelligencer
By Carl W. Hittinger and Tyson Y. Herrold
We know Judge Brett Kavanaugh is a fan of the Washington Nationals. But is he also a fan of the antitrust laws? On July 9, 2018, President Donald Trump nominated Kavanaugh, who currently sits on the U.S. Court of Appeals for the District of Columbia Circuit, to replace retiring justice and long-time swing voter Anthony Kennedy. Judge Kavanaugh is sure to be the subject of exacting congressional scrutiny on any number of topics. But the Senate Judiciary Committee should not overlook Kavanuagh’s antitrust jurisprudence. As of this writing, Kavanaugh’s Senate Judiciary Committee hearing is scheduled to begin on Sept. 4.
Unlike Justice Neil Gorsuch, who practiced antitrust law in the private sector and authored three unanimous antitrust opinions while on the U.S. Court of Appeals for the Tenth Circuit, Judge Kavanaugh has no private antitrust experience. Kavanaugh has authored two antitrust dissents while on the D.C. Circuit, both of which drew sharp criticism from fellow judicial panel members. Despite his limited antitrust experience, these dissents shed some light on Kavanaugh’s antitrust and economic persuasion and provide fertile ground for congressional examination.
‘FTC v. Whole Foods Market’
In the 2008 case of FTC v. Whole Foods, the FTC filed a motion for preliminary injunction challenging Whole Foods’ merger with Wild Oats, which the district court denied. The ensuing appeal to the D.C. Circuit turned on the appropriate definition of the relevant product market. The FTC defined the market as “premium, natural, and organic supermarkets,” called “PNOS” for short. According to the FTC, these stores “focus on high-quality perishables,” “generally have high levels of customer services,” “target affluent and well educated customers,” and “emphasi[ze] … social and environmental responsibility.”
D.C. Circuit Judge Janice Brown, with Judge David Tatel concurring in the judgement, agreed with the FTC’s narrow PNOS market definition and rejected Whole Foods’ proposed alternative market, which included so-called “conventional” supermarkets. In support, Judge Brown pointed to evidence of lower profits on “high-quality perishables” where Whole Foods and Wild Oats competed, compared to where they did not. Further economic data from the FTC showed that, although PNOSs competed with conventional supermarkets for “dry grocery” goods, conventional supermarkets had little to no effect on margins for the “high-quality perishables” sold by PNOSs. Judge Brown also relied on Whole Foods’ proprietary “internal projections” that a majority of Wild Oats’ consumers would switch to Whole Foods if the former chain closed, as well as “pseudonymous blog postings” by Whole Foods’ CEO that conventional supermarkets were “unable to compete” with PNOSs.
Dissenting, Kavanaugh branded the FTC’s case “weak” and, by extension, the court’s decision to preliminarily enjoin the merger (according to him), “a relic of a bygone era when antitrust law was divorced from basic economic principles.”
First, Kavanaugh criticized the court for “diluting the standard for preliminary injunction relief.” He argued that its purportedly lenient application of that standard allowed the “FTC to just snap its fingers and temporarily block a merger.” Citing Robert Bork’s famous (or infamous) book “The Antitrust Paradox,” Kavanaugh explained, “the FTC’s position … calls to mind the bad old days when mergers were viewed with suspicion regardless of their economic benefits.”
In turn, in his concurrence, Judge Tatel called Kavanaugh’s criticism “baffling” and noted that the court “scrupulously followed … the likelihood of success standard.” He rebuked Kavanaugh for his “zeal to reach the merits and preempt the FTC” and reminded him that the preliminary injunction standard was designed by Congress to maintain the status quo pending the FTC’s administrative review of mergers within its jurisdiction.
Second, throwing binding case authority to the winds (not to mention stare decisis), Kavanaugh criticized the court for relying too heavily on the Supreme Court’s Brown Shoe v. United States decision, which framed “practical indicia,” or factors, used to identify discrete product submarkets in merger cases. He called that binding decision “free-wheeling,” and commented that it “has not stood the test of time.” Kavanaugh again approvingly quoted a passage from Bork’s “Antitrust Paradox,” contending that, while it would be “overhasty to say that the Brown Shoe opinion is the worst antitrust essay ever written, … [it] has considerable claim to the title.”
Third, Kavanaugh rejected the court’s PNOS product market, citing Whole Foods’ economic expert. Kavanaugh applauded that expert for relying on “all-but-dispositive price evidence” that prices were uniform across Whole Foods’ stores, regardless of whether there was a competing PNOS like Wild Oats in the area. This observation drew further sharp criticism from Judge Tatel who, calling Kavanaugh’s “all-but-dispositive” price evidence “all-but-meaningless,” pointed out that Whole Foods’ expert testimony only showed pricing on a single day and only after “Whole Foods announced its intent to acquire Wild Oats.” This made the data susceptible, according to Judge Tatel, to “manipulation” and “gave Whole Foods every incentive to eliminate any price differences that may have previously existed between its stores … not only to avoid antitrust liability, but also because the company was no longer competing with Wild Oats.”
Continue reading…https://www.law.com/thelegalintelligencer/2018/08/24/is-judge-kavanaugh-a-fan-of-antitrust-laws-lets-take-a-look/
NYT: Central bankers are wrestling with the idea that how companies compete and exert power affects the overall well-being of the economy.
From the NYT: While these topics more commonly show up in debates around antitrust policy or how the labor market is regulated, it may have implications for the work of central banks as well. For example, if concentrated corporate power is depressing wage growth, the Fed may be able to keep interest rates lower for longer without inflation breaking out. If online retail makes prices jump around more than they once did, policymakers should be more reluctant to make abrupt policy changes based on short-term swings in consumer prices.
Alan Krueger, a Princeton economist, argues that monopsony power is most likely part of the apparent puzzle of why wage growth is low. By his estimates, wages should be rising 1 to 1.5 percentage points faster than they are, given recent inflation levels and the unemployment rate. His paper is at https://www.kansascityfed.org/~/media/files/publicat/sympos/2018/papersandhandouts/824180824kruegerremarks.pdf?la=en
Nicolas Crouzet and Janice Eberly of Northwestern University presented a paper pointing out that more of the investment of modern corporations takes the form of intangible capital, like software and patents, rather than machines and other physical goods. That may be a reason low interest rate policies by central banks over the past decade didn’t prompt more capital spending. Banks are generally disinclined to treat intellectual property or other intangible items as collateral against loans, which could mean interest rate cuts by a central bank have less power to generate increased investment spending. The Crouzet-Eberly paper is at https://www.kansascityfed.org/~/media/files/publicat/sympos/2018/papersandhandouts/824180810eberlycrouzetpaper.pdf?la=enwww.kansascityfed.org/~/media/files/publicat/sympos/2018/papersandhandouts/824180810eberlycrouzetpaper.pdf?la=en
The NYT article is at https://www.nytimes.com/2018/08/25/upshot/big-corporations-influence-economy-central-bank.html?action=click&module=Well&pgtype=Homepage§ion=The%20Upshot
From the NYT: While these topics more commonly show up in debates around antitrust policy or how the labor market is regulated, it may have implications for the work of central banks as well. For example, if concentrated corporate power is depressing wage growth, the Fed may be able to keep interest rates lower for longer without inflation breaking out. If online retail makes prices jump around more than they once did, policymakers should be more reluctant to make abrupt policy changes based on short-term swings in consumer prices.
Alan Krueger, a Princeton economist, argues that monopsony power is most likely part of the apparent puzzle of why wage growth is low. By his estimates, wages should be rising 1 to 1.5 percentage points faster than they are, given recent inflation levels and the unemployment rate. His paper is at https://www.kansascityfed.org/~/media/files/publicat/sympos/2018/papersandhandouts/824180824kruegerremarks.pdf?la=en
Nicolas Crouzet and Janice Eberly of Northwestern University presented a paper pointing out that more of the investment of modern corporations takes the form of intangible capital, like software and patents, rather than machines and other physical goods. That may be a reason low interest rate policies by central banks over the past decade didn’t prompt more capital spending. Banks are generally disinclined to treat intellectual property or other intangible items as collateral against loans, which could mean interest rate cuts by a central bank have less power to generate increased investment spending. The Crouzet-Eberly paper is at https://www.kansascityfed.org/~/media/files/publicat/sympos/2018/papersandhandouts/824180810eberlycrouzetpaper.pdf?la=enwww.kansascityfed.org/~/media/files/publicat/sympos/2018/papersandhandouts/824180810eberlycrouzetpaper.pdf?la=en
The NYT article is at https://www.nytimes.com/2018/08/25/upshot/big-corporations-influence-economy-central-bank.html?action=click&module=Well&pgtype=Homepage§ion=The%20Upshot
Companies and advocacy groups file amicus brief asking appeals court to review the FCC decision to end net neutrality rules.
Software developer Mozilla Corp., video-sharing service Vimeo LLC, and e-commerce site Etsy Inc., and other technology advocacy groups and media companies filed the brief Monday in the U.S. Court of Appeals for the District of Columbia Circuit [#18-1051], joining a petition by attorneys general of 22 states and D.C. against the FCC order ending net neutrality.
The brief is at https://blog.mozilla.org/wp-content/uploads/2018/08/As-filed-Initial-NG-Petitioners-Brief-Mozilla-v-FCC-20Aug2018-1.pdf
Software developer Mozilla Corp., video-sharing service Vimeo LLC, and e-commerce site Etsy Inc., and other technology advocacy groups and media companies filed the brief Monday in the U.S. Court of Appeals for the District of Columbia Circuit [#18-1051], joining a petition by attorneys general of 22 states and D.C. against the FCC order ending net neutrality.
The brief is at https://blog.mozilla.org/wp-content/uploads/2018/08/As-filed-Initial-NG-Petitioners-Brief-Mozilla-v-FCC-20Aug2018-1.pdf
PBS Newshour segment suggests that stock buybacks artificially limit supply and raise price of stocks
www.pbs.org/newshour/show/why-recent-stock-market-gains-might-not-benefit-the-economy
Excerpt:
Irene Tung:
By buying back a company’s stock, the company is removing from the open market a number of shares, creating an artificial scarcity of shares, which then temporarily drives up the price.
www.pbs.org/newshour/show/why-recent-stock-market-gains-might-not-benefit-the-economy
Excerpt:
Irene Tung:
By buying back a company’s stock, the company is removing from the open market a number of shares, creating an artificial scarcity of shares, which then temporarily drives up the price.
From NYT: Opinion about negative effects of stock buybacks
By William Lazonick and Ken Jacobson
Excerpt:
In 2003, the S.E.C. revealed that it was aware of the use of buybacks to manipulate the stock market. The agency acknowledged, in amending Rule 10b-18 to include block trades, that “during the late 1990s, it was reported that many companies were spending more than half their net income on massive buyback programs that were intended to boost share prices — often supporting their share price at levels far above where they would otherwise trade.” But its 2003 amendment was hardly a solution.
From 2003 to 2007, the value of buybacks by companies in the S.&P. 500 Index quadrupled, reaching almost $600 billion in 2007. With their cash reserves depleted by this orgy of buyback activity, these companies were more vulnerable when the downturn came. Having wasted billions on buybacks, many of them incurred huge losses and required mass layoffs to avoid bankruptcy.
After plummeting in 2008 and 2009, buybacks have again soared: A record $800 billion in buybacks by S.&P. 500 companies is predicted for this year.
Democrats have argued that the Republican tax cuts have funded increased buybacks. While this is true, the damage done by corporate stock buybacks over the past decades has been systemic.
Short of a Congressional ban on buybacks, as Ms. Baldwin proposes, the S.E.C. should immediately rescind Rule 10b-18, and confront the reality of stock market manipulation that open market repurchases entail. If Congress and regulators do not take action to rein in buybacks, the rampant economic inequality that already afflicts the United States will only get worse.
www.nytimes.com/2018/08/23/opinion/ban-stock-buybacks.html?action=click&module=Opinion&pgtype=Homepage
By William Lazonick and Ken Jacobson
Excerpt:
In 2003, the S.E.C. revealed that it was aware of the use of buybacks to manipulate the stock market. The agency acknowledged, in amending Rule 10b-18 to include block trades, that “during the late 1990s, it was reported that many companies were spending more than half their net income on massive buyback programs that were intended to boost share prices — often supporting their share price at levels far above where they would otherwise trade.” But its 2003 amendment was hardly a solution.
From 2003 to 2007, the value of buybacks by companies in the S.&P. 500 Index quadrupled, reaching almost $600 billion in 2007. With their cash reserves depleted by this orgy of buyback activity, these companies were more vulnerable when the downturn came. Having wasted billions on buybacks, many of them incurred huge losses and required mass layoffs to avoid bankruptcy.
After plummeting in 2008 and 2009, buybacks have again soared: A record $800 billion in buybacks by S.&P. 500 companies is predicted for this year.
Democrats have argued that the Republican tax cuts have funded increased buybacks. While this is true, the damage done by corporate stock buybacks over the past decades has been systemic.
Short of a Congressional ban on buybacks, as Ms. Baldwin proposes, the S.E.C. should immediately rescind Rule 10b-18, and confront the reality of stock market manipulation that open market repurchases entail. If Congress and regulators do not take action to rein in buybacks, the rampant economic inequality that already afflicts the United States will only get worse.
www.nytimes.com/2018/08/23/opinion/ban-stock-buybacks.html?action=click&module=Opinion&pgtype=Homepage
Nearly a decade after the crisis, the country's biggest banks are starting to raise their Washington profile.
from Bloomberg News article:
A prime example: the push for the Federal Reserve to reconsider its capital surcharge for global systemically important banks, an additional capital requirement for the country’s eight largest banks.
While Fed officials have not indicated that they have any immediate plans to recalibrate the surcharge, the fight is one that solely affects the industry’s largest institutions — a constituency that has garnered little traction in policymaking circles in recent years.
It’s a sign, observers say, that the biggest banks are starting to reassert themselves, after absorbing much of the blame for the financial crisis a decade ago. While moving legislation through Congress is likely to remain an uphill battle given ongoing suspicion of Wall Street on both sides of the aisle, the banks are now raising the profile of key issues they would like President Trump’s regulators to tackle at the banking agencies.
“They’ve come out of the shadows,” said Camden Fine, president and chief executive of Calvert Advisors and the former head of the Independent Community Bankers of America. “They’re becoming more vocal, more aggressive, more strident about the issues that are top priorities to them.”
Legislation to benefit the biggest banks would likely still prove difficult. But in some notable cases even lawmakers are starting to feel more comfortable supporting initiatives to help Wall Street institutions — especially now that regulatory relief for smaller institutions has passed Congress. Republican lawmakers in the House and Senate have both recently sent letters to the Fed asking it to reconsider the capital surcharge, a move backed by the industry. And just last week, seven Republican senators asked the Fed to consider further tailoring prudential standards for those above the $250 billion asset threshold as well as for those with assets between $100 billion and $250 billion.
The shift can also be seen in the fight over the Volcker Rule, a ban on proprietary trading that mostly affects the biggest institutions. As reported by The Wall Street Journal, representatives from more than half a dozen of the biggest banks have raised alarms about the Fed’s proposed revision to the rule, which they argue could make compliance even harder. The biggest banks have largely opposed the Volcker Rule since its creation under the Dodd-Frank Act.
As larger banks seek to re-enter the public debate, they’re bolstered by the support of two industry groups that have recently been revamped: The Financial Services Forum, which now represents eight major banks, is under new leadership, and the Bank Policy Institute, which speaks for large and regional institutions, is the byproduct of a merger between The Clearing House Association and the Financial Services Roundtable. The two groups recently collaborated on a joint blog post about the capital surcharge.
“There is a desire to have more of a voice in the conversation,” said Barbara Hagenbaugh, executive vice president and head of communications for the Financial Services Forum. “We think it is important and appropriate to address the issues of unique importance to our members and to convey the vital role they play in the economy.”
from Bloomberg News article:
A prime example: the push for the Federal Reserve to reconsider its capital surcharge for global systemically important banks, an additional capital requirement for the country’s eight largest banks.
While Fed officials have not indicated that they have any immediate plans to recalibrate the surcharge, the fight is one that solely affects the industry’s largest institutions — a constituency that has garnered little traction in policymaking circles in recent years.
It’s a sign, observers say, that the biggest banks are starting to reassert themselves, after absorbing much of the blame for the financial crisis a decade ago. While moving legislation through Congress is likely to remain an uphill battle given ongoing suspicion of Wall Street on both sides of the aisle, the banks are now raising the profile of key issues they would like President Trump’s regulators to tackle at the banking agencies.
“They’ve come out of the shadows,” said Camden Fine, president and chief executive of Calvert Advisors and the former head of the Independent Community Bankers of America. “They’re becoming more vocal, more aggressive, more strident about the issues that are top priorities to them.”
Legislation to benefit the biggest banks would likely still prove difficult. But in some notable cases even lawmakers are starting to feel more comfortable supporting initiatives to help Wall Street institutions — especially now that regulatory relief for smaller institutions has passed Congress. Republican lawmakers in the House and Senate have both recently sent letters to the Fed asking it to reconsider the capital surcharge, a move backed by the industry. And just last week, seven Republican senators asked the Fed to consider further tailoring prudential standards for those above the $250 billion asset threshold as well as for those with assets between $100 billion and $250 billion.
The shift can also be seen in the fight over the Volcker Rule, a ban on proprietary trading that mostly affects the biggest institutions. As reported by The Wall Street Journal, representatives from more than half a dozen of the biggest banks have raised alarms about the Fed’s proposed revision to the rule, which they argue could make compliance even harder. The biggest banks have largely opposed the Volcker Rule since its creation under the Dodd-Frank Act.
As larger banks seek to re-enter the public debate, they’re bolstered by the support of two industry groups that have recently been revamped: The Financial Services Forum, which now represents eight major banks, is under new leadership, and the Bank Policy Institute, which speaks for large and regional institutions, is the byproduct of a merger between The Clearing House Association and the Financial Services Roundtable. The two groups recently collaborated on a joint blog post about the capital surcharge.
“There is a desire to have more of a voice in the conversation,” said Barbara Hagenbaugh, executive vice president and head of communications for the Financial Services Forum. “We think it is important and appropriate to address the issues of unique importance to our members and to convey the vital role they play in the economy.”
Opinion from DMN:
You Can’t ‘Remaster’ a Brand-New Copyright, U.S. Court of Appeals Rules
August 21, 2018
Remastered oldies sound better. But they’re ultimately technical improvements that don’t constitute a brand-new copyright, the 9th Circuit Court of Appeals just ruled.The complexity of U.S. Copyright Law is now becoming outright absurd, especially as it relates to ‘pre-1972’ oldies recordings. For those just tuning in, federal copyright law in the United States only covers recorded works released after February 15th, 1972, with earlier works defaulting to a patchwork of state laws.
That, of course, has created a giant gray area for rights owners, as well as licensees. Unfortunately, those gray areas have translated into years of expensive litigation and confusion. And, some frankly absurd results.
A reversal of an earlier absurdity just happened in Pasadena, California, where the 9th Circuit Court of Appeals ruled that a remastered song doesn’t create a new copyright.
Why would a remastering create a brand-new copyright, you ask? Well, back in 2016, a lower court ruled that a remastering introduces substantially new elements into the recording, making it a brand-new work. That argument was cleverly posited by CBS Radio, which is fending off a lawsuit alleging that it should pay royalties for pre-1972 recordings.
The lawsuit was lodged by ABS Entertainment, which owns the recording copyrights of Al Green and other ‘oldies’ performers.
In a nutshell, CBS argued that it technically was never playing the old vinyl LPs of pre-1972 tracks. Instead, the station played digitally remastered CDs and digital files, which were released after 1972. Therefore, they should only be liable for post-1972 statutory rates under federal law, which are much lower.
The lower District Court agreed, opening up a number of strange possibilities. Read literally, the ruling meant that any recording copyright could theoretically be extended forever, as long as it was remixed before its expiration date. Other theoretical possibilities were equally hair-raising, though the 9th Circuit ruling has now slammed the door on a myriad of remastering loopholes.
Instead, the 9th Circuit has rejected the idea that a remaster is a substantially unique work deserving for new protections.“It should be evident that a remastered sound recording is not eligible for independent copyright protection as a derivative work unless its essential character and identity reflect a level of independent sound recording authorship that makes it a variation distinguishable from the underlying work,” 9th Circuit Court judge Richard Linn opined.
“That is so even if the digital version would be perceived by a listener to be a brighter or cleaner rendition.”
Accordingly, this case is now headed back to the lower District Court for reconsideration — and perhaps a more sane ruling.
The strange ruling is rooted in arcane U.S. Copyright Law, and this particular wrinkle isn’t quite getting fixed by the Music Modernization Act.Sadly, the Music Modernization Act (MMA) is threatening to further complicate oldies copyrights, in different ways. Under the CLASSICS sub-bill, pre-1972 oldies recordings would enjoy longer copyright terms and broader protections, but also be subject to a patchwork of state laws. That would give copyright owners the greatest level of protection and royalties, simply because states often carry stronger laws and payment requirements for pre-1972 works.
Perhaps predictably, CLASSICS has drawn a counter-proposal in the form of a competing bill. The ACCESS to Recordings Act, introduced by Oregon Democratic Senator Ron Wyden, would place pre-1972 recordings on the same copyright footing as every other recording, pre- or post-1972, a structure that would vastly simplify recording copyright in the US.
At this stage, it’s unclear if ACCESS will hamper the MMA’s chances of passage in the Senate (and ultimately into law).
Here’s the 9th Circuit Court Appeals ruling in ABS Entertainment Inc. v. CBS Corp. et al. [https://www.digitalmusicnews.com/wp-content/uploads/2011/07/9th_circuit_pre_1972_remaster.pdf]
See https://www.digitalmusicnews.com/2018/08/21/remaster-copyright-district-court-appeals/
You Can’t ‘Remaster’ a Brand-New Copyright, U.S. Court of Appeals Rules
August 21, 2018
Remastered oldies sound better. But they’re ultimately technical improvements that don’t constitute a brand-new copyright, the 9th Circuit Court of Appeals just ruled.The complexity of U.S. Copyright Law is now becoming outright absurd, especially as it relates to ‘pre-1972’ oldies recordings. For those just tuning in, federal copyright law in the United States only covers recorded works released after February 15th, 1972, with earlier works defaulting to a patchwork of state laws.
That, of course, has created a giant gray area for rights owners, as well as licensees. Unfortunately, those gray areas have translated into years of expensive litigation and confusion. And, some frankly absurd results.
A reversal of an earlier absurdity just happened in Pasadena, California, where the 9th Circuit Court of Appeals ruled that a remastered song doesn’t create a new copyright.
Why would a remastering create a brand-new copyright, you ask? Well, back in 2016, a lower court ruled that a remastering introduces substantially new elements into the recording, making it a brand-new work. That argument was cleverly posited by CBS Radio, which is fending off a lawsuit alleging that it should pay royalties for pre-1972 recordings.
The lawsuit was lodged by ABS Entertainment, which owns the recording copyrights of Al Green and other ‘oldies’ performers.
In a nutshell, CBS argued that it technically was never playing the old vinyl LPs of pre-1972 tracks. Instead, the station played digitally remastered CDs and digital files, which were released after 1972. Therefore, they should only be liable for post-1972 statutory rates under federal law, which are much lower.
The lower District Court agreed, opening up a number of strange possibilities. Read literally, the ruling meant that any recording copyright could theoretically be extended forever, as long as it was remixed before its expiration date. Other theoretical possibilities were equally hair-raising, though the 9th Circuit ruling has now slammed the door on a myriad of remastering loopholes.
Instead, the 9th Circuit has rejected the idea that a remaster is a substantially unique work deserving for new protections.“It should be evident that a remastered sound recording is not eligible for independent copyright protection as a derivative work unless its essential character and identity reflect a level of independent sound recording authorship that makes it a variation distinguishable from the underlying work,” 9th Circuit Court judge Richard Linn opined.
“That is so even if the digital version would be perceived by a listener to be a brighter or cleaner rendition.”
Accordingly, this case is now headed back to the lower District Court for reconsideration — and perhaps a more sane ruling.
The strange ruling is rooted in arcane U.S. Copyright Law, and this particular wrinkle isn’t quite getting fixed by the Music Modernization Act.Sadly, the Music Modernization Act (MMA) is threatening to further complicate oldies copyrights, in different ways. Under the CLASSICS sub-bill, pre-1972 oldies recordings would enjoy longer copyright terms and broader protections, but also be subject to a patchwork of state laws. That would give copyright owners the greatest level of protection and royalties, simply because states often carry stronger laws and payment requirements for pre-1972 works.
Perhaps predictably, CLASSICS has drawn a counter-proposal in the form of a competing bill. The ACCESS to Recordings Act, introduced by Oregon Democratic Senator Ron Wyden, would place pre-1972 recordings on the same copyright footing as every other recording, pre- or post-1972, a structure that would vastly simplify recording copyright in the US.
At this stage, it’s unclear if ACCESS will hamper the MMA’s chances of passage in the Senate (and ultimately into law).
Here’s the 9th Circuit Court Appeals ruling in ABS Entertainment Inc. v. CBS Corp. et al. [https://www.digitalmusicnews.com/wp-content/uploads/2011/07/9th_circuit_pre_1972_remaster.pdf]
See https://www.digitalmusicnews.com/2018/08/21/remaster-copyright-district-court-appeals/
Court decides: Constitution does not require State to require access to minimum level of education by which the child can attain literacy
The decision is here:http://mediad.publicbroadcasting.net/p/michigan/files/opinion_-_gary_b_vs_richard_snyder__16-13292.pdf [UNITED STATES DISTRICT COURT EASTERN DISTRICT OF MICHIGAN SOUTHERN DIVISION ]
Language from the opinion:
The conditions and outcomes of Plaintiffs' schools, as alleged, are nothing short of devastating. When a child who could be taught to read goes untaught, the child suffers a lasting injury—and so does society. But the Court is faced with a discrete question: does the Due Process Clause demand that a State affirmatively provide each child with a minimum level of education by which the child can attain literacy? Based on the foregoing analysis, the answer to the question is no.
The decision is here:http://mediad.publicbroadcasting.net/p/michigan/files/opinion_-_gary_b_vs_richard_snyder__16-13292.pdf [UNITED STATES DISTRICT COURT EASTERN DISTRICT OF MICHIGAN SOUTHERN DIVISION ]
Language from the opinion:
The conditions and outcomes of Plaintiffs' schools, as alleged, are nothing short of devastating. When a child who could be taught to read goes untaught, the child suffers a lasting injury—and so does society. But the Court is faced with a discrete question: does the Due Process Clause demand that a State affirmatively provide each child with a minimum level of education by which the child can attain literacy? Based on the foregoing analysis, the answer to the question is no.
The Trump Administration's National Park Service proposes fees for free speech demonstrations on federal land
A DCist article explains that NPS released a list of 14 proposed rule changes to the permitting process. One of the new rules under consideration is a requirement for permit applicants to pay fees for free speech demonstrations, to help NPS recover some of the costs of managing the events and providing security. NPS already requires people to pay for special event permits.
“The federal government and taxpayers shouldn’t be required to underwrite the cost of somebody’s special event, whether it’s a concert, wedding, or gathering of some sort,” said NPS spokesman Mike Litterst. “We’re just asking the question,” he said of the proposal to apply the same reasoning to demonstrations. He said there has been no discussion yet of what the fees would be.
The Park Service said the “volume and complexity” of permit requests for the National Mall and White House have increased over the years. NPS issues around 750 permits for First Amendment demonstrations and an additional 1,500 permits for special events in and around D.C. each year.
The NPS proposal URL is https://www.nps.gov/nama/learn/news/upload/TPM-Proposed-Rule-Regs-Draft-08-06-18.pdf
One proposal is: "Consider requiring permit applicants to pay fees to allow the NPS to recover some of the costs of administering permitted activities that contain protected speech."
A DCist article explains that NPS released a list of 14 proposed rule changes to the permitting process. One of the new rules under consideration is a requirement for permit applicants to pay fees for free speech demonstrations, to help NPS recover some of the costs of managing the events and providing security. NPS already requires people to pay for special event permits.
“The federal government and taxpayers shouldn’t be required to underwrite the cost of somebody’s special event, whether it’s a concert, wedding, or gathering of some sort,” said NPS spokesman Mike Litterst. “We’re just asking the question,” he said of the proposal to apply the same reasoning to demonstrations. He said there has been no discussion yet of what the fees would be.
The Park Service said the “volume and complexity” of permit requests for the National Mall and White House have increased over the years. NPS issues around 750 permits for First Amendment demonstrations and an additional 1,500 permits for special events in and around D.C. each year.
The NPS proposal URL is https://www.nps.gov/nama/learn/news/upload/TPM-Proposed-Rule-Regs-Draft-08-06-18.pdf
One proposal is: "Consider requiring permit applicants to pay fees to allow the NPS to recover some of the costs of administering permitted activities that contain protected speech."
Ninth Circuit Says Remastered Songs Not Original in Win for Pre-1972 Artists
Even if engineers make the sound brighter or cleaner, they do not alter the expressive character and identity of the original recording. The decision wipes away a creative defense mounted by broadcasting companies.
https://www.law.com/therecorder/2018/08/20/ninth-circuit-says-remastered-songs-not-original-in-win-for-pre-1972-artists/?kw=Ninth%20Circuit%20Says%20Remastered%20Songs%20Not%20Original%20in%20Win%20for%20Pre-1972%20Artists
Even if engineers make the sound brighter or cleaner, they do not alter the expressive character and identity of the original recording. The decision wipes away a creative defense mounted by broadcasting companies.
https://www.law.com/therecorder/2018/08/20/ninth-circuit-says-remastered-songs-not-original-in-win-for-pre-1972-artists/?kw=Ninth%20Circuit%20Says%20Remastered%20Songs%20Not%20Original%20in%20Win%20for%20Pre-1972%20Artists
Who knew? There is a theme song for those who don't like competition: The Too Much Competition Blues
https://www.youtube.com/watch?v=VR717pSC5Kc
https://www.youtube.com/watch?v=VR717pSC5Kc
Grunes and Stucke on terminating ASCAP and BMI decrees
In their article at https://www.competitionpolicyinternational.com/potential-legal-issues-in-terminating-the-ascap-and-bmi-decrees/?utm_source=CPI+Subscribers&utm_campaign=afe405147d-EMAIL_CAMPAIGN_2018_08_17_03_46&utm_medium=email&utm_term=0_0ea61134a5-afe405147d-236508653
Grunes and Stucke point out, among other things, that the decrees have played an important role in mitigating the antitrust risks from ASCAP and BMI while promoting the efficiencies from collective licensing; and that it is a problem that if the ASCAP and BMI consent decrees were terminated, the duopoly would remain, and licensees and consumers would bear the risk of unduly restrictive anticompetitive practices.
A related problem pointed out by the authors is the difficulty the DOJ would likely face in convincing the court that terminating the decrees would benefit the public, given that it reached the opposite conclusion a couple of years ago. Moreover, the concerns the DOJ heard during its review process from licensees, such as Netflix, Pandora, and religious broadcasters, would undercut the argument that the public would somehow benefit from the decrees’ termination.
In their article at https://www.competitionpolicyinternational.com/potential-legal-issues-in-terminating-the-ascap-and-bmi-decrees/?utm_source=CPI+Subscribers&utm_campaign=afe405147d-EMAIL_CAMPAIGN_2018_08_17_03_46&utm_medium=email&utm_term=0_0ea61134a5-afe405147d-236508653
Grunes and Stucke point out, among other things, that the decrees have played an important role in mitigating the antitrust risks from ASCAP and BMI while promoting the efficiencies from collective licensing; and that it is a problem that if the ASCAP and BMI consent decrees were terminated, the duopoly would remain, and licensees and consumers would bear the risk of unduly restrictive anticompetitive practices.
A related problem pointed out by the authors is the difficulty the DOJ would likely face in convincing the court that terminating the decrees would benefit the public, given that it reached the opposite conclusion a couple of years ago. Moreover, the concerns the DOJ heard during its review process from licensees, such as Netflix, Pandora, and religious broadcasters, would undercut the argument that the public would somehow benefit from the decrees’ termination.
NYT: NY State's ethical horrors
A NYT editorial on an AG candidate mentions in passing that "Albany has long been a chamber of ethical horrors." It then provides the following litany:
n March, Gov. Andrew Cuomo’s former senior aide Joseph Percoco was convicted on corruption charges.
In May, former Assembly Speaker Sheldon Silver, a Democrat, was also convicted of corruption.
In July, the former Republican Senate majority leader, Dean Skelos, was convicted of bribery, extortion and conspiracy. Prosecutors said he used his office to pressure businesses to pay his son $300,000 for no-show jobs.
The same month, Alain Kaloyeros, a key figure behind Mr. Cuomo’s “Buffalo Billion” economic initiative, was convicted in a bid-rigging scheme.
And: Not to be forgotten are the allegations against former Attorney General Eric Schneiderman, who resigned in disgrace earlier this year after women who dated him accused him of choking them and beating them up.
See https://www.nytimes.com/2018/08/19/opinion/zephyr-teachout-new-york-attorney-general.html?action=click&pgtype=Homepage&clickSource=story-heading&module=opinion-c-col-left-region®ion=opinion-c-col-left-region&WT.nav=opinion-c-col-left-region
A NYT editorial on an AG candidate mentions in passing that "Albany has long been a chamber of ethical horrors." It then provides the following litany:
n March, Gov. Andrew Cuomo’s former senior aide Joseph Percoco was convicted on corruption charges.
In May, former Assembly Speaker Sheldon Silver, a Democrat, was also convicted of corruption.
In July, the former Republican Senate majority leader, Dean Skelos, was convicted of bribery, extortion and conspiracy. Prosecutors said he used his office to pressure businesses to pay his son $300,000 for no-show jobs.
The same month, Alain Kaloyeros, a key figure behind Mr. Cuomo’s “Buffalo Billion” economic initiative, was convicted in a bid-rigging scheme.
And: Not to be forgotten are the allegations against former Attorney General Eric Schneiderman, who resigned in disgrace earlier this year after women who dated him accused him of choking them and beating them up.
See https://www.nytimes.com/2018/08/19/opinion/zephyr-teachout-new-york-attorney-general.html?action=click&pgtype=Homepage&clickSource=story-heading&module=opinion-c-col-left-region®ion=opinion-c-col-left-region&WT.nav=opinion-c-col-left-region
NYT: To fight shoplifting, some big retail companies are employing aggressive legal tactics — sometimes against people who didn’t do anything wrong.
But those strategies disproportionately harm low-income shoppers, who say they’re unmatched in the legal fight against the world’s largest retailers.
See NYT at https:// www.nytimes.com/2018/08/17/business/falsely-accused-of-shoplifting-but-retailers-demand-they-pay.html?WT.nav=top-news&action=click&=&=&=&=&=&=&clickSource=story-heading&emc=edit_ne_20180817&hp=&module=second-column-region&nl=evening-briefing&nlid=67075843ng-briefing&pgtype=Homepage®ion=top-news&te=1
But those strategies disproportionately harm low-income shoppers, who say they’re unmatched in the legal fight against the world’s largest retailers.
See NYT at https:// www.nytimes.com/2018/08/17/business/falsely-accused-of-shoplifting-but-retailers-demand-they-pay.html?WT.nav=top-news&action=click&=&=&=&=&=&=&clickSource=story-heading&emc=edit_ne_20180817&hp=&module=second-column-region&nl=evening-briefing&nlid=67075843ng-briefing&pgtype=Homepage®ion=top-news&te=1
Does Airbnb suppress some bad reviews by renters? Some customers complain that their negative reviews are suppressed and never appear publicly.
An acquaintance says she recently complained to Airbnb about a rental that was misdescribed as to condition, size, and convenience. She received a partial refund, but her critical review was never published. The property listing shows only the positive reviews my acquaintance relied on when booking.
The Airbnb website says “To promote trust and transparency in our community, we won't delete reviews unless they violate our content policy.”
That may be true, but some on-line bloggers have a different impression.
One wrote:
“I recently concluded my second stay in two months, and for the second time, my review has not appeared on my host's page, nor have I received any feedback.”
Another wrote:
“Same thing here. Only can see my review in My reviews column but it is not publish on the host page and can't even contact the Airbnb helpline or their email.”
Yet another:
“I have the same problem and cant contact Airbnb! One of my reviews for a host does not appear on their page ( it was there for only 2 days) it was not a bad review at all, quite the contrery. However, i did deduct stars due to bad communication on the day of check in and problems accessing their property (Our host did not communicate with us and did not reply to our message the day before or on the day of check in and we couldn't get into her house. even so, I did not make this public but only told her in the private feedback) . I have noticed that this host has full stars and my review is now not on her page, which makes me feel that hosts can manipulate their ratings. Im trying to get answers to this as it makes me very weary to trust airbnb reviews in the future.”
Yet another:
“I am wondering the same thing. Are negative reviews not published? I didn't post any feelings in my review, only facts. Therefore I believe it's important for others to know how terrible this host was. Despite me calling AirBandB for help with the matter, nothing was resolved. And now, the only recourse I have is to review the place and it won't publish.”
DAR comment: I can’t vouch for any of these complaints, except for the first cited above. What is your experience? It does seem that it is misleading if a property has negative reviews that are not disclosed to prospective renters.
Posted by Don Allen Resnikoff
An acquaintance says she recently complained to Airbnb about a rental that was misdescribed as to condition, size, and convenience. She received a partial refund, but her critical review was never published. The property listing shows only the positive reviews my acquaintance relied on when booking.
The Airbnb website says “To promote trust and transparency in our community, we won't delete reviews unless they violate our content policy.”
That may be true, but some on-line bloggers have a different impression.
One wrote:
“I recently concluded my second stay in two months, and for the second time, my review has not appeared on my host's page, nor have I received any feedback.”
Another wrote:
“Same thing here. Only can see my review in My reviews column but it is not publish on the host page and can't even contact the Airbnb helpline or their email.”
Yet another:
“I have the same problem and cant contact Airbnb! One of my reviews for a host does not appear on their page ( it was there for only 2 days) it was not a bad review at all, quite the contrery. However, i did deduct stars due to bad communication on the day of check in and problems accessing their property (Our host did not communicate with us and did not reply to our message the day before or on the day of check in and we couldn't get into her house. even so, I did not make this public but only told her in the private feedback) . I have noticed that this host has full stars and my review is now not on her page, which makes me feel that hosts can manipulate their ratings. Im trying to get answers to this as it makes me very weary to trust airbnb reviews in the future.”
Yet another:
“I am wondering the same thing. Are negative reviews not published? I didn't post any feelings in my review, only facts. Therefore I believe it's important for others to know how terrible this host was. Despite me calling AirBandB for help with the matter, nothing was resolved. And now, the only recourse I have is to review the place and it won't publish.”
DAR comment: I can’t vouch for any of these complaints, except for the first cited above. What is your experience? It does seem that it is misleading if a property has negative reviews that are not disclosed to prospective renters.
Posted by Don Allen Resnikoff
A lesson to politicians everywhere: Italy’s governing right wing party wrote off safety fears about the motorway bridge that collapsed in Genoa as a children’s “fairy story”
The "fairy tale" jibe at the regional president and other officials was on the party’s website, but is now deleted
The Five Star Movement (M5S), which has been leading the country’s government since earlier this year, has made political capital out of opposing major construction and infrastructure projects, which often draw opposition in Italy because they can be disruptive to local residents.
In 2013 a statement on the party’s website described warnings of “the imminent collapse of the Morandi Bridge” as a “favoletta”, an Italian word meaning a children’s fantasy tale or fairy story. The bridge collapsed on Tuesday killing at least 39 people and severing the country’s A10 motorway.
The statement has since been deleted from the party’s website, but a cached version is still visible online. It was drawn up in opposition to the “Gronda di Genova”, a major infrastructure project to improve the motorways in the city region that included work on the now collapsed bridge.
Some architects and engineers had warned that the bridge, built by Italian civil engineer Riccardo Morandi in the 1960s, suffered from fatal design flaws; reinforcement work was carried out on it in 2016 in an attempt to shore it up. A complete rebuild was not carried out to avoid disruption, however.
The statement on the M5S website accuses the regional president who backed the reinforcement work of not having read a public inquiry report into the state of the bridge, and says the party “asks ourselves what credibility those who support the great works can still have”.
Other infrastructure projects opposed by the M5S include a new high-speed rail line from Turin to the south France, which was also the subject of protests and which has been put under review by the incoming transport ministry and similarly described as a waste of money.
Improvements to the bridge were also included by the M5S on a list of infrastructure projects which could be scrapped subject to a review of the costs and benefits.
Bridges designed by the late civil engineer Mr Morandi tend to be unusual because the planner used reinforced concrete instead of steel cables for the stays of the bridge, and used relatively few cables compared to most other designs.
The story is from https://www.independent.co.uk/news/world/europe/genoa-bridge-collapse-safety-issues-italy-government-five-star-movement-league-populists-a8492201.html
The "fairy tale" jibe at the regional president and other officials was on the party’s website, but is now deleted
The Five Star Movement (M5S), which has been leading the country’s government since earlier this year, has made political capital out of opposing major construction and infrastructure projects, which often draw opposition in Italy because they can be disruptive to local residents.
In 2013 a statement on the party’s website described warnings of “the imminent collapse of the Morandi Bridge” as a “favoletta”, an Italian word meaning a children’s fantasy tale or fairy story. The bridge collapsed on Tuesday killing at least 39 people and severing the country’s A10 motorway.
The statement has since been deleted from the party’s website, but a cached version is still visible online. It was drawn up in opposition to the “Gronda di Genova”, a major infrastructure project to improve the motorways in the city region that included work on the now collapsed bridge.
Some architects and engineers had warned that the bridge, built by Italian civil engineer Riccardo Morandi in the 1960s, suffered from fatal design flaws; reinforcement work was carried out on it in 2016 in an attempt to shore it up. A complete rebuild was not carried out to avoid disruption, however.
The statement on the M5S website accuses the regional president who backed the reinforcement work of not having read a public inquiry report into the state of the bridge, and says the party “asks ourselves what credibility those who support the great works can still have”.
Other infrastructure projects opposed by the M5S include a new high-speed rail line from Turin to the south France, which was also the subject of protests and which has been put under review by the incoming transport ministry and similarly described as a waste of money.
Improvements to the bridge were also included by the M5S on a list of infrastructure projects which could be scrapped subject to a review of the costs and benefits.
Bridges designed by the late civil engineer Mr Morandi tend to be unusual because the planner used reinforced concrete instead of steel cables for the stays of the bridge, and used relatively few cables compared to most other designs.
The story is from https://www.independent.co.uk/news/world/europe/genoa-bridge-collapse-safety-issues-italy-government-five-star-movement-league-populists-a8492201.html
Twitter CEO Jack Dorsey interviewed about Alex Jones "time out" decision
Dors
D Dorsey addresses the company’s decision to give Alex Jones, the controversial conspiracy theorist and radio host, a “timeout,” removing his ability to tweet for seven days. conspiracy theorist and radio host, a “timeout,” removing his ability to tweet for seven days. to tweet for seven days.
https://www.nbcnews.com/nightly-news/video/exclusive-twitter-ceo-jack-dorsey-addresses-alex-jones-timeout-decision-1299834435689
Dors
D Dorsey addresses the company’s decision to give Alex Jones, the controversial conspiracy theorist and radio host, a “timeout,” removing his ability to tweet for seven days. conspiracy theorist and radio host, a “timeout,” removing his ability to tweet for seven days. to tweet for seven days.
https://www.nbcnews.com/nightly-news/video/exclusive-twitter-ceo-jack-dorsey-addresses-alex-jones-timeout-decision-1299834435689
ConAgra seeks US Supreme Court cert of lead-paint judgment it says is "retroactively imposing massive liability based on a defendant’s nearly century-old promotion of its then-lawful products without requiring proof of reliance thereon or injury therefrom. . . ."
The cert petition is here: http://www.leadlawsuits.com/wp-content/uploads/2018/07/ConAgra-cert-petition.pdf
The cert petition statement of questions presented:
Petitioners (or their predecessors) are two of the dozens of companies that promoted lead pigments for use in house paints from the late-nineteenth to midtwentieth centuries, when interior residential use of lead paint was both lawful and widespread. Now, decades later, the decision below has deemed those lawful activities a “public nuisance,” and has ordered petitioners to pay hundreds of millions of dollars to remedy the continued existence of lead paint inside residences constructed before 1951 in ten of the most populous counties in California.
This massive judgment was not imposed because petitioners’ paint was traced to any such residence. Instead, the linchpin for imposing this massive liability was petitioners’ speech, not their paint. Yet plaintiffs were expressly relieved of any need to demonstrate that anyone relied on the speech for which petitioners were held liable. In fact, plaintiffs stipulated that they had no proof of reliance, and the trial court expressly held that no such proof was required. Instead, under the legal ruling below, it was enough that petitioners (or their predecessors) promoted lead paint for interior residential use during the first half of the twentieth century. In short, petitioners were ordered to pay hundreds of millions of dollars to remediate a decades-old problem that plaintiffs were not required to trace to either petitioners’ paint or their speech.
The questions presented are:
1. Whether imposing massive and retroactive “public nuisance” liability without requiring proof that the defendant’s nearly century-old conduct caused any ii individual plaintiff any injury violates the Due Process Clause.
2. Whether retroactively imposing massive liability based on a defendant’s nearly century-old promotion of its then-lawful products without requiring proof of reliance thereon or injury therefrom violates the First Amendment.
Santa Clara county provides its summary of the case history in April, at https://www.sccgov.org/sites/cco/leadpaint/Documents/Fact%20Sheet%20Re%20Lawsuit.pdf
The Santa Clara summary follows:
In 2000, the County of Santa Clara filed this landmark case to hold former lead paint manufacturers responsible for promoting lead paint for use in homes despite their knowledge that the product was highly toxic. Young children are especially vulnerable to lead poisoning, and lead paint is the predominance source of lead poisoning. There is no known level of exposure to lead that is considered safe, and the effects of lead poisoning are irreversible. Lower level exposure can result in reduced IQ and attention, and high level exposure can result in coma, convulsions and death.
Nine other California cities and counties joined the lawsuit, with the County of Santa Clara taking the lead role in prosecuting the case on behalf of the People of the State of California. The other cities and counties involved are the City and County of San Francisco, the Cities of Oakland and San Diego, and the Counties of Alameda, Los Angeles, Monterey, San Mateo, Solano, and Ventura.
In 2014, the Santa Clara County Superior Court issued a lengthy decision holding The SherwinWilliams Company, ConAgra Grocery Products Company, and NL Industries, Inc. (collectively, “Manufacturers”) accountable for creating a public nuisance in the ten cities and counties involved in the lawsuit. The public nuisance created by these Manufacturers consists of the collective presence of lead paint in the interiors of homes in the ten cities and counties.1 The 1 Notably, the court did not find that lead paint on any individual property is a public nuisance.
Manufacturers were ordered to pay $1.15 billion to fund (1) inspection for, and abatement of, lead paint and lead-contaminated dust from the interiors of homes and lead-contaminated soil around homes built in 1980 or earlier in the ten cities and counties, (2) remediation of any structural deficiencies in the homes that would cause the lead control measures to fail, and (3) public education and outreach necessary for the program. The ten cities and counties were designated to oversee the lead inspection and abatement program in their respective jurisdictions. Property owners’ participation would be entirely voluntary, and any unspent funds after four years would revert back to the Manufacturers.
In 2017, the Court of Appeal upheld the Superior Court’s determination that the Manufacturers were liable for creating a public nuisance in the ten cities and counties. (People v. ConAgra Grocery Products Co. (2017) 17 Cal.App.5th 51.) However, the Court of Appeal limited their responsibility to homes built before 1951 in the ten jurisdictions. In February 2018, the California Superior Court announced that it would not review the Court of Appeal’s decision. The Manufacturers plan to further appeal the decision to the U.S. Supreme Court. In the meantime, however, the case is returning to the Superior Court to (1) calculate the amount that the Manufacturers must pay for pre-1951 homes only and (2) decide on a receiver to administer the fund and distribute.
The cert petition is here: http://www.leadlawsuits.com/wp-content/uploads/2018/07/ConAgra-cert-petition.pdf
The cert petition statement of questions presented:
Petitioners (or their predecessors) are two of the dozens of companies that promoted lead pigments for use in house paints from the late-nineteenth to midtwentieth centuries, when interior residential use of lead paint was both lawful and widespread. Now, decades later, the decision below has deemed those lawful activities a “public nuisance,” and has ordered petitioners to pay hundreds of millions of dollars to remedy the continued existence of lead paint inside residences constructed before 1951 in ten of the most populous counties in California.
This massive judgment was not imposed because petitioners’ paint was traced to any such residence. Instead, the linchpin for imposing this massive liability was petitioners’ speech, not their paint. Yet plaintiffs were expressly relieved of any need to demonstrate that anyone relied on the speech for which petitioners were held liable. In fact, plaintiffs stipulated that they had no proof of reliance, and the trial court expressly held that no such proof was required. Instead, under the legal ruling below, it was enough that petitioners (or their predecessors) promoted lead paint for interior residential use during the first half of the twentieth century. In short, petitioners were ordered to pay hundreds of millions of dollars to remediate a decades-old problem that plaintiffs were not required to trace to either petitioners’ paint or their speech.
The questions presented are:
1. Whether imposing massive and retroactive “public nuisance” liability without requiring proof that the defendant’s nearly century-old conduct caused any ii individual plaintiff any injury violates the Due Process Clause.
2. Whether retroactively imposing massive liability based on a defendant’s nearly century-old promotion of its then-lawful products without requiring proof of reliance thereon or injury therefrom violates the First Amendment.
Santa Clara county provides its summary of the case history in April, at https://www.sccgov.org/sites/cco/leadpaint/Documents/Fact%20Sheet%20Re%20Lawsuit.pdf
The Santa Clara summary follows:
In 2000, the County of Santa Clara filed this landmark case to hold former lead paint manufacturers responsible for promoting lead paint for use in homes despite their knowledge that the product was highly toxic. Young children are especially vulnerable to lead poisoning, and lead paint is the predominance source of lead poisoning. There is no known level of exposure to lead that is considered safe, and the effects of lead poisoning are irreversible. Lower level exposure can result in reduced IQ and attention, and high level exposure can result in coma, convulsions and death.
Nine other California cities and counties joined the lawsuit, with the County of Santa Clara taking the lead role in prosecuting the case on behalf of the People of the State of California. The other cities and counties involved are the City and County of San Francisco, the Cities of Oakland and San Diego, and the Counties of Alameda, Los Angeles, Monterey, San Mateo, Solano, and Ventura.
In 2014, the Santa Clara County Superior Court issued a lengthy decision holding The SherwinWilliams Company, ConAgra Grocery Products Company, and NL Industries, Inc. (collectively, “Manufacturers”) accountable for creating a public nuisance in the ten cities and counties involved in the lawsuit. The public nuisance created by these Manufacturers consists of the collective presence of lead paint in the interiors of homes in the ten cities and counties.1 The 1 Notably, the court did not find that lead paint on any individual property is a public nuisance.
Manufacturers were ordered to pay $1.15 billion to fund (1) inspection for, and abatement of, lead paint and lead-contaminated dust from the interiors of homes and lead-contaminated soil around homes built in 1980 or earlier in the ten cities and counties, (2) remediation of any structural deficiencies in the homes that would cause the lead control measures to fail, and (3) public education and outreach necessary for the program. The ten cities and counties were designated to oversee the lead inspection and abatement program in their respective jurisdictions. Property owners’ participation would be entirely voluntary, and any unspent funds after four years would revert back to the Manufacturers.
In 2017, the Court of Appeal upheld the Superior Court’s determination that the Manufacturers were liable for creating a public nuisance in the ten cities and counties. (People v. ConAgra Grocery Products Co. (2017) 17 Cal.App.5th 51.) However, the Court of Appeal limited their responsibility to homes built before 1951 in the ten jurisdictions. In February 2018, the California Superior Court announced that it would not review the Court of Appeal’s decision. The Manufacturers plan to further appeal the decision to the U.S. Supreme Court. In the meantime, however, the case is returning to the Superior Court to (1) calculate the amount that the Manufacturers must pay for pre-1951 homes only and (2) decide on a receiver to administer the fund and distribute.
Opinion from Sanchez of DMN:
If Sony’s acquisition for EMI Music Publishing goes through, will it really harm the music market?
The Independent Music Companies Association (IMPALA) has filed two complaints with the European Commission. The organization, which represents the indie music community in Europe, fears Sony will eclipse the competition in the European digital music space.
IMPALA’s complaints come as Sony has prepared the process for lawmakers to approve its acquisition bid of EMI Music Publishing.
Sony, which already held a 30% EMI stake, completed its ownership across two transactions. First, it agreed to purchase 60% of EMI from a consortium led primarily by Mubadala for $2.3 billion earlier this year. Then, it acquired the remaining 10% stake from the Michael Jackson Estate for $287.5 million.
According to IMPALA, the number of songs the company controls would double from 2.16 million to 4.21 million. This would make Sony “the biggest and most formidable music company in the world.”
In addition, the independent organization argues that the Commission had previously approved Sony’s initial stake in EMI, but on a partial basis. The European Commission ruled the company couldn’t combine EMI with its own current publishing and recording operations.
IMPALA explains,
“When Sony became a shareholder in the consortium structure which acquired EMI Music Publishing in 2012, the European Commission said Sony would control too much music and insisted on divestments. It only approved the transaction on the basis that EMI would be run separately and would not be combined with Sony’s own publishing or recording operations. This was reconfirmed in 2016, when the Commission allowed [the company] to buy out the proportion of Sony/ATV that it did not already own.”
Railing against the potential acquisition, Helen Smith, Executive Chair of IMPALA, argues,
“It cannot be overemphasized that this is completely different to an ordinary change from joint to sole control. It’s like seeking to merge two majors. That would never be allowed and neither should this. Sony’s latest financial results confirm that ‘EMI will become a wholly-owned subsidiary…’”
But has IMPALA simply exaggerated Sony’s potential market reach with EMI?
For starters, Sony’s acquisition of EMI Music Publishing wouldn’t create the largest music company in the world. That would still be Universal Music Group. Though strictly on a publishing basis, Smith is correct: Sony+EMI would become the largest music publisher in the world.
Sony already negotiates on behalf of EMI Music Publishing as its administrator. In fact, some of EMI’s staff already serve at Sony/ATV.
Billboard notes the music company currently uses “the combined clout to strike deals with digital services.” Sony/ATV staff also “run the two catalogs as one portfolio.” That structure may contradict Smith’s worst-case scenario.
Yet, she continues on.
“If permitted, this transaction would also harm collecting societies, songwriters and composers, and consumers who would face higher charges for music services.”
But, has it really?
Smith adds,
“Our view is that the transaction has to be blocked. EMI would have a better future as a stand-alone operation or combined with another smaller music company to make a more effective competitor to the majors.”
So, what’s next?
First, Sony has to file the necessary paperwork for approval. The European Commission will then review the transaction. The independent organization writes the company’s competitors and other market participants will receive questionnaires to answer.
The European Commission will finally assess the transaction and decide whether it would lead to a ‘significant impediment.’
If so, it would decide whether to block the transaction or stipulate certain acquisition conditions.
Source: https://www.digitalmusicnews.com/2018/08/14/sony-emi-music-publishing-acquisition-impala/
If Sony’s acquisition for EMI Music Publishing goes through, will it really harm the music market?
The Independent Music Companies Association (IMPALA) has filed two complaints with the European Commission. The organization, which represents the indie music community in Europe, fears Sony will eclipse the competition in the European digital music space.
IMPALA’s complaints come as Sony has prepared the process for lawmakers to approve its acquisition bid of EMI Music Publishing.
Sony, which already held a 30% EMI stake, completed its ownership across two transactions. First, it agreed to purchase 60% of EMI from a consortium led primarily by Mubadala for $2.3 billion earlier this year. Then, it acquired the remaining 10% stake from the Michael Jackson Estate for $287.5 million.
According to IMPALA, the number of songs the company controls would double from 2.16 million to 4.21 million. This would make Sony “the biggest and most formidable music company in the world.”
In addition, the independent organization argues that the Commission had previously approved Sony’s initial stake in EMI, but on a partial basis. The European Commission ruled the company couldn’t combine EMI with its own current publishing and recording operations.
IMPALA explains,
“When Sony became a shareholder in the consortium structure which acquired EMI Music Publishing in 2012, the European Commission said Sony would control too much music and insisted on divestments. It only approved the transaction on the basis that EMI would be run separately and would not be combined with Sony’s own publishing or recording operations. This was reconfirmed in 2016, when the Commission allowed [the company] to buy out the proportion of Sony/ATV that it did not already own.”
Railing against the potential acquisition, Helen Smith, Executive Chair of IMPALA, argues,
“It cannot be overemphasized that this is completely different to an ordinary change from joint to sole control. It’s like seeking to merge two majors. That would never be allowed and neither should this. Sony’s latest financial results confirm that ‘EMI will become a wholly-owned subsidiary…’”
But has IMPALA simply exaggerated Sony’s potential market reach with EMI?
For starters, Sony’s acquisition of EMI Music Publishing wouldn’t create the largest music company in the world. That would still be Universal Music Group. Though strictly on a publishing basis, Smith is correct: Sony+EMI would become the largest music publisher in the world.
Sony already negotiates on behalf of EMI Music Publishing as its administrator. In fact, some of EMI’s staff already serve at Sony/ATV.
Billboard notes the music company currently uses “the combined clout to strike deals with digital services.” Sony/ATV staff also “run the two catalogs as one portfolio.” That structure may contradict Smith’s worst-case scenario.
Yet, she continues on.
“If permitted, this transaction would also harm collecting societies, songwriters and composers, and consumers who would face higher charges for music services.”
But, has it really?
Smith adds,
“Our view is that the transaction has to be blocked. EMI would have a better future as a stand-alone operation or combined with another smaller music company to make a more effective competitor to the majors.”
So, what’s next?
First, Sony has to file the necessary paperwork for approval. The European Commission will then review the transaction. The independent organization writes the company’s competitors and other market participants will receive questionnaires to answer.
The European Commission will finally assess the transaction and decide whether it would lead to a ‘significant impediment.’
If so, it would decide whether to block the transaction or stipulate certain acquisition conditions.
Source: https://www.digitalmusicnews.com/2018/08/14/sony-emi-music-publishing-acquisition-impala/
Harvard study on water pollution across the US -- PFAs
A two year old but still relevant study of levels of a widely used class of industrial chemicals linked with cancer and other health problems—polyfluoroalkyl and perfluoroalkyl substances (PFASs)—shows federally recommended safety levels exceeded in public drinking water supplies for six million people in the U.S. The study was led by researchers from Harvard T.H. Chan School of Public Health and the Harvard John A. Paulson School of Engineering and Applied Sciences (SEAS).
The study is published in Environmental Science & Technology Letters. http://pubs.acs.org/doi/pdf/10.1021/acs.estlett.6b00260
“For many years, chemicals with unknown toxicities, such as PFASs, were allowed to be used and released to the environment, and we now have to face the severe consequences,” said lead author Xindi Hu, a doctoral student in the Department of Environmental Health at Harvard Chan School and Environmental Science and Engineering at SEAS. “In addition, the actual number of people exposed may be even higher than our study found, because government data for levels of these compounds in drinking water is lacking for almost a third of the U.S. population—about 100 million people.”
PFASs have been used over the past 60 years in industrial and commercial products ranging from food wrappers to clothing to pots and pans. They have been linked with cancer, hormone disruption, high cholesterol, and obesity. Although several major manufacturers have discontinued the use of some PFASs, the chemicals continue to persist in people and wildlife. Drinking water is one of the main routes through which people can be exposed.
The researchers looked at concentrations of six types of PFASs in drinking water supplies, using data from more than 36,000 water samples collected nationwide by the U.S. Environmental Protection Agency (EPA) from 2013–2015. They also looked at industrial sites that manufacture or use PFASs; at military fire training sites and civilian airports where fire-fighting foam containing PFASs is used; and at wastewater treatment plants. Discharges from these plants—which are unable to remove PFASs from wastewater by standard treatment methods—could contaminate groundwater. So could the sludge that the plants generate and which is frequently used as fertilizer.
Source: https://www.hsph.harvard.edu/news/press-releases/toxic-chemicals-drinking-water/
A two year old but still relevant study of levels of a widely used class of industrial chemicals linked with cancer and other health problems—polyfluoroalkyl and perfluoroalkyl substances (PFASs)—shows federally recommended safety levels exceeded in public drinking water supplies for six million people in the U.S. The study was led by researchers from Harvard T.H. Chan School of Public Health and the Harvard John A. Paulson School of Engineering and Applied Sciences (SEAS).
The study is published in Environmental Science & Technology Letters. http://pubs.acs.org/doi/pdf/10.1021/acs.estlett.6b00260
“For many years, chemicals with unknown toxicities, such as PFASs, were allowed to be used and released to the environment, and we now have to face the severe consequences,” said lead author Xindi Hu, a doctoral student in the Department of Environmental Health at Harvard Chan School and Environmental Science and Engineering at SEAS. “In addition, the actual number of people exposed may be even higher than our study found, because government data for levels of these compounds in drinking water is lacking for almost a third of the U.S. population—about 100 million people.”
PFASs have been used over the past 60 years in industrial and commercial products ranging from food wrappers to clothing to pots and pans. They have been linked with cancer, hormone disruption, high cholesterol, and obesity. Although several major manufacturers have discontinued the use of some PFASs, the chemicals continue to persist in people and wildlife. Drinking water is one of the main routes through which people can be exposed.
The researchers looked at concentrations of six types of PFASs in drinking water supplies, using data from more than 36,000 water samples collected nationwide by the U.S. Environmental Protection Agency (EPA) from 2013–2015. They also looked at industrial sites that manufacture or use PFASs; at military fire training sites and civilian airports where fire-fighting foam containing PFASs is used; and at wastewater treatment plants. Discharges from these plants—which are unable to remove PFASs from wastewater by standard treatment methods—could contaminate groundwater. So could the sludge that the plants generate and which is frequently used as fertilizer.
Source: https://www.hsph.harvard.edu/news/press-releases/toxic-chemicals-drinking-water/
California jury awards $289 million to man who claimed Monsanto's Roundup pesticide caused cancer
www.latimes.com/business/la-fi-roundup-verdict-20180810-story.html
A civil jury in San Francisco granted a $289 judgment to a groundskeeper who said his lymphoma resulted from years of applying Monsanto's
Roundup pesticide. From the LA Times article:
Scott Partridge, Monsanto’s vice president of global strategy: “Today’s decision does not change the fact that more than 800 scientific studies and reviews — and conclusions by the U.S. Environmental Protection Agency, the U.S. National Institutes of Health and regulatory authorities around the world — support the fact that glyphosate does not cause cancer, and did not cause Mr. Johnson’s cancer.”
****
Having inherited a company long vilified by environmental activists as “Monsatan,” Bayer faces high potential liabilities from hundreds of similar lawsuits, along with a battle over adding a cancer warning label on products sold in California.
A U.S. District Court judge earlier this year temporarily halted moves by California to require a cancer warning label under Proposition 65, the Safe Drinking Water and Toxic Enforcement Act, passed by voters in 1986.
California’s decision to include [Rounndup ingredient] glyphosate on its list of chemicals linked to cancer followed a 2015 ruling by the Europe-based International Agency for Research on Cancer that the chemical is a “probable” carcinogen.
The U.S. EPA as well as its counterpart agencies in the European Union have disagreed with the conclusion reached by that panel, which is part of the World Health Organization. Last December, the U.S. EPA ruled that glyphosate was “not likely” to cause cancer.
DAR comment: It is striking that the jury declined to follow the views of federal government agencies, the EPA and NIH
www.latimes.com/business/la-fi-roundup-verdict-20180810-story.html
A civil jury in San Francisco granted a $289 judgment to a groundskeeper who said his lymphoma resulted from years of applying Monsanto's
Roundup pesticide. From the LA Times article:
Scott Partridge, Monsanto’s vice president of global strategy: “Today’s decision does not change the fact that more than 800 scientific studies and reviews — and conclusions by the U.S. Environmental Protection Agency, the U.S. National Institutes of Health and regulatory authorities around the world — support the fact that glyphosate does not cause cancer, and did not cause Mr. Johnson’s cancer.”
****
Having inherited a company long vilified by environmental activists as “Monsatan,” Bayer faces high potential liabilities from hundreds of similar lawsuits, along with a battle over adding a cancer warning label on products sold in California.
A U.S. District Court judge earlier this year temporarily halted moves by California to require a cancer warning label under Proposition 65, the Safe Drinking Water and Toxic Enforcement Act, passed by voters in 1986.
California’s decision to include [Rounndup ingredient] glyphosate on its list of chemicals linked to cancer followed a 2015 ruling by the Europe-based International Agency for Research on Cancer that the chemical is a “probable” carcinogen.
The U.S. EPA as well as its counterpart agencies in the European Union have disagreed with the conclusion reached by that panel, which is part of the World Health Organization. Last December, the U.S. EPA ruled that glyphosate was “not likely” to cause cancer.
DAR comment: It is striking that the jury declined to follow the views of federal government agencies, the EPA and NIH
"District Dig" blog reports on allegations that lobbyists were influential in DCRA’s sign regulation enforcement effort against the Digi company
www.districtdig.com/2018/08/07/inside-game/
The publiication reports AG Racines's response, which includes the following: “I hold our attorneys at the Office of the Attorney General to very high professional standards. While the actions of the DCRA lawyer fell short of professional obligations, no one alleged—nor did the Court find—that any attorney employed by OAG acted improperly."
Posting by Don Allen Resnikoff
www.districtdig.com/2018/08/07/inside-game/
The publiication reports AG Racines's response, which includes the following: “I hold our attorneys at the Office of the Attorney General to very high professional standards. While the actions of the DCRA lawyer fell short of professional obligations, no one alleged—nor did the Court find—that any attorney employed by OAG acted improperly."
Posting by Don Allen Resnikoff
From David Balto: PBM 101
My testimony makes the following points:
PBMs are one of the least regulated sectors of the health care system. There is no federal regulation and only a modest level of state regulation.
The PBM market lacks the essential elements for a competitive market: (1) transparency, (2) choice and (3) a lack of conflicts of interest.
The lack of enforcement, regulation, and competition has created a witches brew in which PBMs reign free to engage in anticompetitive, deceptive and fraudulent conduct that harms consumers, employers and unions, and pharmacists. The profits of the major PBMs are increasing at a rapid pace, exceeding $6 billion annually. As drug prices increase rapidly, PBMs are not adequately fulfilling their function in controlling costs
– indeed PBM profits are increasing at the same time drug costs increase because they secure higher rebates from these cost increases. Plan sponsors (employers and unions) cannot attack this problem because PBMs fail to provide adequate transparency.
See http://www.dcantitrustlaw.com/assets/content/documents/testimony/PBM%20Testimony.Balto.pdf
My testimony makes the following points:
PBMs are one of the least regulated sectors of the health care system. There is no federal regulation and only a modest level of state regulation.
The PBM market lacks the essential elements for a competitive market: (1) transparency, (2) choice and (3) a lack of conflicts of interest.
The lack of enforcement, regulation, and competition has created a witches brew in which PBMs reign free to engage in anticompetitive, deceptive and fraudulent conduct that harms consumers, employers and unions, and pharmacists. The profits of the major PBMs are increasing at a rapid pace, exceeding $6 billion annually. As drug prices increase rapidly, PBMs are not adequately fulfilling their function in controlling costs
– indeed PBM profits are increasing at the same time drug costs increase because they secure higher rebates from these cost increases. Plan sponsors (employers and unions) cannot attack this problem because PBMs fail to provide adequate transparency.
See http://www.dcantitrustlaw.com/assets/content/documents/testimony/PBM%20Testimony.Balto.pdf
New NewsHour video: Michael Carrier explains PBM pricing -- video
https://www.youtube.com/watch?v=_4_WNFPnmO8
https://www.youtube.com/watch?v=_4_WNFPnmO8
Source documents on NYC crackdown on Uber
The legislative package: One will stop the TLC from issuing new licenses for FHVs for one year, with the exception of wheelchair-accessible vehicles, while the city studies how the services impact traffic. http://legistar.council.nyc.gov/LegislationDetail.aspx?ID=3331789&GUID=6647E630-2992-461F-B3E3-F5103DED0653&Options=ID%7cText%7c&Search=144
Another will enact new regulations on high-volume FHV services like Uber and Lyft, requiring them to provide data on usage and charges, as well as impose a fine of $10,000 for those who do not comply.http://legistar.council.nyc.gov/LegislationDetail.aspx?ID=3479666&GUID=01C67FF7-C56D-474A-BA53-E83A23173FA7&Options=ID%7cText%7c&Search=838
Geographic restrictions, as well as a minimum wage for FHV drivers, will also be implemented through other measures. http://legistar.council.nyc.gov/LegislationDetail.aspx?ID=3487613&GUID=E47BF280-2CAC-45AE-800F-ED5BE846EFF4&Options=&Search=
Members of the City Council also support “driver assistance centers” that would help struggling cab drivers. http://www.nydailynews.com/news/politics/ny-pol-taxi-bills-20180806-story.html
The legislative package: One will stop the TLC from issuing new licenses for FHVs for one year, with the exception of wheelchair-accessible vehicles, while the city studies how the services impact traffic. http://legistar.council.nyc.gov/LegislationDetail.aspx?ID=3331789&GUID=6647E630-2992-461F-B3E3-F5103DED0653&Options=ID%7cText%7c&Search=144
Another will enact new regulations on high-volume FHV services like Uber and Lyft, requiring them to provide data on usage and charges, as well as impose a fine of $10,000 for those who do not comply.http://legistar.council.nyc.gov/LegislationDetail.aspx?ID=3479666&GUID=01C67FF7-C56D-474A-BA53-E83A23173FA7&Options=ID%7cText%7c&Search=838
Geographic restrictions, as well as a minimum wage for FHV drivers, will also be implemented through other measures. http://legistar.council.nyc.gov/LegislationDetail.aspx?ID=3487613&GUID=E47BF280-2CAC-45AE-800F-ED5BE846EFF4&Options=&Search=
Members of the City Council also support “driver assistance centers” that would help struggling cab drivers. http://www.nydailynews.com/news/politics/ny-pol-taxi-bills-20180806-story.html
Graying of U.S.-- Bankruptcy: Fallout from Life in a Risk Society
Deborah ThorneUniversity of Idaho
Pamela FooheyIndiana University Maurer School of Law
Robert M. LawlessUniversity of Illinois College of Law
Katherine M. PorterUniversity of California - Irvine School of Law
Date Written: August 5, 2018
Abstract:
The social safety net for older Americans has been shrinking for the past couple decades. The risks associated with aging, reduced income, and increased healthcare costs, have been off-loaded onto older individuals. At the same time, older Americans are increasingly likely to file consumer bankruptcy, and their representation among those in bankruptcy has never been higher. Using data from the Consumer Bankruptcy Project, we find more than a two-fold increase in the rate at which older Americans (age 65 and over) file for bankruptcy and an almost five-fold increase in the percentage of older persons in the U.S. bankruptcy system. The magnitude of growth in older Americans in bankruptcy is so large that the broader trend of an aging U.S. population can explain only a small portion of the effect. In our data, older Americans report they are struggling with increased financial risks, namely inadequate income and unmanageable costs of healthcare, as they try to deal with reductions to their social safety net. As a result of these increased financial burdens, the median senior bankruptcy filer enters bankruptcy with negative wealth of $17,390 as compared to more than $250,000 for their non-bankrupt peers. For an increasing number of older Americans, their golden years are fraught with economic risks, the result of which is often bankruptcy.
Citation:
Thorne, Deborah and Foohey, Pamela and Lawless, Robert M. and Porter, Katherine M., Graying of U.S. Bankruptcy: Fallout from Life in a Risk Society (August 5, 2018). Available at SSRN: https://ssrn.com/abstract=3226574
Deborah ThorneUniversity of Idaho
Pamela FooheyIndiana University Maurer School of Law
Robert M. LawlessUniversity of Illinois College of Law
Katherine M. PorterUniversity of California - Irvine School of Law
Date Written: August 5, 2018
Abstract:
The social safety net for older Americans has been shrinking for the past couple decades. The risks associated with aging, reduced income, and increased healthcare costs, have been off-loaded onto older individuals. At the same time, older Americans are increasingly likely to file consumer bankruptcy, and their representation among those in bankruptcy has never been higher. Using data from the Consumer Bankruptcy Project, we find more than a two-fold increase in the rate at which older Americans (age 65 and over) file for bankruptcy and an almost five-fold increase in the percentage of older persons in the U.S. bankruptcy system. The magnitude of growth in older Americans in bankruptcy is so large that the broader trend of an aging U.S. population can explain only a small portion of the effect. In our data, older Americans report they are struggling with increased financial risks, namely inadequate income and unmanageable costs of healthcare, as they try to deal with reductions to their social safety net. As a result of these increased financial burdens, the median senior bankruptcy filer enters bankruptcy with negative wealth of $17,390 as compared to more than $250,000 for their non-bankrupt peers. For an increasing number of older Americans, their golden years are fraught with economic risks, the result of which is often bankruptcy.
Citation:
Thorne, Deborah and Foohey, Pamela and Lawless, Robert M. and Porter, Katherine M., Graying of U.S. Bankruptcy: Fallout from Life in a Risk Society (August 5, 2018). Available at SSRN: https://ssrn.com/abstract=3226574
From Public Citizen Consumer Blog
Will the OCC Try to Preempt State Consumer Protection Rules in FinTech, as It Once Did for Predatory Lending?
by Jeff Sovern
That's the question David Dayen raises in an important essay in InTheseTimes, Trump Appointees Are Pushing a Deregulation Plan That Could Dramatically Erode Consumer Protections. As Dayen points out, in the run-up to the Great Recession, the OCC proclaimed that state anti-predatory lending laws were preempted as to national banks. We know how that ended. Now the OCC has announced that it will accept national bank charters from FinTech companies. When states try to regulate FinTech, will the OCC attempt to preempt their efforts too? For example, will the OCC enable nationally-chartered FinTech companies to skirt state limits on payday lending? That would be an ironic twist from lawmakers usually quick to claim the mantle of states' rights, and any such effort is likely to be subject to court challenges, but we could be headed there. Under the Dodd-Frank Act, section 1044, it is probably going to depend on whether the state "law prevents or significantly interferes with the exercise by the national bank of its powers." I haven't looked into that issue enough to know whether this would qualify. But if, as seems likely for the next five or so years, we can't count on the CFPB to protect consumers, and state efforts to protect them can be preempted, consumers could be in trouble when it comes to predatory lending.
Posted by Jeff Sovern on Saturday, August 04, 2018 at 04:33 PM in Predatory Lending | Permalink
NYT:Steel Giants With Ties to Trump Officials Block Tariff Relief for Hundreds of Firms
Nucor and United States Steel have exercised veto power, so far without fail, over other companies, forcing them to buy their products instead of steel from abroad.
https://www.nytimes.com/2018/08/05/us/politics/nucor-us-steel-tariff-exemptions.html?rref=collection%2Fsectioncollection%2Fbusiness
From the International Steel Institute's litigation challenging the Constitutionality of the President's imposition of tariffs
MEMORANDUM IN SUPPORT OF PLAINTIFFS’ MOTION FOR SUMMARY JUDGMENT: INTRODUCTION AND SUMMARY OF ARGUMENT
This is an action seeking a declaratory judgment and an injunction against the enforcement of section 232 of the Trade Expansion Act of 1962, as amended, 19 U.S.C. § 1862 (“section 232”), on the ground that it constitutes an improper delegation of legislative authority to the President, in violation of Article I, section 1 of the Constitution and the doctrine of separation of powers and the system of checks and balances that the Constitution protects. The specific claim before this Court arises from the actions of the President, through proclamations issued under section 232, in which he imposed a 25% ad valorem tariff on steel products imported into the United States from most, but not all, countries (“the 25% tariff”).
As a facial challenge to section 232, this case should be decided on cross-motions for summary judgment. To demonstrate the injuries caused them by section 232 and the 25% tariff, Plaintiffs have submitted the declarations of Richard Chriss, President of Plaintiff American Institute for International Steel, Inc. (“AIIS”); John Foster, President of Plaintiff Kurt Orban Case 1:18-cv-00152-N/A Document 20 Filed 07/19/18 Page 10 of 54 2 Partners, LLC (“Orban”); and Charles Scianna, President of Plaintiff Sim-Tex, LP (“Sim-Tex”).
In further support of their motion, Plaintiffs cite to the four proclamations of the President that imposed the 25% tariff and then modified the countries whose steel products are subject to it, as well as to the procedures that the Secretary of Commerce (the “Secretary”) issued to respond to individual requests by U.S. companies for product-specific exclusions from the 25% tariff.
Finally, this memorandum includes citations to the Steel Report prepared by the Secretary in support of his finding for the President that steel imports may threaten to impair the national security, as that term is broadly defined in section 232. Included as an appendix to the Steel Report are the written statements submitted by 37 witnesses who testified before the Department of Commerce (“Commerce”) on May 24, 2017. The Steel Report also contains a link to the written statements submitted by more than 200 other interested persons to the Secretary for his consideration, some of which will also be cited herein. The citations to these statements are not to establish the truth of what they assert, but to establish the many ways that those who rely on imported steel in their businesses informed Commerce that the tariffs would affect them. Those statements are significant because they are the kind of effects that a 25% steel tariff would be expected to produce, and yet, most pertinent to this challenge, section 232 does not (a) require the President to take them into account in selecting the means to respond to the perceived threat that imported steel products may impair the national security, (b) forbid him from taking them into account, (c) forbid him to take some into account, but not others; or most importantly (d) provide him with any guidance on whether and how to take these factors into account. Case 1:18-cv-00152-N/A Document 20 Filed 07/19/18 Page 11 of 54 3
This case challenges the constitutionality of section 232 because Congress has essentially turned over to the President the constitutional authority “[t]o lay and collect [t]axes, [d]uties, [i]mposts and [e]xcises,” expressly given in Article I, section 8 of the Constitution to Congress. U.S. CONST., art. 1, § 8, cl. 1. Section 232 does that without providing the kind of “intelligible principle” required by the Supreme Court in J.W. Hampton, Jr., & Co. v. United States, 276 U.S. 394, 409 (1928), to satisfy the nondelegation doctrine and the mandate of Article I that the legislature, not the President, make the laws.
Section 232, like most statutes challenged on nondelegation grounds, has two components, each of which must contain an intelligible principle to guide its application. First, there is a trigger, which is the finding needed to make the statute operative, in this case a conclusion that imports may “threaten to impair the national security.” 19 U.S.C. § 1862(b)(3)(A). Second, once the trigger has been found, the statute gives the designated official the authority to select the remedies (or means of implementation).
Specifically, section 232 allows the President, in his unbridled discretion, to “determine the nature and duration of the action that, in the judgment of the President, must be taken to adjust the imports of the [imported] article and its derivatives so that such imports will not threaten to impair the national security.” 19 U.S.C. § 1862(c)(1)(A)(ii). As we describe below, section 232 provides no restraints that limit the President’s invoking the trigger or in his choice of remedies—tariffs, quotas, or something else—in what amounts, as applied to which products, and to which countries.
In essence, in section 232 Congress has transferred to the President the ability to make the essential policy choices that the Constitution assigns to Congress and Congress is required to retain under our Constitution and the principles of separation of powers that animate it. For that Case 1:18-cv-00152-N/A Document 20 Filed 07/19/18 Page 12 of 54 4 reason, section 232 is like the Line Item Veto Act, which was condemned by the Supreme Court in Clinton v. City of New York, 524 U.S. 417 (1998), because that Act purported to permit the President to use the “cancellation” process in that Act to reject the policy choices made by Congress in the parts of a law that he “canceled.”
To be sure, the Court in Clinton did not rely on the nondelegation doctrine on which Plaintiffs rely here, but the structural flaw of presidential versus congressional lawmaking is present in both. There is another aspect of section 232 that reinforces the conclusion that it is unconstitutional. When today so much of the power to implement the laws has been assigned to the President or administrative agencies, Congress has provided important checks on their use of those powers to assure that the laws are carried out as Congress provided. But section 232 contains none of the procedural safeguards found in rulemakings governed by the Administrative Procedure Act.
Moreover, section 232 has no provision for judicial review, and because discretionary decisions like that imposing the 25% tariff here are made by the President, they are not subject to judicial review under the Administrative Procedure Act. The result is that Congress created an unconstitutional regime in section 232, in which there are essentially no limits or guidelines on the trigger or the remedies available to the President, and no alternative protections to assure that the President stays within the law, instead of making the law himself.
The motion papers are at http://www.aiis.org/wp-content/uploads/2018/07/2018.07.19-Plaintiffs-Motion-Proposed-Order-Memo-for-Summary-Judgment-MMM-from-docket.pdf
The WSJ's Greg Ip explains Donald Trump's policy of picking industry winners and losers
Greg Ip says that President Donald Trump is steering U.S. economic policy in a radically new direction. From trying to revive steelmakers with tariffs to vetoing Chinese technology investments, he is using the federal government to direct which industries prosper and which don’t.
Ip explains that many countries have long tilted the playing field toward favored companies and industries, a practice economists call industrial policy. American presidents have traditionally resisted this as “picking winners.”
The president has broken with that tradition, unveiling a series of actions on trade, foreign investment and energy he hopes will revive favored industries and beat back the competitive challenge of other countries—but which risk creating domestic losers.
Ip's point is that whether it is imposing tariffs to protect the steel industry at the expense of industries that use steel, propping up the dying coal industry or seeking to raise postal rates on Amazon, Trump has become a practitioner of industrial policy of the type conservatives traditionally have shunned. DAR
Drawn from https://www.wsj.com/articles/trumps-emerging-economic-policy-picking-winners-and-losers-1532100935# (paywall)
From Open Markets Institute:
As Independent Grocery Stores Wane and Amazon Looms, Wholesale Middlemen Merge
DAR comment: This article focuses on the supply chain issues relevant to independent groceries. Supply seems crucial to survival of independent groceries, whether their goal is healthy food or providing alternatives in poor neighborhood food deserts.
Last week, organic and natural foods distributor, United Natural Foods Inc. (UNFI) announced plans to buy the largest publicly traded grocery wholesaler, Supervalu, for just under $3 billion. The deal is largely a defensive move by UNFI after Amazon bought their largest customer, Whole Foods.
The takeover is the latest step in a larger trend of grocery consolidation that has greatly reduced the ranks of independent regional groceries and the wholesalers that supply them. As supermarkets and wholesalers try to “get big or get out,” producers at the end of the supply chain feel the squeeze from fewer and bigger buyers.
Between 1992 and 2013, the market share of America’s top twenty grocery stores increased from 39 percent to 64 percent, while the share of just the top four chains more than doubled, from 17 percent to 36 percent. This shifted the majority of the grocery business from smaller regional chains to increasingly large national brands. Today, independent grocers represent only 25 percent of all grocery sales.
The larger a grocer becomes, the more likely they are to cut out the middleman. “Once you get to a certain level it’s easier to have your own warehouses and be self-supplied,” explains grocery analyst David Livingston of DJL Research. WalMart, Kroger, Costco, and Publix are among the chains that increasingly rely on in-house distribution networks.
“There are fewer big wholesalers left today,” says Neil Stern, Senior Partner for retail analysts, McMillan Doolittle. Indeed, between 1997 and 2000 alone, there were 105 grocery wholesaler mergers and acquisitions. In ten years, the market share of the four largest independent grocery wholesalers went from 52 percent in 1997 to 87 percent in 2007. This consolidation has continued. In just the past two years, Supervalu acquired regional wholesalers Central Grocers, Associated Grocers of Florida, and Unified Grocers.
Even though Supervalu bought many of its rivals, the wholesaler’s customer base continued to shrink. “Supervalu’s customers include small- to mid-sized supermarket chains,” Stern says. These are precisely the grocers that have lost the most market share over the past three decades.
To compensate, Supervalu began to vertically integrate into retail in the 1970s, through the buying of regional grocery chains. In 2006, Supervalu briefly became the third largest grocery retailer in the US, when it bought national grocery leader, Albertson’s, taking in their network of 2,150 stores.
But this takeover strategy left Supervalu heavily burdened by debt, and after just seven years the wholesaler sold Albertson’s and started divesting the rest of its retail business. The company ended up with over $1.5 billion in debt and lost 90 percent of its stock value in the process.
UNFI, meanwhile, since 2000 has acquired 19 distributors, manufacturers, and private label suppliers, and their sales have grown at a compounded rate of 12.9 percent each year. They primarily supply organic and natural foods to conventional supermarkets and independent natural chains. But, like Supervalu, in recent years UNFI has come under more pressure as their customer base has consolidated.
In the case of UNFI’s largest customer, Whole Foods, the corporation started to consolidate the organic grocery market in 1988, acquiring thirteen natural grocery chains in 20 years. Today, Whole Foods has 487 locations and accounts for a third of UNFI’s revenue. UNFI’s reliance on Whole Foods was not a major liability until the e-commerce goliath, Amazon, absorbed the chain. Some analysts believe Amazon may soon move to cut UNFI out of the business, much the way other major grocery chains have done.
“They’ve gotten a huge threat from Amazon,” explains Livingston. “They’re probably going to develop their own ways of distribution and kick UNFI to the curb.”
As UNFI and Supervalu combine their supply chains some suppliers, from packaged food companies to produce aggregators, stand to lose. “There might be some overlap in suppliers,” Stern explains, and redundant suppliers could lose contracts. But because UNFI and Supervalu generally fill different niches, Stern argues that many suppliers may benefit from access to new markets. “More scale and size…, could allow suppliers to expand their business,” Stern says.
In general, studies show that as the number of food buyers shrinks, suppliers face greater price pressure. As early as 2000, agricultural economists at UC Davis reported that growing concentration in grocery retail and wholesale created “fewer but larger buyers” for produce growers and shippers, and argued that such big “buyers may enjoy an unfair advantage in bargaining with suppliers.”
If UNFI’s big bet fails, the playing field could shrink further still. “What they’re taking on is risky,” says Livingston, “it’s not a simple acquisition.”
Can voter gerrymandering be fixed by ballot initiative and State constitutional amendment?
The Michigan Voters Not Politicians group thinks so. Here is material from their website: https://www.votersnotpoliticians.com/thesolution:
Let's end Gerrymandering in Michigan
Michigan voters can end gerrymandering in Michigan before 2021 when the next election maps are redrawn.
Voters Not Politicians’ mission is to end gerrymandering by 2018 through a citizen led ballot initiative. We have collected the required 315,654 valid signatures in 180 days, that will secure a spot in the November 6, 2018 election as a ballot measure. With a simple majority vote from the voters of Michigan, we will amend Michigan’s constitution to place an Independent Citizens Redistricting Commission in charge of redistricting, ensuring that voters will choose their politicians, not the other way around.
The proposal to end gerrymandering in Michigan
Instead of giving politicians the power to draw our voting districts - who ultimately stand to benefit from their decisions - we propose an Independent Citizens Redistricting Commission of registered Michigan voters to draw voting districts using guidelines that ensure fairness to all. We believe that the voters of Michigan - not politicians - should be entrusted with this important and monumental task.
Our proposal will eliminate political influence and bias in the redistricting process through a fair, transparent, and nonpartisan solution. Here’s how:
The proposal takes redistricting out of the backroom and ends the conflict of interest that festers when politicians have the power to choose their voters. The Independent Citizens Redistricting Commission will ensure voters choose their politicians, instead of the other way around, so that Michigan votes count and Michiganders’ voices are heard.
Amending Michigan’s constitution
In order to adopt the Independent Citizens Redistricting Commission, we must pass a constitutional amendment through a ballot initiative. Here’s how we do it:
Take Action
People across Michigan who value their votes are taking action to reform redistricting rules. If you're ready, find out how you can get involved.
The Michigan Voters Not Politicians group thinks so. Here is material from their website: https://www.votersnotpoliticians.com/thesolution:
Let's end Gerrymandering in Michigan
Michigan voters can end gerrymandering in Michigan before 2021 when the next election maps are redrawn.
Voters Not Politicians’ mission is to end gerrymandering by 2018 through a citizen led ballot initiative. We have collected the required 315,654 valid signatures in 180 days, that will secure a spot in the November 6, 2018 election as a ballot measure. With a simple majority vote from the voters of Michigan, we will amend Michigan’s constitution to place an Independent Citizens Redistricting Commission in charge of redistricting, ensuring that voters will choose their politicians, not the other way around.
The proposal to end gerrymandering in Michigan
Instead of giving politicians the power to draw our voting districts - who ultimately stand to benefit from their decisions - we propose an Independent Citizens Redistricting Commission of registered Michigan voters to draw voting districts using guidelines that ensure fairness to all. We believe that the voters of Michigan - not politicians - should be entrusted with this important and monumental task.
Our proposal will eliminate political influence and bias in the redistricting process through a fair, transparent, and nonpartisan solution. Here’s how:
- Voters, Not Politicians: An Independent Citizens Redistricting Commission (ICRC) will be in charge of the redistricting process. The Commission will be made up of 4 Democrats, 4 Republicans, and 5 voters who affiliate with neither party with representation from across the state. Political insiders (politicians, consultants, lobbyists) will be banned from serving on the Commission. Read more about how the Commissioners are selected here.
- Transparency: Instead of secret closed door meetings, the ICRC is required to conduct its business in public hearings that are open to input from across the state. All proposed maps and the methodology/data to create them must be submitted as public reports. Everything down to the variables used by the computers to draw the maps will be available to the public. Read more about how the proposal maximizes transparency, promotes meaningful public participation, and ensures independent decision-making here.
- Fairness: The fairness of any idea to reform partisan voting maps comes down to how the maps themselves end up being drawn. The ICRC is required to follow a prioritized set of criteria and standards when drawing the maps. A minimum of 2 Democrats, 2 Republicans, and 2 voters who affiliate with neither party on the Commission must approve the final maps. This prevents one political party from controlling the process. Read more about how maps are drawn here.
The proposal takes redistricting out of the backroom and ends the conflict of interest that festers when politicians have the power to choose their voters. The Independent Citizens Redistricting Commission will ensure voters choose their politicians, instead of the other way around, so that Michigan votes count and Michiganders’ voices are heard.
Amending Michigan’s constitution
In order to adopt the Independent Citizens Redistricting Commission, we must pass a constitutional amendment through a ballot initiative. Here’s how we do it:
- Create and submit a proposal to amend Michigan’s constitution.
- Collect 315,654 valid signatures on paper petitions in 180 consecutive days.
- Obtain a simple majority "yes" vote in the November 2018 general election.
Take Action
People across Michigan who value their votes are taking action to reform redistricting rules. If you're ready, find out how you can get involved.
The D.C. Palisades Citizens Association on Airplane Noise Updates
Updated April 10, 2018
Editorial note by DAR: When citizens have a complaint about private or government action, they may first try complaining, and if that fails they may turn to litigation. The available litigation procedures should be transparent, fair, and expedient. It is plain from the following report that the writers find the litigation procedures to be none of those things. DR
To file a noise complaint, click here.
Click here to see Pierre Oury's slides from his recent presentation at the library, A Pilot's Perspective
DC Fair Skies - AIRCRAFT NOISE LEGAL FIGHT UPDATE:
Unfortunately, the Court did not reach the merits of the case and dismissed the Petition for Review as untimely. Despite the lack of notice to any elected DC Government Official and the efforts by the FAA to ensure no one in DC was aware of the plan to make the LAZIR route the flight path for all northbound departures, the Court found that two small adds in the Washington Post of the intent to do an EA [Environmental Assessment] of the entire DC Metroplex and the fact that one had been completed were adequate notice. The only support for that decision is an old Supreme Court Clean Water case which sanctioned publication as a means of providing notice but did not state that it was sufficient to satisfy NEPA’s [National Environmental Policy Act] requirements that agencies make “diligent efforts to involve the public”. In this case the FAA made diligent efforts to ensure no one in DC was aware of the new flight path we challenged until it was an accomplished fact. We need to consider what if any steps we need to consider taking at this point, but pursuing our Administrative Petition with the FAA is one possible alternative to further litigation. The Opinion is found here.
Click here for the latest summary on our involvement in the Fair Skies Coalition.
Click here to listen to the Oral Argument in DC Fair Skies vs FAA that look place in the Federal Court of Appeals on January 11, 2018.
Neighborhood associations file reply brief. The Reply Brief lambasts the FAA over increased aircraft noise created by the new northern departure flight path.Click here to read it.
New report says noise complaints are up at National, Dulles airports. Click here to read the recent The Washington Post article.
Click here to read about the brief filed to challenge disruptive new aircraft noise created by the FAA’s new northern departure flight path. The brief filed represents many weeks of working through the record to find the holes in the FAA’s argument. Fair Skies then had to prepare motions to expand the record to include materials it wanted included, create statutory addendums to the brief required by the Court, and provide case and record citations for its arguments-all of which took many hours of his time.
Check out this story on jet noise that aired on WAMU in October 2016.
From: http://www.palisadesdc.org/
Updated April 10, 2018
Editorial note by DAR: When citizens have a complaint about private or government action, they may first try complaining, and if that fails they may turn to litigation. The available litigation procedures should be transparent, fair, and expedient. It is plain from the following report that the writers find the litigation procedures to be none of those things. DR
To file a noise complaint, click here.
Click here to see Pierre Oury's slides from his recent presentation at the library, A Pilot's Perspective
DC Fair Skies - AIRCRAFT NOISE LEGAL FIGHT UPDATE:
Unfortunately, the Court did not reach the merits of the case and dismissed the Petition for Review as untimely. Despite the lack of notice to any elected DC Government Official and the efforts by the FAA to ensure no one in DC was aware of the plan to make the LAZIR route the flight path for all northbound departures, the Court found that two small adds in the Washington Post of the intent to do an EA [Environmental Assessment] of the entire DC Metroplex and the fact that one had been completed were adequate notice. The only support for that decision is an old Supreme Court Clean Water case which sanctioned publication as a means of providing notice but did not state that it was sufficient to satisfy NEPA’s [National Environmental Policy Act] requirements that agencies make “diligent efforts to involve the public”. In this case the FAA made diligent efforts to ensure no one in DC was aware of the new flight path we challenged until it was an accomplished fact. We need to consider what if any steps we need to consider taking at this point, but pursuing our Administrative Petition with the FAA is one possible alternative to further litigation. The Opinion is found here.
Click here for the latest summary on our involvement in the Fair Skies Coalition.
Click here to listen to the Oral Argument in DC Fair Skies vs FAA that look place in the Federal Court of Appeals on January 11, 2018.
Neighborhood associations file reply brief. The Reply Brief lambasts the FAA over increased aircraft noise created by the new northern departure flight path.Click here to read it.
New report says noise complaints are up at National, Dulles airports. Click here to read the recent The Washington Post article.
Click here to read about the brief filed to challenge disruptive new aircraft noise created by the FAA’s new northern departure flight path. The brief filed represents many weeks of working through the record to find the holes in the FAA’s argument. Fair Skies then had to prepare motions to expand the record to include materials it wanted included, create statutory addendums to the brief required by the Court, and provide case and record citations for its arguments-all of which took many hours of his time.
Check out this story on jet noise that aired on WAMU in October 2016.
From: http://www.palisadesdc.org/
Steve Calkins on: How Might A Justice Kavanaugh Impact Antitrust Jurisprudence?
Posted on July 20, 2018 by Stephen Calkins on pro-arket.org
Throughout his judicial career, the US president’s latest nominee to the Supreme Court, Brett Kavanaugh, has written three antitrust opinions. Here, Stephen Calkins of Wayne State University Law School reviews the trends that emerge from those opinions.
'A Justice Kavanaugh—this comment simply assumes that he will be confirmed—would become the second Trump-appointed aggressively conservative, pro-business justice. Nominated at age 53, he could be expected to serve for decades.
This commentary reviews Judge Kavanaugh’s antitrust opinions.1) He has dissented from two D.C. Circuit decisions that acceded to government requests to block mergers: United States v. Anthem, Inc.;2) and FTC v. Whole Foods Market, Inc.3)The first, preventing a 4-3 merger of health insurance carriers, turned largely on arguable efficiencies. The second, objecting to the merger of the two largest “premium, natural, and organic supermarkets,” turned principally on market definition. Judge Kavanaugh also addressed antitrust in his concurring opinion in Comcast Cable Communications, LLC v. FCC,4) in which the Court rebuffed the FCC’s order requiring Comcast to carry the Tennis Channel on equal terms with comparable Comcast-owned offerings. The Court reached this result on narrow grounds. Judge Kavanaugh separately wrote a sweeping opinion disagreeing with the FCC and saying that statutory language authorizing regulations to prevent conduct that “unreasonably restrain[s]” a rival from “compet[ing] fairly by discriminating . . . on the basis of affiliation or nonaffiliation” (a) must have meant (no citation of Chevron) to allow only duplication of antitrust law, and (b) must have meant that all vertical restraints are per se protected at least absent proof of market power – which he concluded that Comcast did not have — and (c) that’s a good thing, because the First Amendment protects Comcast’s “editorial discretion” about whether to carry the Tennis Chanel.
Several themes emerge from the three opinions:
Posted on July 20, 2018 by Stephen Calkins on pro-arket.org
Throughout his judicial career, the US president’s latest nominee to the Supreme Court, Brett Kavanaugh, has written three antitrust opinions. Here, Stephen Calkins of Wayne State University Law School reviews the trends that emerge from those opinions.
'A Justice Kavanaugh—this comment simply assumes that he will be confirmed—would become the second Trump-appointed aggressively conservative, pro-business justice. Nominated at age 53, he could be expected to serve for decades.
This commentary reviews Judge Kavanaugh’s antitrust opinions.1) He has dissented from two D.C. Circuit decisions that acceded to government requests to block mergers: United States v. Anthem, Inc.;2) and FTC v. Whole Foods Market, Inc.3)The first, preventing a 4-3 merger of health insurance carriers, turned largely on arguable efficiencies. The second, objecting to the merger of the two largest “premium, natural, and organic supermarkets,” turned principally on market definition. Judge Kavanaugh also addressed antitrust in his concurring opinion in Comcast Cable Communications, LLC v. FCC,4) in which the Court rebuffed the FCC’s order requiring Comcast to carry the Tennis Channel on equal terms with comparable Comcast-owned offerings. The Court reached this result on narrow grounds. Judge Kavanaugh separately wrote a sweeping opinion disagreeing with the FCC and saying that statutory language authorizing regulations to prevent conduct that “unreasonably restrain[s]” a rival from “compet[ing] fairly by discriminating . . . on the basis of affiliation or nonaffiliation” (a) must have meant (no citation of Chevron) to allow only duplication of antitrust law, and (b) must have meant that all vertical restraints are per se protected at least absent proof of market power – which he concluded that Comcast did not have — and (c) that’s a good thing, because the First Amendment protects Comcast’s “editorial discretion” about whether to carry the Tennis Chanel.
Several themes emerge from the three opinions:
- Judge Kavanaugh is smart, energetic, and well-informed;
- He shows considerable respect for the views of defense expert witnesses;
- He is a firm believer in what he repeatedly calls “modern” antitrust law;
- Judges in the majority suggest (with some justification) that he treats the law as he wishes it were, rather than as it is; and
- He sometimes takes a concept and pushes it further than it deserves.
To see the continuation of the Calkins analysis, go to: https://promarket.org/might-justice-kavanaugh-impact-antitrust-jurisprudence/
Bid rigging at public foreclosure auctions: A Too Familiar DOJ Press Release with a Sad Detail
By Robert E. Connolly
The DOJ issued a standard press release yesterday announcing yet another individual guilty plea in its long running real estate foreclosure auction collusion investigation: Seventh Mississippi Real Estate Investor Pleads Guilty to Conspiring to Rig Bids at Public Foreclosure Auctions. According to the press release to date there have been “convictions of well over 100 other individuals who rigged foreclosure auctions all across the country.” Many of those convicted have been sentenced to prison.
What jumped out at me about the press release was that the individual is pleading guilty to rigging auctions “from at least as early as August 20, 2009 through at least as late as December 14, 2016.” In other words, while the DOJ investigation, prosecution and sentencing of others to prison, this defendant continued to collude at auctions. And you can’t collude by yourself, so others were still joining in. I suppose it is more sad than surprising. [People still rob banks.] The temptation for a quick (and illegal) buck by colluding at auctions is too great for some to pass up. After all, this the real estate foreclosure auction investigation is by no means the first widespread auction collusion investigation the Antitrust Division has had with large numbers of criminal prosecutions. When I was the Chief of the Philadelphia office we prosecuted auction “rings” in antiques, jewelry, various types of commercial equipment and Department of Defense surplus auctions. In every investigation we learned was that collusion at auctions was a “way of life” in that business. The individuals prosecuted had excuses for their behavior: “it’s the only way to make money” “there were still other bidders we had to compete against” “the auctioneers pulled phantom bids” “it was a cloudy day” “it was a sunny day” and on and on. But, each person I dealt with understood that what they were doing was a fraud. One guy even remarked in answer to a question about the collusion: “You mean the combination?” I remember that many years later because I had never heard the Sherman Act term “combination” actually used by someone who was in one. [Auction conspirators frequently use the term “the ring.”]
Like many white-collar criminals, auction collusion defendants have not had previous encounters with the law. The entire lengthy process of the investigation, prosecution, and jail sentence if there is one, is usually an absolutely devastating experience to the individuals’ business, family life and self. It can be tempting get involved in an auction ring if you compete against the same individuals/businesses time after time. But, in my experience, auctions rings were by far the easiest bid rigging crime to prosecute. The payoffs to the ring members leave a detailed road map of who was involved and what the scam was.
I don’t know who reads Cartel Capers. Probably not many in the auction business. But, if you are and you are invited into an auction ring, RUN. Be conspicuous that you are not part of the group. If you are in an auction ring, GET OUT. You may want to speak with an attorney and consider the Antitrust Division’s Leniency Program. If it’s the only way to make money, find another line of work. (But don’t rob banks.)
Thanks for reading. Bob Connolly
This post originally appeared on the Cartel Capers blog. https://wklawbusiness.us6.list-manage.com/track/click?u=752026a04d2007135a2ab4662&id=88fe73100b&e=84837a780d
AG Racine on Enhancing Safety through Justice Reform from Karl Racine:
Across the country, reform-minded prosecutors are simultaneously making our communities safer and rehabilitating young offenders through evidence-based, age-sensitive solutions. In a recent article in USA Today, I highlight how prosecutors are implementing reforms tailored to juveniles, such as developing youth-centered facilities that keep young people out of jail and raising the age at which someone can be tried as an adult. These reforms have succeeded in increasing public safety, keeping youth out of the justice system, and saving taxpayers money.
Recently, in partnership with Fair and Just Prosecution and Georgetown University’s Center for Juvenile Justice Reform, I convened prosecutors from across the country to share ideas that can help reform the juvenile justice system. I highlighted two OAG programs that have shown early success in the District: (1) the Alternatives to Court Experience (ACE) Diversion program which provides support services for offenders as an alternative to incarceration and (2) a first-in-the-nation Restorative Justice program which uses mediated conferences between victims and offenders to repair the victim’s harm instead of traditional prosecution. Both programs have shown similar success with approximately 80 percent of participants not being re-arrested after completing either program.
Prosecutors are gatekeepers to the justice system and I strongly believe we can use our positions to change practices and advocate for evidence-based juvenile justice reforms. At OAG, I will continue to implement and advocate for strategies that keep our communities safe, make financial sense, and give young people a shot at a brighter future.
Sincerely,
Karl A. Racine
Attorney General
Across the country, reform-minded prosecutors are simultaneously making our communities safer and rehabilitating young offenders through evidence-based, age-sensitive solutions. In a recent article in USA Today, I highlight how prosecutors are implementing reforms tailored to juveniles, such as developing youth-centered facilities that keep young people out of jail and raising the age at which someone can be tried as an adult. These reforms have succeeded in increasing public safety, keeping youth out of the justice system, and saving taxpayers money.
Recently, in partnership with Fair and Just Prosecution and Georgetown University’s Center for Juvenile Justice Reform, I convened prosecutors from across the country to share ideas that can help reform the juvenile justice system. I highlighted two OAG programs that have shown early success in the District: (1) the Alternatives to Court Experience (ACE) Diversion program which provides support services for offenders as an alternative to incarceration and (2) a first-in-the-nation Restorative Justice program which uses mediated conferences between victims and offenders to repair the victim’s harm instead of traditional prosecution. Both programs have shown similar success with approximately 80 percent of participants not being re-arrested after completing either program.
Prosecutors are gatekeepers to the justice system and I strongly believe we can use our positions to change practices and advocate for evidence-based juvenile justice reforms. At OAG, I will continue to implement and advocate for strategies that keep our communities safe, make financial sense, and give young people a shot at a brighter future.
Sincerely,
Karl A. Racine
Attorney General
Lina Khan, a critic of Amazon on antitrust grounds, joins the FTC
One of Amazon's most prominent critics on antitrust grounds, Lina Khan, has been hired at the Federal Trade Commission. The FTC will hold hearings on competition and consumer protection this fall. "Ms. Khan is one of the leading proponents of the idea that conventional antitrust enforcement needs to be rethought in the era of giant tech platforms like Amazon," reports Priya Anand of The Information.
One of Amazon's most prominent critics on antitrust grounds, Lina Khan, has been hired at the Federal Trade Commission. The FTC will hold hearings on competition and consumer protection this fall. "Ms. Khan is one of the leading proponents of the idea that conventional antitrust enforcement needs to be rethought in the era of giant tech platforms like Amazon," reports Priya Anand of The Information.
From Open Markets Institute: Colluding Pork Packers Accused of Pigging Out On Fixed Prices
Since roughly 2009, Americans may have been paying too much for their pork chops, barbeque, hams, and trotters.
That’s the claim of two law firms that filed separate class action suits on behalf of consumers and food distributors charging eight major pork packers and an industry data sharing service, Agri Stats, with colluding to manipulate prices.
The case comes more than a year after dominant chicken packers were charged with an identical crime. In both cases, the suits argue that Agri Stats’ detailed, company-specific, and forward-looking data made it possible for pork processing companies to coordinate the supply of pork, and critically, monitor one another’s behavior to ensure no one in the cartel deviated from their conspiracy.
Hormel and Smithfield have denied the price-fixing allegations. A representative from Tyson, also a defendant in the poultry case, said in an email, “We intend to vigorously defend against the allegations in court.” Other defendants have not commented.
The suits allege that collusion began around 2008 when Agri Stats started to market pork “benchmarking” reports, which compare data from pork meat packers on everything from total profits and hogs slaughtered, to farm-level data about feed ratios, mortality rates, piglet weaning costs, and so on. By 2016, Agri Stats benchmarking reports collected and internally audited information from over 90 percent of the pork industry.
“Once Agri Stats got everyone in the pork industry to put their card on the table, there was no competition,” said Steve Berman, managing partner at Hagens Berman, one of the firms suing pork producers, in a public statement.
Pork production stagnated and prices increased almost immediately after pork corporations began using Agri Stats benchmarking data. Between 1998 and 2009 the year average price per hundredweight of pork was never more than $50. But from 2009 to 2014, prices rose over 50 percent to $76.30. This was true even though the price of other agricultural commodities started to fall around 2012 and 2013. Annual pork production fell in 2009, 2010, and again in 2013 (with another dip in 2014 due to disease).
The plaintiffs argue that pork corporations coordinated changes in production with the help of Agri Stats. However, this claim raises the question, what makes Agri Stats different from other industry data service companies or market information provided by the USDA?
Darren Tristano, the CEO of a foodservice and hospitality data research service, CHD Expert, says market reports with un-aggregated, company-level information are “very rare.” Indeed, the pork suit claims that “Agri Stats’ reports are unlike those of other lawful industry reports,” in that they provide “current and forward-looking sensitive information” broken down by company and even farm. All of this data is anonymous, but the suit contends that Agri Stats reports contain “the keys to deciphering which data belongs to which producers.”
This key difference, in turn, could allow conspirators to tie specific data back to individual companies and identify any one who tried to cheat the others by not adhering to their price-fixing plan. Without frequent, audited, and disaggregated data from Agri Stats, the suits argue, large pork companies could not be sure that all conspirators were cooperating.
Furthermore, in a decentralized market of many independent pork producers, collusion on the scale in question would be almost impossible to coordinate, even with the help of an especially detailed data service. Yet today, four companies sell just under 70 percent of all pork, making collusion comparatively easy.
Pork packers also have unprecedented ownership over all steps in the supply chain, from breeding to feed production and slaughter, while individual farmers take on the risk of raising hogs on contract for large corporations.
While the new suits focus on the impact of the conspiracy on pork buyers, Agri Stats data-sharing also raises questions about potential harms to hog growers. A 2017 lawsuit filed on behalf of poultry growers claims that poultry processors used Agri Stats to share data on farmer compensation. The suit argues that poultry processors worked together to “[depress] Grower compensation below competitive levels.”
Such a suit has not been filed on behalf of hog farmers, and neither of the current pork price-fixing suits makes mention of Agri Stats providing data on hog grower compensation.
The pork suits do argue that hog farmers bore the brunt of price variations over the course of the alleged conspiracy. Hog farmer earnings plummeted in 2014, and have since failed to bounce back to 2010-2013 levels. Meanwhile, pork packer earnings grew precipitously from 2012 onward, with only a slight dip this past year.
Intentional wage suppression or not, these cases highlight the immense power that a handful of vertically integrated meat companies have to force farmers to assume all the risk, to increase prices for consumers, and to hog the benefits for themselves.
Since roughly 2009, Americans may have been paying too much for their pork chops, barbeque, hams, and trotters.
That’s the claim of two law firms that filed separate class action suits on behalf of consumers and food distributors charging eight major pork packers and an industry data sharing service, Agri Stats, with colluding to manipulate prices.
The case comes more than a year after dominant chicken packers were charged with an identical crime. In both cases, the suits argue that Agri Stats’ detailed, company-specific, and forward-looking data made it possible for pork processing companies to coordinate the supply of pork, and critically, monitor one another’s behavior to ensure no one in the cartel deviated from their conspiracy.
Hormel and Smithfield have denied the price-fixing allegations. A representative from Tyson, also a defendant in the poultry case, said in an email, “We intend to vigorously defend against the allegations in court.” Other defendants have not commented.
The suits allege that collusion began around 2008 when Agri Stats started to market pork “benchmarking” reports, which compare data from pork meat packers on everything from total profits and hogs slaughtered, to farm-level data about feed ratios, mortality rates, piglet weaning costs, and so on. By 2016, Agri Stats benchmarking reports collected and internally audited information from over 90 percent of the pork industry.
“Once Agri Stats got everyone in the pork industry to put their card on the table, there was no competition,” said Steve Berman, managing partner at Hagens Berman, one of the firms suing pork producers, in a public statement.
Pork production stagnated and prices increased almost immediately after pork corporations began using Agri Stats benchmarking data. Between 1998 and 2009 the year average price per hundredweight of pork was never more than $50. But from 2009 to 2014, prices rose over 50 percent to $76.30. This was true even though the price of other agricultural commodities started to fall around 2012 and 2013. Annual pork production fell in 2009, 2010, and again in 2013 (with another dip in 2014 due to disease).
The plaintiffs argue that pork corporations coordinated changes in production with the help of Agri Stats. However, this claim raises the question, what makes Agri Stats different from other industry data service companies or market information provided by the USDA?
Darren Tristano, the CEO of a foodservice and hospitality data research service, CHD Expert, says market reports with un-aggregated, company-level information are “very rare.” Indeed, the pork suit claims that “Agri Stats’ reports are unlike those of other lawful industry reports,” in that they provide “current and forward-looking sensitive information” broken down by company and even farm. All of this data is anonymous, but the suit contends that Agri Stats reports contain “the keys to deciphering which data belongs to which producers.”
This key difference, in turn, could allow conspirators to tie specific data back to individual companies and identify any one who tried to cheat the others by not adhering to their price-fixing plan. Without frequent, audited, and disaggregated data from Agri Stats, the suits argue, large pork companies could not be sure that all conspirators were cooperating.
Furthermore, in a decentralized market of many independent pork producers, collusion on the scale in question would be almost impossible to coordinate, even with the help of an especially detailed data service. Yet today, four companies sell just under 70 percent of all pork, making collusion comparatively easy.
Pork packers also have unprecedented ownership over all steps in the supply chain, from breeding to feed production and slaughter, while individual farmers take on the risk of raising hogs on contract for large corporations.
While the new suits focus on the impact of the conspiracy on pork buyers, Agri Stats data-sharing also raises questions about potential harms to hog growers. A 2017 lawsuit filed on behalf of poultry growers claims that poultry processors used Agri Stats to share data on farmer compensation. The suit argues that poultry processors worked together to “[depress] Grower compensation below competitive levels.”
Such a suit has not been filed on behalf of hog farmers, and neither of the current pork price-fixing suits makes mention of Agri Stats providing data on hog grower compensation.
The pork suits do argue that hog farmers bore the brunt of price variations over the course of the alleged conspiracy. Hog farmer earnings plummeted in 2014, and have since failed to bounce back to 2010-2013 levels. Meanwhile, pork packer earnings grew precipitously from 2012 onward, with only a slight dip this past year.
Intentional wage suppression or not, these cases highlight the immense power that a handful of vertically integrated meat companies have to force farmers to assume all the risk, to increase prices for consumers, and to hog the benefits for themselves.
Transcript: Dan Coats warns the lights are 'blinking red' on Russian cyberattacks - including attacks on infrastructure crucial to consumers
NPR July 19, 2018 5:57 a.m.
Director of National Intelligence Dan Coats warned a think tank last week that cyberattacks from Russia and others are ongoing: "The warning lights are blinking red again."
The director of National Intelligence spoke before the Hudson Institute, a D.C.-based conservative think tank, on July 13. Transcript provided by the Hudson Institute.
Excerpts:
Every day, foreign actors — the worst offenders being Russia, China, Iran and North Korea — are penetrating our digital infrastructure and conducting a range of cyber intrusions and attacks against targets in the United States. The targets range from U.S. businesses to the federal government (including our military), to state and local governments, to academic and financial institutions and elements of our critical infrastructure — just to name a few. The attacks come in different forms. Some are tailored to achieve very tactical goals while others are implemented for strategic purpose, including the possibility of a crippling cyberattack against our critical infrastructure.
All of these disparate efforts share a common purpose: to exploit America’s openness in order to undermine our long-term competitive advantage.
* * *
But focusing on the potential impact of these actions on our midterm elections misses the more important point: these actions are persistent, they are pervasive, and they are meant to undermine America’s democracy on a daily basis, regardless of whether it is election time or not. Russian actors and others are exploring vulnerabilities in our critical infrastructure as well. The DHS and FBI — in coordination with international partners — have detected Russian government actors targeting government and businesses in the energy, nuclear, water, aviation and critical manufacturing sectors.
The warning signs are there, the system is blinking, and that is why I believe we are at a critical point. Today, unlike the status of our intelligence community in 2001, we’re much more integrated and much better at sharing information between agencies. But the evolving cyber threat is illuminating new daily challenges in how we treat information. We are dealing with information silos of a different kind, including between the public and private sector.
* * *
In many ways, the nature of the cyber threat requires that we — the national security community — treat the private sector and American people as intelligence customers. And that is why you will see us talking about this threat more vocally, and why you will continue to see us publish unclassified assessments and statements to inform the American people.
Full transcript: https://www.opb.org/news/article/npr-transcript-dan-coats-warning-on-continuing-russian-cyberattacks/
NPR July 19, 2018 5:57 a.m.
Director of National Intelligence Dan Coats warned a think tank last week that cyberattacks from Russia and others are ongoing: "The warning lights are blinking red again."
The director of National Intelligence spoke before the Hudson Institute, a D.C.-based conservative think tank, on July 13. Transcript provided by the Hudson Institute.
Excerpts:
Every day, foreign actors — the worst offenders being Russia, China, Iran and North Korea — are penetrating our digital infrastructure and conducting a range of cyber intrusions and attacks against targets in the United States. The targets range from U.S. businesses to the federal government (including our military), to state and local governments, to academic and financial institutions and elements of our critical infrastructure — just to name a few. The attacks come in different forms. Some are tailored to achieve very tactical goals while others are implemented for strategic purpose, including the possibility of a crippling cyberattack against our critical infrastructure.
All of these disparate efforts share a common purpose: to exploit America’s openness in order to undermine our long-term competitive advantage.
* * *
But focusing on the potential impact of these actions on our midterm elections misses the more important point: these actions are persistent, they are pervasive, and they are meant to undermine America’s democracy on a daily basis, regardless of whether it is election time or not. Russian actors and others are exploring vulnerabilities in our critical infrastructure as well. The DHS and FBI — in coordination with international partners — have detected Russian government actors targeting government and businesses in the energy, nuclear, water, aviation and critical manufacturing sectors.
The warning signs are there, the system is blinking, and that is why I believe we are at a critical point. Today, unlike the status of our intelligence community in 2001, we’re much more integrated and much better at sharing information between agencies. But the evolving cyber threat is illuminating new daily challenges in how we treat information. We are dealing with information silos of a different kind, including between the public and private sector.
* * *
In many ways, the nature of the cyber threat requires that we — the national security community — treat the private sector and American people as intelligence customers. And that is why you will see us talking about this threat more vocally, and why you will continue to see us publish unclassified assessments and statements to inform the American people.
Full transcript: https://www.opb.org/news/article/npr-transcript-dan-coats-warning-on-continuing-russian-cyberattacks/
WSJ: Counterfeit products of Amazon
Excerpts:
Amazon.com Inc. AMZN -1.16% has made it easy for small brands to sell their products to large numbers of customers, but that has also enabled some counterfeiters to cut into their business.
Counterfeiters, though, have been able to exploit Amazon’s drive to increase the site’s selection and offer lower prices. The company has made the process to list products on its website simple—sellers can register with little more than a business name, email and address, phone number, credit card, ID and bank account—but that also has allowed impostors to create ersatz versions of hot-selling items, according to small brands and seller consultants.
WSJ article at https://www.wsj.com/articles/on-amazon-fake-products-plague-smaller-brands-1532001601?mod=hp_lead_pos4 (pay wall)
The Center For Automotive Research says US car and car parts manufacturers will not benefit from tariffs
Produced By: Industry, Labor, & Economics Group
Categories: Economic Contribution Analysis, Employment, Forecasts, Trade
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Full Description:
The U.S. Department of Commerce is currently investigating whether U.S. automobiles and automotive parts constitute a national security threat under Section 232 of the Trade Expansion Act of 1962, as amended. The Center for Automotive Research (CAR) estimates that consumers will see the price of all new vehicles rise by $455 to $6,875 depending on the level of tariff or quota, where the vehicle was assembled, and whether the policy provides exemptions for automotive trade with Canada and Mexico. Used vehicle prices will also rise due to heightened demand and constricted supply, and higher automotive parts prices will drive up the price of vehicle maintenance and repair, so even holding on to an existing vehicle will become more expensive.
U.S. automotive and automotive parts manufacturers would not benefit from tariff or quota protection since all vehicles produced in the United States rely on imported content and a substantial share of U.S.-produced automotive parts and components are exported for assembly in vehicles built in other countries. CAR estimates that automotive demand will fall by between 493,600 to 2 million vehicles as a result of the implementation of tariffs or quotas. Declining demand is associated with employment losses ranging from over 82,000 to nearly 715,000 jobs and a $6.4 billion to $62.2 billion hit to U.S. Gross Domestic Product (GDP).
This briefing covers the economic, trade, employment, output, and price impacts of the potential Section 232 tariffs or quotas at a range of levels and levied against all trading partners or all non-NAFTA trading parnters.
Download at https://www.cargroup.org/wp-content/uploads/2018/07/NADA-Consumer-Impact-of-Auto-and-Parts-Tariffs-and-Quotas_July-2018.pdf
Produced By: Industry, Labor, & Economics Group
Categories: Economic Contribution Analysis, Employment, Forecasts, Trade
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Full Description:
The U.S. Department of Commerce is currently investigating whether U.S. automobiles and automotive parts constitute a national security threat under Section 232 of the Trade Expansion Act of 1962, as amended. The Center for Automotive Research (CAR) estimates that consumers will see the price of all new vehicles rise by $455 to $6,875 depending on the level of tariff or quota, where the vehicle was assembled, and whether the policy provides exemptions for automotive trade with Canada and Mexico. Used vehicle prices will also rise due to heightened demand and constricted supply, and higher automotive parts prices will drive up the price of vehicle maintenance and repair, so even holding on to an existing vehicle will become more expensive.
U.S. automotive and automotive parts manufacturers would not benefit from tariff or quota protection since all vehicles produced in the United States rely on imported content and a substantial share of U.S.-produced automotive parts and components are exported for assembly in vehicles built in other countries. CAR estimates that automotive demand will fall by between 493,600 to 2 million vehicles as a result of the implementation of tariffs or quotas. Declining demand is associated with employment losses ranging from over 82,000 to nearly 715,000 jobs and a $6.4 billion to $62.2 billion hit to U.S. Gross Domestic Product (GDP).
This briefing covers the economic, trade, employment, output, and price impacts of the potential Section 232 tariffs or quotas at a range of levels and levied against all trading partners or all non-NAFTA trading parnters.
Download at https://www.cargroup.org/wp-content/uploads/2018/07/NADA-Consumer-Impact-of-Auto-and-Parts-Tariffs-and-Quotas_July-2018.pdf
The EU press release on the Google fine:
http://europa.eu/rapid/press-release_IP-18-4581_en.htm
Excerpt:
Brussels, 18 July 2018
The European Commission has fined Google €4.34 billion for breaching EU antitrust rules. Since 2011, Google has imposed illegal restrictions on Android device manufacturers and mobile network operators to cement its dominant position in general internet search.
Google must now bring the conduct effectively to an end within 90 days or face penalty payments of up to 5% of the average daily worldwide turnover of Alphabet, Google's parent company.
Commissioner Margrethe Vestager, in charge of competition policy, said: "Today, mobile internet makes up more than half of global internet traffic. It has changed the lives of millions of Europeans. Our case is about three types of restrictions that Google has imposed on Android device manufacturers and network operators to ensure that traffic on Android devices goes to the Google search engine. In this way, Google has used Android as a vehicle to cement the dominance of its search engine. These practices have denied rivals the chance to innovate and compete on the merits. They have denied European consumers the benefits of effective competition in the important mobile sphere. This is illegal under EU antitrust rules."
In particular, Google:
Google obtains the vast majority of its revenues via its flagship product, the Google search engine. The company understood early on that the shift from desktop PCs to mobile internet, which started in the mid-2000s, would be a fundamental change for Google Search. So, Google developed a strategy to anticipate the effects of this shift, and to make sure that users would continue to use Google Search also on their mobile devices.
In 2005, Google bought the original developer of the Android mobile operating system and has continued to develop Android ever since. Today, about 80% of smart mobile devices in Europe, and worldwide, run on Android.
When Google develops a new version of Android it publishes the source code online. This in principle allows third parties to download and modify this code to create Android forks. The openly accessible Android source code covers basic features of a smart mobile operating system but not Google's proprietary Android apps and services. Device manufacturers who wish to obtain Google's proprietary Android apps and services need to enter into contracts with Google, as part of which Google imposes a number of restrictions. Google also entered into contracts and applied some of these restrictions to certain large mobile network operators, who can also determine which apps and services are installed on devices sold to end users.
The Commission decision concerns three specific types of contractual restrictions that Google has imposed on device manufacturers and mobile network operators. These have enabled Google to use Android as a vehicle to cement the dominance of its search engine. In other words, the Commission decision does not question the open source model or the Android operating system as such.
http://europa.eu/rapid/press-release_IP-18-4581_en.htm
Excerpt:
Brussels, 18 July 2018
The European Commission has fined Google €4.34 billion for breaching EU antitrust rules. Since 2011, Google has imposed illegal restrictions on Android device manufacturers and mobile network operators to cement its dominant position in general internet search.
Google must now bring the conduct effectively to an end within 90 days or face penalty payments of up to 5% of the average daily worldwide turnover of Alphabet, Google's parent company.
Commissioner Margrethe Vestager, in charge of competition policy, said: "Today, mobile internet makes up more than half of global internet traffic. It has changed the lives of millions of Europeans. Our case is about three types of restrictions that Google has imposed on Android device manufacturers and network operators to ensure that traffic on Android devices goes to the Google search engine. In this way, Google has used Android as a vehicle to cement the dominance of its search engine. These practices have denied rivals the chance to innovate and compete on the merits. They have denied European consumers the benefits of effective competition in the important mobile sphere. This is illegal under EU antitrust rules."
In particular, Google:
- has required manufacturers to pre-install the Google Search app and browser app (Chrome), as a condition for licensing Google's app store (the Play Store);
- made payments to certain large manufacturers and mobile network operators on condition that they exclusively pre-installed the Google Search app on their devices; and
- has prevented manufacturers wishing to pre-install Google apps from selling even a single smart mobile device running on alternative versions of Android that were not approved by Google (so-called "Android forks").
Google obtains the vast majority of its revenues via its flagship product, the Google search engine. The company understood early on that the shift from desktop PCs to mobile internet, which started in the mid-2000s, would be a fundamental change for Google Search. So, Google developed a strategy to anticipate the effects of this shift, and to make sure that users would continue to use Google Search also on their mobile devices.
In 2005, Google bought the original developer of the Android mobile operating system and has continued to develop Android ever since. Today, about 80% of smart mobile devices in Europe, and worldwide, run on Android.
When Google develops a new version of Android it publishes the source code online. This in principle allows third parties to download and modify this code to create Android forks. The openly accessible Android source code covers basic features of a smart mobile operating system but not Google's proprietary Android apps and services. Device manufacturers who wish to obtain Google's proprietary Android apps and services need to enter into contracts with Google, as part of which Google imposes a number of restrictions. Google also entered into contracts and applied some of these restrictions to certain large mobile network operators, who can also determine which apps and services are installed on devices sold to end users.
The Commission decision concerns three specific types of contractual restrictions that Google has imposed on device manufacturers and mobile network operators. These have enabled Google to use Android as a vehicle to cement the dominance of its search engine. In other words, the Commission decision does not question the open source model or the Android operating system as such.
Insight into government subsidies to farmers: peanuts and peanut butter
Peanut growers where first financially helped by the government with the 1933 Agricultural Adjustment Act. Through federal policies, it increased overall income for peanut growers. However, consumers felt the hit as they were paying more for their everyday bag of peanuts. The Act later went through a bunch of changes; modifications were made in years 1937, 1941, 1948, and 1949 to justify poverty alleviation incentives.
In 2002, a quota system was introduced into the mix. This allowed peanut growers to obtain funds from US taxpayers versus from consumers. This also meant an increase in the price of consumer-oriented products, such as peanut butter. Around this time, lobbyists justified keeping the subsidies flowing based on the fact that the government had been providing them for so long, it would be unfair to suddenly take them away.
A couple of years later, peanuts were threatened to be kicked off of the 2014 Farm Bill. But, lobbyists fought back for favorable treatment made in a new Price Loss Coverage Program (PLC), which allows them protection from adverse market changes.
With these subsidies in place and the government having a strong control on market price with quotas, the unlikely consequence is huge stockpiles. This year, it is projected that American farmers will harvest 6.1 billion pounds of peanuts with 2.9 billion pounds in leftover. While stockpiles last, consumers will find themselves paying a bit less for their favorite peanut butter brands. However, taxpayers are expected to cover the $2 billion in subsidy payments by the government to farmers.
As mentioned, peanuts are now a lower price based on the stockpiles and the government's quotas for harvest. However, consumers pay for these "lowered prices" through taxes.
When peanut butter is made and marketed, it's sold at a lower price versus other nut spreads. The ingredients of a conventional jar of peanut butter do contain peanuts, but they may also contain other subsidized ingredients such as corn, soy, or sugar (this also ties into the reason of why a fast food salad is going to be more expensive than a cheeseburger). The more subsidized ingredients a product contains, the less it's going to cost. This is also why all-natural peanut butter will be more expensive than one with added sugars and preservatives.
Recently, there has been a big push to reduce the number of subsidies given to farmers. The current presidential administration has even proposed a $4.8 billion annual cut to the $23 billion currently given to farmers in hopes of fixing the issue. What will the future look like for the prices of peanut butter? It will certainly be one to keep an eye out for in the news- and the grocery shelves.
Excerpt from: https://www.msn.com/en-us/foodanddrink/foodnews/peanut-butter-is-subsidized-by-the-government-and-heres-what-that-means-for-you/ar-AAAhBOD?ocid=spartandhp
Peanut growers where first financially helped by the government with the 1933 Agricultural Adjustment Act. Through federal policies, it increased overall income for peanut growers. However, consumers felt the hit as they were paying more for their everyday bag of peanuts. The Act later went through a bunch of changes; modifications were made in years 1937, 1941, 1948, and 1949 to justify poverty alleviation incentives.
In 2002, a quota system was introduced into the mix. This allowed peanut growers to obtain funds from US taxpayers versus from consumers. This also meant an increase in the price of consumer-oriented products, such as peanut butter. Around this time, lobbyists justified keeping the subsidies flowing based on the fact that the government had been providing them for so long, it would be unfair to suddenly take them away.
A couple of years later, peanuts were threatened to be kicked off of the 2014 Farm Bill. But, lobbyists fought back for favorable treatment made in a new Price Loss Coverage Program (PLC), which allows them protection from adverse market changes.
With these subsidies in place and the government having a strong control on market price with quotas, the unlikely consequence is huge stockpiles. This year, it is projected that American farmers will harvest 6.1 billion pounds of peanuts with 2.9 billion pounds in leftover. While stockpiles last, consumers will find themselves paying a bit less for their favorite peanut butter brands. However, taxpayers are expected to cover the $2 billion in subsidy payments by the government to farmers.
As mentioned, peanuts are now a lower price based on the stockpiles and the government's quotas for harvest. However, consumers pay for these "lowered prices" through taxes.
When peanut butter is made and marketed, it's sold at a lower price versus other nut spreads. The ingredients of a conventional jar of peanut butter do contain peanuts, but they may also contain other subsidized ingredients such as corn, soy, or sugar (this also ties into the reason of why a fast food salad is going to be more expensive than a cheeseburger). The more subsidized ingredients a product contains, the less it's going to cost. This is also why all-natural peanut butter will be more expensive than one with added sugars and preservatives.
Recently, there has been a big push to reduce the number of subsidies given to farmers. The current presidential administration has even proposed a $4.8 billion annual cut to the $23 billion currently given to farmers in hopes of fixing the issue. What will the future look like for the prices of peanut butter? It will certainly be one to keep an eye out for in the news- and the grocery shelves.
Excerpt from: https://www.msn.com/en-us/foodanddrink/foodnews/peanut-butter-is-subsidized-by-the-government-and-heres-what-that-means-for-you/ar-AAAhBOD?ocid=spartandhp
Montenegro as a tourist destination
Montenegro has recently been in the news only as a place with an easily pushed aside prime minister, unimportant to the US Administration's NATO defense strategy. But it is an actual, not imaginary place. You might want to visit there as a tourist, while you still can. So, for perspective, here is what the country's tourist agency has to say:
The sea, the lakes, the canyons or the mountains enable everyone to decide on the best way to enjoy a quality vacation. In one day, the curious traveler can have a coffee on one of the numerous beaches of the Budva Riviera, eat lunch with the song of the birds on Skardar Lake and dine next to a fireplace on the slopes of the Durmitor Mountain. These are all characteristics of Montenegro as a tourist destination that has a lot to offer.
The turbulent history of this small country has left behind an invaluable treasure in numerous historic monuments throughout this proud country. The blue sea with endless beaches, restless waters of the clear rivers and beautiful mountain massifs, mixed with the spirit of the old times, have given Montenegro everything one needs for an unforgettable vacation.
Montenegro is an ecological state. This fact grants it one of the primary posts on the tourist maps. A large number of sunny days in summer and a large quantity of snow in winter determine the two most developed forms of tourism in Montenegro: the coastal one- in summer and the ski recreational one – in winter.
Montenegrin towns are rich in architecture, from various periods that take the breath away and bring one back to the time when the structures were created. Through the numerous event and festivals, the tourist gets the opportunity to learn more about the traditions and customs of this country.
In recent times, following the global trends, Montenegro is developing extreme sports that the tourists can enjoy, as well.
From: https://www.visit-montenegro.com/tourism/tourism-in-montenegro/
Montenegro has recently been in the news only as a place with an easily pushed aside prime minister, unimportant to the US Administration's NATO defense strategy. But it is an actual, not imaginary place. You might want to visit there as a tourist, while you still can. So, for perspective, here is what the country's tourist agency has to say:
The sea, the lakes, the canyons or the mountains enable everyone to decide on the best way to enjoy a quality vacation. In one day, the curious traveler can have a coffee on one of the numerous beaches of the Budva Riviera, eat lunch with the song of the birds on Skardar Lake and dine next to a fireplace on the slopes of the Durmitor Mountain. These are all characteristics of Montenegro as a tourist destination that has a lot to offer.
The turbulent history of this small country has left behind an invaluable treasure in numerous historic monuments throughout this proud country. The blue sea with endless beaches, restless waters of the clear rivers and beautiful mountain massifs, mixed with the spirit of the old times, have given Montenegro everything one needs for an unforgettable vacation.
Montenegro is an ecological state. This fact grants it one of the primary posts on the tourist maps. A large number of sunny days in summer and a large quantity of snow in winter determine the two most developed forms of tourism in Montenegro: the coastal one- in summer and the ski recreational one – in winter.
Montenegrin towns are rich in architecture, from various periods that take the breath away and bring one back to the time when the structures were created. Through the numerous event and festivals, the tourist gets the opportunity to learn more about the traditions and customs of this country.
In recent times, following the global trends, Montenegro is developing extreme sports that the tourists can enjoy, as well.
From: https://www.visit-montenegro.com/tourism/tourism-in-montenegro/
Shades of Barry Lynn: The Trump trade wars will be affected by need for rare metals supplied almost solely by China
From NYT: And in one of its more strategic weapons, Beijing could use its dominance [in rare metals] to cut off key parts of the global supply chain. China is the major supplier of a number of mundane but crucial materials and components needed to keep the world’s factories humming. They include obscure materials like arsenic metals, used to make semiconductors; cadmium, found in rechargeable batteries; and tungsten, found in light bulbs and heating elements.
See https://www.nytimes.com/2018/07/11/business/china-trade-war-rare-earths-lynas.html?
Barry Lynn argued in 2016 that the US leaves itself vulnerable when China is a sole source of supply, althouth the material he used to illustrate the point was ascorbic acid, not rare metals:
But to understand the full extent of the danger posed by the radical shift in trade policy in the mid 1990s we must also look at the structure of supply chains. We should study what exactly is made in China, and how much of any vital good comes from China. Looking at supply chains is what allows us to see the full extent of our vulnerabilities in a time of conflict, and a way to judge whether the Pivot to Asia was well designed. Twenty years ago the United States depended on China for nothing that we needed day to day. But the radical changes in U.S. trade policy in the 1990s freed China – often in alliance with large U.S. corporations – to use trade power to consolidate control over many assembly activities and industrial components. This includes the basic ingredients for some of the nation’s most important drugs, including antibiotics, and some of the most vital inputs in our industrial food system, such as ascorbic acid.
See https://docs.house.gov/meetings/FA/FA05/20161206/105445/HHRG-114-FA05-Wstate-LynnB-20161206.pdf
Posting by Don Allen Resnikoff
From NYT: And in one of its more strategic weapons, Beijing could use its dominance [in rare metals] to cut off key parts of the global supply chain. China is the major supplier of a number of mundane but crucial materials and components needed to keep the world’s factories humming. They include obscure materials like arsenic metals, used to make semiconductors; cadmium, found in rechargeable batteries; and tungsten, found in light bulbs and heating elements.
See https://www.nytimes.com/2018/07/11/business/china-trade-war-rare-earths-lynas.html?
Barry Lynn argued in 2016 that the US leaves itself vulnerable when China is a sole source of supply, althouth the material he used to illustrate the point was ascorbic acid, not rare metals:
But to understand the full extent of the danger posed by the radical shift in trade policy in the mid 1990s we must also look at the structure of supply chains. We should study what exactly is made in China, and how much of any vital good comes from China. Looking at supply chains is what allows us to see the full extent of our vulnerabilities in a time of conflict, and a way to judge whether the Pivot to Asia was well designed. Twenty years ago the United States depended on China for nothing that we needed day to day. But the radical changes in U.S. trade policy in the 1990s freed China – often in alliance with large U.S. corporations – to use trade power to consolidate control over many assembly activities and industrial components. This includes the basic ingredients for some of the nation’s most important drugs, including antibiotics, and some of the most vital inputs in our industrial food system, such as ascorbic acid.
See https://docs.house.gov/meetings/FA/FA05/20161206/105445/HHRG-114-FA05-Wstate-LynnB-20161206.pdf
Posting by Don Allen Resnikoff
Just what did Judge Kavanaugh opine about the CFPB?
That the CFPB single director structure is unconstitutional, but the remedy is simply to delete the "for cause" limitation on removable, so the President can remove the director at will. An exceprt from the Kavanaugh opinion follows: DR
The CFPB’s concentration of enormous executive power in a single, unaccountable, unchecked Director not only departs from settled historical practice, but also poses a far greater risk of arbitrary decisionmaking and abuse of power, and a far greater threat to individual liberty, than does a multi-member independent agency. The overarching constitutional concern with independent agencies is that the agencies are unchecked by the President, the official who is accountable to the people and who is responsible under Article II for the exercise of executive power. Recognizing the broad and unaccountable power wielded by independent agencies, Congresses and Presidents of both political parties have therefore long endeavored to keep independent agencies in check through other statutory means. In particular, to check independent agencies, Congress has traditionally required multi-member bodies at the helm of every independent agency. In lieu of Presidential control, the multi-member structure of independent agencies acts as a critical substitute check on the excesses of any individual independent agency head – a check that helps to prevent arbitrary decisionmaking and thereby to protect individual liberty.
This new agency, the CFPB, lacks that critical check and structural constitutional protection, yet wields vast power over the U.S. economy. So “this wolf comes as a wolf.” Morrison v. Olson, 487 U.S. at 699 (Scalia, J., dissenting).
In light of the consistent historical practice under which independent agencies have been headed by multiple commissioners or board members, and in light of the threat to individual liberty posed by a single-Director independent agency, we conclude that Humphrey’s Executor cannot be
stretched to cover this novel agency structure. We therefore hold that the CFPB is unconstitutionally structured. [emphasis added by DR]
What is the remedy for that constitutional flaw? PHH contends that the constitutional flaw means that we must shut down the entire CFPB (if not invalidate the entire Dodd-Frank Act) until Congress, if it chooses, passes new legislation fixing the constitutional flaw. But Supreme Court precedent dictates a narrower remedy. To remedy the constitutional flaw, we follow the Supreme Court’s precedents, including Free Enterprise Fund, and simply sever the statute’s unconstitutional for-cause provision from the remainder of the statute. Here, that targeted remedy will not affect the ongoing operations of the CFPB. With the for-cause provision severed, the President now will have the power to remove the Director at will, and to supervise and direct the Director. The CFPB therefore will continue to operate and to perform its many duties, but will do so as an executive agency akin to other executive agencies headed by a single person, such as the Department of Justice and the Department of the Treasury. [emphasis added by DR]
Those executive agencies have traditionally been headed by a single person precisely because the agency head operates within the Executive Branch chain of command under the supervision and direction of the President. The President is a check on and accountable for the actions of those executive agencies, and the President now will be a check on and accountable for the actions of the CFPB as well.
Because the CFPB as remedied will continue operating, we must also address the statutory issues raised by PHH in its challenge to the $109 million order against it.
* * *
With apologies for the length of this opinion, we now turn to our detailed explanation and analysis of these important issues.
See the opinion at https://www.cadc.uscourts.gov/internet/opinions.nsf/AAC6BFFC4C42614C852580490053C38B/$file/15-1177-1640101.pdf
That the CFPB single director structure is unconstitutional, but the remedy is simply to delete the "for cause" limitation on removable, so the President can remove the director at will. An exceprt from the Kavanaugh opinion follows: DR
The CFPB’s concentration of enormous executive power in a single, unaccountable, unchecked Director not only departs from settled historical practice, but also poses a far greater risk of arbitrary decisionmaking and abuse of power, and a far greater threat to individual liberty, than does a multi-member independent agency. The overarching constitutional concern with independent agencies is that the agencies are unchecked by the President, the official who is accountable to the people and who is responsible under Article II for the exercise of executive power. Recognizing the broad and unaccountable power wielded by independent agencies, Congresses and Presidents of both political parties have therefore long endeavored to keep independent agencies in check through other statutory means. In particular, to check independent agencies, Congress has traditionally required multi-member bodies at the helm of every independent agency. In lieu of Presidential control, the multi-member structure of independent agencies acts as a critical substitute check on the excesses of any individual independent agency head – a check that helps to prevent arbitrary decisionmaking and thereby to protect individual liberty.
This new agency, the CFPB, lacks that critical check and structural constitutional protection, yet wields vast power over the U.S. economy. So “this wolf comes as a wolf.” Morrison v. Olson, 487 U.S. at 699 (Scalia, J., dissenting).
In light of the consistent historical practice under which independent agencies have been headed by multiple commissioners or board members, and in light of the threat to individual liberty posed by a single-Director independent agency, we conclude that Humphrey’s Executor cannot be
stretched to cover this novel agency structure. We therefore hold that the CFPB is unconstitutionally structured. [emphasis added by DR]
What is the remedy for that constitutional flaw? PHH contends that the constitutional flaw means that we must shut down the entire CFPB (if not invalidate the entire Dodd-Frank Act) until Congress, if it chooses, passes new legislation fixing the constitutional flaw. But Supreme Court precedent dictates a narrower remedy. To remedy the constitutional flaw, we follow the Supreme Court’s precedents, including Free Enterprise Fund, and simply sever the statute’s unconstitutional for-cause provision from the remainder of the statute. Here, that targeted remedy will not affect the ongoing operations of the CFPB. With the for-cause provision severed, the President now will have the power to remove the Director at will, and to supervise and direct the Director. The CFPB therefore will continue to operate and to perform its many duties, but will do so as an executive agency akin to other executive agencies headed by a single person, such as the Department of Justice and the Department of the Treasury. [emphasis added by DR]
Those executive agencies have traditionally been headed by a single person precisely because the agency head operates within the Executive Branch chain of command under the supervision and direction of the President. The President is a check on and accountable for the actions of those executive agencies, and the President now will be a check on and accountable for the actions of the CFPB as well.
Because the CFPB as remedied will continue operating, we must also address the statutory issues raised by PHH in its challenge to the $109 million order against it.
* * *
With apologies for the length of this opinion, we now turn to our detailed explanation and analysis of these important issues.
See the opinion at https://www.cadc.uscourts.gov/internet/opinions.nsf/AAC6BFFC4C42614C852580490053C38B/$file/15-1177-1640101.pdf
DC Council majority backs repeal of ballot measure approved by voters -- initiative 77 -- forcing a higher minimum wage for hourly workers who rely on tips
A majority of the D.C. Council on Tuesday backed repeal of a ballot measure approved by voters last month that would force businesses to pay more to servers, bartenders, bellhops and other hourly workers who depend on tips.
Seven of the council’s 13 members co-introduced a bill that would overturn Initiative 77, which was passed by 56 percent of District voters in June’s primary election.
The initiative would stop businesses from counting the tips received by employees toward the minimum wage they must earn under law. The District’s minimum hourly wage is now $13.25 and is on track to reach $15 by 2020. Currently, employers are allowed to pay tipped workers just $3.89 per hour if tips make up the difference.
Initiative 77 was backed by liberal activists and some workers who argued that some workers did not receive enough in tips to earn the minimum wage and that their employers failed to fill the gap.
See: https://www.washingtonpost.com/local/dc-politics/majority-of-dc-council-moves-to-overturn-tipped-wage-ballot-measure/2018/07/10/5320f156-8458-11e8-9e80-403a221946a7_story.html?utm_term=.fa36efadc101
Question for readers: Should the Council follow the wishes of the voters? Is it OK for the Council to force a contrary approach?
The EU v. Google
For those who feel that US competition policy enforcement is too narrow and too meek in addressing use of economic power by big companies, the EU "abuse of dominant position" approach suggests an alternative. Currently (July, 2018) the media reports action by the EU against Google. Following is an earlier statement directly from the EU that explains some of the EU's analysis:
From: http://europa.eu/rapid/press-release_IP-16-1492_en.htm
Antitrust: Commission sends Statement of Objections to Google on Android operating system and applications Brussels, 20 April 2016
The European Commission has informed Google of its preliminary view that the company has, in breach of EU antitrust rules, abused its dominant position by imposing restrictions on Android device manufacturers and mobile network operators. The Commission's preliminary view is that Google has implemented a strategy on mobile devices to preserve and strengthen its dominance in general internet search.
First, the practices mean that Google Search is pre-installed and set as the default, or exclusive, search service on most Android devices sold in Europe.
Second, the practices appear to close off ways for rival search engines to access the market, via competing mobile browsers and operating systems.
In addition, they also seem to harm consumers by stifling competition and restricting innovation in the wider mobile space. The Commission's concerns are outlined in a Statement of Objections addressed to Google and its parent company, Alphabet. Sending a Statement of Objections does not prejudge the outcome of the investigation.
Commissioner Margrethe Vestager, in charge of competition policy, said: "A competitive mobile internet sector is increasingly important for consumers and businesses in Europe. Based on our investigation thus far, we believe that Google's behaviour denies consumers a wider choice of mobile apps and services and stands in the way of innovation by other players, in breach of EU antitrust rules. These rules apply to all companies active in Europe. Google now has the opportunity to reply to the Commission's concerns."
Smartphones and tablets account for more than half of global internet traffic, and are expected to account for even more in the future. About 80% of smart mobile devices in Europe and in the world run on Android, the mobile operating system developed by Google. Google licenses its Android mobile operating system to third party manufacturers of mobile devices.
The Commission opened proceedings in April 2015 concerning Google's conduct as regards the Android operating system and applications. At this stage, the Commission considers that Google is dominant in the markets for general internet search services, licensable smart mobile operating systems and app stores for the Android mobile operating system. Google generally holds market shares of more than 90% in each of these markets in the European Economic Area (EEA).
In today's Statement of Objections, the Commission alleges that Google has breached EU antitrust rules by: requiring manufacturers to pre-install Google Search and Google's Chrome browser and requiring them to set Google Search as default search service on their devices, as a condition to license certain Google proprietary apps; preventing manufacturers from selling smart mobile devices running on competing operating systems based on the Android open source code; giving financial incentives to manufacturers and mobile network operators on condition that they exclusively pre-install Google Search on their devices.
The Commission believes that these business practices may lead to a further consolidation of the dominant position of Google Search in general internet search services. It is also concerned that these practices affect the ability of competing mobile browsers to compete with Google Chrome, and that they hinder the development of operating systems based on the Android open source code and the opportunities they would offer for the development of new apps and services. In the Commission's preliminary view, this conduct ultimately harms consumers because they are not given as wide a choice as possible and because it stifles innovation.
State inquiry letter on employee "no-poach" by fast food chains; targets promptly settle
from https://ag.ny.gov/sites/default/files/npnh_letter_redacted.pdf
Re: Request for Information Regarding Franchise Agreements
Dear ,
Our Offices have learned that certain franchise agreements used in our States and the District of Columbia (hereinafter collectively referred to as “States”) may contain provisions that impact some employees’ ability to obtain higher paying or more attractive positions with a different franchisee. These provisions are known by many terms, including “employee non-competition,” “no solicitation,” “no poach,” “no hire,” or “no switching” agreements (hereinafter referred to collectively as “No Poach Agreements”). As their names suggest, these agreements restrict a franchisee’s ability to recruit or hire employees of and other franchisees of . We have reason to believe that may be including such provisions in its franchise agreements.
As State Attorneys General, we have a common interest in the economic health of our residents and the communities in which they live. Many of us enforce laws that ensure basic worker protections, such as minimum wage, overtime, and anti-discrimination laws, in addition to consumer protection and antitrust laws. Given these roles, we are concerned about the use of No Poach Agreements among franchisees and the harmful impact that such agreements may have on employees in our States and our state economies generally.1 By limiting potential job opportunities, these agreements may restrict employees’ ability to improve their earning potential and the economic security of their families. These provisions also deprive other franchisees of the opportunity to benefit from the skills of workers covered by a No Poach Agreement whom
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1 “Non-compete Contracts: Economic Effects and Policy Implications,” report issued by the Office of Economic Policy, U.S. Department of the Treasury, March 2016. Available at: https://www.treasury.gov/resource-center/economic-policy/Documents/UST%20Noncompetes%20Report.pdf; and Alan B. Krueger and Orley Ashenfelter, Theory and Evidence on Employer Collusion in the Franchise Sector, (July 18, 2017) found that 80 percent of quick service restaurant franchise contracts (i.e., 32 out of 40) contained no poach provisions.
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they would otherwise wish to hire. When taken in the aggregate and replicated across our States, the economic consequences of these restrictions may be significant.
Given these potentially harmful impacts, we would like to gather information relating to the purpose and effects of No Poach Agreements. To that end, we request that you provide the following information and documents:
For the purposes of the below Request for Information and Request for Documents, the term “No Poach Agreement” refers to any and all language contained within franchise agreements or any other document which restricts or prevents franchisees from hiring or soliciting employees of and/or other franchisees for employment. Such language includes, but is not limited to, any “employee non-competition,” “no solicitation,” and/or “no hire” provisions. In addition, all requests for information and documents shall encompass the time period from January 1, 2015 to the present (“Relevant Period”).
Requests for Information
1. At any point during the Relevant Period, have franchise agreements included any language restricting employee hiring between franchise locations? If yes, when did first start including such language in its franchise agreements? Does this practice continue to the present? If this practice does not continue, when did stop the practice and why was it stopped?
2. What categories of employees have been subject to No Poach Agreements? Please provide in your response information about the types of positions (including job titles), whether full-time or part-time employees, as well as the hourly wage and salary ranges for such workers.
3. Have employees who are subject to No Poach Agreements been informed of this restriction on their mobility? If yes, when and how have they been informed?
4. What is the temporal scope of No Poach Agreements? What is the geographic scope?
5. Please identify the franchise locations currently subject to No Poach Agreements, the number and percentage of your franchises to which No Poach Agreements apply, and an estimate of the number of workers currently subject to such agreements in each of the following States: California, Illinois, Massachusetts, Maryland, Minnesota, New Jersey, New York, Oregon, Pennsylvania, Rhode Island and the District of Columbia.
6. Has or any of its franchisees been a party to litigation or binding arbitration involving No Poach Agreements? If yes, please provide the case name, case number, and a summary of the case status as well as resolution (if applicable).
Requests for Documents
1. A copy of any and all franchise or other agreements used by that include No Poach Agreements. Please provide sample franchise agreements or other documents containing the No Poach Agreements that have been used during the Relevant Period. If the terms or language of the No Poach Agreements have changed over the course of the Relevant Period, provide a copy of each version of the No Poach Agreements that have been used.
2. Any and all communications, including emails, correspondence and text messages, with franchisees, separate and apart from the franchise agreement, regarding No Poach Agreements, including any practices, rules, requirements, or contract provisions used within the past three years. This request includes, but is not limited to any and all documents related to training provided to franchisees or store management regarding No Poach Agreements.
3. Any and all documents demonstrating the business rationale and operational need for the No Poach Agreements.
4. Any and all communications, including emails, correspondence and text messages, by and between , employees, and/or franchisees relating to enforcement of the No Poach Agreements, such as for any employee subject to No Poach Agreements who requested a transfer from one franchisee to another, or a new job with a franchisee while employed at another franchisee, whether that request was granted or denied, and the reasoning for such a decision.
5. Any and all communications, including emails, correspondence and text messages, with other franchisors concerning No Poach Agreements, or related practices, policies, rules, requirements or provisions.
We request that you provide your responses on or before August 6, 2018. Please send all written communications via email to Cynthia.Mark@state.ma.us and provide all responsive documents in an electronic format according to the delivery standards separately attached to this communication to Cynthia Mark at the address listed below.
Let us know if you have any questions, and thank you in advance for your prompt attention.
Sincerely,
Cynthia Mark, Chief, Fair Labor Division Massachusetts Office of the Attorney General One Ashburton Place Boston, MA 02108 (617) 963-2626 Cynthia.Mark@state.ma.us
Satoshi Yanai Supervising Deputy Attorney General Underground Economy Unit California Department of Justice Office of the Attorney General 300 S. Spring Street, Suite 1702 Los Angeles, CA 90013 (213) 269-6400
Jane H. Lewis Section Chief, Office of Housing and Community Justice Office of the Attorney General for the District of Columbia 441 4th Street, Suite 630S Washington, DC 20001 Phone: (202) 727-1038 Jane.Lewis@dc.gov
Jane R. Flanagan Chief, Workplace Rights Bureau Office of the Illinois Attorney General 100 W. Randolph Street, 11th Floor Chicago, IL 60601 (312) 814-4720
Leah J. Tulin Special Assistant to the Attorney General Office of the Attorney General State of Maryland 200 Saint Paul Place Baltimore, Maryland 21202 410-576-6962
Jacob Campion Assistant Attorney General Solicitor General’s Division Minnesota Attorney General’s Office 445 Minnesota Street, Suite 1100 St. Paul, Minnesota 55101-2128 (651) 757-1459
Jeremy M. Feigenbaum, Assistant Attorney General Counsel to the Attorney General Office of the New Jersey Attorney General Richard J. Hughes Justice Complex 25 Market Street, 8th Floor, West Wing Trenton, New Jersey 08625-0080 Desk: (609) 376-2690 | Cell: (609) 414-0197 Jeremy.Feigenbaum@njoag.gov
ReNika Moore Labor Bureau Chief New York State Office of the Attorney General 28 Liberty Street New York, NY 10005 (212) 416-6280
Tim Nord, Special Counsel Oregon Department of Justice 1162 Court Street NE Salem, OR 97301 Tel: (503) 934-4400 Fax: (503) 373-7067 Tim.D.Nord@doj.state.or.us
Nancy A. Walker, Chief Deputy Attorney General Fair Labor Section Pennsylvania Office of the Attorney General Strawberry Square Harrisburg, PA17120
Adam D. Roach Special Assistant Attorney General Rhode Island Attorney General’s Office 150 South Main Street Providence, RI 02903 (401) 274-4409, ext. 2490
Follow-up: Under agreements with Washington State announced on Thursday, the companies pledged to remove so-called no-poach clauses from their contracts with franchisees. Auntie Anne’s, Buffalo Wild Wings and Cinnabon also agreed to drop the clauses.
The provisions prohibit workers at, for example, one Carl’s Jr. franchise from going to another Carl’s Jr. They do not stop those workers from taking jobs at restaurants run by a different chain.
In addition to stripping the clauses from existing franchise contracts in Washington, the seven chains have also vowed not to enforce them nationwide. The clauses cannot be included in new and renewed contracts either.
Update from: https://www.nytimes.com/2018/07/12/business/fast-food-wages-no-poach-deal.html?
Are the poorest US citizens deprived of human rights? The UN says yes; the US government says no
More than three million Americans live in “extreme poverty,” according to a report from the United Nations, which ranked poverty in the U.S. alongside some of the poorest areas in the world, and argued the human rights are at stake. The US government vehemently disagrees.
The UN Special Rapporteur for Extreme Poverty paid a visit to the U.S. last year, drawing worldwide attention to his findings.
NewsHour Weekend Special Correspondent Simon Ostrovsky followed in his footsteps to report from Lowndes County, Alabama.
The PBS report is at https://www.pbs.org/newshour/show/the-story-of-american-poverty-as-told-by-one-alabama-county
The vehement US response is reported at https://www.theguardian.com/world/2018/jun/21/nikki-haley-un-poverty-report-misleading-politically-motivated
More than three million Americans live in “extreme poverty,” according to a report from the United Nations, which ranked poverty in the U.S. alongside some of the poorest areas in the world, and argued the human rights are at stake. The US government vehemently disagrees.
The UN Special Rapporteur for Extreme Poverty paid a visit to the U.S. last year, drawing worldwide attention to his findings.
NewsHour Weekend Special Correspondent Simon Ostrovsky followed in his footsteps to report from Lowndes County, Alabama.
The PBS report is at https://www.pbs.org/newshour/show/the-story-of-american-poverty-as-told-by-one-alabama-county
The vehement US response is reported at https://www.theguardian.com/world/2018/jun/21/nikki-haley-un-poverty-report-misleading-politically-motivated
From WaPo: CFPB drops "kickback" action against Zillow
By Ken Harney July 3
Excerpts from Washington Post article:
Zillow said in a statement that “we are pleased the [Consumer Financial Protection Bureau] has concluded their inquiry into our co-marketing program.”
Early last year, Zillow was informed by the CFPB that the bureau was considering legal action because of possible violations of the Real Estate Settlement Procedures Act (RESPA) and federal rules on unfair and deceptive practices. (Scott Eells/BLOOMBERG)
In a move with potentially significant implications for consumers, realty agents and lenders, the Trump administration has decided not to take legal action against online realty giant Zillow under federal anti-kickback and deceptive-practices rules.
The decision represents a departure from the direction the Consumer Financial Protection Bureau appeared to be headed under its previous director, Richard Cordray, an Obama appointee who resigned last November to run for governor of Ohio.
***
The focus of the bureau’s concerns was Zillow’s “co-marketing” plan, under which “premium” realty agents have portions of their advertising bills on Zillow sites paid for by mortgage lenders. (Some quick background here: When buyers visit Zillow’s website, which includes millions of home listings, they frequently see “premium” agents featured prominently, along with a photo and contact information.)
“Premium” agents often are not the listing agent for the property, nor are they necessarily among the most active or successful in the neighborhood. Instead, they are advertisers, paying Zillow hundreds, sometimes thousands of dollars per month for the placement, hoping that shoppers will contact them. Given these high costs for leads, Zillow instituted a “co-marketing” plan that allows mortgage lenders to be featured on the same page as the agent, along with contact information. In exchange for the placement, lenders pay as much as half of the realty agent’s Zillow bill. As with premium agents, “premium” lenders do not necessarily offer the best financial deal or the lowest interest rates to the shopper; they pay money to reduce the realty agent’s monthly expenses and market their own mortgages.
Among the key issues in the CFPB’s investigation, according to legal experts familiar with the case, was whether the Zillow plan violates federal prohibitions against paying compensation for referrals of business — kickbacks. RESPA bans “giving or receiving” anything of value in exchange for referrals of business related to real estate settlements. The rationale is that referral payments are anti-consumer: They add to overall costs, they frequently are unknown to the consumer, and they discourage shopping for the best available services or prices. Zillow insists its co-marketing plan does not entail referrals or endorsements, but on its website in an area designated for realty agents it touts the program as a way to “promote your favorite lenders to customers on Zillow.”
The full Washington Post article is at https://www.washingtonpost.com/realestate/consumer-agency-will-not-take-action-against-zillow/2018/07/02/d3eedaa8-7e15-11e8-b660-4d0f9f0351f1_story.html?noredirect=on&utm_term=.e16c29e973a9
Perspectives on Poverty Law from the Bench: DC Superior Court
From Washington Council of Lawyers:
Trial-court judges with busy dockets must treat each litigant fairly, give each person a chance to be heard, and still keep cases moving apace. Doing all three things is challenging, especially given how many cases most judges have and the number of parties who don't have lawyers.
It's a lot to juggle, and we'll find out how judges do it—and still try to deliver justice—at Perspectives on Poverty Law from the Bench: DC Superior Court. This brown-bag lunch and panel takes place on Tuesday, July 10, from noon to 1:30 at DLA Piper (500 8th Street NW).
The event is free, but space is limited. Register here. [ https://wclawyers.wildapricot.org/EmailTracker/LinkTracker.ashx?linkAndRecipientCode=UF9WJHIWLqH3bsV4TH0gAlMt3qmHEr3cID7O%2bBfBrUYtV5rm%2beGX%2bDyCvM8XEs6srLme594vR56IDDKxpwGk4TYdt2g1NvPxQygf%2fSWvdB0%3d]
Our panel includes D.C. Superior Court Associate Judges Robert Okun and Anita Josey-Herring and Magistrate Judge Noel Johnson. Associate Judge Julie Becker will moderate.
Bring your lunch and feel free to bring a friend; we'll supply drinks, desserts, and a lively, candid discussion.
Nancy Lopez (@NancyLopezWCL)
Executive Director, Washington Council of Lawyers
From Washington Council of Lawyers:
Trial-court judges with busy dockets must treat each litigant fairly, give each person a chance to be heard, and still keep cases moving apace. Doing all three things is challenging, especially given how many cases most judges have and the number of parties who don't have lawyers.
It's a lot to juggle, and we'll find out how judges do it—and still try to deliver justice—at Perspectives on Poverty Law from the Bench: DC Superior Court. This brown-bag lunch and panel takes place on Tuesday, July 10, from noon to 1:30 at DLA Piper (500 8th Street NW).
The event is free, but space is limited. Register here. [ https://wclawyers.wildapricot.org/EmailTracker/LinkTracker.ashx?linkAndRecipientCode=UF9WJHIWLqH3bsV4TH0gAlMt3qmHEr3cID7O%2bBfBrUYtV5rm%2beGX%2bDyCvM8XEs6srLme594vR56IDDKxpwGk4TYdt2g1NvPxQygf%2fSWvdB0%3d]
Our panel includes D.C. Superior Court Associate Judges Robert Okun and Anita Josey-Herring and Magistrate Judge Noel Johnson. Associate Judge Julie Becker will moderate.
Bring your lunch and feel free to bring a friend; we'll supply drinks, desserts, and a lively, candid discussion.
Nancy Lopez (@NancyLopezWCL)
Executive Director, Washington Council of Lawyers
The role of the States in monopolization cases
Some years ago I wrote about the role of the States in monopolization cases. My main point was that the States had played a role of significance to businesses and consumers. That demonstrated that States could do it again. Review of past and more recent State enforcement efforts provides a useful reminder of what the States can do in the future.
State Enforcement Activities Against Microsoft
The active role of States in the litigation against Microsoft is well known. It has now become an old story, but a useful reminder of the potential of the States. Briefly, in 1998 a group of States joined with the DOJ in filing a complaint against Microsoft alleging monopolization, and two years later Microsoft was found liable for maintaining an illegal monopoly in personal computer operating systems.
Following an appeal and several additional court hearings, the U.S. District Court for the District of Columbia issued judgments in 2002 prohibiting Microsoft from continuing certain unlawful conduct. In testimony before the Antitrust Modernization Commission, Steve Houck and Kevin O’Connor, the attorneys who represented plaintiff States at the Microsoft liability trial, emphasized the independent and aggressive role taken by States. They said that the States had decided to file a complaint against Microsoft before the DOJ did and were prepared to proceed without the DOJ. They said that after consolidation of the State and federal actions against Microsoft, the States made important contributions to the trial, and acted independently and assertively in pursuing settlement negotiations.
Some of the States that participated in the liability trial against Microsoft agreed to settlement in 2001, but not all. Non-settling States filed in court for additional relief. The results of their efforts were meager, as the litigated decree added little to the consent decree. Both the consent and litigated decrees provided for termination five years after entry, subject to the court later ordering an extension.
In October 2007, some States filed motions to extend the termination dates of the Final Judgments. Despite opposition by the DOJ, Judge Kollar-Kotelly partially granted the motions. The DOJ argued in part that “the California Movants do not provide any evidence that the goals of the expiring provisions of the Final Judgments have not been achieved.” Judge Kollar-Kotelly reached a different conclusion: Based upon the extreme and unforeseen delay in the availability of complete, accurate, and useable technical documentation, the Court required Microsoft to make such information available to licensees under the Final Judgments.
As a consequence of the court’s granting the States’ motion, significant portions of the Final Judgment were enforced by the States alone.
Recent State Enforcement
States have continued to be aggressive in initiating monopolization challenges in other industries, such as pharmaceuticals.
For example, in 2017 the states of Alaska, Maryland, New York, Texas and Washington joined in the FTC’s complaint and a $100 million settlement with Mallinckrodt ARD Inc.
The Complaint alleged that Mallinckrodt ARD Inc., formerly known as Questcor, violated the antitrust laws when Questcor acquired the rights to a drug that threatened its monopoly in the U.S. market for adrenocorticotropic hormone (ACTH) drugs. Acthar is a specialty drug used as a treatment for infantile spasms, a rare seizure disorder afflicting infants, as well a drug of last resort used to treat other serious medical conditions.
The Complaint alleges that, while benefitting from an existing monopoly over the only U.S. ACTH drug, Acthar, Questcor illegally acquired the U.S. rights to develop a competing drug, Synacthen Depot. The acquisition stifled competition by preventing any other company from using the Synacthen assets to develop a synthetic ACTH drug, preserving Questcor’s monopoly and allowing it to maintain extremely high prices for Acthar.
These stories suggest continuing reasons to believe that vigorous State prosecutors will in the future pursue monopolization cases based on a pragmatic and sometimes aggressive view of specific facts, and be independent about it if necessary. They can do it.
By Don Allen Resnikoff
When Scott Pruitt was Oklahoma’s Attorney General
Scott Pruitt has famously failed to survive ethical scrutiny as a big fish in national waters. But what was he like when he was Attorney General in the more local waters of Oklahoma? That is of interest to those of us interested in local law enforcement. Several publications, including the New York Times, have offered articles suggesting that his behavior then was similar. Here is an excerpt from an article in Mother Jones:
As attorney general of Oklahoma from 2011 to 2017, Pruitt fostered close ties with industry interests, including Koch-funded groups, oil and gas, and agriculture. He used his position as attorney general to advance these interests, copying their language to use against Barack Obama’s EPA, while he benefited from their political support and campaign donations. He targeted the Humane Society’s nonprofit tax status, which the group’s President Wayne Pascell said was motivated by its feud with the Oklahoma Farm Bureau, a Pruitt ally. The AG’s office was slow to release emails that detailed the full extent of Pruitt’s close ties with industry, only making some emails public after a court order that was issued the same day he was confirmed by the US Senate for the EPA.
* * *
At his Senate confirmation hearing last year, Sen. Cory Booker (D-N.J.) asked Pruitt if he used a private email as attorney general. Pruitt answered he did not. Shortly after, Oklahoma reporter Phil Cross found that Pruitt had used a non-government email address in publicly released records. On top of the private email, groups such as the Oklahoma chapter of the American Civil Liberties Union are still fighting for the remainder of Pruitt’s emails with industry groups like Devon Energy. An earlier batch of emails revealed that Pruitt’s Oklahoma office thanked a Devon staffer with messages like, “You are so amazingly helpful!!!” while adopting much of Devon’s language as its own for a letter opposing Obama’s attempt to rein in methane leaks from drilling operations.
Full article: https://www.motherjones.com/environment/2018/04/scott-pruitt-was-always-an-ethical-nightmare/
Here is an excerpt from an article in the New York Times:
During his six years as attorney general, Mr. Pruitt blazed a path of spending that holds new meaning now that his E.P.A. expenditures are the subject of investigations and growing political outrage.
[Photo caption] Early into Mr. Pruitt’s term as state attorney general, he and his wife paid $1.18 million for a 5,518-square-foot home in Tulsa.
Mr. Pruitt moved the attorney general’s outpost in Tulsa to a prime suite in the Bank of America tower, an almost $12,000-a-month space that quadrupled the annual rent. He required his staff to regularly drive him between Tulsa and Oklahoma City, according to several people familiar with his time as attorney general.
And he channeled state contracts to Mr. Wagner’s law firm, which was already doing business with the state.
From 2011 to 2017, state records show, the attorney general’s office awarded more than $600,000 in contracts to Mr. Wagner’s Tulsa-based law firm, Latham, Wagner Steele & Lehman — greatly increasing work with the firm, which had gotten a total of about $100,000 over the four years before that. These contracts are not competitively bid. The additional expenditures reflected an approach, contentious even among some fellow Republicans, to hire private lawyers for state business, often for cases challenging federal regulations.
“He said that these people had special expertise that his agency didn’t have,” said Paul Wesselhoft, a Republican former state representative. “He has an army of lawyers with expertise. He didn’t have to spend that extra tax money to hire another law firm. It didn’t seem frugal.”
Mr. Pruitt used the Bank of America building as a base for his growing political ambitions. Oklahoma Strong Leadership, a political action committee he formed in 2015 to help finance fellow Republicans’ campaigns, operated out of the building. The group shared a suite with another PAC tied to Mr. Pruitt, Liberty 2.0, as well as his campaign office.
Oklahoma Strong Leadership, funded by private donors and corporations, also appeared to support lavish travel and entertainment.
An analysis of expenditure disclosures by the Campaign Legal Center, a nonprofit that pushes for stricter rules governing money in politics, shows that just 9 percent of the PAC’s spending was devoted to other candidates. The group found that the PAC had disbursed more than $7,000 for trips to Hawaii in summer 2015 and 2016, $2,180 of which was spent at a Ritz-Carlton. The PAC also put $4,000 toward dining, including a $661 meal at the Cafe Pacific, a high-end seafood restaurant in Dallas.
The NYT article: https://www.nytimes.com/2018/04/21/us/politics/scott-pruitt-oklahoma-epa.html
Posting by Don Resnikoff
Scott Pruitt has famously failed to survive ethical scrutiny as a big fish in national waters. But what was he like when he was Attorney General in the more local waters of Oklahoma? That is of interest to those of us interested in local law enforcement. Several publications, including the New York Times, have offered articles suggesting that his behavior then was similar. Here is an excerpt from an article in Mother Jones:
As attorney general of Oklahoma from 2011 to 2017, Pruitt fostered close ties with industry interests, including Koch-funded groups, oil and gas, and agriculture. He used his position as attorney general to advance these interests, copying their language to use against Barack Obama’s EPA, while he benefited from their political support and campaign donations. He targeted the Humane Society’s nonprofit tax status, which the group’s President Wayne Pascell said was motivated by its feud with the Oklahoma Farm Bureau, a Pruitt ally. The AG’s office was slow to release emails that detailed the full extent of Pruitt’s close ties with industry, only making some emails public after a court order that was issued the same day he was confirmed by the US Senate for the EPA.
* * *
At his Senate confirmation hearing last year, Sen. Cory Booker (D-N.J.) asked Pruitt if he used a private email as attorney general. Pruitt answered he did not. Shortly after, Oklahoma reporter Phil Cross found that Pruitt had used a non-government email address in publicly released records. On top of the private email, groups such as the Oklahoma chapter of the American Civil Liberties Union are still fighting for the remainder of Pruitt’s emails with industry groups like Devon Energy. An earlier batch of emails revealed that Pruitt’s Oklahoma office thanked a Devon staffer with messages like, “You are so amazingly helpful!!!” while adopting much of Devon’s language as its own for a letter opposing Obama’s attempt to rein in methane leaks from drilling operations.
Full article: https://www.motherjones.com/environment/2018/04/scott-pruitt-was-always-an-ethical-nightmare/
Here is an excerpt from an article in the New York Times:
During his six years as attorney general, Mr. Pruitt blazed a path of spending that holds new meaning now that his E.P.A. expenditures are the subject of investigations and growing political outrage.
[Photo caption] Early into Mr. Pruitt’s term as state attorney general, he and his wife paid $1.18 million for a 5,518-square-foot home in Tulsa.
Mr. Pruitt moved the attorney general’s outpost in Tulsa to a prime suite in the Bank of America tower, an almost $12,000-a-month space that quadrupled the annual rent. He required his staff to regularly drive him between Tulsa and Oklahoma City, according to several people familiar with his time as attorney general.
And he channeled state contracts to Mr. Wagner’s law firm, which was already doing business with the state.
From 2011 to 2017, state records show, the attorney general’s office awarded more than $600,000 in contracts to Mr. Wagner’s Tulsa-based law firm, Latham, Wagner Steele & Lehman — greatly increasing work with the firm, which had gotten a total of about $100,000 over the four years before that. These contracts are not competitively bid. The additional expenditures reflected an approach, contentious even among some fellow Republicans, to hire private lawyers for state business, often for cases challenging federal regulations.
“He said that these people had special expertise that his agency didn’t have,” said Paul Wesselhoft, a Republican former state representative. “He has an army of lawyers with expertise. He didn’t have to spend that extra tax money to hire another law firm. It didn’t seem frugal.”
Mr. Pruitt used the Bank of America building as a base for his growing political ambitions. Oklahoma Strong Leadership, a political action committee he formed in 2015 to help finance fellow Republicans’ campaigns, operated out of the building. The group shared a suite with another PAC tied to Mr. Pruitt, Liberty 2.0, as well as his campaign office.
Oklahoma Strong Leadership, funded by private donors and corporations, also appeared to support lavish travel and entertainment.
An analysis of expenditure disclosures by the Campaign Legal Center, a nonprofit that pushes for stricter rules governing money in politics, shows that just 9 percent of the PAC’s spending was devoted to other candidates. The group found that the PAC had disbursed more than $7,000 for trips to Hawaii in summer 2015 and 2016, $2,180 of which was spent at a Ritz-Carlton. The PAC also put $4,000 toward dining, including a $661 meal at the Cafe Pacific, a high-end seafood restaurant in Dallas.
The NYT article: https://www.nytimes.com/2018/04/21/us/politics/scott-pruitt-oklahoma-epa.html
Posting by Don Resnikoff
Declaration filings from 18 state AG lawsuit challenging Trump administration immigrant family separation policies
From Washington State AG press release:
AG FERGUSON ASKS COURT TO ACCELERATE FAMILY SEPARATION CASE
Jul 2 2018AG’s motion includes declarations from families affected by separation policy
SEATTLE -- Attorney General Bob Ferguson today asked a federal judge to order the federal government to provide details about and access to victims of the Trump Administration’s family separation policy on an expedited schedule. Last week, Attorney General Ferguson led a coalition of 18 attorneys general in filing a lawsuit in Seattle seeking to end the family separation policy permanently.
The motion for expedited discovery is necessary because hundreds of separated parents are in federal custody and the Administration can move them to other facilities at any time without notice. The motion asks the court to order the federal government to cooperate in facilitating access to detained parents and to report to the court on the progress of such efforts.
In support of the motion, the states included declarations from parents and interviews with children [ https://agportal-s3bucket.s3.amazonaws.com/uploadedfiles/Another/News/Press_Releases/motion%20declarations%201-33.pdf ] separated by immigration officials as a result of the policy. The states also filed other declarations from immigration rights workers, elected officials and medical experts. The motion includes 99 declarations in all, and they can be found here [ https://agportal-s3bucket.s3.amazonaws.com/uploadedfiles/Another/News/Press_Releases/motion%20declarations%201-33.pdf ], here [ https://agportal-s3bucket.s3.amazonaws.com/uploadedfiles/Another/News/Press_Releases/motion%20declarations%2034-66.pdf ] and here [ https://agportal-s3bucket.s3.amazonaws.com/uploadedfiles/Another/News/Press_Releases/motion%20declarations%2067-99.pdf ].
One migrant mother said her 14-month-old son was "full of dirt and lice" after being separated from his family for months by the Trump administration.
Another mother who fled Honduras after receiving death threats, currently held in Washington, described the experience of being separated from her 6-year-old son shortly after crossing the border: “From there, my son Jelsin and I were separated. I was not told where he was being taken. They only told me he would be a ward of the state. To calm my son down, I told him it would only be for three days, although I really did not know. We had never been apart.”
She was not able to speak to her son for almost a month. When she did contact him, she said, “He was only able to say a few words. He was just crying. … I cannot express the pain I have felt being apart from him.”
“The Trump Administration’s family separation policy is not over – it continues to harm thousands of parents and children,” said Ferguson. “The gut-wrenching stories we have heard from families demonstrate just how much it violates basic decency and fundamental American values. The policy also violates the Constitution, and I will continue to fight to put an end to it.”
"The federal government has an obligation to reunite children with their parents immediately, and an obligation to cease any and all policies that ignore the due process rights of families seeking asylum or refuge at any of our borders," Governor Jay Inslee said. "Washington will not cease nor desist until justice and fairness for every impacted child and parent in Washington state is restored."
The motion for expedited discovery [https://agportal-s3bucket.s3.amazonaws.com/uploadedfiles/Another/News/Press_Releases/motion%207-2-18.pdf ], filed in the U.S. District Court for the Western District of Washington, requests that Judge Marsha Pechman order several actions to ensure that the Attorney General’s Office can collect information in a timely fashion.
If the judge grants the motion, it will require the federal government to respond to the states’ requests for information on an accelerated timeline and to cooperate with state requests to interview parents in federal detention. Some states have faced procedural difficulties or been denied access to federal detention centers and other federal locations that house affected immigrants.
Ferguson also requests weekly status conferences with the court during the period of expedited discovery.
Victims’ stories from Washington
In addition to the filing, the attorneys general included 99 declarations. Some declarations, given by experts in developmental psychology and public health, discuss the dangers of separating families and housing immigrant families together in barracks housing. Other declarations include those given directly by parents separated from their children and interviews with separated children.
Interviews and testimonies by parents and children voiced the sadness, distress and frustration the family separation policy has caused.
A 13-year-old girl was not able to say goodbye to her father when immigration officials separated them. The investigator wrote that the girl “reported that the guards threatened the people that they detained with separating them and sending them back home, she overheard them telling others they would be jailed for about 10 or 15 years, which scared her. The younger children were crying.”
In attempting to recount her experiences, the girl “had a hard time talking during most of the interview, was visibly upset and broke down in tears frequently.”
A 15-year-old girl identified as G and fleeing threats from a member of a criminal association in her home country, told the investigator “[Immigration officials] told her mother that G would be taken to another place where she would be able to visit her. G and her mother said goodbye to each other while crying, but G’s mother comforted her, saying she was going to visit her wherever she was going. Only later did G realize this was not true. As she recounted this moment, G was sobbing and visibly distraught.”
G also described seeing a 4-year-old girl crying inconsolably, and watching as an immigration official reprimanded the girl and turned her away.
Another girl in Washington is working with a therapist because she has nightmares. Immigration officials also separated her from her father shortly after she arrived in the United States.
Immigration officials took one mother’s children as she was in court. Upon returning and realizing this, she said, “I became physically unwell when I found out that my little boys had been taken away.”
Most parents related the difficulty they had had in contacting their children, and not receiving information on how to find their children from immigration officials. More than one parent relayed that after asking for weeks, their home country’s embassy was able to provide them with the location of their children.
A mother, fleeing death threats to her and her family, described the relief she had at finally contacting her daughter, but her daughter was unable to speak “because of how strongly she was sobbing.”
Though many families were seeking asylum, a number reported that immigration officials had never asked them why they sought refuge in the United States.
The motion includes costs the policy has imposed on states involved in the lawsuit, as well.
Ferguson and the states request that Judge Pechman consider their motion by July 13.
Ferguson leads a coalition of 17 states in the lawsuit: Massachusetts, California, Delaware, Iowa, Illinois, Maryland, Minnesota, New Jersey, New Mexico, New York, North Carolina, Oregon, Pennsylvania, Rhode Island, Vermont, Virginia, and the District of Columbia.
The Office of the Attorney General is the chief legal office for the state of Washington with attorneys and staff in 27 divisions across the state providing legal services to roughly 200 state agencies, boards and commissions. Visit www.atg.wa.gov to learn more.
Contacts:
Brionna Aho, Communications Director, (360) 753-2727; brionna.aho@atg.wa.gov
The California Supreme Court rules that Yelp did not need to remove negative comments posted by a user
In a 4-to-3 opinion, the court said that federal law protected internet companies from liability for statements written by others. The decision to remove posts is at the company’s discretion, the court said.
The Court's opinion is here: http://www.courts.ca.gov/opinions/documents/S235968.PDF
Excerpt from opinion:
In this case, we consider the validity of a court order, entered upon a default judgment in a defamation case, insofar as it directs appellant Yelp Inc. (Yelp) to remove certain consumer reviews posted on its website. Yelp was not named as a defendant in the underlying lawsuit, brought by plaintiffs Dawn Hassell and the Hassell Law Group, and did not participate in the judicial proceedings that led to the default judgment. Instead, Yelp became involved in this litigation only after being served with a copy of the aforementioned judgment and order. Yelp argues that, to the extent the removal order would impose upon it a duty to remove these reviews, the directive violates its right to due process under the federal and state Constitutions because it was issued without proper notice and an opportunity to be heard. Yelp also asserts that this aspect of the order is invalid under the Communications Decency Act of 1996, relevant provisions of which (found at 47 U.S.C. § 230, hereinafter referred to as section 230) relate, “No provider or user of an interactive computer service shall be treated as the publisher or speaker of any information provided by another information content provider” (§ 230(c)(1)), and “No cause of action may be brought and no liability may be imposed under any State or local law that is inconsistent with this section” (§ 230(e)(3)). The Court of Appeal rejected Yelp’s arguments. We reverse. The Court of Appeal erred in regarding the order to Yelp as beyond the scope of section 230. That court reasoned that the judicial command to purge the challenged reviews does not impose liability on Yelp. But as explained below, the Court of Appeal adopted too narrow a construction of section 230.
In directing Yelp to remove the challenged reviews from its website, the removal order improperly treats Yelp as “the publisher or speaker of . . . information provided by another information content provider.” (§ 230(c)(1).) The order therefore must be revised to comply with section 230. I
In a 4-to-3 opinion, the court said that federal law protected internet companies from liability for statements written by others. The decision to remove posts is at the company’s discretion, the court said.
The Court's opinion is here: http://www.courts.ca.gov/opinions/documents/S235968.PDF
Excerpt from opinion:
In this case, we consider the validity of a court order, entered upon a default judgment in a defamation case, insofar as it directs appellant Yelp Inc. (Yelp) to remove certain consumer reviews posted on its website. Yelp was not named as a defendant in the underlying lawsuit, brought by plaintiffs Dawn Hassell and the Hassell Law Group, and did not participate in the judicial proceedings that led to the default judgment. Instead, Yelp became involved in this litigation only after being served with a copy of the aforementioned judgment and order. Yelp argues that, to the extent the removal order would impose upon it a duty to remove these reviews, the directive violates its right to due process under the federal and state Constitutions because it was issued without proper notice and an opportunity to be heard. Yelp also asserts that this aspect of the order is invalid under the Communications Decency Act of 1996, relevant provisions of which (found at 47 U.S.C. § 230, hereinafter referred to as section 230) relate, “No provider or user of an interactive computer service shall be treated as the publisher or speaker of any information provided by another information content provider” (§ 230(c)(1)), and “No cause of action may be brought and no liability may be imposed under any State or local law that is inconsistent with this section” (§ 230(e)(3)). The Court of Appeal rejected Yelp’s arguments. We reverse. The Court of Appeal erred in regarding the order to Yelp as beyond the scope of section 230. That court reasoned that the judicial command to purge the challenged reviews does not impose liability on Yelp. But as explained below, the Court of Appeal adopted too narrow a construction of section 230.
In directing Yelp to remove the challenged reviews from its website, the removal order improperly treats Yelp as “the publisher or speaker of . . . information provided by another information content provider.” (§ 230(c)(1).) The order therefore must be revised to comply with section 230. I
GM's comments to the Commerce Department on the adverse effect of tariffs are here:
https://assets.bwbx.io/documents/users/iqjWHBFdfxIU/rJBrNbApznVU/v0
Excerpt:
Overly Broad and Steep Import Tariffs Undermine Our Ability to Compete
If import tariffs on automobiles are not tailored to specifically advance the objectives of the economic and national security goals of the United States, increased import tariffs could lead to a smaller GM, a reduced presence at home and abroad for this iconic American company, and risk less—not more—U.S. jobs. The threat of steep tariffs on vehicle and auto component imports risks undermining GM’s competitiveness against foreign auto producers by erecting broad brush trade barriers that increase our global costs, remove a key means of competing with manufacturers in lower-wage countries, and promote a trade environment in which we could be retaliated against in other markets. The penalties we could incur from tariffs and increased costs will be detrimental to the future industrial strength and readiness of manufacturing operations in the United States, and could lead to negative consequences for our company and U.S. economic security.
Combined with the other trade actions currently being pursued by the U.S. Government—namely the 232 Steel and Aluminum tariffs and the Section 301 tariffs against Chinese imports—the threat of additional tariffs on automobile imports could be detrimental to our company. At some point, this tariff impact will be felt by customers. Based on historical experience, if cost is passed on to the consumer via higher vehicle prices, demand for new vehicles could be impacted. Moreover, it is likely that some of the vehicles that will be hardest hit by tariff-driven price increases—in the thousands of dollars—are often purchased by customers who can least afford to absorb a higher vehicle price point. The correlation between a decline in vehicle sales in the United States and the negative impact on our workforce here, which, in turn threatens jobs in the supply base and surrounding communities, cannot be ignored. Alternatively, if prices are not increased and we opt to bear the burden of tariffs or plant moves, this could still lead to less investment, fewer jobs, and lower wages for our employees. The carry-on effect of less investment and a smaller workforce could delay breakthrough technologies and threaten U.S. leadership in the next generation of automotive technology.
https://assets.bwbx.io/documents/users/iqjWHBFdfxIU/rJBrNbApznVU/v0
Excerpt:
Overly Broad and Steep Import Tariffs Undermine Our Ability to Compete
If import tariffs on automobiles are not tailored to specifically advance the objectives of the economic and national security goals of the United States, increased import tariffs could lead to a smaller GM, a reduced presence at home and abroad for this iconic American company, and risk less—not more—U.S. jobs. The threat of steep tariffs on vehicle and auto component imports risks undermining GM’s competitiveness against foreign auto producers by erecting broad brush trade barriers that increase our global costs, remove a key means of competing with manufacturers in lower-wage countries, and promote a trade environment in which we could be retaliated against in other markets. The penalties we could incur from tariffs and increased costs will be detrimental to the future industrial strength and readiness of manufacturing operations in the United States, and could lead to negative consequences for our company and U.S. economic security.
Combined with the other trade actions currently being pursued by the U.S. Government—namely the 232 Steel and Aluminum tariffs and the Section 301 tariffs against Chinese imports—the threat of additional tariffs on automobile imports could be detrimental to our company. At some point, this tariff impact will be felt by customers. Based on historical experience, if cost is passed on to the consumer via higher vehicle prices, demand for new vehicles could be impacted. Moreover, it is likely that some of the vehicles that will be hardest hit by tariff-driven price increases—in the thousands of dollars—are often purchased by customers who can least afford to absorb a higher vehicle price point. The correlation between a decline in vehicle sales in the United States and the negative impact on our workforce here, which, in turn threatens jobs in the supply base and surrounding communities, cannot be ignored. Alternatively, if prices are not increased and we opt to bear the burden of tariffs or plant moves, this could still lead to less investment, fewer jobs, and lower wages for our employees. The carry-on effect of less investment and a smaller workforce could delay breakthrough technologies and threaten U.S. leadership in the next generation of automotive technology.
DC AG Racine's aggressive action against house-flippers that do shoddy renovations and rip off buyers.
From the report House flip couple to pay $1.6 Million in restitution - https://www.wusa9.com/article/news/local/house-flip-couple-to-pay-16-million-in-restitution/65-237254061
Virginia couple agrees to settle lawsuit filed by DC's Office of Attorney General
The AG's actions occurred some months ago, but reflect ongoing consumer protection issues. It seems that consumers often go into house purchases without realizing or dealing with risks from shoddy renovations. One ongoing consumer protection issue is education. Home buyers are not necessarily real estate experts, and may not know questions to ask and documents to demand.
Another ongoing issue is whether there should be a legal requirement that sellers provide disclosures to buyers when there has been recent renovation. Required disclosures might include whether the renovations were inspected by the City as being up to Code, and whether the work was done by properly licensed people.
Posted by Don Resnikoff
From the report House flip couple to pay $1.6 Million in restitution - https://www.wusa9.com/article/news/local/house-flip-couple-to-pay-16-million-in-restitution/65-237254061
Virginia couple agrees to settle lawsuit filed by DC's Office of Attorney General
The AG's actions occurred some months ago, but reflect ongoing consumer protection issues. It seems that consumers often go into house purchases without realizing or dealing with risks from shoddy renovations. One ongoing consumer protection issue is education. Home buyers are not necessarily real estate experts, and may not know questions to ask and documents to demand.
Another ongoing issue is whether there should be a legal requirement that sellers provide disclosures to buyers when there has been recent renovation. Required disclosures might include whether the renovations were inspected by the City as being up to Code, and whether the work was done by properly licensed people.
Posted by Don Resnikoff
NYT editorial says USDOJ approval of Fox-Disney deal looks political
Excerpts:
[I]t was stunning when the department announced on Wednesday — just six months after the deal was announced — that it had approved Disney’s $71 billion purchase of the entertainment assets of 21st Century Fox, one of Disney’s top rivals.
***
Mr. Trump and his aides have publicly criticized the AT&T-Time Warner deal — the president said last November that it’s “not good for the country.” And he regularly lambastes CNN, the news network owned by Time Warner.
But he’s all praise when it comes to 21st Century Fox and its executive chairman, Rupert Murdoch. In December, the White House press secretary, Sarah Huckabee Sanders, told reporters that the president congratulated Mr. Murdoch on the impending Disney deal. In addition, Mr. Trump praises Fox News and its hosts every chance he gets — and they regularly return the favor. While Disney will not acquire Fox News or the Fox network and stations as part of this deal, the acquisition will make the Murdoch family the largest individual shareholders in Disney, increasing their wealth by billions of dollars.
The Justice Department’s antitrust chief, Makan Delrahim, will surely argue that the president’s feelings about CNN and Fox News have no bearing on his decisions. But it is mystifying why Mr. Delrahim took such a hard line against AT&T-Time Warner, which legal experts argued would be a difficult case to bring because of the nature of the merger, while going so easy on Disney-Fox.
Full editorial: https://www.nytimes.com/2018/07/01/opinion/disney-fox-deal.html?action=click&pgtype=Homepage&clickSource=story-heading&module=region®ion=region&WT.nav=region
Excerpts:
[I]t was stunning when the department announced on Wednesday — just six months after the deal was announced — that it had approved Disney’s $71 billion purchase of the entertainment assets of 21st Century Fox, one of Disney’s top rivals.
***
Mr. Trump and his aides have publicly criticized the AT&T-Time Warner deal — the president said last November that it’s “not good for the country.” And he regularly lambastes CNN, the news network owned by Time Warner.
But he’s all praise when it comes to 21st Century Fox and its executive chairman, Rupert Murdoch. In December, the White House press secretary, Sarah Huckabee Sanders, told reporters that the president congratulated Mr. Murdoch on the impending Disney deal. In addition, Mr. Trump praises Fox News and its hosts every chance he gets — and they regularly return the favor. While Disney will not acquire Fox News or the Fox network and stations as part of this deal, the acquisition will make the Murdoch family the largest individual shareholders in Disney, increasing their wealth by billions of dollars.
The Justice Department’s antitrust chief, Makan Delrahim, will surely argue that the president’s feelings about CNN and Fox News have no bearing on his decisions. But it is mystifying why Mr. Delrahim took such a hard line against AT&T-Time Warner, which legal experts argued would be a difficult case to bring because of the nature of the merger, while going so easy on Disney-Fox.
Full editorial: https://www.nytimes.com/2018/07/01/opinion/disney-fox-deal.html?action=click&pgtype=Homepage&clickSource=story-heading&module=region®ion=region&WT.nav=region
DC Mayor Bowser on the DC Violence Interrupter program
We know that policing alone will not end violence in our communities,” said Mayor Bowser. “The organizations we selected have already done so much to strengthen our community, and these partnerships will serve as critical tools for engaging residents, preventing senseless violence, providing the supports and resources our most vulnerable neighbors need to succeed, and building a safer, stronger DC.
”The violence interruption program will cover all eight wards, with Training Grounds providing interruption services in Wards 6 and 7 and the Far Southeast Family Strengthening Collaborative providing services in Ward 8. Training Grounds is a District-based non-profit organization founded in 2005 with a mission to assist youth and adults with personal, career, and leadership development through neighborhood-based services. The Far Southeast Family Strengthening Collaborative, also District-based, is guided by its mission to act as a catalyst to develop, nurture, and sustain partnerships of residents, agencies, and institutions in the Southeast community and to create a healthy socioeconomic environment. The community partner serving Wards 1-5 will be announced tomorrow.
When choosing the providers, the Safer Stronger DC Office of Neighborhood Safety and Engagement sought providers that would be able to:
See also https://www.nbcwashington.com/news/local/DC-Using-Violence-Interrupters-to-Stop-Crime_Washington-DC-486501761.html
We know that policing alone will not end violence in our communities,” said Mayor Bowser. “The organizations we selected have already done so much to strengthen our community, and these partnerships will serve as critical tools for engaging residents, preventing senseless violence, providing the supports and resources our most vulnerable neighbors need to succeed, and building a safer, stronger DC.
”The violence interruption program will cover all eight wards, with Training Grounds providing interruption services in Wards 6 and 7 and the Far Southeast Family Strengthening Collaborative providing services in Ward 8. Training Grounds is a District-based non-profit organization founded in 2005 with a mission to assist youth and adults with personal, career, and leadership development through neighborhood-based services. The Far Southeast Family Strengthening Collaborative, also District-based, is guided by its mission to act as a catalyst to develop, nurture, and sustain partnerships of residents, agencies, and institutions in the Southeast community and to create a healthy socioeconomic environment. The community partner serving Wards 1-5 will be announced tomorrow.
When choosing the providers, the Safer Stronger DC Office of Neighborhood Safety and Engagement sought providers that would be able to:
- establish a strong presence in communities that have experienced high levels of violence;
- build partnerships with community members, local agencies, community-based organizations, and businesses to prevent violence and increase community efficacy;
- cultivate relationships with individuals and families most at-risk of participating or being victims of violence;
- connect high-risk individuals and families to resources needed to meet personal goals and objectives; and
- prevent retaliatory violence.
See also https://www.nbcwashington.com/news/local/DC-Using-Violence-Interrupters-to-Stop-Crime_Washington-DC-486501761.html
From PBS: Stockton's young mayor giving city’s youth more opportunities
Jun 30, 2018 4:54 PM EDT
By --Ivette Feliciano Ivette Feliciano --Zachary Green Zachary Green
Stockton, California has come a long way since 2012, when it became the largest U.S. city to declare bankruptcy. Now that it’s solvent, Mayor Michael Tubbs, who was sworn in as the youngest and first-ever black mayor last year, says that using philanthropy and other resources to fight inequality could help secure the city’s financial status.
Excerpt from video:
Jun 30, 2018 4:54 PM EDT
By --Ivette Feliciano Ivette Feliciano --Zachary Green Zachary Green
Stockton, California has come a long way since 2012, when it became the largest U.S. city to declare bankruptcy. Now that it’s solvent, Mayor Michael Tubbs, who was sworn in as the youngest and first-ever black mayor last year, says that using philanthropy and other resources to fight inequality could help secure the city’s financial status.
Excerpt from video:
- IVETTE FELICIANO:
Mayor Tubbs is spearheading a raft of programs addressing violence and inequality in Stockton. Each initiative receives philanthropic funding and is administered independently. One program launching next year is an eighteen-month experiment called the Stockton Economic Empowerment Demonstration–or “SEED”. One hundred recipients will receive five hundred dollars a month on top of what they earn through work. - MAYOR MICHAEL TUBBS:
When one in two Californians can’t afford one $500 emergency, I think that that tells us that, yes, $500 a month matters. - OUTREACH WORKER:
We connect and we talk to people. - IVETTE FELICIANO:
Another program in the works is called Advance Peace, which got its start in 2007 in the nearby city of Richmond. Homicides there have since fallen by more than half. Outreach workers make contact with young men who have had run-ins with law enforcement and then work with them on reforming criminal behavior. Participants may even earn cash stipends for meeting certain benchmarks–like holding down a job or going through drug rehabilitation. - MAYOR MICHAEL TUBBS:
The idea is to target and identify the guys who are currently driving our violent crime rate, which is less than 1% of the population. And to flood them with as much attention as the police used to give them.
URL: https://www.pbs.org/newshour/show/stocktons-young-mayor-giving-citys-youth-more-opportunities
WSJ on the connection between US sanctions on Iran and local gasoline prices
Oil’s recent rally has been undeterred by the prospect of higher production. Prices have gained 11% since OPEC gathered Friday and agreed to raise output. On Wednesday, U.S. oil futures rose to their highest level since November 2014, settling at $72.76 a barrel.
The shift in sentiment stems from a drop-off in Venezuelan production and concerns that harsher-than-anticipated U.S. sanctions on Iran could curb the country’s oil exports and exacerbate supply disruptions.
“If the administration is going to take as hard a line on Iranian exports as their statements would suggest, consumers are going to pay higher prices at the pump, even if OPEC and other countries produce as much as they can," said Jason Bordoff, director of Columbia University's Center on Global Energy Policy.
OPEC has faced pressure to increase supply as oil prices have soared, but analysts say major producers like Saudi Arabia and Russia may not be able to fill the gap left by other exporters.
"Saudi Arabia can't save you from an oil price spike if you sanction Iran,” said Bob McNally, president of Rapidan Energy Group, a consulting firm. “That’s what the market is telling you.”
Excerpt from WSJ article by Stephanie Yang. (paywall)
Oil’s recent rally has been undeterred by the prospect of higher production. Prices have gained 11% since OPEC gathered Friday and agreed to raise output. On Wednesday, U.S. oil futures rose to their highest level since November 2014, settling at $72.76 a barrel.
The shift in sentiment stems from a drop-off in Venezuelan production and concerns that harsher-than-anticipated U.S. sanctions on Iran could curb the country’s oil exports and exacerbate supply disruptions.
“If the administration is going to take as hard a line on Iranian exports as their statements would suggest, consumers are going to pay higher prices at the pump, even if OPEC and other countries produce as much as they can," said Jason Bordoff, director of Columbia University's Center on Global Energy Policy.
OPEC has faced pressure to increase supply as oil prices have soared, but analysts say major producers like Saudi Arabia and Russia may not be able to fill the gap left by other exporters.
"Saudi Arabia can't save you from an oil price spike if you sanction Iran,” said Bob McNally, president of Rapidan Energy Group, a consulting firm. “That’s what the market is telling you.”
Excerpt from WSJ article by Stephanie Yang. (paywall)
Quotation of the day: Judge Richard Posner on a politicized judiciary:
“We have a very crappy judicial system. That’s the long and short of it. And that contaminates much of government,” said Posner. “In England, judges up to the level of the Supreme Court are appointed by commissions which are composed of judges and professors, not politicians or Parliament. Our federal courts are instead appointed by politicians and the president, and confirmed by the Senate. Those politicians do not care about quality, beyond a very low minimum. They care about other things: tokens, political and religious leanings. So you end up with mediocre courts that are highly politicized."
URL: https://promarket.org/richard-posner-real-corruption-ownership-congress-rich/
Editorial comment: We take no position on Posner's observations, but offer them to provoke discussion. DAR
“We have a very crappy judicial system. That’s the long and short of it. And that contaminates much of government,” said Posner. “In England, judges up to the level of the Supreme Court are appointed by commissions which are composed of judges and professors, not politicians or Parliament. Our federal courts are instead appointed by politicians and the president, and confirmed by the Senate. Those politicians do not care about quality, beyond a very low minimum. They care about other things: tokens, political and religious leanings. So you end up with mediocre courts that are highly politicized."
URL: https://promarket.org/richard-posner-real-corruption-ownership-congress-rich/
Editorial comment: We take no position on Posner's observations, but offer them to provoke discussion. DAR
From SCOTUS BLOG: Beth Farmer, a very able reporter, summarizes the recent US Supreme Court decision in the Amex case:
Opinion analysis:
Divided court defines credit-card networks as single two-sided market, rejecting antitrust challenge to anti-steering provision
Posted Mon, June 25th, 2018 6:12 pm by Beth Farmer http://www.scotusblog.com/2018/06/opinion-analysis-divided-court-defines-credit-card-networks-as-single-two-sided-market-rejecting-antitrust-challenge-to-anti-steering-provision/
Today, the Supreme Court ruled that American Express’ anti-steering provisions do not violate the federal antitrust laws. In a 5-4 decision, Justice Clarence Thomas wrote that credit networks such as Amex provide services to cardholders and merchants in a “special type of two-sided platform known as a ‘transaction platform,’” and that this platform is a relevant market for the purposes of antitrust analysis in this vertical-restraints case.
According to the majority, the district court did not define the relevant market properly and the plaintiffs below, Ohio and 10 other states, failed to meet their burden of proving that the challenged anti-steering provision caused competitive harm in a properly defined market. Thomas was joined by Chief Justice John Roberts and Justices Anthony Kennedy, Samuel Alito and Neil Gorsuch. Justice Stephen Breyer, joined by Justices Ruth Bader Ginsburg, Sonia Sotomayor and Elena Kagan, dissented.
The case arose from a Sherman Act Section 1 complaint filed by the U.S. Department of Justice and 17 states that challenged provisions in contracts between American Express and merchants that accept Amex credit cards.
In credit-card transactions, a platform such as the one operated by Amex effectively connects cardholder buyers and merchant sellers, allowing the buyers to obtain the product or service immediately and pay later, and the merchant to receive prompt, guaranteed payment. Amex charges a fee to merchants for each transaction with an Amex card. Merchant fees can vary and the district court found in this case that the Amex merchant fees were historically higher than the fees of other networks. Because the price a buyer pays for the item does not change depending on the particular credit card used, merchants prefer to accept credit cards with lower merchant fees. The Amex anti-steering contract provision prohibited merchants from steering customers to use another credit card or means of payment at the moment of the purchase.
The issue in the case was whether Amex’s anti-steering contract provision was an unreasonable restraint of trade prohibited by the Sherman Act. As I explained in my preview, vertical price and non-price agreements are judged under the rule of reason, which provides that business practices only violate the antitrust law when their effect is to restrain trade unreasonably. Traditionally, plaintiffs have the burden of identifying and describing the challenged conduct and showing that it causes harm to competition. If they meet that burden, the burden shifts to the defendants to establish procompetitive benefits from the conduct. The district court found that the plaintiffs had met their burden, establishing a prima facie case by showing that there was an actual harm to competition in the market for cardholder services for merchants. The 2nd Circuit reversed, holding that the relevant market was the entire two-sided market, consisting of both merchants and cardholders, and that the plaintiffs had failed to show actual or predicted harm in that market. Today, the Supreme Court accepted the 2nd Circuit’s market definition for this particular type of market, and held that the plaintiffs had not proved that the anti-steering provision adversely affected competition.
The majority and dissent agreed on the burden-shifting structure of an antitrust rule of reason case, but little else. Citing a number of scholarly articles, Thomas described modern credit-card transactions as part of a “special type” of two-sided platform called “transaction” platforms. Two-sided markets in general involve sales of products or services to two different sets of buyers. For the majority, a transaction platform requires a simultaneous sale to both sides of the market — that is, the consumer cardholder and the merchant — facilitated by the credit-card platform. These two-sided platforms involve “indirect network effects” because the value of each side of the platform depends on the other side of the platform – the more consumers that use Amex cards, the more merchants are likely to accept Amex cards for payment. In a footnote, Thomas stated that, in competitive markets, these indirect network effects “encourage” firms to increase prices and profits on one side of the platform and divert them to the other side to increase the number of participants on that side of the market.
With that as background, the majority sketched out areas of agreement between the parties: The challenged anti-steering provisions are vertical agreements, the proper antitrust analysis involves a three-step burden-shifting rule of reason, and the plaintiff must prove a substantial anticompetitive effect to shift the burden of going forward with the evidence to the defendant. There was also agreement that the anticompetitive effects can be shown directly by actual harm to competition or by proof of market power and “some evidence” of harm. At this stage, the government is relying on direct evidence of competitive harm. However, the majority stated that market definition is required, even when plaintiffs assert direct evidence of actual anticompetitive effects. Distinguishing Federal Trade Commission v. Indiana Federation of Dentists because it involved horizontal agreements, the court stated that “vertical restraints are different” because there is usually no risk to competition absent market power, so the market and the defendant’s market shares must be identified.
Markets are usually defined by starting with the product at issue and then identifying reasonable substitutes from the buyers’ point of view. However, the majority stated, “commercial realities” may require inclusion of different products or services in a single market, citing United States v. Grinnell Corp. (1966) and Brown Shoe Company Inc. v. United States (1962). Accordingly, the majority wrote that price increases on the merchant side of the two-sided credit card platforms may not reflect either market power or competitive harm. Therefore, both sides of the platform must be included in credit-card markets. The majority took care to limit this rule, noting that “two-sided transaction platforms, like the credit-card market, are different,” so not every two-sided market constitutes a relevant market for antitrust purposes. The key distinction is that a credit-card platform is a transaction platform that facilitates a single, simultaneous transaction.
Having defined the relevant market, the majority stated that the competitive effects must include both the merchant side and the consumer/buyer side of the credit-card transaction. Credit card firms sell transactions, the majority stressed, so plaintiffs must prove that the anti-steering provision increased the cost of transactions or reduced the number of transactions as compared to competitive markets. In this case, they failed to do so. Higher merchant fees were not sufficient proof and, in any case, might indicate a competitive market in which the consumer side of the market was receiving benefits, such as rebates or airline miles. Finally, the majority observed that the credit-card market has expanded, offering a larger variety of cards to diverse consumers and more credit cards overall.
In dissent, Breyer began with a short history of the antitrust rule of reason. He noted that everyone agrees that step one of the analysis requires plaintiffs to show the fact or likelihood of anticompetitive effects and that the issue in this case is how to apply step one. Then the dissent diverged from the majority almost completely. Relying on Indiana Federation of Dentists, Breyer emphasized that market definition is not always required because it is merely a surrogate for actual competitive effects.
The dissent went on to fault the majority’s market definition for incorrectly conflating complementary products rather than using substitutes to define a relevant product market. Complementary products, Breyer argued, are those that function in tandem so that output likely increases together — for example, gasoline and car tires, tennis balls and tennis rackets, and so forth. Breyer found no support in antitrust law for treating customer- or buyer-related services and merchant-related services as a single market. Accordingly, using consumer substitution or, as in Grinnell, producer substitution, as the test, he argued that the market is merchant-related credit-card services, at least as part of step one of the rule of reason.
Breyer found no support in case law or economic literature for the majority’s definition of a market for “two-sided transaction platforms” that include four elements: different products or services, different groups of customers, connection by the platform and simultaneous transactions. Characterizing the definition as “novel,” the dissent failed to find adequate justification for a special rule of market definition, and concluded that traditional principles of market definition should apply to this industry.
Pointing to footnote 7 in the majority opinion, Breyer also noted that the majority “seems categorically to exempt vertical restraints from the ordinary ‘rule of reason’ analysis that has applied to them since the Sherman Act’s enactment in 1890.” He asserted that this would be a new development, because, although the majority cites Leegin Creative Leather Products Inc. v. PSKS Inc. in support, that case did not create such a “novel exemption.”
Finally, Breyer maintained that the government had proved its prima facie case even under the market definition employed by the 2nd Circuit and the majority. He concluded that the “majority’s decision in this case is contrary to basic principles of antitrust law, and it ignores and contradicts the District Court’s detailed factual findings, which were based on an extensive trial record.”
The case is important for the announcement of a new requirement of proof of market definition and market power at step one of the rule of reason in vertical-restraints cases, even when plaintiffs seek to prove competitive harm by direct evidence. It also appears to announce a new relevant market for transaction platforms, which may be distinguishable from other two-sided markets. From now on, plaintiffs may be required to prove total competitive harm summing both sides of the market at step one of a rule of reason case.
[Disclosure: Goldstein & Russell, P.C., whose attorneys contribute to this blog in various capacities, is among the counsel on an amicus brief in support of the petitioners in this case. The author of this post is not affiliated with the firm.]
Appellate Court vacates "fiduciary rule."
The opinion is here: https://www.ca5.uscourts.gov/opinions/pub/17/17-10238-CV0.pdf
Excerpt from opinion:
Three business groups filed suits challenging the “Fiduciary Rule” promulgated by the Department of Labor (DOL) in April 2016. The Fiduciary Rule is a package of seven different rules that broadly reinterpret the term “investment advice fiduciary” and redefine exemptions to provisions concerning fiduciaries that appear in the Employee Retirement Income Security Act of 1974, Pub. L. No. 93-406, 88 Stat. 829 (ERISA), codified as amended at 29 U.S.C. § 1001 et seq, and the Internal Revenue Code, 26 U.S.C. § 4975. The stated purpose of the new rules is to regulate in an entirely new way hundreds of thousands of financial service providers and insurance companies in the trillion dollar markets for ERISA plans and individual retirement accounts (IRAs). The business groups’ challenge proceeds on multiple grounds, including (a) the Rule’s inconsistency with the governing statutes, (b) DOL’s overreaching to regulate services and providers beyond its authority, (c) DOL’s imposition of legally unauthorized contract terms to enforce the new regulations, (d) First Amendment violations, and (e) the Rule’s arbitrary and capricious treatment of variable and fixed indexed annuities. The district court rejected all of these challenges. Finding merit in several of these objections, we VACATE the Rule.
The opinion is here: https://www.ca5.uscourts.gov/opinions/pub/17/17-10238-CV0.pdf
Excerpt from opinion:
Three business groups filed suits challenging the “Fiduciary Rule” promulgated by the Department of Labor (DOL) in April 2016. The Fiduciary Rule is a package of seven different rules that broadly reinterpret the term “investment advice fiduciary” and redefine exemptions to provisions concerning fiduciaries that appear in the Employee Retirement Income Security Act of 1974, Pub. L. No. 93-406, 88 Stat. 829 (ERISA), codified as amended at 29 U.S.C. § 1001 et seq, and the Internal Revenue Code, 26 U.S.C. § 4975. The stated purpose of the new rules is to regulate in an entirely new way hundreds of thousands of financial service providers and insurance companies in the trillion dollar markets for ERISA plans and individual retirement accounts (IRAs). The business groups’ challenge proceeds on multiple grounds, including (a) the Rule’s inconsistency with the governing statutes, (b) DOL’s overreaching to regulate services and providers beyond its authority, (c) DOL’s imposition of legally unauthorized contract terms to enforce the new regulations, (d) First Amendment violations, and (e) the Rule’s arbitrary and capricious treatment of variable and fixed indexed annuities. The district court rejected all of these challenges. Finding merit in several of these objections, we VACATE the Rule.
What happened with the US trade war with Chinese phone company ZTE?
Excerpt from Jeff Spross article in THE WEEK -- URL http://theweek.com/articles/779687/trump-senates-cold-war-over-zte-about-turn-hot
Earlier this month, Commerce Secretary Wilbur Ross said an agreement had been reached with ZTE: In exchange for allowing the company to trade with America again, ZTE would pay a $1 billion fine, replace its management, and allow U.S. officials to conduct oversight of its operations.
This is where things get interesting.
Reaction to the deal from politicians on both sides of the aisle was angry and immediate. And it was the Senate, normally a staid and sober institution, that reacted the most forcefully: Sens. Chris Van Hollen (D-Md.) and Tom Cotton (R-Ark.), along with Senate Minority Leader Chuck Schumer (D-N.Y.), got an amendment added to the National Defense Authorization Act (NDAA) that would scuttle Commerce's deal and resurrect the ban on doing business with ZTE. It would require Trump to certify that ZTE is in compliance for a full year before lifting the bans. Cotton's involvement is especially noteworthy since he's been a long-time Trump ally. The senators also have support from other conservative stalwarts, like Sen. Marco Rubio (R-Fla.) and Sen. John Cornyn (R-Texas), the Republicans' second-in-command in the chamber.
In fact, they went further. The amendment not only went after ZTE, it also banned the U.S. government from doing any business with or giving loans to an even bigger Chinese telecommunications firm called Huawei. The latter is the world's third-largest supplier of smartphones, it brought in over $90 billion in 2017, and it employs 180,000 people. For years, suspicions have swirled that heavy American reliance on Huawei's products could allow the Chinese to spy on U.S. communications. The government hasn't nailed down evidence of misbehavior by the company the same way it has with ZTE, but previous reports at least raised concerns from industry experts and former Huawei employees that it's falling afoul of various U.S. laws.
The Senate passed the NDAA with the amendment Monday night.
Of course, support for the amendment is not universal in the Senate or the House, so it's conceivable the language could get watered down or eliminated in conference before it reaches Trump's desk. But the NDAA bill is considered must-pass legislation, which shows how serious the senators are about cracking down on both ZTE and Huawei: Should the amendment turn into a sticking point, or if the White House threatens to veto the NDAA over the amendment, the controversy would force a massive funding bill for U.S. defense back to the drawing board. "I talked to my colleagues on the Intelligence Committee and they are pretty dug in on this," said Sen. Bob Corker (R-Tenn.).
Ross went to Congress to lobby against the amendment. But it's unclear if the White House would actually go to the mat and threaten a veto over it. "I don't think the president cares about ZTE. Someone told me that he gave them a wink and a nod and told them he didn't care," Corker added. "I think [Trump] did what he did for the Chinese leader but doesn't really care what Congress does."
Nationalism has always played a big role in Republican politics. But cutting taxes and regulations for corporations is equally, if not more, important. The GOP has generally shied away from expressing nationalism through aggressive U.S. trade policies, and has instead focused on national security issues. That's certainly where the Republican senators amassed against ZTE and Huawei are coming from.
Trump, on the other hand, has been happy to deploy economic policy in defense of nationalism as well. Indeed, to the extent he's used laws meant for national security to slap tariffs on China and other countries, it's been a rather obvious pretext for starting trade fights in the name of jobs. But he also wants to be seen as America's dealmaker-in-chief, so if he ultimately forces other countries to the bargaining table — as seemed to happen with China on ZTE, initially — he's fine with that too.
All of which is how we've arrived at the odd impasse of the normally laissez-faire Senate trying to pick a trade fight with China, while the Trump administration pushes for comity and the cessation of hostilities.
Excerpt from Jeff Spross article in THE WEEK -- URL http://theweek.com/articles/779687/trump-senates-cold-war-over-zte-about-turn-hot
Earlier this month, Commerce Secretary Wilbur Ross said an agreement had been reached with ZTE: In exchange for allowing the company to trade with America again, ZTE would pay a $1 billion fine, replace its management, and allow U.S. officials to conduct oversight of its operations.
This is where things get interesting.
Reaction to the deal from politicians on both sides of the aisle was angry and immediate. And it was the Senate, normally a staid and sober institution, that reacted the most forcefully: Sens. Chris Van Hollen (D-Md.) and Tom Cotton (R-Ark.), along with Senate Minority Leader Chuck Schumer (D-N.Y.), got an amendment added to the National Defense Authorization Act (NDAA) that would scuttle Commerce's deal and resurrect the ban on doing business with ZTE. It would require Trump to certify that ZTE is in compliance for a full year before lifting the bans. Cotton's involvement is especially noteworthy since he's been a long-time Trump ally. The senators also have support from other conservative stalwarts, like Sen. Marco Rubio (R-Fla.) and Sen. John Cornyn (R-Texas), the Republicans' second-in-command in the chamber.
In fact, they went further. The amendment not only went after ZTE, it also banned the U.S. government from doing any business with or giving loans to an even bigger Chinese telecommunications firm called Huawei. The latter is the world's third-largest supplier of smartphones, it brought in over $90 billion in 2017, and it employs 180,000 people. For years, suspicions have swirled that heavy American reliance on Huawei's products could allow the Chinese to spy on U.S. communications. The government hasn't nailed down evidence of misbehavior by the company the same way it has with ZTE, but previous reports at least raised concerns from industry experts and former Huawei employees that it's falling afoul of various U.S. laws.
The Senate passed the NDAA with the amendment Monday night.
Of course, support for the amendment is not universal in the Senate or the House, so it's conceivable the language could get watered down or eliminated in conference before it reaches Trump's desk. But the NDAA bill is considered must-pass legislation, which shows how serious the senators are about cracking down on both ZTE and Huawei: Should the amendment turn into a sticking point, or if the White House threatens to veto the NDAA over the amendment, the controversy would force a massive funding bill for U.S. defense back to the drawing board. "I talked to my colleagues on the Intelligence Committee and they are pretty dug in on this," said Sen. Bob Corker (R-Tenn.).
Ross went to Congress to lobby against the amendment. But it's unclear if the White House would actually go to the mat and threaten a veto over it. "I don't think the president cares about ZTE. Someone told me that he gave them a wink and a nod and told them he didn't care," Corker added. "I think [Trump] did what he did for the Chinese leader but doesn't really care what Congress does."
Nationalism has always played a big role in Republican politics. But cutting taxes and regulations for corporations is equally, if not more, important. The GOP has generally shied away from expressing nationalism through aggressive U.S. trade policies, and has instead focused on national security issues. That's certainly where the Republican senators amassed against ZTE and Huawei are coming from.
Trump, on the other hand, has been happy to deploy economic policy in defense of nationalism as well. Indeed, to the extent he's used laws meant for national security to slap tariffs on China and other countries, it's been a rather obvious pretext for starting trade fights in the name of jobs. But he also wants to be seen as America's dealmaker-in-chief, so if he ultimately forces other countries to the bargaining table — as seemed to happen with China on ZTE, initially — he's fine with that too.
All of which is how we've arrived at the odd impasse of the normally laissez-faire Senate trying to pick a trade fight with China, while the Trump administration pushes for comity and the cessation of hostilities.
AAI Issues Part II in New White Paper Series on Competition in the Delivery and Payment of Healthcare Services — Experts Tim Greaney And Barak Richman Discuss Promoting Competition in Healthcare Enforcement And Policy: Framing an Active Competition Agenda
Jun 18 2018
Health and Pharma
Today, the AAI released the second part of its new White Paper series on Competition in the Delivery and Payment of Healthcare Services. Part II of this important and comprehensive analysis addresses “Promoting Competition in Healthcare Enforcement and Policy: Framing an Active Competition Agenda. The White Papers are co-authored by two of AAI's Advisory Board competition experts: Thomas Greaney, Visiting Professor at the University of California Hastings College of Law and Chester A. Myers Professor Emeritus at Saint Louis University School of Law; and Barak Richman, the Edgar P. & Elizabeth C. Bartlett Professor of Law and Business Administration at Duke University.
The policy community, albeit belatedly, now fully recognizes the economic dangers of highly concentrated healthcare markets. The Federal Trade Commission (FTC) and states continue to closely scrutinize hospital mergers. Recent successes by the U.S. Department of Justice (DOJ) in challenging mergers of health insurers are additional indications of invigorated enforcement in the healthcare payment sector. In addition, the FTC, DOJ, and State Attorneys General (AGs) have appropriately dedicated substantial resources to healthcare antitrust enforcement and have achieved significant victories in litigation.
Traditional merger review, however, will be inadequate to compensate for the policy failures of the past. In large part because failed antitrust interventions, overwhelmed enforcers, or mistaken beliefs that market dynamics or negotiated settlements will preserve market competition, both provider and insurer markets across the country are highly concentrated, and dominant providers currently enjoy enormous pricing power. To create the market dynamics that consumers desire, policymakers will need to pursue proactive approaches in healthcare markets that confront extant market power and aim to limit its damage. It will also require exploring innovative paths to stimulate lost or impeded competition. Over the past several years, the FTC has enhanced its advisory and advocacy efforts on healthcare competition issues in numerous forums, and its leadership will need to continue exploring its influence outside its traditional purview.
Antitrust policy, like many other policy areas, will have to be farsighted and proactive to maintain and enhance sorely needed competition in healthcare markets. While traditional antitrust measures can prevent the agglomeration of additional harmful market power, less traditional and more creative policies are necessary to police the harmful market power many healthcare entities have already amassed. Federal and state entities should therefore pursue an active competition agenda by deploying sufficient resources to both prevent the consummation of additional anticompetitive consolidation that enhances or entrenches monopoly power and to pursue multipronged policies to facilitate efficient, competitive markets in healthcare markets. These issues are complicated by the healthcare sector’s long history of state and federal regulatory interventions that impede rivalry, discourage entry and innovation, and advance professional and corporate interests over those of consumers, but they also present multiple opportunities to correct problematic policies and inject competition into previously insulated markets.
In addition, responsibilities and opportunities to promote pro-competition policies must stretch beyond traditional antitrust enforcers, as regulators across government have the capacity to promote competition in healthcare markets. Close attention to regulatory interventions is also important because the distinction between public and private healthcare is vanishing. Government-financed health services, including Medicare and Medicaid, are increasingly relying on privately managed care to provide services. Without robustly competitive markets, these changes will not achieve the goals of controlling costs and improving quality. Likewise, proposals to replace Medicare’s guaranteed benefits with premium support payments, block grant Medicaid, or force downward budgetary pressures on national healthcare spending are also highly dependent on competition between providers and between insurers.
Part I of the AAI White Paper series Competition in the Delivery and Payment of Healthcare Services provided an in-depth examination of the competition concerns and priorities in provider and insurer consolidation—both horizontal and vertical--that is sweeping the industry. Part II of the AAI White Paper Series advances the discussion to identify and define the policy responses needed to address extant market power and prospective issues raised by consolidated markets. These issues include employing antitrust and other measures to stem monopolistic provider practices, encouraging federal agencies to advocate in correcting anticompetitive state policies, and seeking alternative strategies to promote competition in healthcare provider and payer markets. We emphasize a growing need for advocacy in state policymaking, payment reform, and transparency, including issues such as scrutiny of state medical boards, state efforts to improve price and quality transparency, and encouraging precompetitive policies at the Center for Medicare & Medicaid Services (CMS). The final section concludes with policy recommendations.
America has chosen, wisely we think, to rely on competition to spur innovation, assure quality of care, and control costs in the healthcare sector. Where markets have been allowed to function under competitive conditions—free of anticompetitive regulations, cartels, and monopolies—competition has done its job. Much of the revolutionary change occurring today is designed to improve the function of healthcare markets and deal with problems of market failure and excessive regulation. In many areas however, problems persist. Many markets remain controlled by monopolies, constrained by outdated regulation, and foreclosed to new entrants and ideas from anticompetitive strategies from incumbents. We therefore believe the role of the federal antitrust agencies in making healthcare policy is a vital one, and they should be given the fullest support by Congress, the Executive branch and the States. In light of these observations, we offer a number of takeaways from the analysis that would help frame an active competition policy agenda that complements vigorous antitrust enforcement in healthcare. These include:
- Traditional antitrust measures can prevent the agglomeration of additional harmful market power. However, less traditional and more creative, farsighted, and proactive policies are necessary to police the harmful market power many healthcare entities have already amassed.
- COPA proceedings are unlikely to ascertain when consolidations will generate benefits that outweigh costs to competition. Given the weighty evidence that provider consolidations impose significant economic harm, COPA’s frequently amount to evasions of needed FTC scrutiny.
- To mitigate the anticompetitive consequences of bundling monopolized and unmonopolized hospital services, antitrust enforcers ought to require hospitals and other provider entities to unbundle, at a purchaser’s request, certain services so that the purchaser can negotiate prices. This offers a promising, proactive remedial approach to hospital mergers and would restore some lost competition from excessive consolidation.
- Contractual terms between providers and insurers such as MFNs and anti-steering provisions entrenches dominant providers and insurers, limiting competition and benefits to consumers. Antitrust rules can prohibit the use of such anticompetitive contractual terms and insurance regulators can bar such provisions wherever they threaten to preclude effective price competition.
- States should examine reducing barriers that prevent entry by upstart providers, from overly restrictive rules regarding facility licensure and CON. New outpatient surgery centers, retail clinics and urgent care facilities, and physicians are well positioned to offer alternatives to the traditional inpatient acute care facility.
- Insurance exchanges set up under the ACA offer a platform for effective price and quality comparisons across insurance products and are an important tool for combatting concentration in health insurance markets. While regulatory supervision is necessary in the health insurance markets, excessive regulation could undermine the viability of state insurance markets. The FTC and DOJ should monitor the development of these exchanges, help the states fine tune regulation, and encourage the promotion of pro-competitive regulatory strategies.
- The FTC and DOJ should invest in monitoring and advising state regulators regarding potential harms to competition arising from state regulations and policies. This includes advocating for liberalizing state licensure and scope-of-practice limitations. Where repeal is not feasible, states should consider clarifying standards for, and explicitly require consideration of the competitive impact of, CON determinations.
- State licensing boards dominated by market participants are prone to produce anticompetitive regulations. The FTC should take a proactive role in helping states craft regimes in which medical boards do not have inappropriate leeway without active state supervision. And because many states and Congress are considering how best to revise existing regulatory regimes, the FTC should monitor and guide how policymakers implement mechanisms to actively supervise their professional boards.
- The FTC and DOJ should monitor and support public and private initiatives to establish APCDs and similar databases that compile and disseminate healthcare quality and price data. Greater transparency in healthcare markets can enhance competition and expand informed consumer choice.
- Federal healthcare program regulation has a profound impact on competition. As such, we suggest that the Administration inaugurate an interagency health competition task force to advise CMS on policies that affect the competitiveness of provider and payer markets. The FTC and DOJ should use this task force and other opportunities to advocate and support policies affecting payment, conditions of participation, and quality measures for providers that promote entry and cost-effective delivery of care.
From The Nation: "The AT&T-Time Warner Merger Ruling Is Bad for the Country"
An excerpt from the Nation article by David Dayen follows the editorial comment.
Editorial comment (DAR): Dayen is an advocate of what is sometimes called "big is bad" antitrust. He complains that the Justice Department needed to make its case in the AT&T-Time Warner litigation while bound in the "straitjacket" of the traditional "consumer welfare" litigation standard: "Derived during the Reagan administration and now infecting virtually the entire judiciary, the consumer welfare standard puts antitrust law in the province of economists and models and dueling sets of numbers, when common sense clearly demonstrates the dangers of concentration." Dayen holds the consumer welfare litigation approach to blame for the government's reliance on economic witness Carl Shapiro's economic model unpersuasively showing consumer harm from the AT&T-Time Warner merger of less than a dollar a month for the average customer.
I personally have no problem with advocates like David Dayen who argue that "big is bad." On the contrary, I applaud advocates who reach out to the broad public to point out the economic and political problems caused by particular large companies. I would like advocates of "big is bad" thinking to get along well with courtroom advocates like the Justice Department Antitrust Division lawyers, who should be applauded for taking the AT&T-Time Warner merger to court. The DOJ lawyers certainly knew that they were fighting an uphill battle, and that it would be difficult to present facts that would persuade Judge Leon to depart from a judicial tradition of skepticism toward vertical merger challenges. USDOJ leaders showed great determination is pressing forward with a difficult but important case.
Is there a way to bridge the gap between David Dayen's advocacy of "common sense" and the antitrust law's current reliance on the consumer welfare standard in litigation? That gap could be narrowed somewhat by expanding the consumer welfare standard, or perhaps by using different litigation standards. But in American jurisprudence the tradition is that the standards for antitrust prosecution, somewhat like standards in ordinary criminal prosecutions, need to be reasonably precise and understandable to the potential targets of the prosecution. The requirements for litigation standards that will work well in the courtroom can be rigorous, but we can hope for constructive dialog between "big is bad" advocates and courtroom litigators on how standards for antitrust prosecutions can evolve.
Don Allen Resnikoff
- The Dayen article excerpt:
It’s hard to over-emphasize the impact of this ruling. First, the deal itself brings together one of America’s largest telecom and cable companies with a suite of valuable programming to distribute on those networks. HBO, TNT, CNN, Cartoon Network, Warner Brothers Studios, a stake in Hulu and much more will now be held by the owners of DirecTV, U-verse, AT&T mobile and broadband, Cricket wireless, and more. AT&T has already started bundling HBO for free for wireless users; the entire idea is to leverage things people want to watch by forcing them to watch it on AT&T services.
The Justice Department argued this would allow AT&T to raise the cost of Time Warner programming, whether for rival cable companies, online pay-TV services, or consumers. The trial mostly didn’t address other concerns, like narrowing the channels for artists to get their work out, concentrating the power to distribute news and information in too few self-interested hands, or stunting innovation by creating a barrier to competition. That’s because modern antitrust jurisprudence operates under the consumer welfare standard, a constrained method that only looks at costs to consumers to determine whether a merger should be granted.
In other words, the Justice Department needed to make its case while bound in a straitjacket. Derived during the Reagan administration and now infecting virtually the entire judiciary, the consumer welfare standard puts antitrust law in the province of economists and models and dueling sets of numbers, when common sense clearly demonstrates the dangers of concentration. UC Berkeley economics professor and Obama administration veteran Carl Shapiro put together a model for the government to prove consumer harm; it ended up showing less than a dollar a month for the average customer, and AT&T’s attorneys poked numerous holes in it (predictably so, as it was an inherently complex rendering of an uncertain future).
But we know that monopoly is the entire point of this merger. During the trial, the Justice Department revealed an internal document where an executive from Turner Broadcasting, now part of AT&T, stated outright that “Time Warner would be a weapon for AT&T because AT&T’s competitors need Time Warner programming.” But instead of recognizing that this desire to screw rivals obviously may “substantially lessen competition,” as the antitrust statute states, judges require economists to act as wizards and predict precise percentages of the market and markups in price.
So the courts can overlook very clear statements from executives running these companies that they need this merger to secure market power. The desire to monopolize is crystal clear, but as long as you can spin a theoretical model showing a pretense of consumer benefits, then market power is no hurdle.
***
Comcast will announce a bidding war for coveted Fox TV and movie assets, already pledged to Disney, as early as Wednesday. That’s just the first domino in a likely rush to close deals. Amazon could buy a movie studio like Lion’s Gate. Apple, Facebook and Google are dipping into producing video and can acquire more assets for that endeavor. Sprint has already announced a deal with T-Mobile, which has a partnership with Netflix. Sinclair Broadcasting, with an assist from the FCC, is morphing into an indomitable giant at the local news level. Verizon, the other big distribution network, waits in the wings. The media business is already deeply consolidated, and this merger will ramp that up.
The entire point of these mergers—indeed, a stated goal of AT&T’s deal—is to compete with the tech platforms in a war for your attention, enabling the sale of targeted ads using your personal data. Time Warner wants more of your information so they can keep your eyeballs glued to your screen as they serve up more ads. This is nothing less than a surveillance tax on every man, woman, and child: an endless sea of using your every waking thought to bombard you with corporate pitches. Targeted advertising serves no useful purpose, facilitates monopoly and magnifies the potential for abuse of consumers and our democracy. It ought to be banned; instead it will further entrench itself.
The ruling will also give a green light for more vertical deals—those between companies that don’t technically compete with one another. That was never actually true in this case; HBO had a distribution network for its programming that will now almost certainly be folded into AT&T’s offerings. But modern antitrust law has taken a hands-off approach to vertical mergers, despite the ability to use leverage in one market to stifle competition further down the supply chain (like using Time Warner content as a weapon against AT&T’s rival distributors, you know, like Time Warner executives said explicitly that AT&T would do). Judge Leon so thoroughly smacked down the government in this case, that vertical deals will likely be too hot to handle for a few years.
The full article is at https://www.thenation.com/article/att-time-warner-merger-ruling-bad-country/
AT&T, Time Warner, and the Future of Health Care
June 21, 2018
David Blumenthal, M.D.
The recent federal district court ruling allowing the merger of AT&T and Time Warner — a case of so-called vertical integration — will likely encourage similar unions throughout the U.S. economy, including in health care. Nevertheless, a close look at the court’s decision, and at the wide variety of vertical health care mergers under way, suggests that policymakers and private actors should not interpret the court’s ruling as an unconditional green light for vertical integration in health care, or any other sector.
***
Some antitrust experts question whether the analogy between manufactured products and health care delivery is accurate. Independent physicians, for example, often work within hospitals and help to produce their “products.” Nevertheless, there are clear differences between mergers across the same types of health care organizations, like hospitals, and those between different types of providers, like physicians and hospitals.
***
Evidence on the effects of horizontal health care mergers has grown considerably in recent years, and generally shows that they increase prices. But studies of vertical health care mergers are much less common. Perhaps the most relevant experience concerns long-standing integrated health systems, such as Kaiser Permanente, Intermountain, Geisinger, and a handful of similar organizations.
Full article: https://www.commonwealthfund.org/blog/2018/att-time-warner-and-future-health-care?omnicid=EALERT%25%25jobid%25%25&mid=%25%25emailaddr%25%25
FTC Announces Hearings On Competition and Consumer Protection in the 21st Century
The Federal Trade Commission announced that the agency will hold a series of public hearings on whether broad-based changes in the economy, evolving business practices, new technologies, or international developments might require adjustments to competition and consumer protection enforcement law, enforcement priorities, and policy. The multi-day, multi-part hearings, which will take place this fall and winter, will be similar in form and structure to the FTC’s 1995 “Global Competition and Innovation Hearings” under the leadership of then-Chairman Robert Pitofsky.
“The FTC has always been committed to self-examination and critical thinking, to ensure that our enforcement and policy efforts keep pace with changes in the economy,” FTC Chairman Joe Simons commented today. “When the FTC periodically engages in serious reflection and evaluation, we are better able to promote competition and innovation, protect consumers, and shape the law, so that free markets continue to thrive.”
The hearings and public comment process will provide opportunities for FTC staff and leadership to listen to interested persons and outside experts representing a broad and diverse range of viewpoints. Additionally, the hearings will stimulate thoughtful internal and external evaluation of the FTC’s near- and long-term law enforcement and policy agenda. The hearings may identify areas for enforcement and policy guidance, including improvements to the agency’s investigation and law enforcement processes, as well as areas that warrant additional study.
In advance of these hearings, public comments on any of the following topics may be submitted to the FTC:
The Commission will invite public comment in stages throughout the term of the hearings.
Public comments may address one or more of the above topics generally, or may address them with respect to a specific industry, such as the health care, high-tech, or energy industries. Any additional topics for comment will be identified in later notices.
The hearings will begin in September 2018 and are expected to continue through January 2019, and will consist of 15 to 20 public sessions. All hearings will be webcast, transcribed, and placed on the public record. A dedicated website for information about the hearings including the schedule as it evolves can be found at www.ftc.gov/ftc-hearings.
Public Comments: Interested parties are invited to submit written comments on the topics listed above to the FTC, either electronically at www.ftc.gov/ftc-hearings or in paper form. FTC staff may use these comments in any subsequent reports or policy papers. Comments should refer to “Competition and Consumer Protection in the 21st Century Hearings, Project Number P181201.” If an interested party wishes to comment on multiple topics, we encourage filing a separate comment for each topic. If an interested party wishes to make general comments about the hearings, we encourage filing a comment in response to Topic 1. For this stage of the public comment process, comments will be accepted until August 20, 2018.
If you prefer to file a comment in hard copy, write ‘‘Competition and Consumer Protection in the 21st Century Hearing, Project Number P181201,” on your comment and on the envelope and mail your comment to the following address: Federal Trade Commission, Office of the Secretary, 600 Pennsylvania Avenue NW., Suite CC–5610 (Annex C), Washington, DC 20580, or deliver your comment to the following address: Federal Trade Commission, Office of the Secretary, Constitution Center, 400 7th Street SW., 5th Floor, Suite 5610 (Annex C), Washington, DC 20024.
The FTC Act and other laws that the Commission administers permit the collection of public comments. More information, including routine uses permitted by the Privacy Act, may be found in the FTC’s privacy policy, available at ftc.gov/site-information/privacy-policy.
For Further Information Contact: Derek Moore, Office of Policy Planning, 202-326-3367, John Dubiansky, Office of Policy Planning, 202-326-2182 or email us at CCPhearings@ftc.gov (link sends e-mail).
The Federal Trade Commission works to promote competition, and protect and educate consumers. You can learn more about consumer topics and file a consumer complaint online or by calling 1-877-FTC-HELP (382-4357). Like the FTC on Facebook (link is external), follow us on Twitter (link is external), read our blogs and subscribe to press releases for the latest FTC news and resources.
Contact InformationFTC Media Contact
Peter Kaplan (link sends e-mail)
Office of Public Affairs
202-326-2334
- For Release June 20, 2018
The Federal Trade Commission announced that the agency will hold a series of public hearings on whether broad-based changes in the economy, evolving business practices, new technologies, or international developments might require adjustments to competition and consumer protection enforcement law, enforcement priorities, and policy. The multi-day, multi-part hearings, which will take place this fall and winter, will be similar in form and structure to the FTC’s 1995 “Global Competition and Innovation Hearings” under the leadership of then-Chairman Robert Pitofsky.
“The FTC has always been committed to self-examination and critical thinking, to ensure that our enforcement and policy efforts keep pace with changes in the economy,” FTC Chairman Joe Simons commented today. “When the FTC periodically engages in serious reflection and evaluation, we are better able to promote competition and innovation, protect consumers, and shape the law, so that free markets continue to thrive.”
The hearings and public comment process will provide opportunities for FTC staff and leadership to listen to interested persons and outside experts representing a broad and diverse range of viewpoints. Additionally, the hearings will stimulate thoughtful internal and external evaluation of the FTC’s near- and long-term law enforcement and policy agenda. The hearings may identify areas for enforcement and policy guidance, including improvements to the agency’s investigation and law enforcement processes, as well as areas that warrant additional study.
In advance of these hearings, public comments on any of the following topics may be submitted to the FTC:
- The state of antitrust and consumer protection law and enforcement, and their development, since the Pitofsky hearings;
- Competition and consumer protection issues in communication, information, and media technology networks;
- The identification and measurement of market power and entry barriers, and the evaluation of collusive, exclusionary, or predatory conduct or conduct that violates the consumer protection statutes enforced by the FTC, in markets featuring “platform” businesses;
- The intersection between privacy, big data, and competition;
- The Commission’s remedial authority to deter unfair and deceptive conduct in privacy and data security matters;
- Evaluating the competitive effects of corporate acquisitions and mergers;
- Evidence and analysis of monopsony power, including but not limited to, in labor markets;
- The role of intellectual property and competition policy in promoting innovation;
- The consumer welfare implications associated with the use of algorithmic decision tools, artificial intelligence, and predictive analytics;
- The interpretation and harmonization of state and federal statutes and regulations that prohibit unfair and deceptive acts and practices; and
- The agency’s investigation, enforcement, and remedial processes.
The Commission will invite public comment in stages throughout the term of the hearings.
- Through August 20, 2018, the Commission will accept public comment on the topics identified in the announcement. Each topic description includes issues of particular interest to the Commission, but comments need not be restricted to these subjects.
- Additionally, the Commission will invite comments on the topic of each hearing session. The FTC will issue a news release before each session to inform the public of the agenda, the date and location, and instructions on submitting comment.
- The Commission will also invite public comment upon completion of the entire series of hearings.
Public comments may address one or more of the above topics generally, or may address them with respect to a specific industry, such as the health care, high-tech, or energy industries. Any additional topics for comment will be identified in later notices.
The hearings will begin in September 2018 and are expected to continue through January 2019, and will consist of 15 to 20 public sessions. All hearings will be webcast, transcribed, and placed on the public record. A dedicated website for information about the hearings including the schedule as it evolves can be found at www.ftc.gov/ftc-hearings.
Public Comments: Interested parties are invited to submit written comments on the topics listed above to the FTC, either electronically at www.ftc.gov/ftc-hearings or in paper form. FTC staff may use these comments in any subsequent reports or policy papers. Comments should refer to “Competition and Consumer Protection in the 21st Century Hearings, Project Number P181201.” If an interested party wishes to comment on multiple topics, we encourage filing a separate comment for each topic. If an interested party wishes to make general comments about the hearings, we encourage filing a comment in response to Topic 1. For this stage of the public comment process, comments will be accepted until August 20, 2018.
If you prefer to file a comment in hard copy, write ‘‘Competition and Consumer Protection in the 21st Century Hearing, Project Number P181201,” on your comment and on the envelope and mail your comment to the following address: Federal Trade Commission, Office of the Secretary, 600 Pennsylvania Avenue NW., Suite CC–5610 (Annex C), Washington, DC 20580, or deliver your comment to the following address: Federal Trade Commission, Office of the Secretary, Constitution Center, 400 7th Street SW., 5th Floor, Suite 5610 (Annex C), Washington, DC 20024.
The FTC Act and other laws that the Commission administers permit the collection of public comments. More information, including routine uses permitted by the Privacy Act, may be found in the FTC’s privacy policy, available at ftc.gov/site-information/privacy-policy.
For Further Information Contact: Derek Moore, Office of Policy Planning, 202-326-3367, John Dubiansky, Office of Policy Planning, 202-326-2182 or email us at CCPhearings@ftc.gov (link sends e-mail).
The Federal Trade Commission works to promote competition, and protect and educate consumers. You can learn more about consumer topics and file a consumer complaint online or by calling 1-877-FTC-HELP (382-4357). Like the FTC on Facebook (link is external), follow us on Twitter (link is external), read our blogs and subscribe to press releases for the latest FTC news and resources.
Contact InformationFTC Media Contact
Peter Kaplan (link sends e-mail)
Office of Public Affairs
202-326-2334
From NYT: Koch brothers affiliated group, Americans for Prosperity, focuses on local issues, opposes mass transit
Excerpt:
Last year Americans for Prosperity spent $711,000 on lobbying for various issues, a near 1,000-fold increase since 2011, when it spent $856. Overall, the group has spent almost $4 million on state-level lobbying the past seven years, according to disclosures compiled by the National Institute on Money in State Politics, a nonpartisan nonprofit that tracks political spending.
Broadly speaking, Americans for Prosperity campaigns against big government, but many of its initiatives target public transit. In Indiana, it marshaled opposition to a 2017 Republican gas-tax plan meant to raise roughly a billion dollars to invest in local buses and other projects. In New Jersey, the group ran an ad against a proposed gas-tax increase in 2016 that showed a father giving away his baby’s milk bottle, and also Sparky the family dog, to pay for transit improvements among other things. “Save Sparky,” the ad implores.
In Nashville, Americans for Prosperity played a major role: organizing door-to-door canvassing teams using iPads running the i360 software. Those in-kind contributions can be difficult to measure. According to A.F.P.’s campaign finance disclosure, the group made only one contribution, of $4,744, to the campaign for “canvassing expenses.”
Instead, a local group, NoTax4Tracks, led the Nashville fund-raising. Nearly three-quarters of the $1.1 million it raised came from a single nonprofit, Nashville Smart Inc., which is not required to disclose donors. The rest of the contributions to NoTax4Tracks came from wealthy local donors, including a local auto dealer.
Both NoTax4Tracks and Nashville Smart declined to fully disclose their funding.
Note: In Nashville, the anti-transit campaign succeeded -- voters failed to approve the City's mass transit plan
https://www.nytimes.com/2018/06/19/climate/koch-brothers-public-transit.html?hp&action=click&pgtype=Homepage&clickSource=story-heading&module=first-column-region®ion=top-news&WT.nav=top-news
Here is a blog post from a Koch bothers ally attacking the concept of mass transit for most urban areas:
https://www.cato.org/blog/nine-reasons-few-americans-use-transit
Excerpt:
Last year Americans for Prosperity spent $711,000 on lobbying for various issues, a near 1,000-fold increase since 2011, when it spent $856. Overall, the group has spent almost $4 million on state-level lobbying the past seven years, according to disclosures compiled by the National Institute on Money in State Politics, a nonpartisan nonprofit that tracks political spending.
Broadly speaking, Americans for Prosperity campaigns against big government, but many of its initiatives target public transit. In Indiana, it marshaled opposition to a 2017 Republican gas-tax plan meant to raise roughly a billion dollars to invest in local buses and other projects. In New Jersey, the group ran an ad against a proposed gas-tax increase in 2016 that showed a father giving away his baby’s milk bottle, and also Sparky the family dog, to pay for transit improvements among other things. “Save Sparky,” the ad implores.
In Nashville, Americans for Prosperity played a major role: organizing door-to-door canvassing teams using iPads running the i360 software. Those in-kind contributions can be difficult to measure. According to A.F.P.’s campaign finance disclosure, the group made only one contribution, of $4,744, to the campaign for “canvassing expenses.”
Instead, a local group, NoTax4Tracks, led the Nashville fund-raising. Nearly three-quarters of the $1.1 million it raised came from a single nonprofit, Nashville Smart Inc., which is not required to disclose donors. The rest of the contributions to NoTax4Tracks came from wealthy local donors, including a local auto dealer.
Both NoTax4Tracks and Nashville Smart declined to fully disclose their funding.
Note: In Nashville, the anti-transit campaign succeeded -- voters failed to approve the City's mass transit plan
https://www.nytimes.com/2018/06/19/climate/koch-brothers-public-transit.html?hp&action=click&pgtype=Homepage&clickSource=story-heading&module=first-column-region®ion=top-news&WT.nav=top-news
Here is a blog post from a Koch bothers ally attacking the concept of mass transit for most urban areas:
https://www.cato.org/blog/nine-reasons-few-americans-use-transit
Local DC area mass transit advocacy group launches Purple Line Newsletter
The Koch brothers may be supporting local advocacy against mass transit, but in the DC area there is an advocacy group that supports mass transit, particularly the new Purple line. The Purple Line NOW group has launched a newsletter. Their announcement follows. DAR
Welcome to the Debut of the Purple Line NOW Bi-weekly Newsletter!
We’re fast approaching the 1-year anniversary of the groundbreaking of the Purple Line and you may have noticed that construction activity is beginning to pick up across the corridor. The first year of construction has largely consisted of preparatory work such as tree clearing, utility relocation, staging areas, and demolition, but you’ll begin to see more visible signs of progress and changes to the built environment starting this month.
For that reason, we’ve decided to launch a new bi-weekly newsletter to keep the community up-to-date on the latest construction news and how it will impact getting around town, as well as important events, and general Purple Line information. Going forward, you can expect a new edition of this newsletter in your inbox every other Wednesday, provided, of course, that there is news to report.
See the full announcement at http://www.purplelinenow.com/
Here is language from the site's "Who we are" section:
Who We ArePurple Line NOW! is a coalition of business, labor, environment, neighborhood, and civic organizations that works with local, state, and federal government officials in pursuit of our mission to build the Purple Line.
"Our mission is ensure the completion of the light rail purple line from Bethesda to New Carrollton, integrated with a hiker/biker trail between Bethesda & Silver Spring."
Our Vision: The Purple Line will energize Maryland suburbs of the national capital region by integrating transportation systems including existing Metro and MARC lines and improved bycycle and pedestrian connections.
Our Board: PLN is governed by a Board of Directors with balanced representation from the environmental, civic, business and labor support for the Purple Line. The strength of our organization is in its diversity and we continue to work to expand our base of support. PLN Executive Director Christine Scott works at the direction of the Board to assist in coordinating the PLN advocacy efforts. Ms. Scott can be contacted at cscott@purplelinenow.com.
The Koch brothers may be supporting local advocacy against mass transit, but in the DC area there is an advocacy group that supports mass transit, particularly the new Purple line. The Purple Line NOW group has launched a newsletter. Their announcement follows. DAR
Welcome to the Debut of the Purple Line NOW Bi-weekly Newsletter!
We’re fast approaching the 1-year anniversary of the groundbreaking of the Purple Line and you may have noticed that construction activity is beginning to pick up across the corridor. The first year of construction has largely consisted of preparatory work such as tree clearing, utility relocation, staging areas, and demolition, but you’ll begin to see more visible signs of progress and changes to the built environment starting this month.
For that reason, we’ve decided to launch a new bi-weekly newsletter to keep the community up-to-date on the latest construction news and how it will impact getting around town, as well as important events, and general Purple Line information. Going forward, you can expect a new edition of this newsletter in your inbox every other Wednesday, provided, of course, that there is news to report.
See the full announcement at http://www.purplelinenow.com/
Here is language from the site's "Who we are" section:
Who We ArePurple Line NOW! is a coalition of business, labor, environment, neighborhood, and civic organizations that works with local, state, and federal government officials in pursuit of our mission to build the Purple Line.
"Our mission is ensure the completion of the light rail purple line from Bethesda to New Carrollton, integrated with a hiker/biker trail between Bethesda & Silver Spring."
Our Vision: The Purple Line will energize Maryland suburbs of the national capital region by integrating transportation systems including existing Metro and MARC lines and improved bycycle and pedestrian connections.
Our Board: PLN is governed by a Board of Directors with balanced representation from the environmental, civic, business and labor support for the Purple Line. The strength of our organization is in its diversity and we continue to work to expand our base of support. PLN Executive Director Christine Scott works at the direction of the Board to assist in coordinating the PLN advocacy efforts. Ms. Scott can be contacted at cscott@purplelinenow.com.
From CBS News: Lobbyists pay for access to state attorneys general at fancy resorts
A CBS video reports that State attorneys general, are playing an increasingly bigger role – and lobbyists are noticing. CBS News got an inside look at one lavish retreat at Kiawah Island, South Carolina, where businesses and trade groups paid for access. Some of the companies are under investigation by state attorneys general, but still give large donations so they can get one-on-one access to AGs to state their case.
The video is here:
https://www.msn.com/en-us/video/n/inside-a-lavish-retreat-where-lobbyists-pay-for-access-to-state-attorneys-general/vp-AAyQKhA
A CBS video reports that State attorneys general, are playing an increasingly bigger role – and lobbyists are noticing. CBS News got an inside look at one lavish retreat at Kiawah Island, South Carolina, where businesses and trade groups paid for access. Some of the companies are under investigation by state attorneys general, but still give large donations so they can get one-on-one access to AGs to state their case.
The video is here:
https://www.msn.com/en-us/video/n/inside-a-lavish-retreat-where-lobbyists-pay-for-access-to-state-attorneys-general/vp-AAyQKhA
DC proposition 77 and the tipped minimum wage issue
My wife and I recently joined friends at an upscale DC restaurant with lots of style, high prices, and weak fast-food quality menu offerings, where we chatted with the waitress about proposition 77. That is the proposal on the DC ballot that would change the current system where tips go to the wait staff, and the minimum wage for tipped wait staff is lower than for non-tipped workers. The waitress feels strongly about preserving the current tipping arrangement, and recommended that we consult Washington City Paper to learn more. DAR
Here is an excerpt from Washingtion City Paper:
On June 19, D.C. voters will decide whether the city should eliminate its two-tiered wage system. Tipped employees currently earn $3.33 an hour compared to the standard minimum wage of $12.50. All but seven states in the U.S. have this so-called “tip credit” that restaurateurs rely on to staff a robust team of employees and tame prices for customers.
Even with this tip credit, all workers in D.C. are entitled to the standard minimum wage. If a worker fails to reach $12.50 per hour with their base wage plus tips, the employer is required to make up the difference.
If 77 passes, the tipped minimum wage will go up eight increments until it equals the standard minimum wage in 2026. The standard minimum wage will reach $15 in 2020. Increases after that would be tied to inflation. If 77 doesn’t pass, the tipped minimum wage will still increase to $3.89 in July, $4.45 in 2019, and $5 in 2020.
Diners may have noticed servers and bartenders sporting “Save Our Tips” buttons that ask D.C. residents to vote no on 77. The initiative committee by the same name is one of several being bankrolled by industry leaders, operators, employees, and trade associations. National groups like Restaurant Workers of America (RWA) have also joined the local fight against 77.
Restaurant Opportunities Center United (ROC) is the national nonprofit that’s bringing 77 to the table. They advocate for workers rights and the elimination of the tip credit in favor of “One Fair Wage.” ROC tried and failed to do away with the tip credit when the D.C. Council approved increasing the standard minimum wage to $15 in June 2016, but after jumping a few more hurdles, including gathering enough signatures from voters, ROC succeeded in getting 77 on the ballot two years later. Now this monumental decision is in the hands of the voters, and early local and national polling suggests D.C. residents will vote yes on 77.
Full article at https://www.washingtoncitypaper.com/food/young-hungry/article/21004275/fear-mounts-in-restaurant-industry-as-dc-prepares-to-vote-on-the-tipped-minimum-wage
Court filing from lawsuit charging Harvard with systematically discriminating against Asian-Americans
See https://int.nyt.com/data/documenthelper/43-sffa-memo-for-summary-judgement/1a7a4880cb6a662b3b51/optimized/full.pdf#page=1
The suit says that Harvard imposes what is in effect a soft quota of “racial balancing.” This keeps the numbers of Asian-Americans artificially low, while advancing less qualified white, black and Hispanic applicants, the plaintiffs contend.
Tim Wu's Brandeisian "big is bad" antitrust v. "Chicago School" limited antitrust
Responding to Judge Lean's decision in the AT&T/Time Warner merger matter, Tim Wu writes:
Judge Leon’s decision shows just how far the law has wandered from congressional intent. The law has become a license for near-uncontrolled consolidation and concentration in almost every sector of economy. Whether involving airlines, hospitals, the pharmaceutical industry, cable television or the major tech platforms, mergers leading to oligopolies or monopolies have become commonplace.
Reading Judge Leon’s opinion makes it clear how this has happened. The decision barely touches on Congress’s concerns about excessive concentration of economic power or other guiding principles or values. Instead, the opinion is mostly a tedious dissection of whether customers might end up paying an extra 45 cents per month for pay-TV service.
***
The public cares about the aggregation of wealth in the top echelons, the suppression of wages and the shrinking of the middle class, all of which are linked to industry concentration. That’s why Congress, in the wake of repeated affirmations that the anti-merger laws no longer work, needs to act. It should reassert that Congress in 1950 really did intend to preserve a competitive economy — one that is free, if possible, from what the Supreme Court Justice Louis Brandeis once called the “curse of bigness.”
[NYT URL: https://www.nytimes.com/2018/06/14/opinion/time-warner-att-merger.html?action=click&pgtype=Homepage&clickSource=story-heading&module=region®ion=region&WT.nav=region]
Judge Leon's opinion has been widely criticized (another accessible critique is at https://www.washingtonpost.com/amphtml/news/wonk/wp/2018/06/15/how-judge-leon-blew-it-with-u-s-v-att/), but it seems fair to say that Judge Leon's opinion reflects a decades old judicial tradition that treats "vertical" mergers -- joining companies at different levels of distribution -- as unlikely to be an antitrust problem.
There is obviously a clash between the judicial tradition that is permissive to vertical mergers and the Brandeisian view urged by Tim Wu. Because of that clash, Tim Wu suggests that reconciliation requires Congressional action.
But it seems unlikely that a Congress that doesn't do much will take up Tim Wu's action proposal any time soon.
In the meanwhile, there are issues to wrestle with for lawyers and economists who earn their living as courtroom antitrust advocates. First, should courtroom advocates join Tim Wu in in supporting broad legal restraints against "aggregation of wealth in the top echelons." Many do not. To the extent that courtroom advocates agree with Tim Wu, they would need to deal with his observation that the courts generally get vertical cases wrong. To Tim Wu, getting it wrong may mean rejecting broad legal restraints against corporate behemoths. Court precedent broadly approving vertical mergers reduces the leeway for advocates successfully arguing against vertical mergers in court.
Can Tim Wu's "big is bad" thinking ever be reconciled with courtroom legal precedent in vertical cases, without recourse to Congress? Maybe yes, to some extent, if antitrust advocates can argue within the leeway allowed by legal precedent for judicially manageable legal standards that are less permissive toward vertical mergers.
--Don Allen Resnikoff
Responding to Judge Lean's decision in the AT&T/Time Warner merger matter, Tim Wu writes:
Judge Leon’s decision shows just how far the law has wandered from congressional intent. The law has become a license for near-uncontrolled consolidation and concentration in almost every sector of economy. Whether involving airlines, hospitals, the pharmaceutical industry, cable television or the major tech platforms, mergers leading to oligopolies or monopolies have become commonplace.
Reading Judge Leon’s opinion makes it clear how this has happened. The decision barely touches on Congress’s concerns about excessive concentration of economic power or other guiding principles or values. Instead, the opinion is mostly a tedious dissection of whether customers might end up paying an extra 45 cents per month for pay-TV service.
***
The public cares about the aggregation of wealth in the top echelons, the suppression of wages and the shrinking of the middle class, all of which are linked to industry concentration. That’s why Congress, in the wake of repeated affirmations that the anti-merger laws no longer work, needs to act. It should reassert that Congress in 1950 really did intend to preserve a competitive economy — one that is free, if possible, from what the Supreme Court Justice Louis Brandeis once called the “curse of bigness.”
[NYT URL: https://www.nytimes.com/2018/06/14/opinion/time-warner-att-merger.html?action=click&pgtype=Homepage&clickSource=story-heading&module=region®ion=region&WT.nav=region]
Judge Leon's opinion has been widely criticized (another accessible critique is at https://www.washingtonpost.com/amphtml/news/wonk/wp/2018/06/15/how-judge-leon-blew-it-with-u-s-v-att/), but it seems fair to say that Judge Leon's opinion reflects a decades old judicial tradition that treats "vertical" mergers -- joining companies at different levels of distribution -- as unlikely to be an antitrust problem.
There is obviously a clash between the judicial tradition that is permissive to vertical mergers and the Brandeisian view urged by Tim Wu. Because of that clash, Tim Wu suggests that reconciliation requires Congressional action.
But it seems unlikely that a Congress that doesn't do much will take up Tim Wu's action proposal any time soon.
In the meanwhile, there are issues to wrestle with for lawyers and economists who earn their living as courtroom antitrust advocates. First, should courtroom advocates join Tim Wu in in supporting broad legal restraints against "aggregation of wealth in the top echelons." Many do not. To the extent that courtroom advocates agree with Tim Wu, they would need to deal with his observation that the courts generally get vertical cases wrong. To Tim Wu, getting it wrong may mean rejecting broad legal restraints against corporate behemoths. Court precedent broadly approving vertical mergers reduces the leeway for advocates successfully arguing against vertical mergers in court.
Can Tim Wu's "big is bad" thinking ever be reconciled with courtroom legal precedent in vertical cases, without recourse to Congress? Maybe yes, to some extent, if antitrust advocates can argue within the leeway allowed by legal precedent for judicially manageable legal standards that are less permissive toward vertical mergers.
--Don Allen Resnikoff
The text of the NY AG lawsuit against the Trump Foundation is here:
https://int.nyt.com/data/documenthelper/38-lawsuit-against-the-trump-foundation/5e54a6bfd23e7b94fbad/optimized/full.pdf#page=1
The AG's concern about the Foundation and its Board includes extensive
political activity, repeated and willful self-dealing transactions, and failure to follow basic
fiduciary obligations or to implement even elementary corporate formalities required by law.
DAR
Excerpt from the Complaint:
PRELIMINARY STATEMENT
1. For more than a decade, the Donald J. Trump Foundation has operated in
persistent violation of state and federal law governing New York State charities. This pattern of
illegal conduct by the Foundation and its board members includes improper and extensive
political activity, repeated and willful self-dealing transactions, and failure to follow basic
fiduciary obligations or to implement even elementary corporate formalities required by law.
The Attorney General therefore brings this special proceeding to dissolve the Foundation for its
persistently illegal conduct, enjoin its board members from future service as a director of any
not-for-profit authorized by New York law, to obtain restitution and penalties, and to direct the
Foundation to cooperate with the Attorney General in the lawful distribution of its remaining
assets to qualified charitable entities.
2. In June 2016, the Attorney General began an investigation (the "Investigation") of
the Donald J. Trump Foundation (the "Foundation") "Foundation"
pursuant to the New York Not-for Profit Corporation Law ("N-PCL"), the New York Estates, Powers and Trusts Law ("EPTL"), the New
York Executive Law, and other applicable law governing New York State charities. The
Investigation found that the Foundation operated without any oversight by a functioning board of
directors. Decisions concerning the administration of the charitable assets entrusted to the care
of the Foundation were made without adequate consideration or oversight, and resulted in the
misuse of charitable assets for the benefit of Donald J. Trump ("Mr. Trump"
and his personal, political and/or business interests. In sum, the Investigation revealed that the Foundation was
little more than a checkbook for payments to not-for-profits from Mr. Trump or the Trump
Organization. This resulted in multiple violations of state and federal law because payments
were made using Foundation money regardless of the purpose of the payment. Mr. Trump used
charitable assets to pay off the legal obligations of entities he controlled, to promote Trump
hotels, to purchase personal items, and to support his presidential election campaign.
3. As set forth below, the Foundation and its directors and officers violated multiple
sections of the N-PCL, the EPTL, and the Executive Law, including provisions that prohibit
foundations from making false statements in filings with the Attorney General, engaging in self
dealing, wasting charitable assets, or violating the Internal Revenue Code by, among other
things, making expenditures to influence the outcome of an election. The Foundation's directors
failed to meet basic fiduciary duties and abdicated all responsibility for ensuring that the
Foundation's assets were used in compliance with the law. The violations that resulted were
significant and not only ran afoul of the applicable provisions of the N-PCL, the EPTL, and the
Executive Law, but also resulted in the Foundation failing to comply with the terms of its own
certificate of incorporation.
4. As a result of these persistent violations of law by the Respondents, the Attomey
General brings this special proceeding to dissolve the Foundation pursuant to Article 11 of the
N-PCL and New York Civil Practice Law and Rules ("CPLR") Article 4. In addition, pursuant
to the N-PCL, EPTL, Executive Law and CPLR Article 4, the Attorney General seeks an order
(i) directing Mr. Trump, Donald J. Trump, Jr., Ivanka Trump, and Eric Trump (together, the
"Individual Respondents") to make restitution and pay all penalties resulting from the breach of
fiduciary duties and their misuse of charitable assets for the benefit of Mr. Trump and his
interests; (ii) enjoining Mr. Trump from future service as an officer, director or trustee, or in any
other capacity as a fiduciary of any not-for-profit or charitable organization incorporated or
authorized to conduct business in the State of New York, or which solicits charitable donations
in the State of New York for a period of ten years, and enjoining the remaining Individual
Respondents from future service as an officer, director or trustee, or in any other capacity as a
fiduciary of any not-for-profit or charitable organization incorporated or authorized to conduct
business in the State of New York, or which solicits charitable donations in the State of New
York for a period of one year, subject to suspension in the event the remaining Individual
Respondents undergo adequate training on the fiduciary duties of directors of not-for-profit
corporations; (iii) directing Mr. Trump to pay an amount up to double the amount of benefits
improperly obtained through related party transactions entered into after July 1, 2014; (iv)
declaring that the Foundation has conducted its business in a persistently illegal manner and has
abused its powers contrary to the public policy of this state; (v) directing the Foundation to
cooperate with the Attorney General in the distribution of remaining assets to qualified charities;
(vi) restraining the Foundation, except by permission of the court, from exercising any corporate
powers; (vii) dissolving the Foundation; and (viii) granting such other and further relief as the
Court may deem just and proper.
FILED: NEW YORK COUNTY CLERK 06/14/2018 09:58 AM INDEX NO. 451130/2018 NYSCEF DOC. NO. 1 RECEIVED NYSCEF: 06/14/2018
3 of 41
https://int.nyt.com/data/documenthelper/38-lawsuit-against-the-trump-foundation/5e54a6bfd23e7b94fbad/optimized/full.pdf#page=1
The AG's concern about the Foundation and its Board includes extensive
political activity, repeated and willful self-dealing transactions, and failure to follow basic
fiduciary obligations or to implement even elementary corporate formalities required by law.
DAR
Excerpt from the Complaint:
PRELIMINARY STATEMENT
1. For more than a decade, the Donald J. Trump Foundation has operated in
persistent violation of state and federal law governing New York State charities. This pattern of
illegal conduct by the Foundation and its board members includes improper and extensive
political activity, repeated and willful self-dealing transactions, and failure to follow basic
fiduciary obligations or to implement even elementary corporate formalities required by law.
The Attorney General therefore brings this special proceeding to dissolve the Foundation for its
persistently illegal conduct, enjoin its board members from future service as a director of any
not-for-profit authorized by New York law, to obtain restitution and penalties, and to direct the
Foundation to cooperate with the Attorney General in the lawful distribution of its remaining
assets to qualified charitable entities.
2. In June 2016, the Attorney General began an investigation (the "Investigation") of
the Donald J. Trump Foundation (the "Foundation") "Foundation"
pursuant to the New York Not-for Profit Corporation Law ("N-PCL"), the New York Estates, Powers and Trusts Law ("EPTL"), the New
York Executive Law, and other applicable law governing New York State charities. The
Investigation found that the Foundation operated without any oversight by a functioning board of
directors. Decisions concerning the administration of the charitable assets entrusted to the care
of the Foundation were made without adequate consideration or oversight, and resulted in the
misuse of charitable assets for the benefit of Donald J. Trump ("Mr. Trump"
and his personal, political and/or business interests. In sum, the Investigation revealed that the Foundation was
little more than a checkbook for payments to not-for-profits from Mr. Trump or the Trump
Organization. This resulted in multiple violations of state and federal law because payments
were made using Foundation money regardless of the purpose of the payment. Mr. Trump used
charitable assets to pay off the legal obligations of entities he controlled, to promote Trump
hotels, to purchase personal items, and to support his presidential election campaign.
3. As set forth below, the Foundation and its directors and officers violated multiple
sections of the N-PCL, the EPTL, and the Executive Law, including provisions that prohibit
foundations from making false statements in filings with the Attorney General, engaging in self
dealing, wasting charitable assets, or violating the Internal Revenue Code by, among other
things, making expenditures to influence the outcome of an election. The Foundation's directors
failed to meet basic fiduciary duties and abdicated all responsibility for ensuring that the
Foundation's assets were used in compliance with the law. The violations that resulted were
significant and not only ran afoul of the applicable provisions of the N-PCL, the EPTL, and the
Executive Law, but also resulted in the Foundation failing to comply with the terms of its own
certificate of incorporation.
4. As a result of these persistent violations of law by the Respondents, the Attomey
General brings this special proceeding to dissolve the Foundation pursuant to Article 11 of the
N-PCL and New York Civil Practice Law and Rules ("CPLR") Article 4. In addition, pursuant
to the N-PCL, EPTL, Executive Law and CPLR Article 4, the Attorney General seeks an order
(i) directing Mr. Trump, Donald J. Trump, Jr., Ivanka Trump, and Eric Trump (together, the
"Individual Respondents") to make restitution and pay all penalties resulting from the breach of
fiduciary duties and their misuse of charitable assets for the benefit of Mr. Trump and his
interests; (ii) enjoining Mr. Trump from future service as an officer, director or trustee, or in any
other capacity as a fiduciary of any not-for-profit or charitable organization incorporated or
authorized to conduct business in the State of New York, or which solicits charitable donations
in the State of New York for a period of ten years, and enjoining the remaining Individual
Respondents from future service as an officer, director or trustee, or in any other capacity as a
fiduciary of any not-for-profit or charitable organization incorporated or authorized to conduct
business in the State of New York, or which solicits charitable donations in the State of New
York for a period of one year, subject to suspension in the event the remaining Individual
Respondents undergo adequate training on the fiduciary duties of directors of not-for-profit
corporations; (iii) directing Mr. Trump to pay an amount up to double the amount of benefits
improperly obtained through related party transactions entered into after July 1, 2014; (iv)
declaring that the Foundation has conducted its business in a persistently illegal manner and has
abused its powers contrary to the public policy of this state; (v) directing the Foundation to
cooperate with the Attorney General in the distribution of remaining assets to qualified charities;
(vi) restraining the Foundation, except by permission of the court, from exercising any corporate
powers; (vii) dissolving the Foundation; and (viii) granting such other and further relief as the
Court may deem just and proper.
FILED: NEW YORK COUNTY CLERK 06/14/2018 09:58 AM INDEX NO. 451130/2018 NYSCEF DOC. NO. 1 RECEIVED NYSCEF: 06/14/2018
3 of 41
From the NYT: Have patients been misled about the dangers of LASIK surgery?
Nearly half of all people who had healthy eyes before Lasik developed visual aberrations for the first time after the procedure, a recent FDA trial found. Nearly one-third developed dry eyes, a complication that can cause serious discomfort, for the first time.
The authors wrote that “patients undergoing Lasik surgery should be adequately counseled about the possibility of developing new visual symptoms after surgery before undergoing this elective procedure.”
Lack of precise information about complications is a problem that plagues many medical devices, which are tested by manufacturers and often gain F.D.A. approval before long-term outcomes are known, said Diana Zuckerman, president of the nonprofit National Center for Health Research in Washington.
Patients’ vision may regress after surgery, and they may need to use eyeglasses at times, some concede. But most Lasik surgeons maintain that soreness, dry eyes, double vision and other visual aberrations like those suffered by Mr. Ramirez subside within months for most patients.
Surgeons frequently point to the procedure’s popularity as evidence of its success: Lasik was performed on some 700,000 eyes last year, up from 628,724 in 2016, according to Market Scope, a market research company that focuses on the ophthalmic industry.
Dr. Donnenfeld wrote a frequently cited 2016 review paper that reported the vast majority of Lasik patients were satisfied. He counsels patients that symptoms like halos and excessive glare may get worse in the short term but improve over time, except in the “rare patient.”
Yet few studies have followed patients for more than a few months or a year, and many are authored by surgeons with financial ties to manufacturers that make the lasers.
One such study, written by the global medical director for a large laser eye-surgery provider, reported high satisfaction rates among patients five years after Lasik.
But the study also found that even after all those years, nearly half had dry eyes at least some of the time. Twenty percent had painful or sore eyes, 40 percent were sensitive to light, and one-third had difficulty driving at night or doing work that required seeing well up close.
A similar percentage experienced “severe or worse” glare, halos and problems driving at night.
Lasik surgeons say the procedure has improved over time, and one surgeon’s 2017 analysis of more recent data submitted to the F.D.A. by manufacturers concluded that for many patients, visual problems eventually resolved.
Still, a year after surgery, the percentage of the roughly 350 patients who had mild difficulties driving at night had increased slightly to 20 percent, while the percentage with mild glare and halos had more than doubled to about 20 percent in each category. The percentage with mild dryness more than doubled to 40 percent.
Now a vocal cadre of patient advocates is demanding the agency issue strong public warnings about Lasik.
The group is led by Morris Waxler, a retired senior F.D.A. official who regrets the role he played in Lasik’s approval over 20 years ago, and Paula Cofer, a patient-turned-advocate who says Lasik destroyed her eyesight and left her with chronic pain.
Ms. Cofer now runs a website, lasikcomplications.com, that features blog posts like “Top 10 Reasons Not to Have Lasik Surgery” and is dedicated to two men who committed suicide after suffering Lasik complications, including Max Burleson Cronin, a 27-year-old veteran.
The preceding is a series of excerpts from the full article, which is at https://www.nytimes.com/2018/06/11/well/lasik-complications-vision.html
Nearly half of all people who had healthy eyes before Lasik developed visual aberrations for the first time after the procedure, a recent FDA trial found. Nearly one-third developed dry eyes, a complication that can cause serious discomfort, for the first time.
The authors wrote that “patients undergoing Lasik surgery should be adequately counseled about the possibility of developing new visual symptoms after surgery before undergoing this elective procedure.”
Lack of precise information about complications is a problem that plagues many medical devices, which are tested by manufacturers and often gain F.D.A. approval before long-term outcomes are known, said Diana Zuckerman, president of the nonprofit National Center for Health Research in Washington.
Patients’ vision may regress after surgery, and they may need to use eyeglasses at times, some concede. But most Lasik surgeons maintain that soreness, dry eyes, double vision and other visual aberrations like those suffered by Mr. Ramirez subside within months for most patients.
Surgeons frequently point to the procedure’s popularity as evidence of its success: Lasik was performed on some 700,000 eyes last year, up from 628,724 in 2016, according to Market Scope, a market research company that focuses on the ophthalmic industry.
Dr. Donnenfeld wrote a frequently cited 2016 review paper that reported the vast majority of Lasik patients were satisfied. He counsels patients that symptoms like halos and excessive glare may get worse in the short term but improve over time, except in the “rare patient.”
Yet few studies have followed patients for more than a few months or a year, and many are authored by surgeons with financial ties to manufacturers that make the lasers.
One such study, written by the global medical director for a large laser eye-surgery provider, reported high satisfaction rates among patients five years after Lasik.
But the study also found that even after all those years, nearly half had dry eyes at least some of the time. Twenty percent had painful or sore eyes, 40 percent were sensitive to light, and one-third had difficulty driving at night or doing work that required seeing well up close.
A similar percentage experienced “severe or worse” glare, halos and problems driving at night.
Lasik surgeons say the procedure has improved over time, and one surgeon’s 2017 analysis of more recent data submitted to the F.D.A. by manufacturers concluded that for many patients, visual problems eventually resolved.
Still, a year after surgery, the percentage of the roughly 350 patients who had mild difficulties driving at night had increased slightly to 20 percent, while the percentage with mild glare and halos had more than doubled to about 20 percent in each category. The percentage with mild dryness more than doubled to 40 percent.
Now a vocal cadre of patient advocates is demanding the agency issue strong public warnings about Lasik.
The group is led by Morris Waxler, a retired senior F.D.A. official who regrets the role he played in Lasik’s approval over 20 years ago, and Paula Cofer, a patient-turned-advocate who says Lasik destroyed her eyesight and left her with chronic pain.
Ms. Cofer now runs a website, lasikcomplications.com, that features blog posts like “Top 10 Reasons Not to Have Lasik Surgery” and is dedicated to two men who committed suicide after suffering Lasik complications, including Max Burleson Cronin, a 27-year-old veteran.
The preceding is a series of excerpts from the full article, which is at https://www.nytimes.com/2018/06/11/well/lasik-complications-vision.html
The SEC's fraud complaint against Theranos principals is here:
https://www.sec.gov/litigation/complaints/2018/comp-pr2018-41-theranos-holmes.pdf
Excerpt:
Plaintiff Securities and Exchange Commission (the “Commission”) alleges:
SUMMARY OF THE ACTION
1. This case involves the fraudulent offer and sale of securities by Theranos, Inc. (“Theranos”), a California company that aimed to revolutionize the diagnostics industry, its Chairman and Chief Executive Officer Elizabeth Holmes, and its former President and Chief Operating Officer, Ramesh “Sunny” Balwani. The Commission has filed a separate action against Balwani.
2. Holmes, Balwani, and Theranos raised more than $700 million from late 2013 to 2015 while deceiving investors by making it appear as if Theranos had successfully developed a commercially-ready portable blood analyzer that could perform a full range of laboratory tests from a small sample of blood. They deceived investors by, among other things, making false and misleading statements to the media, hosting misleading technology demonstrations, and overstating the extent of Theranos’ relationships with commercial partners and government entities, to whom they had also made misrepresentations.
3. Holmes, Balwani, and Theranos also made false or misleading statements to investors about many aspects of Theranos’ business, including the capabilities of its proprietary analyzers, its commercial relationships, its relationship with the Department of Defense (“DOD”), its regulatory status with the U.S. Food and Drug Administration (“FDA”), and its financial condition. These statements were made with the intent to deceive or with reckless disregard for the truth.
4. Investors believed, based on these representations, that Theranos had successfully developed a proprietary analyzer that was capable of conducting a comprehensive set of blood tests from a few drops of blood from a finger. From Holmes’ and Balwani’s representations, investors understood Theranos offered a suite of technologies to (1) collect and transport a fingerstick sample of blood, (2) place the sample on a special cartridge which could be inserted into (3) Theranos’ proprietary analyzer, which would generate the results that Theranos could transmit to the patient or care provider. According to Holmes and Balwani, Theranos’ technology could provide blood testing that was faster, cheaper, and more accurate than existing blood testing laboratories, all in one analyzer that could be used outside traditional laboratory settings.
5. At all times, however, Holmes, Balwani, and Theranos were aware that, in its clinical laboratory, Theranos’ proprietary analyzer performed only approximately 12 tests of the over 200 tests on Theranos’ published patient testing menu, and Theranos used third-party
commercially available analyzers, some of which Theranos had modified to analyze fingerstick samples, to process the remainder of its patient tests.
6. In this action, the Commission seeks an order enjoining Holmes and Theranos from future violations of the securities laws, requiring Holmes to pay a civil monetary penalty, prohibiting Holmes from acting as an officer or director of any publicly-listed company, requiring Holmes to return all of the shares she obtained during this period, requiring Holmes to relinquish super-majority voting shares she obtained during this period, and providing other appropriate relief.
https://www.sec.gov/litigation/complaints/2018/comp-pr2018-41-theranos-holmes.pdf
Excerpt:
Plaintiff Securities and Exchange Commission (the “Commission”) alleges:
SUMMARY OF THE ACTION
1. This case involves the fraudulent offer and sale of securities by Theranos, Inc. (“Theranos”), a California company that aimed to revolutionize the diagnostics industry, its Chairman and Chief Executive Officer Elizabeth Holmes, and its former President and Chief Operating Officer, Ramesh “Sunny” Balwani. The Commission has filed a separate action against Balwani.
2. Holmes, Balwani, and Theranos raised more than $700 million from late 2013 to 2015 while deceiving investors by making it appear as if Theranos had successfully developed a commercially-ready portable blood analyzer that could perform a full range of laboratory tests from a small sample of blood. They deceived investors by, among other things, making false and misleading statements to the media, hosting misleading technology demonstrations, and overstating the extent of Theranos’ relationships with commercial partners and government entities, to whom they had also made misrepresentations.
3. Holmes, Balwani, and Theranos also made false or misleading statements to investors about many aspects of Theranos’ business, including the capabilities of its proprietary analyzers, its commercial relationships, its relationship with the Department of Defense (“DOD”), its regulatory status with the U.S. Food and Drug Administration (“FDA”), and its financial condition. These statements were made with the intent to deceive or with reckless disregard for the truth.
4. Investors believed, based on these representations, that Theranos had successfully developed a proprietary analyzer that was capable of conducting a comprehensive set of blood tests from a few drops of blood from a finger. From Holmes’ and Balwani’s representations, investors understood Theranos offered a suite of technologies to (1) collect and transport a fingerstick sample of blood, (2) place the sample on a special cartridge which could be inserted into (3) Theranos’ proprietary analyzer, which would generate the results that Theranos could transmit to the patient or care provider. According to Holmes and Balwani, Theranos’ technology could provide blood testing that was faster, cheaper, and more accurate than existing blood testing laboratories, all in one analyzer that could be used outside traditional laboratory settings.
5. At all times, however, Holmes, Balwani, and Theranos were aware that, in its clinical laboratory, Theranos’ proprietary analyzer performed only approximately 12 tests of the over 200 tests on Theranos’ published patient testing menu, and Theranos used third-party
commercially available analyzers, some of which Theranos had modified to analyze fingerstick samples, to process the remainder of its patient tests.
6. In this action, the Commission seeks an order enjoining Holmes and Theranos from future violations of the securities laws, requiring Holmes to pay a civil monetary penalty, prohibiting Holmes from acting as an officer or director of any publicly-listed company, requiring Holmes to return all of the shares she obtained during this period, requiring Holmes to relinquish super-majority voting shares she obtained during this period, and providing other appropriate relief.
Karl A. Racine's May 12, 2017 Washington Post writing on violence in DC
Karl A. Racine is the D.C. attorney general.
With the District’s coffers brimming with excess revenue, our officials and community leaders must devise, fund and competently implement a comprehensive strategy to treat the trauma that hurts our city’s most vulnerable young residents and breeds the violence that affects us all — violence described in the April 23 front-page article “‘Did your father die?.’ ” That article depicted the experiences of 8-year-old Tyshaun McPhatter and heartbreakingly described parts of the nation’s capital as places where children live in fear.
At the Office of the Attorney General, we come into contact with kids such as Tyshaun every day. Based on that experience, there are three steps we can take quickly.
First, we must invest in proven, data-based methods to interrupt violence and address it as a public-health crisis. Shootings and other violence cause long-term damage to whole communities, hampering prospects of economic development, traumatizing children and trapping families inside their homes out of fear. While heightened law enforcement is necessary, it is not sufficient to turn around high-crime communities.
Models such as Cure Violence are proven. This model has three main components.
● Detect and interrupt potentially violent conflicts by preventing retaliation and mediating simmering disputes.
● Identify and treat individuals at the highest risk for conflict by providing services and changing behavior.
● Engage communities in changing norms around violence (for instance, organize community responses to every shooting to counter normalization).
Multiple studies have shown that, where implemented, Cure Violence results in reductions in shootings and violent confrontations. New Orleans went 200 days without a murder in its Cure Violence sites; Philadelphia saw significant reductions in shootings in Cure Violence areas compared with similar districts; and Baltimore’s Cure Violence sites saw fewer homicides. We must fund a Cure Violence-based program in the District.
Second, the District must invest in strategies to reduce and prevent childhood trauma at home. Ongoing trauma puts a child’s brain in a constant fight-or-flight state, making it hard for other parts of the brain to develop properly. Children experience difficulty paying attention. Untreated trauma can lead to school failure, higher dropout rates, and aggression and other risky behavior. According to the National Kids Count Data Center, for children in the District, rates of abuse and neglect — major contributors to childhood trauma — are higher than the national average. In neighborhoods such as Tyshaun’s, they are dramatically higher.
The District should invest in evidence-based parenting programs that have been proved to reduce rates of child abuse and neglect, such as Triple P (for “Positive Parenting Program”). Triple P draws on extensive social science research to help parents and has the strongest evidence base of any such program in the country. For instance, a Centers for Disease Control and Prevention-funded randomized study showed a reduction in child-abuse and foster-care rates in counties using Triple P compared with control locations. This is the kind of support that should be available to every District family that needs it.
Third, the District must invest more resources in programs and services that treat the effects of trauma before children make contact with the court system. Therapeutic early interventions, when instituted in a comprehensive manner, have improved public safety. For instance, since I took office, we have increased the rate at which we divert low-level juvenile offenders into the D.C. Department of Human Services’ Alternatives to the Court Experience (ACE) program. This program offers intensive services for six months, tailored to an individual child’s needs. Of the approximately 1,000 kids who have completed the ACE program, more than 80 percent have not been rearrested. That’s an extraordinary success rate in juvenile justice.
The same approach should be used to provide quality psychiatric services for children, increase trauma-informed practices for schools and provide other supports to children before they find themselves in trouble.
My colleagues and I do not pretend to have all the answers. But we owe it to our young people to give them what they need to become resilient, thriving, contributing members of our community. We must focus our resources to meet the crisis facing our children. No child in this city should have to face the fear that young Tyshaun and his peers face every day.
***
Editor's comment: AG Racine's comment reflects the view that violence is much more than a police problem -- an array of social interventions is required. DAR
Karl A. Racine is the D.C. attorney general.
With the District’s coffers brimming with excess revenue, our officials and community leaders must devise, fund and competently implement a comprehensive strategy to treat the trauma that hurts our city’s most vulnerable young residents and breeds the violence that affects us all — violence described in the April 23 front-page article “‘Did your father die?.’ ” That article depicted the experiences of 8-year-old Tyshaun McPhatter and heartbreakingly described parts of the nation’s capital as places where children live in fear.
At the Office of the Attorney General, we come into contact with kids such as Tyshaun every day. Based on that experience, there are three steps we can take quickly.
First, we must invest in proven, data-based methods to interrupt violence and address it as a public-health crisis. Shootings and other violence cause long-term damage to whole communities, hampering prospects of economic development, traumatizing children and trapping families inside their homes out of fear. While heightened law enforcement is necessary, it is not sufficient to turn around high-crime communities.
Models such as Cure Violence are proven. This model has three main components.
● Detect and interrupt potentially violent conflicts by preventing retaliation and mediating simmering disputes.
● Identify and treat individuals at the highest risk for conflict by providing services and changing behavior.
● Engage communities in changing norms around violence (for instance, organize community responses to every shooting to counter normalization).
Multiple studies have shown that, where implemented, Cure Violence results in reductions in shootings and violent confrontations. New Orleans went 200 days without a murder in its Cure Violence sites; Philadelphia saw significant reductions in shootings in Cure Violence areas compared with similar districts; and Baltimore’s Cure Violence sites saw fewer homicides. We must fund a Cure Violence-based program in the District.
Second, the District must invest in strategies to reduce and prevent childhood trauma at home. Ongoing trauma puts a child’s brain in a constant fight-or-flight state, making it hard for other parts of the brain to develop properly. Children experience difficulty paying attention. Untreated trauma can lead to school failure, higher dropout rates, and aggression and other risky behavior. According to the National Kids Count Data Center, for children in the District, rates of abuse and neglect — major contributors to childhood trauma — are higher than the national average. In neighborhoods such as Tyshaun’s, they are dramatically higher.
The District should invest in evidence-based parenting programs that have been proved to reduce rates of child abuse and neglect, such as Triple P (for “Positive Parenting Program”). Triple P draws on extensive social science research to help parents and has the strongest evidence base of any such program in the country. For instance, a Centers for Disease Control and Prevention-funded randomized study showed a reduction in child-abuse and foster-care rates in counties using Triple P compared with control locations. This is the kind of support that should be available to every District family that needs it.
Third, the District must invest more resources in programs and services that treat the effects of trauma before children make contact with the court system. Therapeutic early interventions, when instituted in a comprehensive manner, have improved public safety. For instance, since I took office, we have increased the rate at which we divert low-level juvenile offenders into the D.C. Department of Human Services’ Alternatives to the Court Experience (ACE) program. This program offers intensive services for six months, tailored to an individual child’s needs. Of the approximately 1,000 kids who have completed the ACE program, more than 80 percent have not been rearrested. That’s an extraordinary success rate in juvenile justice.
The same approach should be used to provide quality psychiatric services for children, increase trauma-informed practices for schools and provide other supports to children before they find themselves in trouble.
My colleagues and I do not pretend to have all the answers. But we owe it to our young people to give them what they need to become resilient, thriving, contributing members of our community. We must focus our resources to meet the crisis facing our children. No child in this city should have to face the fear that young Tyshaun and his peers face every day.
***
Editor's comment: AG Racine's comment reflects the view that violence is much more than a police problem -- an array of social interventions is required. DAR
Massachusetts joins ranks of states guaranteeing counsel in fees/fines cases
Massachusetts now provides a right to counsel in fees and fines cases thanks to SB 2371, which was signed by the Governor in April. This provision added ALM GL ch. 127, § 145(b), which specifies that “A court shall not commit a person to a correctional facility for non-payment of money owed if such a person is not represented by counsel for the commitment proceeding, unless such person has waived counsel. A person deemed indigent for the purpose of being offered counsel and who is assigned counsel for the commitment portion of a proceeding solely for the nonpayment of money owed shall not be assessed a fee for such counsel.” This is a big win on the fees/fines front, and we expect to see other similar bills in the coming years.
Credit: The National Coalition for a Civil Right to Counsel. The Coalition " is an association of individuals and organizations committed to ensuring meaningful access to the courts for all. Our mission is to encourage, support and coordinate advocacy to expand recognition and implementation of a right to counsel in civil cases."
--From AAI:
AAI SAYS THE PROPOSED SPRINT-T-MOBILE MERGER SHOULD BE "DOA AT THE DOJ"
JUNE 05 2018
DIANA MOSS
WHITE PAPERS
DOJ, IP AND INNOVATION, TECHNOLOGY AND COMMUNICATIONSNew analysis from the American Antitrust Institute (AAI) concludes that the proposed merger of U.S. wireless carriers Sprint and T-Mobile should not survive a first look by the U.S. Department of Justice (DOJ). AAI says the government should move to block the deal to protect competition and consumers.
In less than a decade, consolidation has restructured the national U.S. wireless market. In 2002, the market featured seven major wireless carriers. By 2009, the number of significant national rivals fell to four. A Sprint-T-Mobile deal would further reduce the number of rivals from four to three, stoking even higher concentration in the national U.S. wireless market and contributing to growing concerns over a broader systemic decline in competition, market entry, and equality in the U.S. economy.
If approved, the Sprint-T-Mobile merger deal would complete the roll-up of the national U.S. wireless market. The 4-3 merger would create an oligopoly that would promote the market “stabilization” that is coveted by large players that grow tired of the rough and tumble of competition and the disruptive rivals that pressure them to compete. At the same time, the deal would eliminate important head-to-head competition between Sprint and T-Mobile, the two disruptive wireless carriers in the U.S. Either way, the competition eliminated by the merger would likely result in higher prices, less choice, lower quality, and slower innovation—to the detriment of U.S. wireless subscribers.
AAI’s analysis explains that a government complaint seeking to enjoin the merger should be based on five straightforward arguments:
Download AAI Spring-T-Mobile Analysis -- http://www.antitrustinstitute.org/sites/default/files/AAI_Sprint-T-Mobile.pdf
AAI SAYS THE PROPOSED SPRINT-T-MOBILE MERGER SHOULD BE "DOA AT THE DOJ"
JUNE 05 2018
DIANA MOSS
WHITE PAPERS
DOJ, IP AND INNOVATION, TECHNOLOGY AND COMMUNICATIONSNew analysis from the American Antitrust Institute (AAI) concludes that the proposed merger of U.S. wireless carriers Sprint and T-Mobile should not survive a first look by the U.S. Department of Justice (DOJ). AAI says the government should move to block the deal to protect competition and consumers.
In less than a decade, consolidation has restructured the national U.S. wireless market. In 2002, the market featured seven major wireless carriers. By 2009, the number of significant national rivals fell to four. A Sprint-T-Mobile deal would further reduce the number of rivals from four to three, stoking even higher concentration in the national U.S. wireless market and contributing to growing concerns over a broader systemic decline in competition, market entry, and equality in the U.S. economy.
If approved, the Sprint-T-Mobile merger deal would complete the roll-up of the national U.S. wireless market. The 4-3 merger would create an oligopoly that would promote the market “stabilization” that is coveted by large players that grow tired of the rough and tumble of competition and the disruptive rivals that pressure them to compete. At the same time, the deal would eliminate important head-to-head competition between Sprint and T-Mobile, the two disruptive wireless carriers in the U.S. Either way, the competition eliminated by the merger would likely result in higher prices, less choice, lower quality, and slower innovation—to the detriment of U.S. wireless subscribers.
AAI’s analysis explains that a government complaint seeking to enjoin the merger should be based on five straightforward arguments:
- Sprint-T-Mobile is a highly concentrative merger that is presumed to be illegal under longstanding U.S. merger law. If allowed, it would virtually guarantee harm to competition and consumers through higher retail and wholesale prices, lower quality and variety, less choice, and slower innovation.
- By reducing the field of rivals from four to three, the deal is a textbook set-up for anticompetitive coordination between the remaining Big 3 carriers: Verizon, AT&T, and Sprint-T-Mobile. The merged firm would undoubtedly find that maintaining a competitive “peace” with its rivals would be more profitable than trying to gain market share by competing aggressively on price, quality, and innovation.
- Compelling economic evidence from consummated mergers and enforcement in the U.S., together with experience in wireless sectors in other countries, strongly supports concerns over the anticompetitive and anti-consumer effects of highly concentrative 4-3 mergers.
- The merger eliminates head-to-head competition between the two disruptive rivals in the national U.S. wireless market. The proposed AT&T-T-Mobile merger failed in large part because it eliminated T-Mobile as a disruptive competitor, or a “maverick.” Sprint also competes hard on price to woo consumers away from rival carriers. Such competition, and the benefits it delivers to consumers, would be lost by the merger.
- No claimed cost savings or consumer benefits from the merger outweigh the merger’s likely harmful effects. The major “efficiency” claimed by Sprint and T-Mobile—that they need the merger to roll out 5G network technology—is meritless. Indeed, the potential difficulties of integrating the different Sprint and T-Mobile networks could actually increase costs and create inefficiencies for consumers.
Download AAI Spring-T-Mobile Analysis -- http://www.antitrustinstitute.org/sites/default/files/AAI_Sprint-T-Mobile.pdf
The NYC "Right to Counsel" Bill for Landlord-Tenant Court
The New York Times recently ran a series focusing on lack of access to justice in NYC courts dealing with landlord-tenant issues: The Eviction Machine Churning Through New York City-- https://www.nytimes.com/interactive/2018/05/20/nyregion/nyc-affordable-housing.html
In a letter to the NYT editor, a writer said:
While the article mentions the right to counsel, it misses the strength and potential of this law that the tenant movement won. It is so much more than funding for free attorneys; the law emboldens tenants to organize and fight for their rights as the threat of eviction becomes less powerful. The knowledge that tenants have a right to an attorney will be a deterrent to landlords who would otherwise harass tenants, deny services and repairs or charge illegal rents.
What is the law the letter writer refers to? Here's language from an article that explains it:
The "Right to Counsel" bill, passed by the City Council in July [2017, signed into law in August], funds housing court lawyers for New Yorkers facing eviction or foreclosure who earn up to double the federal poverty line — $49,200 annually for a family of four.
Higher-income people will also get legal consultation, but will not be represented in court.
In 2015, almost 22,000 New Yorkers were evicted, according to City Councilman Mark Levine's office. Only about 20 percent of people facing eviction are represented by an attorney. The law aims to level the playing field in housing courts, which have long been criticized for exacerbating inequities between landlords and tenants.
"For too long unscrupulous landlords have used housing court as a weapon to push out tenants by hauling them into court, often on the flimsiest of eviction grounds, knowing that the other side would not have an attorney," said Levine, who co-sponsored the bill.
"The era of any New Yorker losing their home because they simply didn't have an attorney ends today, for tenants in private housing and tenants in public housing as well."
Prior to the passing of the law, [Mayor] de Blasio said, low-income tenants facing of evictions were defenseless and would end up in shelters costing the city money.
"For a long time when that eviction notice came it felt like the ballgame was over," de Blasio said, adding that people felt "powerless." That, he said, was about to change.
"God forbid anyone gets that notice. The next thing they're gonna do is they're gonna reach for their phone and they're gonna call 3-1-1 and they're gonna get a lawyer to defend them. It's gonna be as simple as that," de Blasio said.
Levine said New York leading is the way for similar legislation in other cities, including Washington, D.C., Chicago and Philadelphia. De Blasio said the bill will impact hundreds of thousands of people.
Article cite: https://www.dnainfo.com/new-york/20170811/concourse/right-to-counsel-bill-law/
The New York Times recently ran a series focusing on lack of access to justice in NYC courts dealing with landlord-tenant issues: The Eviction Machine Churning Through New York City-- https://www.nytimes.com/interactive/2018/05/20/nyregion/nyc-affordable-housing.html
In a letter to the NYT editor, a writer said:
While the article mentions the right to counsel, it misses the strength and potential of this law that the tenant movement won. It is so much more than funding for free attorneys; the law emboldens tenants to organize and fight for their rights as the threat of eviction becomes less powerful. The knowledge that tenants have a right to an attorney will be a deterrent to landlords who would otherwise harass tenants, deny services and repairs or charge illegal rents.
What is the law the letter writer refers to? Here's language from an article that explains it:
The "Right to Counsel" bill, passed by the City Council in July [2017, signed into law in August], funds housing court lawyers for New Yorkers facing eviction or foreclosure who earn up to double the federal poverty line — $49,200 annually for a family of four.
Higher-income people will also get legal consultation, but will not be represented in court.
In 2015, almost 22,000 New Yorkers were evicted, according to City Councilman Mark Levine's office. Only about 20 percent of people facing eviction are represented by an attorney. The law aims to level the playing field in housing courts, which have long been criticized for exacerbating inequities between landlords and tenants.
"For too long unscrupulous landlords have used housing court as a weapon to push out tenants by hauling them into court, often on the flimsiest of eviction grounds, knowing that the other side would not have an attorney," said Levine, who co-sponsored the bill.
"The era of any New Yorker losing their home because they simply didn't have an attorney ends today, for tenants in private housing and tenants in public housing as well."
Prior to the passing of the law, [Mayor] de Blasio said, low-income tenants facing of evictions were defenseless and would end up in shelters costing the city money.
"For a long time when that eviction notice came it felt like the ballgame was over," de Blasio said, adding that people felt "powerless." That, he said, was about to change.
"God forbid anyone gets that notice. The next thing they're gonna do is they're gonna reach for their phone and they're gonna call 3-1-1 and they're gonna get a lawyer to defend them. It's gonna be as simple as that," de Blasio said.
Levine said New York leading is the way for similar legislation in other cities, including Washington, D.C., Chicago and Philadelphia. De Blasio said the bill will impact hundreds of thousands of people.
Article cite: https://www.dnainfo.com/new-york/20170811/concourse/right-to-counsel-bill-law/
Good News for Consumers: Free Credit Freezes - Consumer Reports
see https://www.consumerreports.org/credit-protection.../credit-freezes-are-now-free/
Article excerpts:
Credit reporting companies such as Equifax, Experian, and TransUnion will soon be required to let consumers freeze and unfreeze their credit files free of charge.
The provision is part of a bipartisan bill signed Thursday by President Donald Trump that rolls back certain Dodd-Frank financial rules that Congress approved after the 2008 financial crisis.
Currently, consumers could pay up to $10 to freeze their credit reports, depending on where they live. The new rules take effect in 120 days.
Along with the free credit freezes are some other benefits. Consumers now have the right to place a fraud alert on their credit file at no cost for one year—up from 90 days currently.
If you do that, businesses will be required to take steps to verify your identity before extending new credit, providing you with extra protection but possibly delaying the amount of time it takes for you to get a new credit card, say, or be approved for a mortgage. In addition, victims of identity theft are entitled to an extended fraud alert lasting seven years.
Each credit reporting agency will also be required to create a web page that allows consumers to request security freezes and fraud alerts, and opt out of the use of their information by companies marketing credit or insurance products.
“The new law has strengths and weaknesses regarding credit freezes,” says Anna Laitin, director of financial policy at Consumers Union, the advocacy division of Consumer Reports. “It would enable individuals across the country to freeze and unfreeze their credit at no cost, a right that consumers in only a few states now have. However, it also preempts the ability of states to provide greater protections to consumers. States have been the innovators on credit freezes, and this legislation would stop that innovation in its tracks.”
Laitin points to recent legislation in California that would make it so that if a consumer freezes his or her credit report at one of the main credit reporting agencies, it would be frozen at the others as well, creating a one-stop shop for consumers seeking to implement a credit freeze.
see https://www.consumerreports.org/credit-protection.../credit-freezes-are-now-free/
Article excerpts:
Credit reporting companies such as Equifax, Experian, and TransUnion will soon be required to let consumers freeze and unfreeze their credit files free of charge.
The provision is part of a bipartisan bill signed Thursday by President Donald Trump that rolls back certain Dodd-Frank financial rules that Congress approved after the 2008 financial crisis.
Currently, consumers could pay up to $10 to freeze their credit reports, depending on where they live. The new rules take effect in 120 days.
Along with the free credit freezes are some other benefits. Consumers now have the right to place a fraud alert on their credit file at no cost for one year—up from 90 days currently.
If you do that, businesses will be required to take steps to verify your identity before extending new credit, providing you with extra protection but possibly delaying the amount of time it takes for you to get a new credit card, say, or be approved for a mortgage. In addition, victims of identity theft are entitled to an extended fraud alert lasting seven years.
Each credit reporting agency will also be required to create a web page that allows consumers to request security freezes and fraud alerts, and opt out of the use of their information by companies marketing credit or insurance products.
“The new law has strengths and weaknesses regarding credit freezes,” says Anna Laitin, director of financial policy at Consumers Union, the advocacy division of Consumer Reports. “It would enable individuals across the country to freeze and unfreeze their credit at no cost, a right that consumers in only a few states now have. However, it also preempts the ability of states to provide greater protections to consumers. States have been the innovators on credit freezes, and this legislation would stop that innovation in its tracks.”
Laitin points to recent legislation in California that would make it so that if a consumer freezes his or her credit report at one of the main credit reporting agencies, it would be frozen at the others as well, creating a one-stop shop for consumers seeking to implement a credit freeze.
The DC judiciary on access to justice for all
The District of Columbia is fortunate that the DC Bar and DC’s judiciary are dedicated to the goal of access to justice for all. That includes the poor. But there will always be challenges to achieving that goal. The DC Court’s website says:
The Courts have a responsibility to eliminate barriers to meaningful participation in the judicial process and to accessing court services. Such barriers may include a lack of legal representation, limited literacy or limited English language skills, limited financial resources, and physical or mental disability. In collaboration with justice and community partners, the Courts will work to ensure full access to the justice system and court services.
With regard to legal assistance, the Court’s site says:
The Courts provide legal representation for eligible indigent defendants in criminal cases at the trial and appellate levels and to parents in child abuse and neglect matters. There is an urgent need for legal assistance for parties in our Courts who cannot afford legal representation for many types of civil disputes or appeals. In 2017, the Courts sought and received legislative authority to raise the monetary limit for matters that can be brought to small claims court, from $5,000 to $10,000, which will bring some needed relief to these residents. In addition, the Courts will continue to partner with the DC Bar, law firms and other local organizations to identify unmet needs for legal assistance and to expand the availability of free, pro bono or low-cost civil legal assistance in the District.
With regard to unrepresented litigants, the Court’s site says:
Many of the District’s residents who cannot afford an attorney must represent themselves in court, often against an opposing party with legal representation. Additionally, an increasing number of individuals who may be able to afford counsel are choosing to represent themselves. In partnership with the DC Bar, legal services providers and organizations, the Courts have created self-help centers where such litigants can obtain information and assistance in representing themselves. The Courts will continue to expand the availability of assistance and information at the self-help centers and resource centers. The Courts will expand the electronic filing program to enable self-represented litigants to file cases and documents online, saving time and costs incurred to visit the courthouse. The Courts will also develop informational videos and self-guided materials on key court processes and post them on the Courts’ website and electronic monitors in court buildings. Continuing efforts will be made to ensure that all court forms and documents are in plain language.
The Court recognizes the challenges of bringing justice to people of limited means. These challenges affect many lawyers, not just those who provide legal services to the poor. For example, attorneys in litigation where the opposing party is unrepresented may be challenged by an adversary who is ill-prepared for litigation but very angry. Of course, the unpresented litigant can be a challenge to the presiding judge.
The relevant DC Court website URL is https://www.dccourts.gov/about/organizational-performance/goal1
Posting by Don Allen Resnikoff
The District of Columbia is fortunate that the DC Bar and DC’s judiciary are dedicated to the goal of access to justice for all. That includes the poor. But there will always be challenges to achieving that goal. The DC Court’s website says:
The Courts have a responsibility to eliminate barriers to meaningful participation in the judicial process and to accessing court services. Such barriers may include a lack of legal representation, limited literacy or limited English language skills, limited financial resources, and physical or mental disability. In collaboration with justice and community partners, the Courts will work to ensure full access to the justice system and court services.
With regard to legal assistance, the Court’s site says:
The Courts provide legal representation for eligible indigent defendants in criminal cases at the trial and appellate levels and to parents in child abuse and neglect matters. There is an urgent need for legal assistance for parties in our Courts who cannot afford legal representation for many types of civil disputes or appeals. In 2017, the Courts sought and received legislative authority to raise the monetary limit for matters that can be brought to small claims court, from $5,000 to $10,000, which will bring some needed relief to these residents. In addition, the Courts will continue to partner with the DC Bar, law firms and other local organizations to identify unmet needs for legal assistance and to expand the availability of free, pro bono or low-cost civil legal assistance in the District.
With regard to unrepresented litigants, the Court’s site says:
Many of the District’s residents who cannot afford an attorney must represent themselves in court, often against an opposing party with legal representation. Additionally, an increasing number of individuals who may be able to afford counsel are choosing to represent themselves. In partnership with the DC Bar, legal services providers and organizations, the Courts have created self-help centers where such litigants can obtain information and assistance in representing themselves. The Courts will continue to expand the availability of assistance and information at the self-help centers and resource centers. The Courts will expand the electronic filing program to enable self-represented litigants to file cases and documents online, saving time and costs incurred to visit the courthouse. The Courts will also develop informational videos and self-guided materials on key court processes and post them on the Courts’ website and electronic monitors in court buildings. Continuing efforts will be made to ensure that all court forms and documents are in plain language.
The Court recognizes the challenges of bringing justice to people of limited means. These challenges affect many lawyers, not just those who provide legal services to the poor. For example, attorneys in litigation where the opposing party is unrepresented may be challenged by an adversary who is ill-prepared for litigation but very angry. Of course, the unpresented litigant can be a challenge to the presiding judge.
The relevant DC Court website URL is https://www.dccourts.gov/about/organizational-performance/goal1
Posting by Don Allen Resnikoff
Oncotype DX, a genetic test first marketed in 2004, will now be used to spare "intermediate risk" breast cancer patients from chemotherapy
Oncotype DX [URL http://www.oncotypeiq.com/en-US] first hit the market in 2004. The genomic test measures the expression of 21 genes in tumor tissue removed at the time of surgery and predicts risk of recurrence on a scale of 0 to 100.
Earlier research [URL https://www.nejm.org/doi/full/10.1056/NEJMoa1510764?query=recirc_curatedRelated_article] found that a patient with a high-risk case, or score of 26-100, would benefit from chemotherapy, while a patient at the lower end with a score of 10 and under would not. This left a lot of women, an estimated 65,000 in the U.S. each year, in a gray zone, unsure if they would benefit from chemo.
A new study, published Sunday in the New England Journal of Medicine,[URL http://dx.doi.org/10.1056/NEJMoa1804710] finds that patients who fall in the intermediate risk zone do as well with hormone therapy alone as with chemo plus hormone therapy after surgery. "[The findings] are both important and significant, and also practice-changing," says, Dr. José Baselga, a medical oncologist and physician in chief at Memorial Sloan Kettering Cancer Center in New York, who was not involved with this research. "Basically, it's going to spare a lot of unnecessary chemotherapy in patients with breast cancer."
Source: https://www.npr.org/sections/health-shots/2018/06/03/616298863/for-some-breast-cancer-patients-the-chemo-decision-just-got-easier
Oncotype DX [URL http://www.oncotypeiq.com/en-US] first hit the market in 2004. The genomic test measures the expression of 21 genes in tumor tissue removed at the time of surgery and predicts risk of recurrence on a scale of 0 to 100.
Earlier research [URL https://www.nejm.org/doi/full/10.1056/NEJMoa1510764?query=recirc_curatedRelated_article] found that a patient with a high-risk case, or score of 26-100, would benefit from chemotherapy, while a patient at the lower end with a score of 10 and under would not. This left a lot of women, an estimated 65,000 in the U.S. each year, in a gray zone, unsure if they would benefit from chemo.
A new study, published Sunday in the New England Journal of Medicine,[URL http://dx.doi.org/10.1056/NEJMoa1804710] finds that patients who fall in the intermediate risk zone do as well with hormone therapy alone as with chemo plus hormone therapy after surgery. "[The findings] are both important and significant, and also practice-changing," says, Dr. José Baselga, a medical oncologist and physician in chief at Memorial Sloan Kettering Cancer Center in New York, who was not involved with this research. "Basically, it's going to spare a lot of unnecessary chemotherapy in patients with breast cancer."
Source: https://www.npr.org/sections/health-shots/2018/06/03/616298863/for-some-breast-cancer-patients-the-chemo-decision-just-got-easier
The Trump Administration's leaked memo preserving unprofitable coal and nuclear power plants-- see it here: https://www.documentcloud.org/documents/4491203-Grid-Memo.html
The rationale is that coal and nuclear power plants are more stable than natural gas plants, because the fuel source is on site. That aids national security.
The rationale is that coal and nuclear power plants are more stable than natural gas plants, because the fuel source is on site. That aids national security.
Pending and recent federal and state government investigations and actions regarding for-profit colleges
Compiled by David Halperin, Attorney, Washington DC
UPDATED 05-23-18
This is a list of pending and recent significant federal and state civil and criminal law enforcement investigations of, and actions against, for-profit colleges. It also includes some major investigations and disciplinary actions by the U.S. Department of Education and Department of Defense. It does not include investigations or disciplinary actions by state education oversight boards. It also does not include (except for False Claims Act cases that resulted in payments to the United States) lawsuits prosecuted only by private parties — students, staff, etc.
To date, 37 state attorneys general [link: http://migration.kentucky.gov/newsroom/ag/conwaydurbin.htm ] are participating in a joint working group examining for-profit colleges. Many of those are actively investigating specific for-profit colleges in their states.
Some of the most-investigated for-profit colleges have now converted to non-profit status or are in the process of doing so, often through troubling transactions and arrangements. Schools will remain on this list, for-profit or not, if they have engaged in troubling behavior.
Please send corrections, additions, updates, and comments to tips@RepublicReport.org
Mr. Halperin's list is here: https://www.republicreport.org/2014/law-enforcement-for-profit-colleges/
Compiled by David Halperin, Attorney, Washington DC
UPDATED 05-23-18
This is a list of pending and recent significant federal and state civil and criminal law enforcement investigations of, and actions against, for-profit colleges. It also includes some major investigations and disciplinary actions by the U.S. Department of Education and Department of Defense. It does not include investigations or disciplinary actions by state education oversight boards. It also does not include (except for False Claims Act cases that resulted in payments to the United States) lawsuits prosecuted only by private parties — students, staff, etc.
To date, 37 state attorneys general [link: http://migration.kentucky.gov/newsroom/ag/conwaydurbin.htm ] are participating in a joint working group examining for-profit colleges. Many of those are actively investigating specific for-profit colleges in their states.
Some of the most-investigated for-profit colleges have now converted to non-profit status or are in the process of doing so, often through troubling transactions and arrangements. Schools will remain on this list, for-profit or not, if they have engaged in troubling behavior.
Please send corrections, additions, updates, and comments to tips@RepublicReport.org
Mr. Halperin's list is here: https://www.republicreport.org/2014/law-enforcement-for-profit-colleges/
Trump orders facilitating firing of federal employess are a threat to democracy, union says.
White House directives aim to strip federal workers of right to representation
NEWS PROVIDED BY
American Federation of Government Employees May 25, 2018, 16:49 ET
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"This is more than union busting – it's democracy busting," AFGE National President J. David Cox Sr.said. "These executive orders are a direct assault on the legal rights and protections that Congress has specifically guaranteed to the 2 million public-sector employees across the country who work for the federal government."
"Our government is built on a system of checks and balances to prevent any one person from having too much influence. President Trump's executive orders will undo all of that. This administration seems hellbent on replacing a civil service that works for all taxpayers with a political service that serves at its whim."
"Federal employees swear an oath to serve this country. The American people rightly expect that federal employees go to work every day and do the jobs they were hired to do – whether it's ensuring our food is safe to eat, caring for veterans who were injured while serving their country, preventing illegal weapons and drugs from crossing our borders, or helping communities recover from hurricanes and other disasters."
"President Trump's executive orders do nothing to help federal workers do their jobs better. In fact, they do the opposite by depriving workers of their rights to address and resolve workplace issues such as sexual harassment, racial discrimination, retaliation against whistleblowers, improving workplace health and safety, enforcing reasonable accommodations for workers with disabilities, and so much more."
"These executive orders strip agencies of their right to bargain terms and conditions of employment and replace it with a politically charged scheme to fire employees without due process," Cox said.
AFGE representatives have used official time in myriad ways that benefit taxpayers, including to:
"It's a policy that has saved taxpayers in the long run because it helps resolve isolated conflicts that arise in the workplace before they become costly, agency-wide problems. And contrary to some reports, official time is never used to conduct union-specific business, solicit members, hold internal union meetings, elect union officers, or engage in partisan political activities."
"By preventing problem solving, these executive orders will create inefficiencies and hinder the ability of dedicated federal employees to effectively deliver services to the American public."
The American Federation of Government Employees (AFGE) is the largest federal employee union, representing 700,000 workers in the federal government and the government of the District of Columbia.
For the latest AFGE news and information, visit the AFGE Media Center. Follow us on Facebook, Twitter, and YouTube.
SOURCE American Federation of Government Employees
Related Linkshttp://www.afge.org
White House directives aim to strip federal workers of right to representation
NEWS PROVIDED BY
American Federation of Government Employees May 25, 2018, 16:49 ET
SHARE THIS ARTICLE
"This is more than union busting – it's democracy busting," AFGE National President J. David Cox Sr.said. "These executive orders are a direct assault on the legal rights and protections that Congress has specifically guaranteed to the 2 million public-sector employees across the country who work for the federal government."
"Our government is built on a system of checks and balances to prevent any one person from having too much influence. President Trump's executive orders will undo all of that. This administration seems hellbent on replacing a civil service that works for all taxpayers with a political service that serves at its whim."
"Federal employees swear an oath to serve this country. The American people rightly expect that federal employees go to work every day and do the jobs they were hired to do – whether it's ensuring our food is safe to eat, caring for veterans who were injured while serving their country, preventing illegal weapons and drugs from crossing our borders, or helping communities recover from hurricanes and other disasters."
"President Trump's executive orders do nothing to help federal workers do their jobs better. In fact, they do the opposite by depriving workers of their rights to address and resolve workplace issues such as sexual harassment, racial discrimination, retaliation against whistleblowers, improving workplace health and safety, enforcing reasonable accommodations for workers with disabilities, and so much more."
"These executive orders strip agencies of their right to bargain terms and conditions of employment and replace it with a politically charged scheme to fire employees without due process," Cox said.
AFGE representatives have used official time in myriad ways that benefit taxpayers, including to:
- Blow the whistle on management's attempt to cover up an outbreak of Legionnaires disease that killed and sickened veterans in Pittsburgh;
- Address an incident in which a noose was placed on the chair of an African-American worker at the U.S. Mint in Philadelphia;
- Mitigate the impact of Army downsizing on employees and their families;
- Expedite the processing of benefits to veterans and their survivors; and
- Successfully negotiate equipping federal correctional officers with pepper spray to keep them safe on the job.
"It's a policy that has saved taxpayers in the long run because it helps resolve isolated conflicts that arise in the workplace before they become costly, agency-wide problems. And contrary to some reports, official time is never used to conduct union-specific business, solicit members, hold internal union meetings, elect union officers, or engage in partisan political activities."
"By preventing problem solving, these executive orders will create inefficiencies and hinder the ability of dedicated federal employees to effectively deliver services to the American public."
The American Federation of Government Employees (AFGE) is the largest federal employee union, representing 700,000 workers in the federal government and the government of the District of Columbia.
For the latest AFGE news and information, visit the AFGE Media Center. Follow us on Facebook, Twitter, and YouTube.
SOURCE American Federation of Government Employees
Related Linkshttp://www.afge.org
From the federal indictment concerning bribes and fraud in distribution of opioid Fentanyl:
"Beginning in or about May 2012 and continuing until in or about December 2015, the Company, KAPOOR, BABICH, BURLAKOFF, GURRY, SIMON, LEE, and ROWAN, the co-conspirator practitioners, . . .the co-conspirator pharmacies, and other persons and entities known and unknown to the Grand Jury, conspired with one another to profit from the illicit distribution of the Fentanyl Spray, by using bribes and fraud."
A copy of the unsealed federal indictment is here: https://www.scribd.com/document/362727686/Unsealed-Indictment-vs-Insys-Founder-John-Kapoor-others
The current NYT magazine article on the story is here: https://www.nytimes.com/interactive/2018/05/02/magazine/money-issue-insys-opioids-kickbacks.html
"Beginning in or about May 2012 and continuing until in or about December 2015, the Company, KAPOOR, BABICH, BURLAKOFF, GURRY, SIMON, LEE, and ROWAN, the co-conspirator practitioners, . . .the co-conspirator pharmacies, and other persons and entities known and unknown to the Grand Jury, conspired with one another to profit from the illicit distribution of the Fentanyl Spray, by using bribes and fraud."
A copy of the unsealed federal indictment is here: https://www.scribd.com/document/362727686/Unsealed-Indictment-vs-Insys-Founder-John-Kapoor-others
The current NYT magazine article on the story is here: https://www.nytimes.com/interactive/2018/05/02/magazine/money-issue-insys-opioids-kickbacks.html
NYT explains zoning practices in lava land
“Many people are willing to risk living next to a volcano because the living is cheap.”
When developers were carving up Puna back in the 1960s and 70s, many investors on the mainland bought lots in the lava lands sight unseen.
In some cases, public officials leveraged their power into cobbling together real estate deals on the Big Island from which they could benefit.
At the time, basic infrastructure — things like paved roads, sewage systems, running water and electricity — was lacking. Subdivisions such as Leilani now have some of those services, but many residents still rely on rain catchment tanks for water. Just a few miles away, many homeowners live entirely off the grid, on even cheaper land parcels.
In some parts of Puna, newcomers are building nearly directly on fields of hardened lava from eruptions that destroyed other communities. For instance, an eruption of Kilauea in 1990 destroyed about 100 homes in the community of Kalapana. Less than 30 years later, dozens of homes now stand atop the flow field that swallowed Kalapana. The homes, some built without heed to code, lack ties to the electricity grid and sewage systems. Residents collect water in catchment tanks.
Often, banks won’t issue a traditional mortgage on such properties, but those determined to come here have found other ways to finance their ventures.
DAR comment: Go figure.
From https://www.nytimes.com/2018/05/25/us/hawaii-volcano-housing.html?emc=edit_ne_20180525&nl=evening-briefing&nlid=6707584320180525&te=1
“Many people are willing to risk living next to a volcano because the living is cheap.”
When developers were carving up Puna back in the 1960s and 70s, many investors on the mainland bought lots in the lava lands sight unseen.
In some cases, public officials leveraged their power into cobbling together real estate deals on the Big Island from which they could benefit.
At the time, basic infrastructure — things like paved roads, sewage systems, running water and electricity — was lacking. Subdivisions such as Leilani now have some of those services, but many residents still rely on rain catchment tanks for water. Just a few miles away, many homeowners live entirely off the grid, on even cheaper land parcels.
In some parts of Puna, newcomers are building nearly directly on fields of hardened lava from eruptions that destroyed other communities. For instance, an eruption of Kilauea in 1990 destroyed about 100 homes in the community of Kalapana. Less than 30 years later, dozens of homes now stand atop the flow field that swallowed Kalapana. The homes, some built without heed to code, lack ties to the electricity grid and sewage systems. Residents collect water in catchment tanks.
Often, banks won’t issue a traditional mortgage on such properties, but those determined to come here have found other ways to finance their ventures.
DAR comment: Go figure.
From https://www.nytimes.com/2018/05/25/us/hawaii-volcano-housing.html?emc=edit_ne_20180525&nl=evening-briefing&nlid=6707584320180525&te=1
From DMN:
The newly launched YouTube Music's ’s payouts to artists are a tiny fraction of what Spotify delivers, thanks to clever loopholes in existing copyright law.
Just recently, Elon Musk blasted streaming music platforms for delivering ‘crazy low payouts,’ while presenting a depressing breakdown from Statista of what those payouts are. But on the ‘crazy low’ spectrum, perhaps YouTube would qualify as ‘psychotically bottom-scraping’.
The story continues here. [ https://www.digitalmusicnews.com/2018/05/23/youtube-music-threat-artist-livelihood/ ]
The newly launched YouTube Music's ’s payouts to artists are a tiny fraction of what Spotify delivers, thanks to clever loopholes in existing copyright law.
Just recently, Elon Musk blasted streaming music platforms for delivering ‘crazy low payouts,’ while presenting a depressing breakdown from Statista of what those payouts are. But on the ‘crazy low’ spectrum, perhaps YouTube would qualify as ‘psychotically bottom-scraping’.
The story continues here. [ https://www.digitalmusicnews.com/2018/05/23/youtube-music-threat-artist-livelihood/ ]
Comment of the DCConsumerRightsCoalition.org filed with the CFPB regarding limiting or reducing the CFPB's public consumer complaint database:
The mission of the Consumer Financial Protection Bureau (CFPB) is to identify dangerous and unfair financial practices, educate consumers about these practices, and regulate the financial institutions that perpetuate them.
To accomplish these goals, the CFPB created the public Consumer Complaint Database. The database tracks complaints made by consumers to the CFPB and how they are resolved. As USPIRG and others have pointed out, the database enables the CFPB to identify financial practices that threaten to harm consumers and enables the public to evaluate both the performance of the financial industry and of the CFPB. More importantly, a database which is also publicly available, also assist consumers in making choices. By reviewing complaints, and the responses, consumers can vet potential businesses and choose companies based on real track records rather than puffery and advertising.
If CFPB were to limit or reduce the public Consumer Complaint Database, that would impede the public's ability to evaluate the performance of financial industry participants and of the CFPB. For that reason we believe the public Consumer Database should be maintained in essentially the same manner as in the recent past.
The mission of the Consumer Financial Protection Bureau (CFPB) is to identify dangerous and unfair financial practices, educate consumers about these practices, and regulate the financial institutions that perpetuate them.
To accomplish these goals, the CFPB created the public Consumer Complaint Database. The database tracks complaints made by consumers to the CFPB and how they are resolved. As USPIRG and others have pointed out, the database enables the CFPB to identify financial practices that threaten to harm consumers and enables the public to evaluate both the performance of the financial industry and of the CFPB. More importantly, a database which is also publicly available, also assist consumers in making choices. By reviewing complaints, and the responses, consumers can vet potential businesses and choose companies based on real track records rather than puffery and advertising.
If CFPB were to limit or reduce the public Consumer Complaint Database, that would impede the public's ability to evaluate the performance of financial industry participants and of the CFPB. For that reason we believe the public Consumer Database should be maintained in essentially the same manner as in the recent past.
The recent US Supreme Court decision in Murphy v. NCAA opens the door to State policies permitting gambling. There are many questions that follow about the evolution of gambling as a business in the future. Which companies will play an important role? Will it be fantasy sports companies like Fanduel and DraftKings? Casino companies? What will be the reaction of the National Collegiate Athletic Association and others responsible for events and athletes likely to be the targets for gambling? How will issues of legality and ethics be dealt with? The statement recently issued by four State gambling regulators briefly suggests that State regulators can handle it. --DAR
FOUR STATE GAMBLING REGULATORS ISSUE STATEMENT IN DEFENSE OF STATE REGULATION
André Wilsenach Executive Director, International Center for Gaming Regulation, UNLV1MAY 22, 2018
This statement is issued by gaming regulatory leaders from four state gambling jurisdictions in response to the recent U.S. Supreme Court ruling to confirm and assert that states and tribal gaming regulatory agencies have the capacity, resources, and ability to oversee the regulation of legalized sports betting.
Sports betting in Nevada has already been regulated with integrity and success, and gaming jurisdictions across the United States, including tribal jurisdictions, have demonstrated their ability to oversee gaming of all sorts while adhering to the highest standards.
Since the opinion in Murphy v. National Collegiate Athletic Association was released last week, there has been an overwhelming response by the various interested parties, including states, leagues, federal congressional representatives, responsible gambling organizations, sports betting consumers, and gambling industry operators and affiliates. As we expect the dialogue to continue with substantial actions to be undertaken rapidly, it is important to assert and confirm our support for a rational, state-based and tribal government approach to an expansion of legal, regulated sports wagering in the United States.
For nearly two years, leading regulators from key state commercial gambling jurisdictions have been meeting under the auspices of the University of Nevada, Las Vegas’s International Center for Gaming Regulation (ICGR), to dialogue about current issues affecting the gambling industry and to further best regulatory practices.
As experienced gaming regulators who are part of the U.S. State Gaming Regulators Forum, we would encourage jurisdictions to establish and implement regulatory models that are not only adaptive and successful, but that remain flexible enough to be sturdy, yet encourage innovation.
This group looks forward to continuing to collaborate together while serving as a resource as the various states and tribal governments begin implementing sports betting in their jurisdictions. Nevada, having both the depth and experience with legalized, regulated sports wagering, serves as a leader to help guide us and other jurisdictions through this historical time.
As the regulators in different gambling jurisdictions, we have jointly concluded that the following simple guidelines will help with an initial approach to sports betting regulation. While we cannot personally commit our respective jurisdictions to any specific position or practice, we support all of these positions individually, will support them throughout our regulatory agencies, and will help provide guidance to other jurisdictions as to how these guidelines can be implemented.
1. Coordinated action among jurisdictions offering sports betting against illegal bookmaking, illegal gambling activities, and any unsuitable and unlawful associations, along with strong support from federal-level enforcement agencies, is the best way to eradicate illegal activities.
2. Another critical element of legalized sports betting is the establishment of structures and processes that will ensure a high level of integrity in all sports. Therefore, all of our jurisdictions and others that legalize and regulate sports wagering should aim to share real-time betting information, in an effort to detect, prevent, and eliminate match fixing.
3. Measures for responsible gambling in sports betting are important to help protect and maintain the credibility of the activity.
4. The history of legalized sports betting in both Nevada and the United Kingdom indicates that it is a very low-margin business compared to other forms of gambling. Reasonable tax rates and fees are essential for legal sports betting to be competitive until illegal providers can be eradicated.
5. Additional fees, including the so-called “integrity fee,” increase the costs of legal sports betting, siphon much needed tax revenues away from state coffers, and increase state regulatory burdens.
We encourage state legislatures that elect to legalize sports betting to consider these guidelines in order to promote a coherent regulatory environment.
We, as members of the U.S. State Gaming Regulators Forum, will look to immediately develop a Memorandum of Understanding between our jurisdictions to acknowledge support for implementation of these principles. We welcome other jurisdictions’ regulatory bodies sharing these values to join with us.
Becky Harris, Chairwoman, Nevada Gaming Control Board
Stephen P. Crosby, Chairman, Massachusetts Gaming Commission
Ronnie Jones, Chairman, Louisiana Gaming Control Board
Rick Kalm, Executive Director, Michigan Gaming Control Board
For further media inquiries, contact Jennifer Roberts, Associate Director of UNLV International Center for Gaming Regulation, at jennifer.roberts@unlv.edu or 702-895-2653.
FOUR STATE GAMBLING REGULATORS ISSUE STATEMENT IN DEFENSE OF STATE REGULATION
- Published on May 23, 2018
André Wilsenach Executive Director, International Center for Gaming Regulation, UNLV1MAY 22, 2018
This statement is issued by gaming regulatory leaders from four state gambling jurisdictions in response to the recent U.S. Supreme Court ruling to confirm and assert that states and tribal gaming regulatory agencies have the capacity, resources, and ability to oversee the regulation of legalized sports betting.
Sports betting in Nevada has already been regulated with integrity and success, and gaming jurisdictions across the United States, including tribal jurisdictions, have demonstrated their ability to oversee gaming of all sorts while adhering to the highest standards.
Since the opinion in Murphy v. National Collegiate Athletic Association was released last week, there has been an overwhelming response by the various interested parties, including states, leagues, federal congressional representatives, responsible gambling organizations, sports betting consumers, and gambling industry operators and affiliates. As we expect the dialogue to continue with substantial actions to be undertaken rapidly, it is important to assert and confirm our support for a rational, state-based and tribal government approach to an expansion of legal, regulated sports wagering in the United States.
For nearly two years, leading regulators from key state commercial gambling jurisdictions have been meeting under the auspices of the University of Nevada, Las Vegas’s International Center for Gaming Regulation (ICGR), to dialogue about current issues affecting the gambling industry and to further best regulatory practices.
As experienced gaming regulators who are part of the U.S. State Gaming Regulators Forum, we would encourage jurisdictions to establish and implement regulatory models that are not only adaptive and successful, but that remain flexible enough to be sturdy, yet encourage innovation.
This group looks forward to continuing to collaborate together while serving as a resource as the various states and tribal governments begin implementing sports betting in their jurisdictions. Nevada, having both the depth and experience with legalized, regulated sports wagering, serves as a leader to help guide us and other jurisdictions through this historical time.
As the regulators in different gambling jurisdictions, we have jointly concluded that the following simple guidelines will help with an initial approach to sports betting regulation. While we cannot personally commit our respective jurisdictions to any specific position or practice, we support all of these positions individually, will support them throughout our regulatory agencies, and will help provide guidance to other jurisdictions as to how these guidelines can be implemented.
1. Coordinated action among jurisdictions offering sports betting against illegal bookmaking, illegal gambling activities, and any unsuitable and unlawful associations, along with strong support from federal-level enforcement agencies, is the best way to eradicate illegal activities.
2. Another critical element of legalized sports betting is the establishment of structures and processes that will ensure a high level of integrity in all sports. Therefore, all of our jurisdictions and others that legalize and regulate sports wagering should aim to share real-time betting information, in an effort to detect, prevent, and eliminate match fixing.
3. Measures for responsible gambling in sports betting are important to help protect and maintain the credibility of the activity.
4. The history of legalized sports betting in both Nevada and the United Kingdom indicates that it is a very low-margin business compared to other forms of gambling. Reasonable tax rates and fees are essential for legal sports betting to be competitive until illegal providers can be eradicated.
5. Additional fees, including the so-called “integrity fee,” increase the costs of legal sports betting, siphon much needed tax revenues away from state coffers, and increase state regulatory burdens.
We encourage state legislatures that elect to legalize sports betting to consider these guidelines in order to promote a coherent regulatory environment.
We, as members of the U.S. State Gaming Regulators Forum, will look to immediately develop a Memorandum of Understanding between our jurisdictions to acknowledge support for implementation of these principles. We welcome other jurisdictions’ regulatory bodies sharing these values to join with us.
Becky Harris, Chairwoman, Nevada Gaming Control Board
Stephen P. Crosby, Chairman, Massachusetts Gaming Commission
Ronnie Jones, Chairman, Louisiana Gaming Control Board
Rick Kalm, Executive Director, Michigan Gaming Control Board
For further media inquiries, contact Jennifer Roberts, Associate Director of UNLV International Center for Gaming Regulation, at jennifer.roberts@unlv.edu or 702-895-2653.
Law.com provides copy of Complaint by Sandy Hook victims against conspiracy theorist Alex Jones
Law.com reports that trial lawyers from Bridgeport, Connecticut-based Koskoff Koskoff & Bieder filed suit Wednesday against media personality Alex Jones on behalf of an FBI agent and the families of six victims of the deadly Sandy Hook Elementary School shooting. The Complaint cites a campaign of inflammatory statements by Jones. Jones claims that the shooting was a fake. The Complaint says that:
“Time and again, Jones has accused Sandy Hook families, who are readily identifiable, of faking their loved ones’ deaths, and insisted that the children killed that day are actually alive.” The premise of the litigation is that the First Amendment does not protect such lies.
The Law.com article provides a copy of the Complaint
The Law.com article is at https://www.law.com/ctlawtribune/2018/05/23/connecticut-lawyers-sue-conspiracy-theorist-alex-jones-for-sandy-hook-families-fbi-agent/
Law.com reports that trial lawyers from Bridgeport, Connecticut-based Koskoff Koskoff & Bieder filed suit Wednesday against media personality Alex Jones on behalf of an FBI agent and the families of six victims of the deadly Sandy Hook Elementary School shooting. The Complaint cites a campaign of inflammatory statements by Jones. Jones claims that the shooting was a fake. The Complaint says that:
“Time and again, Jones has accused Sandy Hook families, who are readily identifiable, of faking their loved ones’ deaths, and insisted that the children killed that day are actually alive.” The premise of the litigation is that the First Amendment does not protect such lies.
The Law.com article provides a copy of the Complaint
The Law.com article is at https://www.law.com/ctlawtribune/2018/05/23/connecticut-lawyers-sue-conspiracy-theorist-alex-jones-for-sandy-hook-families-fbi-agent/
Court decision refusing to dismiss the NY AG's suit charged internet service provider Spectrum-TWC with false advertising of internet speeds
The decision is here: https://iapps.courts.state.ny.us/nyscef/ViewDocument?docIndex=dJY_PLUS_yretXYSY8msX1l3vXQ=='
A brief excerpt follows:
According to the complaint, Spectrum-TWC did not deliver the promised level of service (id., ¶¶ 75-76, 80-83, 178-241). For many customers, the promised Internet speeds were impossible to attain because of technological bottlenecks for which Spectrum-TWC was responsible.
First, in early 2013, defendants determined (as a result of Internet speed tests conducted by the FCC) that the older generation modems they leased to many of their subscribers were incapable of reliably achieving Internet speeds of even 20 Mbps per second (id., ¶¶ 9, 76, 101-177) (the Modem Failures). These failures date back to early in the Covered Period, and intensified when Spectrum-TWC began to promise New York City subscribers faster speeds in connection with its MAXX upgrade, which was launched in 2014 (id., 5 78). These failures were not resolved by the company's modem "replacement" program, which was designed to result in many subscribers continuing to pay for promised speeds beyond the technical capabilities of their Spectrum-TWC-provided modems (id., ¶¶ 121, 146, 151, 159).
Plaintiff alleges that, in fact, Spectrum-TWC knew that the modems it leased to many subscribers were "non-compliant," or incapable of delivering the speeds promised (id., ¶¶ 76, 110-113, 169). Plaintiff alleges this failure affected 900,000 subscribers (id., ¶ 102).
Second, Spectrum-TWC also failed to maintain its network as necessary to deliver the promised speeds (id., 55 178-200) (the Network Failures).
Plaintiff alleges that, although Spectrum-TWC knew the precise levels of network congestion at which customers would be prevented from achieving the promised speeds, it deliberately hid and exceeded those congestion levels to save itself money (id., ¶¶ 184-193).
Third, plaintiff alleges that, due to older or slower wireless routers it provided, and other technological limitations, Spectrum-TWC knew that its subscribers could not achieve the same speeds wirelessly as through a wired connection (id., ¶¶ 221-241) (the Wireless Failures). Plaintiff asserts that Spectrum-TWC's failure to deliver its promised Internet speeds is confirmed by the results of at least three independent tests of Internet speed: (1) a test used by the FCC to generate its annual "Measuring Broadband America" report; (2) a test used by Spectrum-TWC to monitor speeds on its last miles of service; and (3) a test recommended by Spectrum-TWC to its subscribers for testing Internet speeds (Complaint, ¶¶ 196-213).
The decision is here: https://iapps.courts.state.ny.us/nyscef/ViewDocument?docIndex=dJY_PLUS_yretXYSY8msX1l3vXQ=='
A brief excerpt follows:
According to the complaint, Spectrum-TWC did not deliver the promised level of service (id., ¶¶ 75-76, 80-83, 178-241). For many customers, the promised Internet speeds were impossible to attain because of technological bottlenecks for which Spectrum-TWC was responsible.
First, in early 2013, defendants determined (as a result of Internet speed tests conducted by the FCC) that the older generation modems they leased to many of their subscribers were incapable of reliably achieving Internet speeds of even 20 Mbps per second (id., ¶¶ 9, 76, 101-177) (the Modem Failures). These failures date back to early in the Covered Period, and intensified when Spectrum-TWC began to promise New York City subscribers faster speeds in connection with its MAXX upgrade, which was launched in 2014 (id., 5 78). These failures were not resolved by the company's modem "replacement" program, which was designed to result in many subscribers continuing to pay for promised speeds beyond the technical capabilities of their Spectrum-TWC-provided modems (id., ¶¶ 121, 146, 151, 159).
Plaintiff alleges that, in fact, Spectrum-TWC knew that the modems it leased to many subscribers were "non-compliant," or incapable of delivering the speeds promised (id., ¶¶ 76, 110-113, 169). Plaintiff alleges this failure affected 900,000 subscribers (id., ¶ 102).
Second, Spectrum-TWC also failed to maintain its network as necessary to deliver the promised speeds (id., 55 178-200) (the Network Failures).
Plaintiff alleges that, although Spectrum-TWC knew the precise levels of network congestion at which customers would be prevented from achieving the promised speeds, it deliberately hid and exceeded those congestion levels to save itself money (id., ¶¶ 184-193).
Third, plaintiff alleges that, due to older or slower wireless routers it provided, and other technological limitations, Spectrum-TWC knew that its subscribers could not achieve the same speeds wirelessly as through a wired connection (id., ¶¶ 221-241) (the Wireless Failures). Plaintiff asserts that Spectrum-TWC's failure to deliver its promised Internet speeds is confirmed by the results of at least three independent tests of Internet speed: (1) a test used by the FCC to generate its annual "Measuring Broadband America" report; (2) a test used by Spectrum-TWC to monitor speeds on its last miles of service; and (3) a test recommended by Spectrum-TWC to its subscribers for testing Internet speeds (Complaint, ¶¶ 196-213).
National Women’s Law Center announcement: launch of the TIME’S UP Legal Defense Fund.
From https://nwlc.org/times-up-legal-defense-fund/
The sexual harassment that has been reported in the last few months has been both horrific and illuminating. We stand with the brave individuals who have come forward, at great risk to themselves, to protect others from similar behavior.
The National Women’s Law Center is excited to announce the launch of the TIME’S UP Legal Defense Fund. The TIME’S UP Legal Defense Fund, which is housed at and administered by the National Women’s Law Center, connects those who experience sexual misconduct including assault, harassment, abuse and related retaliation in the workplace or in trying to advance their careers with legal and public relations assistance. The Fund will help defray legal and public relations costs in select cases based on criteria and availability of funds. Donations to the TIME’S UP Legal Defense Fund are tax deductible through the Direct Impact Fund, a 501(c)(3) nonprofit organization or through the National Women’s Law Center, a 501(c)(3) nonprofit organization. The initiative was spearheaded by actors and others in the entertainment industry, attorneys Tina Tchen and Roberta Kaplan, and top public relations professionals. Women in Hollywood came together around their own experience of harassment and assault, and were moved by the outpouring of support and solidarity against sexual harassment from women across sectors. This inspired them to help create a Fund to help survivors of sexual harassment and retaliation in all industries—especially low-income women and people of color. They worked together in an historic first to design a structure that would be both inclusive and effective. The Fund will be housed and administered by the National Women’s Law Center and the participating attorneys will be working with the Center’s Legal Network for Gender Equity. Access to prompt and comprehensive legal and communications help will empower individuals and help fuel long-term systemic change.
This Fund will enable more individuals to come forward and be connected with lawyers — regardless of industry, rank or role. Countless activists, celebrities, and other donors want to see an end to a culture that allows sexual harassment and retaliation of those who courageously step forward to go unpunished. This effort is not just to support women in Hollywood, but others in need – the factory worker, the waitress, the teacher, the office worker, and others subjected to this unacceptable behavior. Now is the time to finally stop the sexual harassment and retaliation that has often gone unchecked.
From https://nwlc.org/times-up-legal-defense-fund/
The sexual harassment that has been reported in the last few months has been both horrific and illuminating. We stand with the brave individuals who have come forward, at great risk to themselves, to protect others from similar behavior.
The National Women’s Law Center is excited to announce the launch of the TIME’S UP Legal Defense Fund. The TIME’S UP Legal Defense Fund, which is housed at and administered by the National Women’s Law Center, connects those who experience sexual misconduct including assault, harassment, abuse and related retaliation in the workplace or in trying to advance their careers with legal and public relations assistance. The Fund will help defray legal and public relations costs in select cases based on criteria and availability of funds. Donations to the TIME’S UP Legal Defense Fund are tax deductible through the Direct Impact Fund, a 501(c)(3) nonprofit organization or through the National Women’s Law Center, a 501(c)(3) nonprofit organization. The initiative was spearheaded by actors and others in the entertainment industry, attorneys Tina Tchen and Roberta Kaplan, and top public relations professionals. Women in Hollywood came together around their own experience of harassment and assault, and were moved by the outpouring of support and solidarity against sexual harassment from women across sectors. This inspired them to help create a Fund to help survivors of sexual harassment and retaliation in all industries—especially low-income women and people of color. They worked together in an historic first to design a structure that would be both inclusive and effective. The Fund will be housed and administered by the National Women’s Law Center and the participating attorneys will be working with the Center’s Legal Network for Gender Equity. Access to prompt and comprehensive legal and communications help will empower individuals and help fuel long-term systemic change.
This Fund will enable more individuals to come forward and be connected with lawyers — regardless of industry, rank or role. Countless activists, celebrities, and other donors want to see an end to a culture that allows sexual harassment and retaliation of those who courageously step forward to go unpunished. This effort is not just to support women in Hollywood, but others in need – the factory worker, the waitress, the teacher, the office worker, and others subjected to this unacceptable behavior. Now is the time to finally stop the sexual harassment and retaliation that has often gone unchecked.
The text of the US Supreme Court decision permitting workplace arbitration clauses precluding class actions:
https://www.supremecourt.gov/opinions/17pdf/16-285_q8l1.pdf
https://www.supremecourt.gov/opinions/17pdf/16-285_q8l1.pdf
Federal student loans to be made more expensive by Congress
Federal student loan rates are a few percent higher than benchmark rates like the interest rate on 10 year federal bonds. As those bond rates move up closer to 3%, student loan rates will go up in tandem. In addition, new "PROSPER" legislation in planned that -- surprise-- make student loans more expensive and students less prosperous. The legislation would eliminate variations among student loans and eliminate federal subsidies. The Forbes article, an excerpt of which appears below, provides more detail. -- DAR
From https://www.forbes.com/sites/andrewjosuweit/2018/01/17/student-loan-changes-you-need-to-know-for-2018-and-beyond/#11d9ebe6ba51 :
As we head into 2018, changes could be coming to student loans that could impact your borrowing beyond the coming year. Here’s what to watch out for:
Student Loan Rates Could Rise Again
In December, the Federal Reserve raised its Funds rate, and three rate hikes are expected in 2018. On top of that, the London Interbank Offered Rate (LIBOR), on which most private student loan interest rates are based, continues its rise. The LIBOR ended 2016 just under 1.00%, and as of December 15, 2017, the rate was at 1.61%.
Private student loans follow what’s happening with the Federal Reserve’s benchmark rate and LIBOR. On top of that, when setting federal student loan rates, members of Congress rely, in part, on what’s happening in the market and with 10-year Treasuries, which are also adding upward pressure on interest rates.
Even though they just raised rates for the 2017-18 academic year, there’s a possibility that our representatives will give them a bit of a further boost for 2018-2019. And, of course, continued increases in market rates means heftier interest rates on private student loans.
The Prosper Act Could Impact Student Loans In 2019 And Beyond
What you really have to watch for, though, is the passage of the Promoting Real Opportunity, Success and Prosperity through Education Reform (PROSPER) Act.
Unlike many of the pieces of student loan legislation that often languish and die in committee, the PROSPER Act has a chance of being passed, thanks to the fact the bill also includes long-awaited reform of the Higher Education Act (HEA) of 1965, which hasn’t been reauthorized since 2008.
If not reauthorized, the HEA is automatically extended for a year. Work has been done on the issue, but nothing has managed to pass both the House of Representatives and the Senate in a decade. If the PROSPER Act does clear Congress in 2018 (as currently written), here are some of the changes you can expect to see, starting in 2019:
Taking The “Subsidized” Out Of Subsidized Federal Loans
Right now, the government pays the interest on some federal loans while borrowers are in school, during the grace period (usually the first six months after graduation), or during certain deferments. This program is based on need. However, if the PROSPER Act passes, no federal loans — no matter the need of the student — will be subsidized.
Federal student loan rates are a few percent higher than benchmark rates like the interest rate on 10 year federal bonds. As those bond rates move up closer to 3%, student loan rates will go up in tandem. In addition, new "PROSPER" legislation in planned that -- surprise-- make student loans more expensive and students less prosperous. The legislation would eliminate variations among student loans and eliminate federal subsidies. The Forbes article, an excerpt of which appears below, provides more detail. -- DAR
From https://www.forbes.com/sites/andrewjosuweit/2018/01/17/student-loan-changes-you-need-to-know-for-2018-and-beyond/#11d9ebe6ba51 :
As we head into 2018, changes could be coming to student loans that could impact your borrowing beyond the coming year. Here’s what to watch out for:
Student Loan Rates Could Rise Again
In December, the Federal Reserve raised its Funds rate, and three rate hikes are expected in 2018. On top of that, the London Interbank Offered Rate (LIBOR), on which most private student loan interest rates are based, continues its rise. The LIBOR ended 2016 just under 1.00%, and as of December 15, 2017, the rate was at 1.61%.
Private student loans follow what’s happening with the Federal Reserve’s benchmark rate and LIBOR. On top of that, when setting federal student loan rates, members of Congress rely, in part, on what’s happening in the market and with 10-year Treasuries, which are also adding upward pressure on interest rates.
Even though they just raised rates for the 2017-18 academic year, there’s a possibility that our representatives will give them a bit of a further boost for 2018-2019. And, of course, continued increases in market rates means heftier interest rates on private student loans.
The Prosper Act Could Impact Student Loans In 2019 And Beyond
What you really have to watch for, though, is the passage of the Promoting Real Opportunity, Success and Prosperity through Education Reform (PROSPER) Act.
Unlike many of the pieces of student loan legislation that often languish and die in committee, the PROSPER Act has a chance of being passed, thanks to the fact the bill also includes long-awaited reform of the Higher Education Act (HEA) of 1965, which hasn’t been reauthorized since 2008.
If not reauthorized, the HEA is automatically extended for a year. Work has been done on the issue, but nothing has managed to pass both the House of Representatives and the Senate in a decade. If the PROSPER Act does clear Congress in 2018 (as currently written), here are some of the changes you can expect to see, starting in 2019:
Taking The “Subsidized” Out Of Subsidized Federal Loans
Right now, the government pays the interest on some federal loans while borrowers are in school, during the grace period (usually the first six months after graduation), or during certain deferments. This program is based on need. However, if the PROSPER Act passes, no federal loans — no matter the need of the student — will be subsidized.
A Catholic Church report discusses Credit Default Swaps -- as in "The Big Short"
The recent report from the Catholic Church is consistent with recent comments from the Pope: Banking is not necessarily immoral, but ethical standards are relevant. Government engagement is required to avoid ethical abuses. The Catholic Church report does not mention Barry Lynn, Tim Wu, or Simon Johnson by name, or explicitly refer to the book "The Big Short." But there is some similarity among them in opposing unregulated greed by financial industry people as a source of economic and social harm. DAR
Excerpt from “‘Oeconomicae et pecuniariae quaestiones’. Considerations for an ethical discernment regarding some aspects of the present economic-financial system” of the Congregation for the Doctrine of the Faith and the Dicastery for Promoting Integral Human Development, 17.05.2018,
found at http://press.vatican.va/content/salastampa/en/bollettino/pubblico/2018/05/17/180517a.html
26. Some financial products, among which the so called “derivatives”, are created for the purpose of guaranteeing an insurance on the inherent risks of certain operations often containing a gamble made on the basis of the presumed value attributed to those risks. At the foundation of such financial instruments lay contracts in which the parties are still able to reasonably evaluate the fundamental risk on which they want to insure.
However, in some types of derivatives (in the particular the so-called securitizations) it is noted that, starting with the original structures, and linked to identifiable financial investments, more and more complex structures were built (securitizations of securitizations) in which it is increasingly difficult, and after many of these transactions almost impossible, to stabilize in a reasonable and fair manner their fundamental value. This means that every passage in the trade of these shares, beyond the will of the parties, effects in fact a distortion of the actual value of the risk from that which the instrument must defend. All these have encouraged the rising of speculative bubbles, which have been the important contributive cause of the recent financial crisis.
It is obvious that the uncertainty surrounding these products, such as the steady decline of the transparency of that which is assured, still not appearing in the original operation, makes them continuously less acceptable from the perspective of ethics respectful of the truth and the common good, because it transforms them into a ticking time bomb ready sooner or later to explode, poisoning the health of the markets. It is noted that there is an ethical void which becomes more serious as these products are negotiated on the so-called markets with less regulation (over the counter) and are exposed more to the markets regulated by chance, if not by fraud, and thus take away vital life-lines and investments to the real economy.
A similar ethical assessment can be also applied for those uses of credit default swap (CDS: they are particular insurance contracts for the risk of bankruptcy) that permit gambling at the risk of the bankruptcy of a third party, even to those who haven’t taken any such risk of credit earlier, and really to repeat such operations on the same event, which is absolutely not consented to by the normal pact or insurance.
The market of CDS, in the wake of the economic crisis of 2007, was imposing enough to represent almost the equivalent of the GDP of the entire world. The spread of such a kind of contract without proper limits has encouraged the growth of a finance of chance, and of gambling on the failure of others, which is unacceptable from the ethical point of view.
In fact, the process of acquiring these instruments, by those who do not have any risk of credit already in existence, creates a unique case in which persons start to nurture interests for the ruin of other economic entities, and can even resolve themselves to do so.
It is evident that such a possibility, if, on the one hand, shapes an event particularly deplorable from the moral perspective, because the one who acts does so in view of a kind of economic cannibalism, and, on the other hand, ends up undermining that necessary basic trust without which the economic system would end up blocking itself. In this case, also, we can notice how a negative event, from the ethical point of view, also harms the healthy functioning of the economic system.
Therefore, it must be noted, that when from such gambling can derive enormous damage for entire nations and millions of families, we are faced with extremely immoral actions, it seems necessary to extend deterrents, already present in some nations, for such types of operations, sanctioning the infractions with maximum severity.
The recent report from the Catholic Church is consistent with recent comments from the Pope: Banking is not necessarily immoral, but ethical standards are relevant. Government engagement is required to avoid ethical abuses. The Catholic Church report does not mention Barry Lynn, Tim Wu, or Simon Johnson by name, or explicitly refer to the book "The Big Short." But there is some similarity among them in opposing unregulated greed by financial industry people as a source of economic and social harm. DAR
Excerpt from “‘Oeconomicae et pecuniariae quaestiones’. Considerations for an ethical discernment regarding some aspects of the present economic-financial system” of the Congregation for the Doctrine of the Faith and the Dicastery for Promoting Integral Human Development, 17.05.2018,
found at http://press.vatican.va/content/salastampa/en/bollettino/pubblico/2018/05/17/180517a.html
26. Some financial products, among which the so called “derivatives”, are created for the purpose of guaranteeing an insurance on the inherent risks of certain operations often containing a gamble made on the basis of the presumed value attributed to those risks. At the foundation of such financial instruments lay contracts in which the parties are still able to reasonably evaluate the fundamental risk on which they want to insure.
However, in some types of derivatives (in the particular the so-called securitizations) it is noted that, starting with the original structures, and linked to identifiable financial investments, more and more complex structures were built (securitizations of securitizations) in which it is increasingly difficult, and after many of these transactions almost impossible, to stabilize in a reasonable and fair manner their fundamental value. This means that every passage in the trade of these shares, beyond the will of the parties, effects in fact a distortion of the actual value of the risk from that which the instrument must defend. All these have encouraged the rising of speculative bubbles, which have been the important contributive cause of the recent financial crisis.
It is obvious that the uncertainty surrounding these products, such as the steady decline of the transparency of that which is assured, still not appearing in the original operation, makes them continuously less acceptable from the perspective of ethics respectful of the truth and the common good, because it transforms them into a ticking time bomb ready sooner or later to explode, poisoning the health of the markets. It is noted that there is an ethical void which becomes more serious as these products are negotiated on the so-called markets with less regulation (over the counter) and are exposed more to the markets regulated by chance, if not by fraud, and thus take away vital life-lines and investments to the real economy.
A similar ethical assessment can be also applied for those uses of credit default swap (CDS: they are particular insurance contracts for the risk of bankruptcy) that permit gambling at the risk of the bankruptcy of a third party, even to those who haven’t taken any such risk of credit earlier, and really to repeat such operations on the same event, which is absolutely not consented to by the normal pact or insurance.
The market of CDS, in the wake of the economic crisis of 2007, was imposing enough to represent almost the equivalent of the GDP of the entire world. The spread of such a kind of contract without proper limits has encouraged the growth of a finance of chance, and of gambling on the failure of others, which is unacceptable from the ethical point of view.
In fact, the process of acquiring these instruments, by those who do not have any risk of credit already in existence, creates a unique case in which persons start to nurture interests for the ruin of other economic entities, and can even resolve themselves to do so.
It is evident that such a possibility, if, on the one hand, shapes an event particularly deplorable from the moral perspective, because the one who acts does so in view of a kind of economic cannibalism, and, on the other hand, ends up undermining that necessary basic trust without which the economic system would end up blocking itself. In this case, also, we can notice how a negative event, from the ethical point of view, also harms the healthy functioning of the economic system.
Therefore, it must be noted, that when from such gambling can derive enormous damage for entire nations and millions of families, we are faced with extremely immoral actions, it seems necessary to extend deterrents, already present in some nations, for such types of operations, sanctioning the infractions with maximum severity.
Uber press release: No more forced arbitration in sexual misconduct cases
Perhaps the most offensive use of forced arbitration and confidentiality requirements involves sexual misconduct actions. Uber has responded to public campaigns on these topics by changing its announced policies. DAR
Excerpt:
First, we will no longer require mandatory arbitration for individual claims of sexual assault or sexual harassment by Uber riders, drivers or employees.
Arbitration has an important role in the American justice system and includes many benefits for individuals and companies alike. Arbitration is not a settlement (cases are decided on their merits), and, unless the parties agree to keep the process confidential, it does not prevent survivors from speaking out about their experience.
But we have learned it’s important to give sexual assault and harassment survivors control of how they pursue their claims. So moving forward, survivors will be free to choose to resolve their individual claims in the venue they prefer: in a mediation where they can choose confidentiality; in arbitration, where they can choose to maintain their privacy while pursuing their case; or in open court. Whatever they decide, they will be free to tell their story wherever and however they see fit.
Second, survivors will now have the option to settle their claims with Uber without a confidentiality provision that prevents them from speaking about the facts of the sexual assault or sexual harassment they suffered.
Confidentiality provisions in settlement agreements also have an appropriate role in resolving legal disputes. Often they help expedite resolution because they give both sides comfort that certain information (such as the settlement amount) will remain confidential. And frequently, survivors insist on broad confidentiality in order to preserve their privacy.
But divulging the details of what happened in a sexual assault or harassment should be up to the survivor, not us. So we’re making it clear that Uber will not require confidentiality provisions or non-disclosure agreements to prevent survivors from talking about the facts of what happened to them. Whether to find closure, seek treatment, or become advocates for change themselves, survivors will be in control of whether to share their stories. Enabling survivors to make this choice will help to end the culture of silence that surrounds sexual violence.
Third, we commit to publishing a safety transparency report that will include data on sexual assaults and other incidents that occur on the Uber platform.
We believe transparency fosters accountability. But truthfully, this was a decision we struggled to make, in part because data on safety and sexual assaults is sparse and inconsistent. In fact, there is no data to reliably or accurately compare reports against Uber drivers versus taxi drivers or limo drivers, or Uber versus buses, subways, airplanes or trains. And when it comes to categorizing this data for public release, no uniform industry standard for reporting exists today.
Making things even more complicated, sexual assault is a vastly underreported crime, with two out of three assaults going unreported to police.
But we decided we can’t let all of that hold us back. That’s why we’ve met more than 80 women’s groups and recruited advisors like Ebony Tucker of the National Alliance to End Sexual Violence, Cindy Southworth of the National Network to End Domestic Violence and Tina Tchen, one of the founders of the Time’s Up Legal Defense Fund and partner at Buckley Sandler LLP to advise us on these issues.
We’re working with experts in the field to develop a taxonomy to categorize the incidents that are reported to us. We hope to open-source this methodology so we can encourage others in the ridesharing, transportation and travel industries, both private and public, to join us in taking this step. We know that a project of this magnitude will take some time, but we pledge to keep you updated along the way.
Dara recently said that sexual predators often look for a dark corner. Our message to the world is that we need to turn the lights on. It starts with improving our product and policies, but it requires so much more, and we’re in it for the long haul. Together, we can make meaningful progress towards ending sexual violence. Our commitment to you is that when we say we stand for safety, we mean it.
Press release at https://www.uber.com/newsroom/turning-the-lights-on/
Perhaps the most offensive use of forced arbitration and confidentiality requirements involves sexual misconduct actions. Uber has responded to public campaigns on these topics by changing its announced policies. DAR
Excerpt:
First, we will no longer require mandatory arbitration for individual claims of sexual assault or sexual harassment by Uber riders, drivers or employees.
Arbitration has an important role in the American justice system and includes many benefits for individuals and companies alike. Arbitration is not a settlement (cases are decided on their merits), and, unless the parties agree to keep the process confidential, it does not prevent survivors from speaking out about their experience.
But we have learned it’s important to give sexual assault and harassment survivors control of how they pursue their claims. So moving forward, survivors will be free to choose to resolve their individual claims in the venue they prefer: in a mediation where they can choose confidentiality; in arbitration, where they can choose to maintain their privacy while pursuing their case; or in open court. Whatever they decide, they will be free to tell their story wherever and however they see fit.
Second, survivors will now have the option to settle their claims with Uber without a confidentiality provision that prevents them from speaking about the facts of the sexual assault or sexual harassment they suffered.
Confidentiality provisions in settlement agreements also have an appropriate role in resolving legal disputes. Often they help expedite resolution because they give both sides comfort that certain information (such as the settlement amount) will remain confidential. And frequently, survivors insist on broad confidentiality in order to preserve their privacy.
But divulging the details of what happened in a sexual assault or harassment should be up to the survivor, not us. So we’re making it clear that Uber will not require confidentiality provisions or non-disclosure agreements to prevent survivors from talking about the facts of what happened to them. Whether to find closure, seek treatment, or become advocates for change themselves, survivors will be in control of whether to share their stories. Enabling survivors to make this choice will help to end the culture of silence that surrounds sexual violence.
Third, we commit to publishing a safety transparency report that will include data on sexual assaults and other incidents that occur on the Uber platform.
We believe transparency fosters accountability. But truthfully, this was a decision we struggled to make, in part because data on safety and sexual assaults is sparse and inconsistent. In fact, there is no data to reliably or accurately compare reports against Uber drivers versus taxi drivers or limo drivers, or Uber versus buses, subways, airplanes or trains. And when it comes to categorizing this data for public release, no uniform industry standard for reporting exists today.
Making things even more complicated, sexual assault is a vastly underreported crime, with two out of three assaults going unreported to police.
But we decided we can’t let all of that hold us back. That’s why we’ve met more than 80 women’s groups and recruited advisors like Ebony Tucker of the National Alliance to End Sexual Violence, Cindy Southworth of the National Network to End Domestic Violence and Tina Tchen, one of the founders of the Time’s Up Legal Defense Fund and partner at Buckley Sandler LLP to advise us on these issues.
We’re working with experts in the field to develop a taxonomy to categorize the incidents that are reported to us. We hope to open-source this methodology so we can encourage others in the ridesharing, transportation and travel industries, both private and public, to join us in taking this step. We know that a project of this magnitude will take some time, but we pledge to keep you updated along the way.
Dara recently said that sexual predators often look for a dark corner. Our message to the world is that we need to turn the lights on. It starts with improving our product and policies, but it requires so much more, and we’re in it for the long haul. Together, we can make meaningful progress towards ending sexual violence. Our commitment to you is that when we say we stand for safety, we mean it.
Press release at https://www.uber.com/newsroom/turning-the-lights-on/
There there are just two relevant smartphone platforms left .
Devices running Android (85.9%) and iOS (14%) accounted for 99.9% of global smartphone sales to end users in 2017, according to market research firm Gartner. All other platforms, including former market leaders BlackBerry and Microsoft’s Windows Phone have been rendered completely irrelevant.See https://www.gartner.com/newsroom/id/3859963 (table 3)
Does that lack of competition raise competition/antitrust concerns? Of course. -- DAR
Devices running Android (85.9%) and iOS (14%) accounted for 99.9% of global smartphone sales to end users in 2017, according to market research firm Gartner. All other platforms, including former market leaders BlackBerry and Microsoft’s Windows Phone have been rendered completely irrelevant.See https://www.gartner.com/newsroom/id/3859963 (table 3)
Does that lack of competition raise competition/antitrust concerns? Of course. -- DAR
Internet connect speeds much slower than your carrier promised? Maybe your State AG can help: NY AG v. Charter Communications
NY's State AG sued carrier Charter Communications for failing to deliver promised internet communication speeds. In a recent slip opinion the Court allowed the suit to go forward. Here is an excerpt from the opinion:
Spectrum-TWC advertised specific Internet speeds, available in tiers ranging from 20 to 300 megabits per second (Mbps), and promised its subscribers that it would deliver such speeds in exchange for a fee, with higher fees for faster-speed tiers (id., ~~ 79-84). Spectrum-TWC assured subscribers not only that they could achieve the advertised speeds, but that subscribers were guaranteed "reliable Internet speeds," delivered "consistently," "without slowdowns," and otherwise without interruption (id., ~ ~ 83, 85-86). Spectrum-TWC assured subscribers that the promised speeds would be delivered anywhere in their homes, at any time, and on any number of devices, regardless of whether the subscriber connected by wire or wirelessly (see id.,~~ 74, 83, 89, 94-95)
According to the complaint, Spectrurn-TWC did not deliver the promised level of service (id., ,.rn 75-76, 80-83, 178-241 ). For many customers, the promised Internet speeds were impossible to attain because of technological bottlenecks for which Spectrurn-TWC was responsible. First, in early 2013, defendants determined (as a result of Internet speed tests conducted by the FCC) that the older generation moderns they leased to many of their subscribers were incapable of reliably achieving Internet speeds of even 20 Mbps per second (id., ,-r ,-r 9, 76, 101-177) (the Modern Failures). These failures date back to early in the Covered Period, and intensified when Spectrurn-TWC began to promise New York City subscribers faster speeds in connection with its MAXX upgrade, which was launched in 2014 (id., ,-r 78). These failures were not resolved by the company's modern "replacement" program, which was designed to result in many subscribers continuing to pay for promised speeds beyond the technical capabilities of their Spectrurn-TWC-provided moderns (id., ,-r ,-r 121, 146, 151, 159). Plaintiff alleges that, in fact, Spectrurn-TWC knew that the moderns it leased to many subscribers were "non-compliant," or incapable of delivering the speeds promised (id., ,-r,-r 76, 110-113, 169). Plaintiff alleges this failure affected 900,000 subscribers (id., ,-r 102).
Second, Spectrurn-TWC also failed to maintain its network as necessary to deliver the promised speeds (id., ,-r,-r 178-200) (the Network Failures). Plaintiff alleges that, although Spectrurn-TWC knew the precise levels of network congestion at which customers would be prevented from achieving the promised speeds, it deliberately hid and exceeded those congestion levels to save itself money (id., ,-r,-r 184-193).
Third, plaintiff alleges that, due to older or slower wireless routers it provided, and other technological limitations, Spectrurn-TWC knew that its subscribers could not achieve the same speeds wirelessly as through a wired connection (id., ,-r,-r 221-241) (the Wireless Failures).
Plaintiff asserts that Spectrurn-TWC's failure to deliver its promised Internet speeds is confirmed by the results of at least three independent tests of Internet speed: (1) a test used by the FCC to generate its annual "Measuring Broadband America" report; (2) a test used by Spectrurn-TWC to monitor speeds on its last miles of service; and (3) a test recommended by Spectrurn-TWC to its subscribers for testing Internet speeds (Complaint, ,-r,-r 196-213).
The slip opinion is here: https://cases.justia.com/new-york/other-courts/2018-2018-ny-slip-op-30253-u.pdf?ts=1519251428
The NY AG initial pleading is here: https://ag.ny.gov/sites/default/files/summons_and_complaint.pdf
NY's State AG sued carrier Charter Communications for failing to deliver promised internet communication speeds. In a recent slip opinion the Court allowed the suit to go forward. Here is an excerpt from the opinion:
Spectrum-TWC advertised specific Internet speeds, available in tiers ranging from 20 to 300 megabits per second (Mbps), and promised its subscribers that it would deliver such speeds in exchange for a fee, with higher fees for faster-speed tiers (id., ~~ 79-84). Spectrum-TWC assured subscribers not only that they could achieve the advertised speeds, but that subscribers were guaranteed "reliable Internet speeds," delivered "consistently," "without slowdowns," and otherwise without interruption (id., ~ ~ 83, 85-86). Spectrum-TWC assured subscribers that the promised speeds would be delivered anywhere in their homes, at any time, and on any number of devices, regardless of whether the subscriber connected by wire or wirelessly (see id.,~~ 74, 83, 89, 94-95)
According to the complaint, Spectrurn-TWC did not deliver the promised level of service (id., ,.rn 75-76, 80-83, 178-241 ). For many customers, the promised Internet speeds were impossible to attain because of technological bottlenecks for which Spectrurn-TWC was responsible. First, in early 2013, defendants determined (as a result of Internet speed tests conducted by the FCC) that the older generation moderns they leased to many of their subscribers were incapable of reliably achieving Internet speeds of even 20 Mbps per second (id., ,-r ,-r 9, 76, 101-177) (the Modern Failures). These failures date back to early in the Covered Period, and intensified when Spectrurn-TWC began to promise New York City subscribers faster speeds in connection with its MAXX upgrade, which was launched in 2014 (id., ,-r 78). These failures were not resolved by the company's modern "replacement" program, which was designed to result in many subscribers continuing to pay for promised speeds beyond the technical capabilities of their Spectrurn-TWC-provided moderns (id., ,-r ,-r 121, 146, 151, 159). Plaintiff alleges that, in fact, Spectrurn-TWC knew that the moderns it leased to many subscribers were "non-compliant," or incapable of delivering the speeds promised (id., ,-r,-r 76, 110-113, 169). Plaintiff alleges this failure affected 900,000 subscribers (id., ,-r 102).
Second, Spectrurn-TWC also failed to maintain its network as necessary to deliver the promised speeds (id., ,-r,-r 178-200) (the Network Failures). Plaintiff alleges that, although Spectrurn-TWC knew the precise levels of network congestion at which customers would be prevented from achieving the promised speeds, it deliberately hid and exceeded those congestion levels to save itself money (id., ,-r,-r 184-193).
Third, plaintiff alleges that, due to older or slower wireless routers it provided, and other technological limitations, Spectrurn-TWC knew that its subscribers could not achieve the same speeds wirelessly as through a wired connection (id., ,-r,-r 221-241) (the Wireless Failures).
Plaintiff asserts that Spectrurn-TWC's failure to deliver its promised Internet speeds is confirmed by the results of at least three independent tests of Internet speed: (1) a test used by the FCC to generate its annual "Measuring Broadband America" report; (2) a test used by Spectrurn-TWC to monitor speeds on its last miles of service; and (3) a test recommended by Spectrurn-TWC to its subscribers for testing Internet speeds (Complaint, ,-r,-r 196-213).
The slip opinion is here: https://cases.justia.com/new-york/other-courts/2018-2018-ny-slip-op-30253-u.pdf?ts=1519251428
The NY AG initial pleading is here: https://ag.ny.gov/sites/default/files/summons_and_complaint.pdf
Washington, DC has one of the highest per capita 911 calls for Emergency Medical Services (EMS) in the country, but a new program hopes to change that.
On April 19th, Washington, DC's EMS Department rolled out a new pilot program for handling non-emergency 911 calls. The goal of this program is to alleviate emergency room crowding and improve patient care. The “Right Care, Right Now” program will filter out non-emergency calls by redirecting them to a nurse triage line to assess the caller's symptoms. The hope is that the program will decrease the burden on the Emergency Medical system and reduce some of the overcrowding in local emergency rooms. This approach was adopted from some other jurisdictions' attempts to deal with the problem of how to handle non-emergency calls.
The medical director for Washington, DC EMS' system, Dr. Holman, explained, “About 25-percent of callers turn out to have lower acuity calls which could be better handled in an outpatient setting rather than an emergency department.” The nurse triage line will be tested for six months and is expected to route to a nurse 64 out of an estimated 500 emergency calls received daily.
DC Fire & EMS Chief Gregory Dean said that some non-emergency Medicaid callers will have appointments made for them at a clinic for treatment and would also be eligible for round-trip Lyft transportation in non-life-threatening situations.
The District has high hopes that the pilot program will work to improve care across the board, though some are skeptical of this new process as it is sometimes difficult to detect an emergency situation over the phone.
See https://www.washingtonpost.com/local/public-safety/nurses-will-be-in-dcs-911-center-in-latest-attempt-to-cut-emergency-call-volume/2018/04/18/6b40764c-4288-11e8-8569-26fda6b404c7_story.html?noredirect=on
On April 19th, Washington, DC's EMS Department rolled out a new pilot program for handling non-emergency 911 calls. The goal of this program is to alleviate emergency room crowding and improve patient care. The “Right Care, Right Now” program will filter out non-emergency calls by redirecting them to a nurse triage line to assess the caller's symptoms. The hope is that the program will decrease the burden on the Emergency Medical system and reduce some of the overcrowding in local emergency rooms. This approach was adopted from some other jurisdictions' attempts to deal with the problem of how to handle non-emergency calls.
The medical director for Washington, DC EMS' system, Dr. Holman, explained, “About 25-percent of callers turn out to have lower acuity calls which could be better handled in an outpatient setting rather than an emergency department.” The nurse triage line will be tested for six months and is expected to route to a nurse 64 out of an estimated 500 emergency calls received daily.
DC Fire & EMS Chief Gregory Dean said that some non-emergency Medicaid callers will have appointments made for them at a clinic for treatment and would also be eligible for round-trip Lyft transportation in non-life-threatening situations.
The District has high hopes that the pilot program will work to improve care across the board, though some are skeptical of this new process as it is sometimes difficult to detect an emergency situation over the phone.
See https://www.washingtonpost.com/local/public-safety/nurses-will-be-in-dcs-911-center-in-latest-attempt-to-cut-emergency-call-volume/2018/04/18/6b40764c-4288-11e8-8569-26fda6b404c7_story.html?noredirect=on
NY Times pickup of lack of zoning restrictions in Hawaii lava flow risk areas: There have been three lava flows in the Leilani Estates area since 1790.
From the NYT article:
The most recent eruption near the Leilani Estates area was in 1955, before subdivisions were built in the area. The volcano had long been dormant, until its eruption forced villagers in the area to flee.
Lava flow after1790 eruption: [graphic showing lava flows in Leilani Estates area omitted]: 1840, 1955, 2018
Source: Historic lava flows from the United States Geological Survey | Note: Lava areas for 2018 are through May 10
The construction of Leilani Estates was approved in 1960, according to Daryn Arai, deputy planning director at the Hawaii County Planning Department, and about 1,600 people live in the neighborhood today. It’s a rural neighborhood that has offered relatively affordable homes, in contrast with Hawaii’s more expensive real estate on Oahu and Maui.
Despite the neighborhood’s position in an area where lava flows are most likely to occur on the island, there are no building restrictions, Mr. Arai said.
https://www.nytimes.com/interactive/2018/05/12/us/kilauea-volcano-lava-leilani-estates-hawaii.html?hp&action=click&pgtype=Homepage&clickSource=story-heading&module=photo-spot-region®ion=top-news&WT.nav=top-news
From the NYT article:
The most recent eruption near the Leilani Estates area was in 1955, before subdivisions were built in the area. The volcano had long been dormant, until its eruption forced villagers in the area to flee.
Lava flow after1790 eruption: [graphic showing lava flows in Leilani Estates area omitted]: 1840, 1955, 2018
Source: Historic lava flows from the United States Geological Survey | Note: Lava areas for 2018 are through May 10
The construction of Leilani Estates was approved in 1960, according to Daryn Arai, deputy planning director at the Hawaii County Planning Department, and about 1,600 people live in the neighborhood today. It’s a rural neighborhood that has offered relatively affordable homes, in contrast with Hawaii’s more expensive real estate on Oahu and Maui.
Despite the neighborhood’s position in an area where lava flows are most likely to occur on the island, there are no building restrictions, Mr. Arai said.
https://www.nytimes.com/interactive/2018/05/12/us/kilauea-volcano-lava-leilani-estates-hawaii.html?hp&action=click&pgtype=Homepage&clickSource=story-heading&module=photo-spot-region®ion=top-news&WT.nav=top-news
Does Microsoft resist product repairs in order to promote product replacements that boost its sales?
Microsoft faces questions about how it handled the case of Eric Lundgren, facing 15 months in prison for duplicating freely available MS Windows restore software.
U.S. PIRG and iFixit noted the tough environment for repair and Microsoft’s role in other repair disputes, and called for Microsoft to come to the table to move repair forward.
Los Angeles – Microsoft is facing widespread criticism for the way it handled a dispute with recycling entrepreneur Eric Lundgren. Among the criticisms are that the company presented misleading testimony about the function of the software in question to increase the penalties—which is provided for free and can only be used to repair a computer with a valid Windows license. Microsoft’s testimony was the basis for the sentence.
The U.S. Public Interest Research Group (U.S. PIRG), a national advocacy organization which works to cut waste and advocate for repair, and iFixit, the world’s leading online repair manual, spoke out, noting other issues around with repair with Microsoft and other large tech companies, and calling for Microsoft to meet with advocates and discuss how repair can continue to move forward.
“Electronic waste is a rapidly growing problem and by far the best solution we have is repair and reuse,” said Nathan Proctor, Director of U.S. PIRG’s Right to Repair campaign. “Repair saves people money, extends the life of electronics and keep things off the scrap heap. Some 70 percent of the toxic waste produced now is electronic waste. But we face significant barriers to repair from a wide-range of large manufacturing companies, and that adds to how much waste we produce. Microsoft has a role to play in coming up with solutions, as one of the leading tech companies in the world.”
“I have a lot of friends at Microsoft, and know many people who have put in significant effort regarding their environmental record, but this was a setback,” said Kyle Wiens, CEO of iFixit.com. “We tried to broker a peace before this got out of hand. I like Microsoft and have a lot of respect for Satya Nadella, but their actions in this case were very discouraging. Across the board, recyclers are innovative and resourceful people who find that they can make more money repurposing hardware than shredding it. But they frequently run headlong into copyright issues. I’ve never seen tactics like those used by Microsoft in this case.”
The case against Mr. Lundgren is not the only example of Microsoft resisting repair. Microsoft lobbies against “Right to Repair” reforms which would give consumers and independent businesses access to tools, parts, manuals and diagnostics needed for repair.
Through the Entertainment Software Association, Microsoft and other gaming companies argue against changes to federal Copyright law to protect repair and address barriers to repair. And while some of their products are designed for serviceability, their Surface line is notorious for being almost impossible to repair.
The Surface’s glued-in battery design is so egregious that consumer protection legislators in Microsoft’s home state of Washington have discussed banning the practice altogether. iFixit recently awarded the Surface Laptop their lowest serviceability score ever, a 0 out of 10, for its completely unrepairable (and likely unrecyclable) design that both glues and welds the battery into the frame.
Furthermore, Microsoft has been one of the biggest offenders using illegal void if removed warranty stickers to prevent consumer repair. They were one of six companies that received letters from the FTC last month warning them to change the language in their warranties. Failure to comply could win them charges for “unfair or deceptive acts”.
“Companies have gotten too aggressive at pushing us to throw things away and buy new things. What we should be doing instead is reusing more, repairing more, and recycling the rest — ideas that Eric Lundgren has been pioneering,” added Proctor. “Microsoft has a chance to show they can be part of the solution, but they need to step up.”
“We welcome the chance to meet with Microsoft,” added Wiens.
U.S. PIRG has launched a petition calling for Microsoft to apologize and pledge to work with repair advocates moving forward.
From: https://ifixit.org/blog/10010/microsoft-eric-lundgren/
Microsoft faces questions about how it handled the case of Eric Lundgren, facing 15 months in prison for duplicating freely available MS Windows restore software.
U.S. PIRG and iFixit noted the tough environment for repair and Microsoft’s role in other repair disputes, and called for Microsoft to come to the table to move repair forward.
Los Angeles – Microsoft is facing widespread criticism for the way it handled a dispute with recycling entrepreneur Eric Lundgren. Among the criticisms are that the company presented misleading testimony about the function of the software in question to increase the penalties—which is provided for free and can only be used to repair a computer with a valid Windows license. Microsoft’s testimony was the basis for the sentence.
The U.S. Public Interest Research Group (U.S. PIRG), a national advocacy organization which works to cut waste and advocate for repair, and iFixit, the world’s leading online repair manual, spoke out, noting other issues around with repair with Microsoft and other large tech companies, and calling for Microsoft to meet with advocates and discuss how repair can continue to move forward.
“Electronic waste is a rapidly growing problem and by far the best solution we have is repair and reuse,” said Nathan Proctor, Director of U.S. PIRG’s Right to Repair campaign. “Repair saves people money, extends the life of electronics and keep things off the scrap heap. Some 70 percent of the toxic waste produced now is electronic waste. But we face significant barriers to repair from a wide-range of large manufacturing companies, and that adds to how much waste we produce. Microsoft has a role to play in coming up with solutions, as one of the leading tech companies in the world.”
“I have a lot of friends at Microsoft, and know many people who have put in significant effort regarding their environmental record, but this was a setback,” said Kyle Wiens, CEO of iFixit.com. “We tried to broker a peace before this got out of hand. I like Microsoft and have a lot of respect for Satya Nadella, but their actions in this case were very discouraging. Across the board, recyclers are innovative and resourceful people who find that they can make more money repurposing hardware than shredding it. But they frequently run headlong into copyright issues. I’ve never seen tactics like those used by Microsoft in this case.”
The case against Mr. Lundgren is not the only example of Microsoft resisting repair. Microsoft lobbies against “Right to Repair” reforms which would give consumers and independent businesses access to tools, parts, manuals and diagnostics needed for repair.
Through the Entertainment Software Association, Microsoft and other gaming companies argue against changes to federal Copyright law to protect repair and address barriers to repair. And while some of their products are designed for serviceability, their Surface line is notorious for being almost impossible to repair.
The Surface’s glued-in battery design is so egregious that consumer protection legislators in Microsoft’s home state of Washington have discussed banning the practice altogether. iFixit recently awarded the Surface Laptop their lowest serviceability score ever, a 0 out of 10, for its completely unrepairable (and likely unrecyclable) design that both glues and welds the battery into the frame.
Furthermore, Microsoft has been one of the biggest offenders using illegal void if removed warranty stickers to prevent consumer repair. They were one of six companies that received letters from the FTC last month warning them to change the language in their warranties. Failure to comply could win them charges for “unfair or deceptive acts”.
“Companies have gotten too aggressive at pushing us to throw things away and buy new things. What we should be doing instead is reusing more, repairing more, and recycling the rest — ideas that Eric Lundgren has been pioneering,” added Proctor. “Microsoft has a chance to show they can be part of the solution, but they need to step up.”
“We welcome the chance to meet with Microsoft,” added Wiens.
U.S. PIRG has launched a petition calling for Microsoft to apologize and pledge to work with repair advocates moving forward.
From: https://ifixit.org/blog/10010/microsoft-eric-lundgren/
The District of Columbia prevailed before the DC Court of Appeals in its case against ExxonMobil, Capitol Petroleum Group, et al.; In February, 2018 the Court docket shows "Filed Stipulation To Dismiss Appeal and withdrawal of petition for rehearing en banc (Appellee Exxonmobil Oil Corporation)"
Excerpts from the Court's docket:
11/09/2016 Filed Argued before Associate Judge Thompson, Associate Judge Easterly, and Senior Judge Reid. (Catherine A. Jackson, Esq. for appellant District of Columbia) (Alphonse M. Alfano, Esq. for appellee Capitol Petroleum Group LLC, Anacostia Reality LLC, Springfield Petroleum Realty LLC) (Robert M. Loeb, Esq. for appellee Exxonmobil Oil Corporation, et al)
11/02/2017 Filed Reversed And Remanded by OPINION
11/13/2017 Filed Motion For Extension Of Time to File petition for rehearing en banc. (Appellee Exxonmobil Oil Corporation)
.
11/15/2017 Filed Motion For Extension Of Time to File petition for rehearing en banc (Appellee Anacostia Reality LLC, Appellee Capitol Petroleum Group LLC, Appellee Springfield Petroleum Realty LLC)Granted
11/21/2017 Filed Order Granting Appellees's Motion For Extension Of Time to File petition for rehearing en banc to November 30, 2017. (Appellee Anacostia Reality LLC, Appellee Capitol Petroleum Group LLC, Appellee Springfield Petroleum Realty LLC)
11/30/2017 Filed Petition For Rehearing En Banc (Appellee Exxonmobil Oil Corporation)
12/21/2017 Filed ORDERED that appellant, within 14 days from the date of this order, shall file a response thereto.
01/04/2018 Filed Motion For Extension Of Time to File response to the petition for rehearing en banc (Appellant)Granted
01/18/2018 Filed Motion For Extension Of Time to File Response to petition for rehearing en banc. (Appellant)Granted
01/26/2018 Filed Order Granting Appellant's Motions For Extensions Of Time to File a Response to appellees' petition for rehearing en banc to February 20, 2018.
02/14/2018 Filed Stipulation To Dismiss Appeal and withdrawal of petition for rehearing en banc (Appellee Exxonmobil Oil Corporation)
* * * *
Following is some explanatory language from the Appellate Court's opinion:
According to the District — and this is the gravamen of its complaint — “[t]he dealer franchise agreements, and later versions of these agreements” unlawfully “compel the independent retail dealers operating these stations to buy their Exxon-branded gasoline exclusively from – and at prices set by” Anacostia or Springfield or CPG. The complaint further alleges that Exxon continues to enforce the unlawful exclusive-supply requirement through its distribution agreements with Anacostia and Springfield, which “allow only one supplier to supply [Exxon-branded] gasoline to each Exxon-branded gasoline station in D.C.” As a result of the dealer-franchise and distribution agreements, the complaint alleges, the defendants/appellees “set the wholesale price[ ] paid for Exxon-branded gasoline in D.C.,” depriving retail dealers who sell Exxon-branded gasoline and “many thousands of consumers in D.C.” who purchase Exxon-branded gasoline in D.C. of “the benefits of competition in the wholesale supply of Exxon-branded gasoline.” The complaint asserts that independent retail Exxon stations cannot “purchase Exxon-branded gasoline at prices below the prices charged by” the Distributors. The complaint further asserts that of the thirty-one Exxon-branded gasoline stations in the District, all of which are owned by Anacostia or Springfield, twenty-seven are operated by independent retail dealer franchisees, all of which are subject to and restricted by the allegedly unlawful dealer-franchise and distribution agreements. According to the complaint, these independent franchisee-operated retail stations comprise about 25% of the gasoline stations in the District.
The complaint charges that the dealer-franchise agreements between the Distributors and independent retail service stations and the distribution agreements between Exxon and the Distributors (all of which the District asserts constitute “marketing agreements” as that term is defined in the RSSA) violate two provisions of Subchapter III of the RSSA: D.C. Code § 36-303.01 (a)(6) and (11). D.C. Code § 36-303.01 (a)(6) states that:
[No marketing agreement shall ․] [p]rohibit a retail dealer from purchasing or accepting delivery of, on consignment or otherwise, any motor fuels, petroleum products, automotive products, or other products from any person who is not a party to the marketing agreement or prohibit a retail dealer from selling such motor fuels or products, provided that if the marketing agreement permits the retail dealer to use the distributor's trademark, the marketing agreement may require such motor fuels, petroleum products, and automotive products to be of a reasonably similar quality to those of the distributor, and provided further that the retail dealer shall neither represent such motor fuels or products as having been procured from the distributor nor sell such motor fuels or products under the distributor's trademark[.]
D.C. Code § 36-303.01 (a)(11) states that “no marketing agreement shall” “[c]ontain any term or condition which, directly or indirectly, violates this subchapter.” The complaint asks for a declaration that defendants'/appellees' marketing agreements violate these provisions of District of Columbia law and for an injunction prohibiting enforcement of the agreements.
Excerpts from the Court's docket:
11/09/2016 Filed Argued before Associate Judge Thompson, Associate Judge Easterly, and Senior Judge Reid. (Catherine A. Jackson, Esq. for appellant District of Columbia) (Alphonse M. Alfano, Esq. for appellee Capitol Petroleum Group LLC, Anacostia Reality LLC, Springfield Petroleum Realty LLC) (Robert M. Loeb, Esq. for appellee Exxonmobil Oil Corporation, et al)
11/02/2017 Filed Reversed And Remanded by OPINION
11/13/2017 Filed Motion For Extension Of Time to File petition for rehearing en banc. (Appellee Exxonmobil Oil Corporation)
.
11/15/2017 Filed Motion For Extension Of Time to File petition for rehearing en banc (Appellee Anacostia Reality LLC, Appellee Capitol Petroleum Group LLC, Appellee Springfield Petroleum Realty LLC)Granted
11/21/2017 Filed Order Granting Appellees's Motion For Extension Of Time to File petition for rehearing en banc to November 30, 2017. (Appellee Anacostia Reality LLC, Appellee Capitol Petroleum Group LLC, Appellee Springfield Petroleum Realty LLC)
11/30/2017 Filed Petition For Rehearing En Banc (Appellee Exxonmobil Oil Corporation)
12/21/2017 Filed ORDERED that appellant, within 14 days from the date of this order, shall file a response thereto.
01/04/2018 Filed Motion For Extension Of Time to File response to the petition for rehearing en banc (Appellant)Granted
01/18/2018 Filed Motion For Extension Of Time to File Response to petition for rehearing en banc. (Appellant)Granted
01/26/2018 Filed Order Granting Appellant's Motions For Extensions Of Time to File a Response to appellees' petition for rehearing en banc to February 20, 2018.
02/14/2018 Filed Stipulation To Dismiss Appeal and withdrawal of petition for rehearing en banc (Appellee Exxonmobil Oil Corporation)
* * * *
Following is some explanatory language from the Appellate Court's opinion:
According to the District — and this is the gravamen of its complaint — “[t]he dealer franchise agreements, and later versions of these agreements” unlawfully “compel the independent retail dealers operating these stations to buy their Exxon-branded gasoline exclusively from – and at prices set by” Anacostia or Springfield or CPG. The complaint further alleges that Exxon continues to enforce the unlawful exclusive-supply requirement through its distribution agreements with Anacostia and Springfield, which “allow only one supplier to supply [Exxon-branded] gasoline to each Exxon-branded gasoline station in D.C.” As a result of the dealer-franchise and distribution agreements, the complaint alleges, the defendants/appellees “set the wholesale price[ ] paid for Exxon-branded gasoline in D.C.,” depriving retail dealers who sell Exxon-branded gasoline and “many thousands of consumers in D.C.” who purchase Exxon-branded gasoline in D.C. of “the benefits of competition in the wholesale supply of Exxon-branded gasoline.” The complaint asserts that independent retail Exxon stations cannot “purchase Exxon-branded gasoline at prices below the prices charged by” the Distributors. The complaint further asserts that of the thirty-one Exxon-branded gasoline stations in the District, all of which are owned by Anacostia or Springfield, twenty-seven are operated by independent retail dealer franchisees, all of which are subject to and restricted by the allegedly unlawful dealer-franchise and distribution agreements. According to the complaint, these independent franchisee-operated retail stations comprise about 25% of the gasoline stations in the District.
The complaint charges that the dealer-franchise agreements between the Distributors and independent retail service stations and the distribution agreements between Exxon and the Distributors (all of which the District asserts constitute “marketing agreements” as that term is defined in the RSSA) violate two provisions of Subchapter III of the RSSA: D.C. Code § 36-303.01 (a)(6) and (11). D.C. Code § 36-303.01 (a)(6) states that:
[No marketing agreement shall ․] [p]rohibit a retail dealer from purchasing or accepting delivery of, on consignment or otherwise, any motor fuels, petroleum products, automotive products, or other products from any person who is not a party to the marketing agreement or prohibit a retail dealer from selling such motor fuels or products, provided that if the marketing agreement permits the retail dealer to use the distributor's trademark, the marketing agreement may require such motor fuels, petroleum products, and automotive products to be of a reasonably similar quality to those of the distributor, and provided further that the retail dealer shall neither represent such motor fuels or products as having been procured from the distributor nor sell such motor fuels or products under the distributor's trademark[.]
D.C. Code § 36-303.01 (a)(11) states that “no marketing agreement shall” “[c]ontain any term or condition which, directly or indirectly, violates this subchapter.” The complaint asks for a declaration that defendants'/appellees' marketing agreements violate these provisions of District of Columbia law and for an injunction prohibiting enforcement of the agreements.
Is it wise to buy a Hawaiian house in Zone 1 for volcano risk?
It hasn't worked out well for some who live in Leilani Estates, one of the areas evacuated recently because of volcanic eruption. That includes a man interviewed on TV who said he moved to Hawaii from California to avoid fires.
It turns out that the US Geological Survey categorizes areas by volcano lava riskiness. Apparently government regulations permit people to buy into high risk areas, and people are attracted to buy because home prices are lower where risk is higher. On the other hand, its harder to get insurance or financing in high risk areas. Luckily for people who need financing to buy a high risk home, the Federal government apparently does offer a lending program through Rural Housing development. A local real estate broker posting explains it [see: http://www.koarealty.com/buying-property/lava-zones/ ] -- DAR
Lava hazard zones:
Here on the island of Hawaii Lava hazards are a real part of the journey. Hawaii island is comprised of active volcanoes and as that is a real fact there are important issues to consider when looking at purchasing real estate in areas that are at higher risk of the flow of lava. The United States Geological Survey has broken up the island in 9 zones commonly known as lava hazard zones, and labeled them 1-9. Zone 1 is considered the highest risk zone based upon and according to the degree of the risk of hazard, historical flows, and the geographical lay of the land. Zone 2 is also a high-risk zone based upon the same criteria. As the hazard zone number increases in number the degree of risk decreases. In such lava zone 9 is considered a zone of least risk.
When it comes to purchasing real estate in these high risk areas one needs to be aware of the risks that come with owning in these areas as well as the costs associated on a level related to lending and insurance, as well as to the actual physical risk factor associated.
When choosing to purchase real estate here on the island, many buyer’s are attracted to lava zones 1 and 2. This is in part due to the weather and scenic beauty but along with this we cannot deny the affordable prices. It is true, land located in the lava hazard zones 1 & 2 is typically less expensive than any other areas on Hawaii island. In fact, the district of Puna and the district of Kau; both areas designated with lava hazard zones 1 & 2; offer some of the most affordable land in ALL of the island chain. When making a decision to purchase in these areas one must be aware and consider these variables:
1. Limited insurers for homeowners insurance and hazard insurance.
Currently there is the Hawaii Property insurance Association that offers insurance on homes up to a value of $350,000.00. Any replacement value amount above and beyond $350,000.00 would be provided by Lloyds of London. Typically insurance premiums are higher than what one would see on a property outside of these high-risk zones.
2. Limited financing for residential purchases or construction loans.
In recent times many lending institutions have completely eliminated programs that they once had for financing in these risk zones. At current, the Federal government does offer a program through Rural Housing development.
As for conventional financing, most institutions are requiring a minimum of 20% down in order to lend on a property in either of these two high-risk zones.
Which subdivisions are in each lava hazard zone?East side, covering Hilo to the district of Puna the following are
District of PUNA:
Lava Zone 1
Where can YOU get more information?
Go to the experts by following this site.
http://hvo.wr.usgs.gov/hazards/lavazones/main.html
It hasn't worked out well for some who live in Leilani Estates, one of the areas evacuated recently because of volcanic eruption. That includes a man interviewed on TV who said he moved to Hawaii from California to avoid fires.
It turns out that the US Geological Survey categorizes areas by volcano lava riskiness. Apparently government regulations permit people to buy into high risk areas, and people are attracted to buy because home prices are lower where risk is higher. On the other hand, its harder to get insurance or financing in high risk areas. Luckily for people who need financing to buy a high risk home, the Federal government apparently does offer a lending program through Rural Housing development. A local real estate broker posting explains it [see: http://www.koarealty.com/buying-property/lava-zones/ ] -- DAR
Lava hazard zones:
Here on the island of Hawaii Lava hazards are a real part of the journey. Hawaii island is comprised of active volcanoes and as that is a real fact there are important issues to consider when looking at purchasing real estate in areas that are at higher risk of the flow of lava. The United States Geological Survey has broken up the island in 9 zones commonly known as lava hazard zones, and labeled them 1-9. Zone 1 is considered the highest risk zone based upon and according to the degree of the risk of hazard, historical flows, and the geographical lay of the land. Zone 2 is also a high-risk zone based upon the same criteria. As the hazard zone number increases in number the degree of risk decreases. In such lava zone 9 is considered a zone of least risk.
When it comes to purchasing real estate in these high risk areas one needs to be aware of the risks that come with owning in these areas as well as the costs associated on a level related to lending and insurance, as well as to the actual physical risk factor associated.
When choosing to purchase real estate here on the island, many buyer’s are attracted to lava zones 1 and 2. This is in part due to the weather and scenic beauty but along with this we cannot deny the affordable prices. It is true, land located in the lava hazard zones 1 & 2 is typically less expensive than any other areas on Hawaii island. In fact, the district of Puna and the district of Kau; both areas designated with lava hazard zones 1 & 2; offer some of the most affordable land in ALL of the island chain. When making a decision to purchase in these areas one must be aware and consider these variables:
1. Limited insurers for homeowners insurance and hazard insurance.
Currently there is the Hawaii Property insurance Association that offers insurance on homes up to a value of $350,000.00. Any replacement value amount above and beyond $350,000.00 would be provided by Lloyds of London. Typically insurance premiums are higher than what one would see on a property outside of these high-risk zones.
2. Limited financing for residential purchases or construction loans.
In recent times many lending institutions have completely eliminated programs that they once had for financing in these risk zones. At current, the Federal government does offer a program through Rural Housing development.
As for conventional financing, most institutions are requiring a minimum of 20% down in order to lend on a property in either of these two high-risk zones.
Which subdivisions are in each lava hazard zone?East side, covering Hilo to the district of Puna the following are
District of PUNA:
Lava Zone 1
- Leilani Estates
- Kapoho (parts of it, not all — call for details)
- Kalapana Vacation Lots
- Royal Gardens
Where can YOU get more information?
Go to the experts by following this site.
http://hvo.wr.usgs.gov/hazards/lavazones/main.html
CRISPR gene-editing technology IP battles
CRISPR is a recent break-through technology that allows genes to be edited is a way that may potentially cure many illnesses with a genetic component. For example, blindness caused by retinitis pigmentosa might be curable by using CRISPR technology to fix the relevant genetic defect. It seems unfortunate that patent battles have developed which could cause scientists to compete in a commercial sense rather than coordinating research to accelerate scientific progress. The patent battles are going on now, but the article I've picked for your attention is an older one that provides a useful overview. What you see below is a brief excerpt, with a link to the original article. DAR
The battle to own the CRISPR–Cas9 gene-editing toolApril 2017
By Catherine Jewell, Communications Division, WIPO, and Vijay Shankar Balakrishnan, Science and Health Journalist
Millions suffer from devastating genetic disorders like cancer, muscular dystrophy, cystic fibrosis, sickle cell anaemia, Huntington’s disease and many others. Imagine the pain and suffering that could be avoided (not to mention the healthcare costs) if we could cure these diseases simply by rewriting the genetic code of patients. This is the promise of the CRISPR-Cas9 gene-editing technology.
Billed as the most exciting breakthrough in biomedical research since the dawn of genetic engineering in the 1970s, the CRISPR-Cas9 gene editing tool has huge scope to improve understanding of human and animal disease and its treatment (photo: iStock.com/cosmin4000).Billed as the most exciting breakthrough in biomedical research since the dawn of genetic engineering in the 1970s, the CRISPR-Cas9 gene-editing tool has huge scope to improve understanding of human and animal disease and its treatment. It has the potential to revolutionize medicine and agricultural research. The race to develop commercial applications of CRISPR-Cas9 in healthcare, agriculture and industry, however, has thrust the technology, its pioneers, the institutions they work for and a clutch of startups in which they are involved into a high-stakes legal battle over who actually invented it and when. The outcome will determine who controls the technology and where the highly lucrative economic benefits it promises to generate will flow.
The technology and how it came about:
Ever since Watson and Crick identified the DNA double helix, scientists have been searching for ways to better understand the role that DNA plays in the genetic make-up of living organisms. The CRISPR tool is a huge step forward. Compared to existing research tools, it offers a relatively quick, easy, reliable and cheap way to target and edit specific genetic sequences.
CRISPR stands for Clustered Regularly Interspaced Short Palindromic Repeats. It is a natural defence mechanism that allows bacterial cells to detect and destroy the viruses that attack them.
The CRISPR mechanism was first identified as a “general purpose gene-editing tool” in a scientific paper published by scientists Erik Sontheimer and Luciano Marrafinni from Northwestern University, Evanston, Illinois, USA in 2008. The scientists filed for a patent but their application was rejected because they were unable to reduce it to any practical application, Science’s Jon Cohen writes.
But CRISPR really began to create a buzz, with the publication in June 2012, of a scientific paper by Emmanuelle Charpentier, a French microbiologist then working at the University of Vienna and now at the Max Planck Institute for Infection Biology, Germany and Umeå University, Sweden, and Jennifer Doudna at the University of California, Berkeley, USA. Their paper outlined how CRISPR, with the help of an enzyme called Cas9, can be transformed into a tool to edit genes. Specifically, how CRISPR-Cas9 can be used to cut DNA in a test tube. They filed their first CRISPR-related patent application in May 2012. It is still under review.
Six months later, in January 2013, scientists at the Broad Institute of the Massachusetts Institute of Technology (MIT) and Harvard University, led by Feng Zhang, reported that they had found a way to use CRISPR-Cas9 to edit the cells of mammals, further fuelling interest in its potential to generate new and more effective medical treatments. The Broad researchers filed their first CRISPR-related patent application in December 2012 and paid for a fast-track review process. Eleven additional patent applications were filed to bolster the claim that they were the first to invent a CRISPR system to edit mammalian cells, Jon Cohen notes. In April 2014, the United States Patent and Trademark Office (USPTO) granted the Broad team a patent on their CRISPR technology.
Jennifer Doudna (top left) at the University of California, Berkeley, USA, and Feng Zhang (top right) at the Broad Institute of the Massachusetts Institute of Technology (MIT) and Harvard University, have each undertaken pioneering work in relation to CRISPR-Cas9. They and others are currently embroiled in a legal firestorm over who owns commercial or IP rights in the technology. (Photos: Keegan Houser/UC Berkeley and Justin Knight Photography).The battle for ownershipThe grant of the patent to the Broad team triggered a legal firestorm. Professor Jake Sherkow of the New York Law School characterizes it as “an absolutely humungous biotech patent dispute”.
The stakes are clearly very high. Whoever owns the commercial or IP rights to CRISPR-Cas9 has the potential to generate huge financial returns and to decide who gets to use it.
Each of the pioneering researchers and their respective institutions has a stake in a handful of start-ups which have attracted millions of investment dollars to translate CRISPR-Cas9 systems into new treatments for a broad range of genetic diseases. They include Intellia Therapeutics (UC Berkeley), Caribou Sciences (J. Doudna), CRISPR Therapeutics and ERS Genomics (E. Charpentier) and Editas Medicine (Broad Institute).
An analysis of the CRISPR-Cas9 commercial landscape by Science’s Jon Cohen reveals that a web of often overlapping licenses have already been granted by CRISPR startups for many applications in medicine, agriculture and industry.
Full article:http://www.wipo.int/wipo_magazine/en/2017/02/article_0005.html
CRISPR is a recent break-through technology that allows genes to be edited is a way that may potentially cure many illnesses with a genetic component. For example, blindness caused by retinitis pigmentosa might be curable by using CRISPR technology to fix the relevant genetic defect. It seems unfortunate that patent battles have developed which could cause scientists to compete in a commercial sense rather than coordinating research to accelerate scientific progress. The patent battles are going on now, but the article I've picked for your attention is an older one that provides a useful overview. What you see below is a brief excerpt, with a link to the original article. DAR
The battle to own the CRISPR–Cas9 gene-editing toolApril 2017
By Catherine Jewell, Communications Division, WIPO, and Vijay Shankar Balakrishnan, Science and Health Journalist
Millions suffer from devastating genetic disorders like cancer, muscular dystrophy, cystic fibrosis, sickle cell anaemia, Huntington’s disease and many others. Imagine the pain and suffering that could be avoided (not to mention the healthcare costs) if we could cure these diseases simply by rewriting the genetic code of patients. This is the promise of the CRISPR-Cas9 gene-editing technology.
Billed as the most exciting breakthrough in biomedical research since the dawn of genetic engineering in the 1970s, the CRISPR-Cas9 gene editing tool has huge scope to improve understanding of human and animal disease and its treatment (photo: iStock.com/cosmin4000).Billed as the most exciting breakthrough in biomedical research since the dawn of genetic engineering in the 1970s, the CRISPR-Cas9 gene-editing tool has huge scope to improve understanding of human and animal disease and its treatment. It has the potential to revolutionize medicine and agricultural research. The race to develop commercial applications of CRISPR-Cas9 in healthcare, agriculture and industry, however, has thrust the technology, its pioneers, the institutions they work for and a clutch of startups in which they are involved into a high-stakes legal battle over who actually invented it and when. The outcome will determine who controls the technology and where the highly lucrative economic benefits it promises to generate will flow.
The technology and how it came about:
Ever since Watson and Crick identified the DNA double helix, scientists have been searching for ways to better understand the role that DNA plays in the genetic make-up of living organisms. The CRISPR tool is a huge step forward. Compared to existing research tools, it offers a relatively quick, easy, reliable and cheap way to target and edit specific genetic sequences.
CRISPR stands for Clustered Regularly Interspaced Short Palindromic Repeats. It is a natural defence mechanism that allows bacterial cells to detect and destroy the viruses that attack them.
The CRISPR mechanism was first identified as a “general purpose gene-editing tool” in a scientific paper published by scientists Erik Sontheimer and Luciano Marrafinni from Northwestern University, Evanston, Illinois, USA in 2008. The scientists filed for a patent but their application was rejected because they were unable to reduce it to any practical application, Science’s Jon Cohen writes.
But CRISPR really began to create a buzz, with the publication in June 2012, of a scientific paper by Emmanuelle Charpentier, a French microbiologist then working at the University of Vienna and now at the Max Planck Institute for Infection Biology, Germany and Umeå University, Sweden, and Jennifer Doudna at the University of California, Berkeley, USA. Their paper outlined how CRISPR, with the help of an enzyme called Cas9, can be transformed into a tool to edit genes. Specifically, how CRISPR-Cas9 can be used to cut DNA in a test tube. They filed their first CRISPR-related patent application in May 2012. It is still under review.
Six months later, in January 2013, scientists at the Broad Institute of the Massachusetts Institute of Technology (MIT) and Harvard University, led by Feng Zhang, reported that they had found a way to use CRISPR-Cas9 to edit the cells of mammals, further fuelling interest in its potential to generate new and more effective medical treatments. The Broad researchers filed their first CRISPR-related patent application in December 2012 and paid for a fast-track review process. Eleven additional patent applications were filed to bolster the claim that they were the first to invent a CRISPR system to edit mammalian cells, Jon Cohen notes. In April 2014, the United States Patent and Trademark Office (USPTO) granted the Broad team a patent on their CRISPR technology.
Jennifer Doudna (top left) at the University of California, Berkeley, USA, and Feng Zhang (top right) at the Broad Institute of the Massachusetts Institute of Technology (MIT) and Harvard University, have each undertaken pioneering work in relation to CRISPR-Cas9. They and others are currently embroiled in a legal firestorm over who owns commercial or IP rights in the technology. (Photos: Keegan Houser/UC Berkeley and Justin Knight Photography).The battle for ownershipThe grant of the patent to the Broad team triggered a legal firestorm. Professor Jake Sherkow of the New York Law School characterizes it as “an absolutely humungous biotech patent dispute”.
The stakes are clearly very high. Whoever owns the commercial or IP rights to CRISPR-Cas9 has the potential to generate huge financial returns and to decide who gets to use it.
Each of the pioneering researchers and their respective institutions has a stake in a handful of start-ups which have attracted millions of investment dollars to translate CRISPR-Cas9 systems into new treatments for a broad range of genetic diseases. They include Intellia Therapeutics (UC Berkeley), Caribou Sciences (J. Doudna), CRISPR Therapeutics and ERS Genomics (E. Charpentier) and Editas Medicine (Broad Institute).
An analysis of the CRISPR-Cas9 commercial landscape by Science’s Jon Cohen reveals that a web of often overlapping licenses have already been granted by CRISPR startups for many applications in medicine, agriculture and industry.
Full article:http://www.wipo.int/wipo_magazine/en/2017/02/article_0005.html
AAI 19th Annual Conference "Antitrust at a Crossroads - Plotting the Course for the Next Decade"
DATE: JUNE 21, 2018
LOCATION: NATIONAL PRESS CLUB, WASHINGTON DCOn Thursday June 21, 2018, the American Antitrust Institute will host its 19th Annual Conference “Antitrust at a Crossroads: Plotting the Policy Course for the Next Decade.” Experts from law, economics, and policy will offer insight via four panels:
Registration Fees:
Early Bird (until May 18): $450
Government and Academic Rate: $15
DATE: JUNE 21, 2018
LOCATION: NATIONAL PRESS CLUB, WASHINGTON DCOn Thursday June 21, 2018, the American Antitrust Institute will host its 19th Annual Conference “Antitrust at a Crossroads: Plotting the Policy Course for the Next Decade.” Experts from law, economics, and policy will offer insight via four panels:
- Antitrust and Workers -- Agreements, Mergers, and Monopsony
As American workers struggle to navigate an economy characterized by increasing corporate concentration, experts have begun to focus greater attention on anticompetitive conduct in labor markets. This panel will explore applications of the antitrust laws to prohibit the exercise of buyer power that harms competition and suppresses wages and salaries. Among other things, panelists will discuss landmark civil cases challenging employer no-poaching and no-hiring agreements, the Department of Justice’s movement toward prosecuting naked wage-fixing and no-poaching agreements criminally, and recent scholarship addressing the role of merger enforcement in preserving buy-side competition. - Innovation and Antitrust — Sword or Shield?
Promoting innovation is widely recognized to be a critical, if not the most important, goal of antitrust law. In practice, however, harm to innovation is just as often used as a defense to antitrust claims, particularly where intellectual property rights are involved. This panel of experts will address several hot topics at the edge of this divide, including: antitrust claims involving product redesign and product hopping, developments in the Noerr-Pennington doctrine and sham litigation, the antitrust treatment of FRAND breaches and SSO rules, and the use of the potential competition doctrine as a means to protect nascent competition and promote innovation. - Vertical Merger Enforcement — Competitive Effects, Remedies, and Guidelines
Vertical merger proposals in key sectors such as telecommunications, media, agricultural biotechnology, and healthcare continue to pile up. Once a lower-profile area of enforcement, vertical mergers are now a hot topic that have generated debate over competitive effects and past remedies. This panel will take up three important, interrelated topics in vertical merger enforcement. Panelists will first discuss recent developments in framing theories of harm around bargaining leverage and exclusionary effects and anticompetitive coordination. In light of controversy in past vertical merger cases, panelists will then turn to how enforcement should address the question of effectiveness of conduct remedies. Finally, the panel will take up the question of whether more guidance on how the antitrust agencies will evaluate vertical mergers is warranted, through an update and/or formalization of the 1984 vertical merger guidelines. - Oyez! Antitrust and the Supreme Court
This term at the Supreme Court has been a busy one for antitrust cases and could be quite significant. The leading case, Ohio v. Amex, may have wide ramifications beyond its practical implications for credit-card merchant fees and two-sided markets. Fundamental antitrust issues of market definition and the operation of the rule of reason are at stake. Animal Science v. Hebei raises important questions involving international comity and export cartels. And Salt River v. Tesla indicates that the Court is poised to resolve a split in the circuits over the state-action doctrine. Our panel of leading Supreme Court advocates will address these cases and other antitrust developments at the Court, including potentially momentous cert petitions.
Registration Fees:
Early Bird (until May 18): $450
Government and Academic Rate: $15
AAI letter opposing "Smarter" Act modifying agency jurisdiction
AAI issued a letter opposing the SMARTER Act to the Ranking Member of the House Judiciary Committee, Jerry Nadler, and Ranking Member of the House Subcommittee on Regulatory Reform, Commercial and Antitrust Law, David Cicilline. The SMARTER Act proposes “[t]o amend the Clayton Act and the Federal Trade Commission Act to provide that the Federal Trade Commission shall exercise authority with respect to mergers only under the Clayton Act and only in the same procedural manner as the Attorney General exercises such authority.” AAI reviewed workload statistics compiled by the U.S. Department of Justice and Federal Trade Commission to examine whether the premise of the SMARTER Act is sound. The review indicates that the concerns of the bill’s sponsors are without foundation and that the SMARTER Act would not serve the interests of competition or consumers. The letter summarizes AAI’s analysis and findings.
Download AAI Letter Opposing SMARTER Act [ http://www.antitrustinstitute.org/sites/default/files/AAI%20Letter%20for%20Record_H.R.%205645_5.2.18.pdf ]
AAI issued a letter opposing the SMARTER Act to the Ranking Member of the House Judiciary Committee, Jerry Nadler, and Ranking Member of the House Subcommittee on Regulatory Reform, Commercial and Antitrust Law, David Cicilline. The SMARTER Act proposes “[t]o amend the Clayton Act and the Federal Trade Commission Act to provide that the Federal Trade Commission shall exercise authority with respect to mergers only under the Clayton Act and only in the same procedural manner as the Attorney General exercises such authority.” AAI reviewed workload statistics compiled by the U.S. Department of Justice and Federal Trade Commission to examine whether the premise of the SMARTER Act is sound. The review indicates that the concerns of the bill’s sponsors are without foundation and that the SMARTER Act would not serve the interests of competition or consumers. The letter summarizes AAI’s analysis and findings.
Download AAI Letter Opposing SMARTER Act [ http://www.antitrustinstitute.org/sites/default/files/AAI%20Letter%20for%20Record_H.R.%205645_5.2.18.pdf ]
Bloomberg on exploitation of the elderly
Excerpt:
The total number of victims is increasing as baby boomers retire and their ability to manage trillions of dollars in personal assets diminishes. One financial services firm estimates seniors lose as much as $36.5 billion a year. But assessments like that are “grossly underestimated,” according to a 2016 study by New York State’s Office of Children and Family Services. For every case reported to authorities, as many as 44 are not. The study found losses in New York alone could be as high as $1.5 billion.
The U.S. Centers for Disease Control and Prevention drew attention to elder exploitation as a public health problem in a 2016 report, citing groundbreaking research two decades earlier by Mark Lachs. Now co-chief of the Division of Geriatrics and Palliative Medicine at Weill Cornell Medicine and New York-Presbyterian Hospital, Lachs says elder abuse victims—including those who suffer financial exploitation--die at a rate three times faster than those who haven’t been abused. It’s a “public health crisis,” he warns.
“I knew these crimes were killing people,” says Elizabeth Loewy, who directed the elder abuse unit at the Manhattan District Attorney’s Office. As her exploitation cases steadily rose to hundreds per year, she says, “so many family members told me, ‘I can’t prove it, but this killed him.’”
Full article: https://www.bloomberg.com/news/features/2018-05-03/america-s-elderly-are-losing-37-billion-a-year-to-fraud
Excerpt:
The total number of victims is increasing as baby boomers retire and their ability to manage trillions of dollars in personal assets diminishes. One financial services firm estimates seniors lose as much as $36.5 billion a year. But assessments like that are “grossly underestimated,” according to a 2016 study by New York State’s Office of Children and Family Services. For every case reported to authorities, as many as 44 are not. The study found losses in New York alone could be as high as $1.5 billion.
The U.S. Centers for Disease Control and Prevention drew attention to elder exploitation as a public health problem in a 2016 report, citing groundbreaking research two decades earlier by Mark Lachs. Now co-chief of the Division of Geriatrics and Palliative Medicine at Weill Cornell Medicine and New York-Presbyterian Hospital, Lachs says elder abuse victims—including those who suffer financial exploitation--die at a rate three times faster than those who haven’t been abused. It’s a “public health crisis,” he warns.
“I knew these crimes were killing people,” says Elizabeth Loewy, who directed the elder abuse unit at the Manhattan District Attorney’s Office. As her exploitation cases steadily rose to hundreds per year, she says, “so many family members told me, ‘I can’t prove it, but this killed him.’”
Full article: https://www.bloomberg.com/news/features/2018-05-03/america-s-elderly-are-losing-37-billion-a-year-to-fraud
California's press release: California and States Representing Over 40 Percent of U.S. Car Market Sue to Defend National Clean Car Rules
May 1, 2018
See https://oag.ca.gov/news/press-releases/california-and-states-representing-over-40-percent-us-car-market-sue-defend
Excerpt:
SACRAMENTO – Moving to curb toxic air pollution and improve car gas mileage, California Attorney General Xavier Becerra, California Governor Edmund G. Brown Jr. and the California Air Resources Board today announced that they are leading a coalition of 17 states and the District of Columbia in suing the U.S. Environmental Protection Agency to preserve the nation’s single vehicle emission standard.
“The evidence is irrefutable: today’s clean car standards are achievable, science-based and a boon for hardworking American families. But the EPA and Administrator Scott Pruitt refuse to do their job and enforce these standards,” said Attorney General Becerra. “Enough is enough. We’re not looking to pick a fight with the Trump Administration, but when the stakes are this high for our families’ health and our economic prosperity, we have a responsibility to do what is necessary to defend them.”
“The states joining today’s lawsuit represent 140 million people who simply want cleaner and more efficient cars,” said Governor Brown. “This phalanx of states will defend the nation’s clean car standards to boost gas mileage and curb toxic air pollution.”
May 1, 2018
See https://oag.ca.gov/news/press-releases/california-and-states-representing-over-40-percent-us-car-market-sue-defend
Excerpt:
SACRAMENTO – Moving to curb toxic air pollution and improve car gas mileage, California Attorney General Xavier Becerra, California Governor Edmund G. Brown Jr. and the California Air Resources Board today announced that they are leading a coalition of 17 states and the District of Columbia in suing the U.S. Environmental Protection Agency to preserve the nation’s single vehicle emission standard.
“The evidence is irrefutable: today’s clean car standards are achievable, science-based and a boon for hardworking American families. But the EPA and Administrator Scott Pruitt refuse to do their job and enforce these standards,” said Attorney General Becerra. “Enough is enough. We’re not looking to pick a fight with the Trump Administration, but when the stakes are this high for our families’ health and our economic prosperity, we have a responsibility to do what is necessary to defend them.”
“The states joining today’s lawsuit represent 140 million people who simply want cleaner and more efficient cars,” said Governor Brown. “This phalanx of states will defend the nation’s clean car standards to boost gas mileage and curb toxic air pollution.”
Financial problems of new technology proton radiation medical treatment systems suggest that the market doesn't always correctly allocate resources
For years, health systems rushed enthusiastically into expensive medical technologies such as proton beam centers, robotic surgery devices and laser scalpels — potential cash cows in the one economic sector that was reliably growing. Developers got easy financing to purchase the latest multimillion-dollar machine, confident of generous reimbursement.
There are now 27 proton beam units in the U.S., up from about half a dozen a decade ago. More than 20 more are either under construction or in development.
But now that employers, insurers and government seem determined to curb growth in health care spending and to combat overcharges and wasteful procedures, such bets are less of a sure thing.
The problem is that the rollicking business of new medical machines often ignored or outpaced the science: Little research has shown that proton beam therapy reduces side effects or improves survival for common cancers compared with much cheaper, traditional treatment.
If the dot-com bubble and the housing bubble marked previous decades, something of a medical-equipment bubble may be showing itself now. And proton beam machines could become the first casualty.
“The biggest problem these guys have is extra capacity. They don’t have enough patients to fill the rooms” at many proton centers, said Dr. Peter Johnstone, who was CEO of a proton facility at Indiana University before it closed in 2014 and has published research on the industry. At that operation, he said, “we began to see that simply having a proton center didn’t mean people would come.”
Sometimes occupying as much space as a Walmart store and costing enough money to build a dozen elementary schools, the facilities zap cancer with beams of subatomic proton particles instead of conventional radiation. The treatment, which can cost $48,000 or more, affects surrounding tissue less than traditional radiation does because its beams stop at a tumor rather than passing through. But evidence is sparse that this matters.
And so, except in cases of childhood cancer or tumors near sensitive organs such as eyes, commercial insurers have largely balked at paying for proton therapy.
“Something that gets you the same clinical outcomes at a higher price is called inefficient,” said Dr. Ezekiel Emanuel, a health policy professor at the University of Pennsylvania and a longtime critic of the proton-center boom. “If investors have tried to make money off the inefficiency, I don’t think we should be upset that they’re losing money on it.”
Investors backing a surge of new facilities starting in 2009 counted on insurers approving proton therapy not just for children, but also for common adult tumors, especially prostate cancer. In many cases, nonprofit health systems such as Maryland’s partnered with for-profit investors seeking high returns.
Companies marketed proton machines under the assumption that advertising, doctors and insurers would ensure steady business involving patients with a wide variety of cancers. But the dollars haven’t flowed in as expected.
Indiana University’s center became the first proton-therapy facility to close following the investment boom, in 2014. An abandoned proton project in Dallas is in bankruptcy court.
California Protons, formerly associated with Scripps Health in San Diego, landed in bankruptcy last year.
A number of others, including Maryland’s, have missed financial targets or are hemorrhaging money, according to industry analysts, financial documents and interviews with executives.
From https://khn.org/news/as-proton-centers-struggle-a-sign-of-a-health-care-bubble/?utm_campaign=KHN%3A%20First%20Edition&utm_source=hs_email&utm_medium=email&utm_content=62610060&_hsenc=p2ANqtz-__oPaRRQbRgimaO9tY0aAr0CXq4FUiDbftmnl6HOdmdxv43-WsRmzkvSPvfIzsJktuXQIabIKJqEYahL5t1zNyp5-euQ&_hsmi=62610060
For years, health systems rushed enthusiastically into expensive medical technologies such as proton beam centers, robotic surgery devices and laser scalpels — potential cash cows in the one economic sector that was reliably growing. Developers got easy financing to purchase the latest multimillion-dollar machine, confident of generous reimbursement.
There are now 27 proton beam units in the U.S., up from about half a dozen a decade ago. More than 20 more are either under construction or in development.
But now that employers, insurers and government seem determined to curb growth in health care spending and to combat overcharges and wasteful procedures, such bets are less of a sure thing.
The problem is that the rollicking business of new medical machines often ignored or outpaced the science: Little research has shown that proton beam therapy reduces side effects or improves survival for common cancers compared with much cheaper, traditional treatment.
If the dot-com bubble and the housing bubble marked previous decades, something of a medical-equipment bubble may be showing itself now. And proton beam machines could become the first casualty.
“The biggest problem these guys have is extra capacity. They don’t have enough patients to fill the rooms” at many proton centers, said Dr. Peter Johnstone, who was CEO of a proton facility at Indiana University before it closed in 2014 and has published research on the industry. At that operation, he said, “we began to see that simply having a proton center didn’t mean people would come.”
Sometimes occupying as much space as a Walmart store and costing enough money to build a dozen elementary schools, the facilities zap cancer with beams of subatomic proton particles instead of conventional radiation. The treatment, which can cost $48,000 or more, affects surrounding tissue less than traditional radiation does because its beams stop at a tumor rather than passing through. But evidence is sparse that this matters.
And so, except in cases of childhood cancer or tumors near sensitive organs such as eyes, commercial insurers have largely balked at paying for proton therapy.
“Something that gets you the same clinical outcomes at a higher price is called inefficient,” said Dr. Ezekiel Emanuel, a health policy professor at the University of Pennsylvania and a longtime critic of the proton-center boom. “If investors have tried to make money off the inefficiency, I don’t think we should be upset that they’re losing money on it.”
Investors backing a surge of new facilities starting in 2009 counted on insurers approving proton therapy not just for children, but also for common adult tumors, especially prostate cancer. In many cases, nonprofit health systems such as Maryland’s partnered with for-profit investors seeking high returns.
Companies marketed proton machines under the assumption that advertising, doctors and insurers would ensure steady business involving patients with a wide variety of cancers. But the dollars haven’t flowed in as expected.
Indiana University’s center became the first proton-therapy facility to close following the investment boom, in 2014. An abandoned proton project in Dallas is in bankruptcy court.
California Protons, formerly associated with Scripps Health in San Diego, landed in bankruptcy last year.
A number of others, including Maryland’s, have missed financial targets or are hemorrhaging money, according to industry analysts, financial documents and interviews with executives.
From https://khn.org/news/as-proton-centers-struggle-a-sign-of-a-health-care-bubble/?utm_campaign=KHN%3A%20First%20Edition&utm_source=hs_email&utm_medium=email&utm_content=62610060&_hsenc=p2ANqtz-__oPaRRQbRgimaO9tY0aAr0CXq4FUiDbftmnl6HOdmdxv43-WsRmzkvSPvfIzsJktuXQIabIKJqEYahL5t1zNyp5-euQ&_hsmi=62610060
DCCRC Joins 132 Groups Urging SEC Not to Facilitate Forced Arbitration
133 organizations including DCCRC, sent a letter [ https://secureoursavings.com/wp-content/uploads/2018/04/SEC-Sign-on-Letter-Forced-Arbitration.pdf] urging the U.S. Securities and Exchange Commission (SEC) to stand by its mission and longstanding policy of empowering and protecting American investors, including retired servicemembers, first responders, and teachers, by safeguarding their right to join together to hold law-breaking corporations publicly accountable in a court of law.
In recent months, Chairman Clayton has fueled speculation about a dramatic policy shift at the SEC that would threaten the security of hardworking Americans’ retirement savings and gut their legal rights by allowing publicly traded corporations to use forced arbitration clauses against their investors. These “rip-off clauses” would force investors to give up their most effective tool to fight back against securities fraud that could decimate their savings – class action lawsuits.
The letter reads in part:
“Investors rely on the SEC to promote market integrity and deter and detect fraud. But the SEC cannot fulfill this role on its own. Private shareholder lawsuits serve as an essential supplement to Commission action…Recent high-profile examples of securities fraud illustrate the devastating effect this would have. In enforcement actions against Enron, WorldCom, Tyco, Bank of America and Global Crossing, for example, the SEC recovered penalties and fees totaling $1.8 billion, while private securities class actions were able to recover $19.4 billion for defrauded shareholders – more than ten times as much.”
In addition to the letter, more than 40 national and state-based organizations, led by the Consumer Federation of America, Public Justice, and the American Association for Justice, have joined together to form the Secure Our Savings (SOS) Coalition to keep up pressure on SEC leadership.
133 organizations including DCCRC, sent a letter [ https://secureoursavings.com/wp-content/uploads/2018/04/SEC-Sign-on-Letter-Forced-Arbitration.pdf] urging the U.S. Securities and Exchange Commission (SEC) to stand by its mission and longstanding policy of empowering and protecting American investors, including retired servicemembers, first responders, and teachers, by safeguarding their right to join together to hold law-breaking corporations publicly accountable in a court of law.
In recent months, Chairman Clayton has fueled speculation about a dramatic policy shift at the SEC that would threaten the security of hardworking Americans’ retirement savings and gut their legal rights by allowing publicly traded corporations to use forced arbitration clauses against their investors. These “rip-off clauses” would force investors to give up their most effective tool to fight back against securities fraud that could decimate their savings – class action lawsuits.
The letter reads in part:
“Investors rely on the SEC to promote market integrity and deter and detect fraud. But the SEC cannot fulfill this role on its own. Private shareholder lawsuits serve as an essential supplement to Commission action…Recent high-profile examples of securities fraud illustrate the devastating effect this would have. In enforcement actions against Enron, WorldCom, Tyco, Bank of America and Global Crossing, for example, the SEC recovered penalties and fees totaling $1.8 billion, while private securities class actions were able to recover $19.4 billion for defrauded shareholders – more than ten times as much.”
In addition to the letter, more than 40 national and state-based organizations, led by the Consumer Federation of America, Public Justice, and the American Association for Justice, have joined together to form the Secure Our Savings (SOS) Coalition to keep up pressure on SEC leadership.
Susan Crawford on the problems of a T-Mobile/Sprint merger
Excerpt from article in Wired:
The problem is not just that we’d have three instead of four wireless giants in the US, though that’s certainly a major issue. An even bigger threat to the consumer is what would happen next. As I see it, a Sprint/T-Mobile combination would inevitably end up being a wholesale partner for our giant cable companies (Comcast and Spectrum). The resulting business deals would allow those behemoths to neatly control many segments—wired, wireless, prepaid, post-paid—of the stagnant and expensive connectivity marketplace in America. That isn’t a future we should want.
Full article: https://www.wired.com/story/the-case-against-the-t-mobile-sprint-merger/
Excerpt from article in Wired:
The problem is not just that we’d have three instead of four wireless giants in the US, though that’s certainly a major issue. An even bigger threat to the consumer is what would happen next. As I see it, a Sprint/T-Mobile combination would inevitably end up being a wholesale partner for our giant cable companies (Comcast and Spectrum). The resulting business deals would allow those behemoths to neatly control many segments—wired, wireless, prepaid, post-paid—of the stagnant and expensive connectivity marketplace in America. That isn’t a future we should want.
Full article: https://www.wired.com/story/the-case-against-the-t-mobile-sprint-merger/
Philip Marsden on "Hipster" antitrust -- a European perspective
Marsden is Professor of Competition Law and Economics at the College of Europe, Bruges and Senior Director for Case Decision Groups at the Competition & Markets Authority, London.
Here is an excerpt from the concluding part of Marsden's article:
In many fast-moving and high tech markets, consumer engagement and data are key. It thus makes sense to divert loud but vague populist calls for action into joined-up assessments of how these markets work. Consumer law plays a crucial role here. So often we see consumer enforcement complementing competition enforcement, and vice versa. The complement is natural, since in both we are making sure that consumers can trust markets and helping them know that what they’re seeing is what they’re getting.
Online reviews, for example, bolster competition as people can make more informed choices, but this only works if reviews are trustworthy. Making sure that businesses abide by consumer protection law, that they treat their customers fairly, and in ways that engender trust, helps to create a more competitive marketplace. Firms have to work harder to offer better products, across all the competitive variables.
A CALL FOR EVIDENCE: Competition authorities can adapt further too. Competition laws are designed to adapt – but this doesn’t necessarily mean entirely new rules are required. The evolutionary process starts with deepening our understanding of how markets work. Can authorities stimulate this understanding, rather than always being on the back foot, or being presumed to be defending our corner from hipster and political intrusion?
As evidence-based authorities, is there not something blindingly obvious we could contribute to the calls for us to do more? Two things come to mind: a call for evidence, and at the same time, an enhancement of the tools we have to analyze evidence. This year, at the CMA, we are encouraging more fundamental research into trust in markets. This would likely be highly interdisciplinary in nature and would seek to identify which market practices are most likely to be considered unfair and to undermine trust in markets. We could, for example, test perceptions of the fairness of a range of practices, including those that are not transparent or where the consumer does not feel in control; practices that require undue effort or transactions costs to secure a good deal or practices that involve extreme forms of price discrimination. We want to understand the drivers of trust and mistrust in markets and improve our understanding of the challenges facing vulnerable groups of customers who are at high risk of experiencing poor outcomes in markets.
This could all be with a view to informing case selection, diagnosis of problems and the development of remedies. At the same time, we need to improve our ability to assess the evidence we will receive. All competition authorities need highly skilled economics and remedies teams to understand and examine markets and business models. To address the knowledge gaps regarding the use of data, though the CMA is creating a Data and Digital Insights team to help us understand better how online markets work, the importance of data in these markets, what are the barriers to entry, what drives consumer behavior, and when the transparent nature of the Internet might increase the scope for dominance to become entrenched.
This should enhance our understanding of the digital economy and make sure our interventions and capabilities keep pace with the evolution of business models and practices. This welcoming of new evidence and the ability to assess it will of course influence a range of thinking within authorities, on markets, consumer work, mergers or even antitrust. Until then though, I will close with some arguments about why I feel it is incredibly important to hold the line and not let wooly, non-evidence based, populist influences affect antitrust law enforcement itself.
The full article is at https://www.competitionpolicyinternational.com/wp-content/uploads/2018/04/CPI-Marsden.pdf
Marsden is Professor of Competition Law and Economics at the College of Europe, Bruges and Senior Director for Case Decision Groups at the Competition & Markets Authority, London.
Here is an excerpt from the concluding part of Marsden's article:
In many fast-moving and high tech markets, consumer engagement and data are key. It thus makes sense to divert loud but vague populist calls for action into joined-up assessments of how these markets work. Consumer law plays a crucial role here. So often we see consumer enforcement complementing competition enforcement, and vice versa. The complement is natural, since in both we are making sure that consumers can trust markets and helping them know that what they’re seeing is what they’re getting.
Online reviews, for example, bolster competition as people can make more informed choices, but this only works if reviews are trustworthy. Making sure that businesses abide by consumer protection law, that they treat their customers fairly, and in ways that engender trust, helps to create a more competitive marketplace. Firms have to work harder to offer better products, across all the competitive variables.
A CALL FOR EVIDENCE: Competition authorities can adapt further too. Competition laws are designed to adapt – but this doesn’t necessarily mean entirely new rules are required. The evolutionary process starts with deepening our understanding of how markets work. Can authorities stimulate this understanding, rather than always being on the back foot, or being presumed to be defending our corner from hipster and political intrusion?
As evidence-based authorities, is there not something blindingly obvious we could contribute to the calls for us to do more? Two things come to mind: a call for evidence, and at the same time, an enhancement of the tools we have to analyze evidence. This year, at the CMA, we are encouraging more fundamental research into trust in markets. This would likely be highly interdisciplinary in nature and would seek to identify which market practices are most likely to be considered unfair and to undermine trust in markets. We could, for example, test perceptions of the fairness of a range of practices, including those that are not transparent or where the consumer does not feel in control; practices that require undue effort or transactions costs to secure a good deal or practices that involve extreme forms of price discrimination. We want to understand the drivers of trust and mistrust in markets and improve our understanding of the challenges facing vulnerable groups of customers who are at high risk of experiencing poor outcomes in markets.
This could all be with a view to informing case selection, diagnosis of problems and the development of remedies. At the same time, we need to improve our ability to assess the evidence we will receive. All competition authorities need highly skilled economics and remedies teams to understand and examine markets and business models. To address the knowledge gaps regarding the use of data, though the CMA is creating a Data and Digital Insights team to help us understand better how online markets work, the importance of data in these markets, what are the barriers to entry, what drives consumer behavior, and when the transparent nature of the Internet might increase the scope for dominance to become entrenched.
This should enhance our understanding of the digital economy and make sure our interventions and capabilities keep pace with the evolution of business models and practices. This welcoming of new evidence and the ability to assess it will of course influence a range of thinking within authorities, on markets, consumer work, mergers or even antitrust. Until then though, I will close with some arguments about why I feel it is incredibly important to hold the line and not let wooly, non-evidence based, populist influences affect antitrust law enforcement itself.
The full article is at https://www.competitionpolicyinternational.com/wp-content/uploads/2018/04/CPI-Marsden.pdf
This Start-Up Says It Wants to Fight Poverty. A Food Stamp Giant Is Blocking It
April 23, 2018. From https://www.nytimes.com/2018/04/23/technology/start-up-fight-poverty-food-stamp-giant-blocking-it.html?rref=collection%2Fsectioncollection%2Fbusiness&action=click&contentCollection=business®ion=stream&module=stream_unit&version=latest&contentPlacement=8&pgtype=sectionfront Author Steve Lohr
Four years ago, Jimmy Chen left a lucrative perch as a product manager at Facebook to found Propel, what he calls an “anti-poverty software company.”
In 2016, the Brooklyn start-up released a smartphone app that lets food stamp recipients easily look up how much money was left in their accounts, rather than call an 800 number or keep paper receipts. Today, one million food stamp participants use Propel’s app, and the start-up has added features like links to food coupons, healthy recipes, budgeting tools and job opportunities.
But in the last few months, the Propel app has been hobbled or become unavailable in many states, sometimes for weeks. Behind the slowdown is a big government contractor, Conduent, which runs the food stamp networks in 25 states, including New York, California and Pennsylvania. In those states, where 60 percent of Propel’s users live, Conduent maintains the database that Propel’s app uses to let people check their accounts.
The Propel-Conduent conflict offers a textbook case of a digital newcomer running into resistance from the old order.
April 23, 2018. From https://www.nytimes.com/2018/04/23/technology/start-up-fight-poverty-food-stamp-giant-blocking-it.html?rref=collection%2Fsectioncollection%2Fbusiness&action=click&contentCollection=business®ion=stream&module=stream_unit&version=latest&contentPlacement=8&pgtype=sectionfront Author Steve Lohr
Four years ago, Jimmy Chen left a lucrative perch as a product manager at Facebook to found Propel, what he calls an “anti-poverty software company.”
In 2016, the Brooklyn start-up released a smartphone app that lets food stamp recipients easily look up how much money was left in their accounts, rather than call an 800 number or keep paper receipts. Today, one million food stamp participants use Propel’s app, and the start-up has added features like links to food coupons, healthy recipes, budgeting tools and job opportunities.
But in the last few months, the Propel app has been hobbled or become unavailable in many states, sometimes for weeks. Behind the slowdown is a big government contractor, Conduent, which runs the food stamp networks in 25 states, including New York, California and Pennsylvania. In those states, where 60 percent of Propel’s users live, Conduent maintains the database that Propel’s app uses to let people check their accounts.
The Propel-Conduent conflict offers a textbook case of a digital newcomer running into resistance from the old order.
Ford to cede sedan market to foreign imports
Protectionist efforts by the US government appear not to have saved Ford's sedan automobile business. Industry rumors suggest that Chevrolet will also abandon sedans.
Ford's recent financial report is at https://media.ford.com/content/dam/fordmedia/North%20America/US/2018/04/25/1q18-financials.pdf
The report includes the following language describing its strategy:
• Building a winning portfolio and focusing on products and markets where Ford can win. For example, by 2020, almost 90 percent of the Ford portfolio in North America will be trucks, utilities and commercial vehicles. Given declining consumer demand and product profitability, the company will not invest in next generations of traditional Ford sedans for North America. Over the next few years, the Ford car portfolio in North America will transition to two vehicles – the best-selling Mustang and the all-new Focus Active crossover coming out next year. The company is also exploring new “white space” vehicle silhouettes that combine the best attributes of cars and utilities, such as higher ride height, space and versatility.
Protectionist efforts by the US government appear not to have saved Ford's sedan automobile business. Industry rumors suggest that Chevrolet will also abandon sedans.
Ford's recent financial report is at https://media.ford.com/content/dam/fordmedia/North%20America/US/2018/04/25/1q18-financials.pdf
The report includes the following language describing its strategy:
• Building a winning portfolio and focusing on products and markets where Ford can win. For example, by 2020, almost 90 percent of the Ford portfolio in North America will be trucks, utilities and commercial vehicles. Given declining consumer demand and product profitability, the company will not invest in next generations of traditional Ford sedans for North America. Over the next few years, the Ford car portfolio in North America will transition to two vehicles – the best-selling Mustang and the all-new Focus Active crossover coming out next year. The company is also exploring new “white space” vehicle silhouettes that combine the best attributes of cars and utilities, such as higher ride height, space and versatility.
In Walmart’s home town
By Don Allen Resnikoff
Recently I visited Walmart’s home town, Bentonville, Arkamsas. It is where Sam Walton operated a small five and dime store that was the forerunner of his enormous Walmart retail chain.
The Walton legacy in Bentonville is a strong one, and there are many who will admiringly tell you the story of Sam Walton as a humble and innovative entrepreneur who succeeded because of ingenuity, hard work, and good ability to work with people.
Sam’s autobiography was on the bookshelf of the Bentonville bed and breakfast where my wife and I stayed. It reinforces the very American story of Sam Walton’s success achieved from humble beginnings.
The autobiography, written with a professional co-author shortly before Sam Walton’s death (Sam Walton:Made in America:My Story, 1992, Doubleday), includes some rebuttal of complaints about Walmart as a bad corporate citizen. Part of the defense is that Walmart disrupted the retail business in the same positive way that A&P once disupted the grocery business: It brought large scale efficiencies to a business that had been small scale and inefficient. The result benefited consumers.
The autobiography argues that Walmart did not have the advantage of artificial barriers to competition, so competitors have been free to challenge Walmart. Kmart, Sears, and others have been serious competitors, but fell by the wayside because of self-inflicted management problems.
The autobiography is written in a popular style and addressed to a largely admiring audience, so the rebuttal of complaints about Walmart is limited. Of course it does not address more recent complaints of critics like Barry Lynn, who point to the low wages paid by Walmart to employees, as well as low wages paid to employees by Walmart suppliers. Barry Lynn argues that Walmart causes an array of problems, including use of market power to degrade the quality of products provided by Walmart suppliers.
Whatever the complaints made about Walmart, the Sam Walton legacy includes transforming Bentonville from a rural backwater to a model of small town living. Many middle class people live in the Bentonville area, some of whom are either Walmart employees or employees of suppliers that work with Walmart and do business in Bentonville. In 1950 Bentonville was a shabby small town, but now its small town square is almost Disneyland perfect, surrounded by prosperous businesses and attractive residences, many in spruced-up vintage buildings. We had dinner at a restaurant on the square that offered an interesting menu at prices just a bit lower than similar upscale Washington, D.C. restaurants.
The town adjoins the Crystal Bridges development, an extensive park-like area of great beauty that contains the Crystal Bridges Art Museum. Walton largesse allows the museum admission to be free. Exhibits are beautifully curated in a manner reminiscent of the National Galleries in Washington DC, and tend to be grouped by socially relevant themes. For example, an exhibit shown in cooperation with the Tate Museum focuses on art by black artists relevant to black political issues.
The elegance of the architecture of the Bentonville town-park-museum complex sponsored by the Walton family stands out in comparison with nearby areas like Springdale, where Tyson operates its chicken plants. Springdale is close to areas of great natural beauty, but the Bentonville level of integration of town and open space and attractive visiting spots is lacking. Interestingly, because of Tyson there are substantial areas in Springdale where nearly all residents are Spanish speaking and primarily of Mexican descent. Points of interest in Springdale include the Tyson’s company store, and some great small Mexican food stands and restaurants.
Further reading: A 201l article about Crystal Bridges Museum and the Walton heir who is the museum’s moving force: https://www.newyorker.com/magazine/2011/06/27/alices-wonderland
PS: By way of full disclosure, I made several purchases at the Walmart Neighborhood Store on the main square in Bentonville. Purchases included a bottle of wine, a roasted half chicken for a picnic, and a few other items. I paid by credit card. On the last stay of my stay in Bentonville I received an email from Walmart inviting me to be an occasional paid secret shopper for the company and provide reports about store conditions. I have not accepted.
Posted by Don Allen Resnikoff
By Don Allen Resnikoff
Recently I visited Walmart’s home town, Bentonville, Arkamsas. It is where Sam Walton operated a small five and dime store that was the forerunner of his enormous Walmart retail chain.
The Walton legacy in Bentonville is a strong one, and there are many who will admiringly tell you the story of Sam Walton as a humble and innovative entrepreneur who succeeded because of ingenuity, hard work, and good ability to work with people.
Sam’s autobiography was on the bookshelf of the Bentonville bed and breakfast where my wife and I stayed. It reinforces the very American story of Sam Walton’s success achieved from humble beginnings.
The autobiography, written with a professional co-author shortly before Sam Walton’s death (Sam Walton:Made in America:My Story, 1992, Doubleday), includes some rebuttal of complaints about Walmart as a bad corporate citizen. Part of the defense is that Walmart disrupted the retail business in the same positive way that A&P once disupted the grocery business: It brought large scale efficiencies to a business that had been small scale and inefficient. The result benefited consumers.
The autobiography argues that Walmart did not have the advantage of artificial barriers to competition, so competitors have been free to challenge Walmart. Kmart, Sears, and others have been serious competitors, but fell by the wayside because of self-inflicted management problems.
The autobiography is written in a popular style and addressed to a largely admiring audience, so the rebuttal of complaints about Walmart is limited. Of course it does not address more recent complaints of critics like Barry Lynn, who point to the low wages paid by Walmart to employees, as well as low wages paid to employees by Walmart suppliers. Barry Lynn argues that Walmart causes an array of problems, including use of market power to degrade the quality of products provided by Walmart suppliers.
Whatever the complaints made about Walmart, the Sam Walton legacy includes transforming Bentonville from a rural backwater to a model of small town living. Many middle class people live in the Bentonville area, some of whom are either Walmart employees or employees of suppliers that work with Walmart and do business in Bentonville. In 1950 Bentonville was a shabby small town, but now its small town square is almost Disneyland perfect, surrounded by prosperous businesses and attractive residences, many in spruced-up vintage buildings. We had dinner at a restaurant on the square that offered an interesting menu at prices just a bit lower than similar upscale Washington, D.C. restaurants.
The town adjoins the Crystal Bridges development, an extensive park-like area of great beauty that contains the Crystal Bridges Art Museum. Walton largesse allows the museum admission to be free. Exhibits are beautifully curated in a manner reminiscent of the National Galleries in Washington DC, and tend to be grouped by socially relevant themes. For example, an exhibit shown in cooperation with the Tate Museum focuses on art by black artists relevant to black political issues.
The elegance of the architecture of the Bentonville town-park-museum complex sponsored by the Walton family stands out in comparison with nearby areas like Springdale, where Tyson operates its chicken plants. Springdale is close to areas of great natural beauty, but the Bentonville level of integration of town and open space and attractive visiting spots is lacking. Interestingly, because of Tyson there are substantial areas in Springdale where nearly all residents are Spanish speaking and primarily of Mexican descent. Points of interest in Springdale include the Tyson’s company store, and some great small Mexican food stands and restaurants.
Further reading: A 201l article about Crystal Bridges Museum and the Walton heir who is the museum’s moving force: https://www.newyorker.com/magazine/2011/06/27/alices-wonderland
PS: By way of full disclosure, I made several purchases at the Walmart Neighborhood Store on the main square in Bentonville. Purchases included a bottle of wine, a roasted half chicken for a picnic, and a few other items. I paid by credit card. On the last stay of my stay in Bentonville I received an email from Walmart inviting me to be an occasional paid secret shopper for the company and provide reports about store conditions. I have not accepted.
Posted by Don Allen Resnikoff
Southwest Airlines sought more time last year to inspect jet-engine fan blades like the one that snapped off during one of its flights Tuesday in an accident that left a passenger dead.
The airline opposed a recommendation by the engine manufacturer to require ultrasonic inspections of certain fan blades within 12 months. Southwest said it needed more time, and it raised concern over the number of engines it would need to inspect. Other airlines also voiced objections.
It wasn't until after Tuesday's accident that the Federal Aviation Administration announced that it will soon make the inspections mandatory. It is unclear how many planes will be affected by the FAA order. Airlines including Southwest say they have begun inspections anyway.
From http://www.omaha.com/news/nation/southwest-airlines-sought-more-time-for-engine-inspections/article_383c4093-b2c7-5b1d-ba1a-be5e90442e36.html
The airline opposed a recommendation by the engine manufacturer to require ultrasonic inspections of certain fan blades within 12 months. Southwest said it needed more time, and it raised concern over the number of engines it would need to inspect. Other airlines also voiced objections.
It wasn't until after Tuesday's accident that the Federal Aviation Administration announced that it will soon make the inspections mandatory. It is unclear how many planes will be affected by the FAA order. Airlines including Southwest say they have begun inspections anyway.
From http://www.omaha.com/news/nation/southwest-airlines-sought-more-time-for-engine-inspections/article_383c4093-b2c7-5b1d-ba1a-be5e90442e36.html
FCC opens process to step up offensive on Chinese companies Huawei, ZTE
18 APR 2018
The Federal Communications Commission (FCC) launched a consultation process on a proposal to block smaller operators from using government funds to purchase equipment and services from vendors deemed a national security risk.
The move, announced in a statement, comes after FCC chairman Ajit Pai confirmed in a briefing last month [ https://www.mobileworldlive.com/featured-content/home-banner/fcc-moves-to-ban-vendors-deemed-security-threats/ ] that the regulator had prepared a draft document outlining laws to restrict operators from using money in the FCC’s $8 billion Universal Service Fund (USF) to purchase equipment from vendors on a ban list.
Such a move forms part of a wider offensive instigated by the US government, stepping up regulations against Chinese vendors Huawei and ZTE. This week, the US Department of Commerce banned US companies from selling components to ZTE [ https://www.mobileworldlive.com/featured-content/top-three/us-clamps-down-on-zte/ ], while Huawei’s efforts to establish a foothold in the US have also been thwarted.
Operators accessing the USF tend to be the country’s tier two and three operators, which target rural parts of the US. The country’s big four operators (AT&T, Verizon, Sprint and T-Mobile US) are already barred from using ZTE and Huawei equipment.
Feedback
The FCC said it is now seeking comment on the proposal to prohibit the use of government funds, stating it “alone cannot safeguard our networks from these threats”.
Comments are being sought on “a number of issues”, including: how best to implement the proposal going forward; what types of equipment and services should be covered by the rule; how the FCC can identify, and USF recipients learn, which suppliers are covered by the proposed rule; and the cost and benefits of the move.
FCC commissioner Jessica Rosenworcel said in a statement that she would vote to approve the proposal as it supports Congress’ concerns “about the potential for supply chain vulnerability to undermine national security”.
She added communications networks also face “other security threats that we cannot continue to ignore”.
Credit:https://www.mobileworldlive.com/featured-content/home-banner/fcc-opens-process-to-step-up-offensive-on-huawei-zte/
18 APR 2018
The Federal Communications Commission (FCC) launched a consultation process on a proposal to block smaller operators from using government funds to purchase equipment and services from vendors deemed a national security risk.
The move, announced in a statement, comes after FCC chairman Ajit Pai confirmed in a briefing last month [ https://www.mobileworldlive.com/featured-content/home-banner/fcc-moves-to-ban-vendors-deemed-security-threats/ ] that the regulator had prepared a draft document outlining laws to restrict operators from using money in the FCC’s $8 billion Universal Service Fund (USF) to purchase equipment from vendors on a ban list.
Such a move forms part of a wider offensive instigated by the US government, stepping up regulations against Chinese vendors Huawei and ZTE. This week, the US Department of Commerce banned US companies from selling components to ZTE [ https://www.mobileworldlive.com/featured-content/top-three/us-clamps-down-on-zte/ ], while Huawei’s efforts to establish a foothold in the US have also been thwarted.
Operators accessing the USF tend to be the country’s tier two and three operators, which target rural parts of the US. The country’s big four operators (AT&T, Verizon, Sprint and T-Mobile US) are already barred from using ZTE and Huawei equipment.
Feedback
The FCC said it is now seeking comment on the proposal to prohibit the use of government funds, stating it “alone cannot safeguard our networks from these threats”.
Comments are being sought on “a number of issues”, including: how best to implement the proposal going forward; what types of equipment and services should be covered by the rule; how the FCC can identify, and USF recipients learn, which suppliers are covered by the proposed rule; and the cost and benefits of the move.
FCC commissioner Jessica Rosenworcel said in a statement that she would vote to approve the proposal as it supports Congress’ concerns “about the potential for supply chain vulnerability to undermine national security”.
She added communications networks also face “other security threats that we cannot continue to ignore”.
Credit:https://www.mobileworldlive.com/featured-content/home-banner/fcc-opens-process-to-step-up-offensive-on-huawei-zte/
A looming trade war between the United States and China has put Qualcomm, one of America’s largest technology companies, squarely in the middle of the battlefield.
A major supplier in both China and the United States, the San Diego-based chip maker has long managed to play the trading relationship between the world’s two largest economies to its advantage. But an escalating trade battle over which country will dominate the technologies of the future is now threatening Qualcomm’s business and its growth.
On Monday, Qualcomm lost the ability to export semiconductors [ https://www.nytimes.com/2018/04/16/technology/chinese-tech-company-blocked-from-buying-american-components.html ] to one of its biggest customers after the United States banned Chinese telecom equipment maker ZTE Corporation from purchasing American technology for seven years.
In China, Qualcomm’s plan to acquire NXP Semiconductors, a critical part of its growth strategy, has been stalled by a prolonged antitrust review, a move critics see as Chinese retaliation for President Trump’s aggressive trade moves.
The White House, which has already threatened tariffs on more than $150 billion in Chinese goods, is preparing new restrictions on Chinese investments in the United States and could limit American partnerships with Chinese firms abroad. Such a move could place further restraints on American companies with advanced technology, like Qualcomm, General Electric and Boeing, as they seek to form overseas partnerships. It would also likely incite more retaliation from the Chinese.
On Tuesday, the administration advanced a new rule
[ https://www.nytimes.com/2018/04/17/technology/china-huawei-washington.html ] that would limit the ability of Chinese telecommunications companies, including Huawei, one of Qualcomm’s competitors and a customer, to sell their products in America.
Credit: https://www.nytimes.com/2018/04/18/us/politics/qualcomm-us-china-trade-war.html?rref=collection%2Fsectioncollection%2Fbusiness&action=click&contentCollection=business®ion=rank&module=package&version=highlights&contentPlacement=1&pgtype=sectionfront
A major supplier in both China and the United States, the San Diego-based chip maker has long managed to play the trading relationship between the world’s two largest economies to its advantage. But an escalating trade battle over which country will dominate the technologies of the future is now threatening Qualcomm’s business and its growth.
On Monday, Qualcomm lost the ability to export semiconductors [ https://www.nytimes.com/2018/04/16/technology/chinese-tech-company-blocked-from-buying-american-components.html ] to one of its biggest customers after the United States banned Chinese telecom equipment maker ZTE Corporation from purchasing American technology for seven years.
In China, Qualcomm’s plan to acquire NXP Semiconductors, a critical part of its growth strategy, has been stalled by a prolonged antitrust review, a move critics see as Chinese retaliation for President Trump’s aggressive trade moves.
The White House, which has already threatened tariffs on more than $150 billion in Chinese goods, is preparing new restrictions on Chinese investments in the United States and could limit American partnerships with Chinese firms abroad. Such a move could place further restraints on American companies with advanced technology, like Qualcomm, General Electric and Boeing, as they seek to form overseas partnerships. It would also likely incite more retaliation from the Chinese.
On Tuesday, the administration advanced a new rule
[ https://www.nytimes.com/2018/04/17/technology/china-huawei-washington.html ] that would limit the ability of Chinese telecommunications companies, including Huawei, one of Qualcomm’s competitors and a customer, to sell their products in America.
Credit: https://www.nytimes.com/2018/04/18/us/politics/qualcomm-us-china-trade-war.html?rref=collection%2Fsectioncollection%2Fbusiness&action=click&contentCollection=business®ion=rank&module=package&version=highlights&contentPlacement=1&pgtype=sectionfront
Short-term dockless rental bikes may be a public nuisance, and they may also be unprofitable
See http://www.sandiegouniontribune.com/business/energy-green/sd-fi-dockless-profitable-20180415-story.html#nws=true
The San Diego Journal article shows a a picture that may be worth a thousand words. It shows a big pile of dockless bikes on a street in Beijng China, where dockless bikes have been around for a while. DR
See http://www.sandiegouniontribune.com/business/energy-green/sd-fi-dockless-profitable-20180415-story.html#nws=true
The San Diego Journal article shows a a picture that may be worth a thousand words. It shows a big pile of dockless bikes on a street in Beijng China, where dockless bikes have been around for a while. DR
Mirosoft forces obsolescence of Office 2007
Microsoft may not be dominant in many things as it was 20 years ago, but it is still a major force in word processing and related MS Office Suite products, and some others. That is simply because the applications are in common use. Other cheaper software offerings offer similar capabilities, like Apache Open Office, which is free. But Open Office word processing is not so convenient when colleagues are using Word.
As I recently discovered when trying to make an old laptop useful, in late 2017 Microsoft used its market position to make Office 2007 applications obsolete, or at least much less useful. No matter that Word 2007 and other applications work quite well, and that people around the world use them. Microsoft wishes you to switch to newer alternatives, which are not cheap. Following is a media piece from October 2017 describing the MS policy. DR
* * *
Microsoft is urging customers still on Outlook 2007 and Office 2007 to upgrade as each of the products ran out of extended support on Tuesday.
That means no more security updates, feature updates, support or technical notes for the products, which Microsoft has supported for the past decade.
Microsoft wants customers on Office 2007 to plan to migrate to Office 365 in the cloud or to upgrade to Office 2016.
Office 2007 introduced Microsoft's "ribbon" interface that brought a series of tabbed toolbars with each ribbon containing related buttons.
For customers that have already use Office 365 that still use Outlook 2007, it will be important to upgrade by the end of October [2017], after which the product won't allow users to access Exchange Online mailboxes though the Office 365 portal.
"Customers who use Office 365 will have noted that there is a change to the supported client connectivity methods. Outlook Anywhere is being replaced with MAPI/HTTP. Outlook 2007 does not support MAPI/HTTP, and as such will be unable to connect," Microsoft highlights in a send-off note for the email client.
Come October 31, Microsoft will drop support for the RPC over HTTP protocol, also known as Outlook Anywhere, for accessing mail data from Exchange Online. The new protocol, MAPI over HTTP, is sturdier and supports multi-factor authentication for Office 365, according to Microsoft.
Microsoft didn't backport the protocol to Outlook 2007 as it would be past its extended support date by the time it cut off Outlook Anywhere.
Microsoft has a full list of Office 2007 products and their exact cut off dates here and Outlook 2007 here.
Unlike previous years Microsoft is not offering enterprise customers extended support for Office 2007 through its custom support contracts. The same goes for its other Office products, including Exchange Server; Office Suites; SharePoint Server; Office Communications Server; Lync Server; Skype for Business Server; Project Server and Visio.
Microsoft said demand for custom support has declined with greater adoption of Office 365.
See https://www.zdnet.com/article/microsoft-just-ended-support-for-office-2007-and-outlook-2007/
Microsoft may not be dominant in many things as it was 20 years ago, but it is still a major force in word processing and related MS Office Suite products, and some others. That is simply because the applications are in common use. Other cheaper software offerings offer similar capabilities, like Apache Open Office, which is free. But Open Office word processing is not so convenient when colleagues are using Word.
As I recently discovered when trying to make an old laptop useful, in late 2017 Microsoft used its market position to make Office 2007 applications obsolete, or at least much less useful. No matter that Word 2007 and other applications work quite well, and that people around the world use them. Microsoft wishes you to switch to newer alternatives, which are not cheap. Following is a media piece from October 2017 describing the MS policy. DR
* * *
Microsoft is urging customers still on Outlook 2007 and Office 2007 to upgrade as each of the products ran out of extended support on Tuesday.
That means no more security updates, feature updates, support or technical notes for the products, which Microsoft has supported for the past decade.
Microsoft wants customers on Office 2007 to plan to migrate to Office 365 in the cloud or to upgrade to Office 2016.
Office 2007 introduced Microsoft's "ribbon" interface that brought a series of tabbed toolbars with each ribbon containing related buttons.
For customers that have already use Office 365 that still use Outlook 2007, it will be important to upgrade by the end of October [2017], after which the product won't allow users to access Exchange Online mailboxes though the Office 365 portal.
"Customers who use Office 365 will have noted that there is a change to the supported client connectivity methods. Outlook Anywhere is being replaced with MAPI/HTTP. Outlook 2007 does not support MAPI/HTTP, and as such will be unable to connect," Microsoft highlights in a send-off note for the email client.
Come October 31, Microsoft will drop support for the RPC over HTTP protocol, also known as Outlook Anywhere, for accessing mail data from Exchange Online. The new protocol, MAPI over HTTP, is sturdier and supports multi-factor authentication for Office 365, according to Microsoft.
Microsoft didn't backport the protocol to Outlook 2007 as it would be past its extended support date by the time it cut off Outlook Anywhere.
Microsoft has a full list of Office 2007 products and their exact cut off dates here and Outlook 2007 here.
Unlike previous years Microsoft is not offering enterprise customers extended support for Office 2007 through its custom support contracts. The same goes for its other Office products, including Exchange Server; Office Suites; SharePoint Server; Office Communications Server; Lync Server; Skype for Business Server; Project Server and Visio.
Microsoft said demand for custom support has declined with greater adoption of Office 365.
See https://www.zdnet.com/article/microsoft-just-ended-support-for-office-2007-and-outlook-2007/
FDA's Gottlieb warns drug companies: don't game the generics system
From the speech at https://www.fda.gov/NewsEvents/Speeches/ucm584195.htm:
One of the practices that concerns me the most is when branded firms “game” the system: taking advantage of certain rules, or exploiting loopholes in our system, to delay generic approval – and thereby extend a drug’s monopoly beyond what Congress intended.
I see this clearly, for example, in steps branded companies sometimes take to make it hard, or altogether impossible, for generic firms to get access to the doses of the branded drug needed in order to complete bioequivalence studies that FDA requires for a generic approval.
Consider this: FDA requires generic firms to complete certain bioequivalence and bioavailability studies as a condition of the approval of a generic drug. To do these studies, they need to purchase doses of the branded drug that they seek to copy, to prove that the generic copy performs the same way original medicine.
The generic companies are willing to go into the market and buy these branded doses at full market price. They’re not asking for a discount.
They’re just asking for the right to be able to buy the drug at its retail price, just like a pharmacy or a hospital can make these legal purchases.
But we know that branded companies sometimes adopt tactics to make it nearly impossible for the generic firms to accumulate the doses they need to run their studies. That’s a real concern of mine.
We have a system that relies on, and requires, the ability of generic firms to conduct certain studies for approval.
When drug manufacturers game the system in ways such as this, they upend the generic drug framework created by Hatch Waxman.
The effects of this gaming do not end within FDA or drug manufacturers. Medicare relies on this process working to help make sure its beneficiaries can get access to the benefits of low cost generics.
Patients depend on this system. So does innovation. I’ll say this plainly:
Our economic model, which rewards highly innovative drugs with the opportunity to hold monopolies for a limited period of time through patents and exclusivities, and to freely price their products to a measure of the value that a transformative drug offers, also depends on the generic approval process working as intended.
It depends on the ability to have vigorous competition once those patents and exclusivities have lapsed.
Our system would not have functioned so well for so long without this carefully crafted balance between access and innovation.
If innovators want the current structure to continue to work, but they actively prevent certain parts of the system from functioning as Congress intended, then at some point, they’ll find more advocacy for moving away from this incentive based model.
From the speech at https://www.fda.gov/NewsEvents/Speeches/ucm584195.htm:
One of the practices that concerns me the most is when branded firms “game” the system: taking advantage of certain rules, or exploiting loopholes in our system, to delay generic approval – and thereby extend a drug’s monopoly beyond what Congress intended.
I see this clearly, for example, in steps branded companies sometimes take to make it hard, or altogether impossible, for generic firms to get access to the doses of the branded drug needed in order to complete bioequivalence studies that FDA requires for a generic approval.
Consider this: FDA requires generic firms to complete certain bioequivalence and bioavailability studies as a condition of the approval of a generic drug. To do these studies, they need to purchase doses of the branded drug that they seek to copy, to prove that the generic copy performs the same way original medicine.
The generic companies are willing to go into the market and buy these branded doses at full market price. They’re not asking for a discount.
They’re just asking for the right to be able to buy the drug at its retail price, just like a pharmacy or a hospital can make these legal purchases.
But we know that branded companies sometimes adopt tactics to make it nearly impossible for the generic firms to accumulate the doses they need to run their studies. That’s a real concern of mine.
We have a system that relies on, and requires, the ability of generic firms to conduct certain studies for approval.
When drug manufacturers game the system in ways such as this, they upend the generic drug framework created by Hatch Waxman.
The effects of this gaming do not end within FDA or drug manufacturers. Medicare relies on this process working to help make sure its beneficiaries can get access to the benefits of low cost generics.
Patients depend on this system. So does innovation. I’ll say this plainly:
Our economic model, which rewards highly innovative drugs with the opportunity to hold monopolies for a limited period of time through patents and exclusivities, and to freely price their products to a measure of the value that a transformative drug offers, also depends on the generic approval process working as intended.
It depends on the ability to have vigorous competition once those patents and exclusivities have lapsed.
Our system would not have functioned so well for so long without this carefully crafted balance between access and innovation.
If innovators want the current structure to continue to work, but they actively prevent certain parts of the system from functioning as Congress intended, then at some point, they’ll find more advocacy for moving away from this incentive based model.
When the NHTSA tracked user compliance with auto safety recalls through Vehicle Identification Numbers (VIN), they found that just 61 percent of recalled vehicles get repaired.
Recall notices are typically sent out multiple times for a single recall over the course of 18 months.
“The results suggest a discrepancy between the good intentions of automobile owners and what they actually do when they receive a recall notice,” said Wayne Mitchell, Stericycle's Director of Automotive Solutions.
Traditional outreach methods may be failing when it comes to recalls. Only 46 percent of respondents stated they'd gotten between one and four auto recall notices, while 37 percent claim to have never received any.
“This is another example where communication techniques come into play,” said one commenterl. “A multichannel approach – including emails, text messages, and outbound calls – has been proven to raise repair rates, and it may be even more beneficial among millennials.”
From https://www.autocreditexpress.com/blog/new-survey-suggests-car-owners-don-t-act-on-recall-notices/
Editor's note: GM recently pointed out that State inspection systems could require inspections on cars subject to safety recalls, but that most States don't do it.
Recall notices are typically sent out multiple times for a single recall over the course of 18 months.
“The results suggest a discrepancy between the good intentions of automobile owners and what they actually do when they receive a recall notice,” said Wayne Mitchell, Stericycle's Director of Automotive Solutions.
Traditional outreach methods may be failing when it comes to recalls. Only 46 percent of respondents stated they'd gotten between one and four auto recall notices, while 37 percent claim to have never received any.
“This is another example where communication techniques come into play,” said one commenterl. “A multichannel approach – including emails, text messages, and outbound calls – has been proven to raise repair rates, and it may be even more beneficial among millennials.”
From https://www.autocreditexpress.com/blog/new-survey-suggests-car-owners-don-t-act-on-recall-notices/
Editor's note: GM recently pointed out that State inspection systems could require inspections on cars subject to safety recalls, but that most States don't do it.
From foodtruckoperators.com: DC food truck owners object to new system for assigning prime city locations
April 13, 2018
The D.C., Maryland and Virginia Food Truck Association has sent a letter to the Department of Consumer and Regulatory Affairs in Washington, D.C., stating its opposition to a change in the way the department decides which trucks get the best spots in the city.
The new policy limits every food truck business — no matter how many trucks it operates — to one lottery entry to win the prime locations.
When some of those businesses called DCRA to find out why policy change was made, they were informed that the regulations were changed this month to prevent multitruck businesses from entering more than one truck in the lottery, according to the letter.
The association claims the policy discourages growth in the food truck segment. It also claims that the policy discriminates against one group of small businesses in favor of another group; that there are better ways for the department to address the problems it has identified; and that the manner in which the policy was implemented violates the Administrative Procedure Act.
April 13, 2018
The D.C., Maryland and Virginia Food Truck Association has sent a letter to the Department of Consumer and Regulatory Affairs in Washington, D.C., stating its opposition to a change in the way the department decides which trucks get the best spots in the city.
The new policy limits every food truck business — no matter how many trucks it operates — to one lottery entry to win the prime locations.
When some of those businesses called DCRA to find out why policy change was made, they were informed that the regulations were changed this month to prevent multitruck businesses from entering more than one truck in the lottery, according to the letter.
The association claims the policy discourages growth in the food truck segment. It also claims that the policy discriminates against one group of small businesses in favor of another group; that there are better ways for the department to address the problems it has identified; and that the manner in which the policy was implemented violates the Administrative Procedure Act.
From American Antitrust Institute
Class Action Issues Update April 2018
The American Antitrust Institute seeks to preserve the effectiveness of antitrust class actions as a central component of ensuring the vitality of private antitrust enforcement. As part of its efforts, AAI issues periodic updates on developments in the courts and elsewhere that may affect this important device for protecting competition and consumers. This update covers developments since our Fall 2017 update.
Read More [http://r20.rs6.net/tn.jsp?f=001SBHRRBBZpuze4VAFXhDTWGToZVNxfRtPrB4pRm0s0Medt3gF_B2_RPZ65esmwohl5lsWX1y4C3sH8um18xz8XlQDZU3t6SYyKlsRa8uQER1EJh-igsLO9mdUBf_4MqVtQV18uHch_UU4nN5mBqmzBsxXcqGBnRPNMmIMoPcJu4XsEuxyvI3uqOYXddIzP9Ay104ZoYkbP6vngKOeo_aGmMA4Pdem9wCU_QKuIumWEQ6ieIZ-zCtT3Q==&c=icU7QXSchHojBit5pWmgYayxIngHWmvvmeDqB_CNfDtaBAglFjPzZw==&ch=ueZhcgcTX3ii2Ygr7EPlkjzNrMCxSGCCq0r8VyrEq5aHBltJtwnjDw== ]
AAI Highlights Need to Realign Merger Remedies With the Goals of Antitrust
In a white paper released today "Realigning Merger Remedies with the Goals of Antitrust," [ http://r20.rs6.net/tn.jsp?f=001SBHRRBBZpuze4VAFXhDTWGToZVNxfRtPrB4pRm0s0Medt3gF_B2_RPZ65esmwohlSTZdBtBcPItEGaYw3O-ViC6Swe0Rp8BJd3tmBMIXc1Cb5-f58ZoCafawGvVv8QLANi4Sjrr7YIien3vw9I2a4OnpDLRvDRtyBu1oKaPlku2GXL5tuD-VI9cIEQte9DyuY0LXtxVduiD93NiBS3TmCZ6IIxJQP6xaEQkimrLx7_lTVtzbCbz5NiEbcWxzaYFWDjroRjR-_ZlKmdixqc0VQA==&c=icU7QXSchHojBit5pWmgYayxIngHWmvvmeDqB_CNfDtaBAglFjPzZw==&ch=ueZhcgcTX3ii2Ygr7EPlkjzNrMCxSGCCq0r8VyrEq5aHBltJtwnjDw== ] the American Antitrust Institute makes the case for why remedies policy may be at an important inflection point. The paper notes that we do not yet know the full extent to which rising concentration, slowing rates of startups, and widening inequality gaps are the product of the lax antitrust enforcement that has prevailed in U.S. for three decades. But as the story continues to unfold, it remains clear that merger enforcement should be high on the antitrust agenda.
Read More [ http://r20.rs6.net/tn.jsp?f=001SBHRRBBZpuze4VAFXhDTWGToZVNxfRtPrB4pRm0s0Medt3gF_B2_RPZ65esmwohlSTZdBtBcPItEGaYw3O-ViC6Swe0Rp8BJd3tmBMIXc1Cb5-f58ZoCafawGvVv8QLANi4Sjrr7YIien3vw9I2a4OnpDLRvDRtyBu1oKaPlku2GXL5tuD-VI9cIEQte9DyuY0LXtxVduiD93NiBS3TmCZ6IIxJQP6xaEQkimrLx7_lTVtzbCbz5NiEbcWxzaYFWDjroRjR-_ZlKmdixqc0VQA==&c=icU7QXSchHojBit5pWmgYayxIngHWmvvmeDqB_CNfDtaBAglFjPzZw==&ch=ueZhcgcTX3ii2Ygr7EPlkjzNrMCxSGCCq0r8VyrEq5aHBltJtwnjDw== ]
Class Action Issues Update April 2018
The American Antitrust Institute seeks to preserve the effectiveness of antitrust class actions as a central component of ensuring the vitality of private antitrust enforcement. As part of its efforts, AAI issues periodic updates on developments in the courts and elsewhere that may affect this important device for protecting competition and consumers. This update covers developments since our Fall 2017 update.
Read More [http://r20.rs6.net/tn.jsp?f=001SBHRRBBZpuze4VAFXhDTWGToZVNxfRtPrB4pRm0s0Medt3gF_B2_RPZ65esmwohl5lsWX1y4C3sH8um18xz8XlQDZU3t6SYyKlsRa8uQER1EJh-igsLO9mdUBf_4MqVtQV18uHch_UU4nN5mBqmzBsxXcqGBnRPNMmIMoPcJu4XsEuxyvI3uqOYXddIzP9Ay104ZoYkbP6vngKOeo_aGmMA4Pdem9wCU_QKuIumWEQ6ieIZ-zCtT3Q==&c=icU7QXSchHojBit5pWmgYayxIngHWmvvmeDqB_CNfDtaBAglFjPzZw==&ch=ueZhcgcTX3ii2Ygr7EPlkjzNrMCxSGCCq0r8VyrEq5aHBltJtwnjDw== ]
AAI Highlights Need to Realign Merger Remedies With the Goals of Antitrust
In a white paper released today "Realigning Merger Remedies with the Goals of Antitrust," [ http://r20.rs6.net/tn.jsp?f=001SBHRRBBZpuze4VAFXhDTWGToZVNxfRtPrB4pRm0s0Medt3gF_B2_RPZ65esmwohlSTZdBtBcPItEGaYw3O-ViC6Swe0Rp8BJd3tmBMIXc1Cb5-f58ZoCafawGvVv8QLANi4Sjrr7YIien3vw9I2a4OnpDLRvDRtyBu1oKaPlku2GXL5tuD-VI9cIEQte9DyuY0LXtxVduiD93NiBS3TmCZ6IIxJQP6xaEQkimrLx7_lTVtzbCbz5NiEbcWxzaYFWDjroRjR-_ZlKmdixqc0VQA==&c=icU7QXSchHojBit5pWmgYayxIngHWmvvmeDqB_CNfDtaBAglFjPzZw==&ch=ueZhcgcTX3ii2Ygr7EPlkjzNrMCxSGCCq0r8VyrEq5aHBltJtwnjDw== ] the American Antitrust Institute makes the case for why remedies policy may be at an important inflection point. The paper notes that we do not yet know the full extent to which rising concentration, slowing rates of startups, and widening inequality gaps are the product of the lax antitrust enforcement that has prevailed in U.S. for three decades. But as the story continues to unfold, it remains clear that merger enforcement should be high on the antitrust agenda.
Read More [ http://r20.rs6.net/tn.jsp?f=001SBHRRBBZpuze4VAFXhDTWGToZVNxfRtPrB4pRm0s0Medt3gF_B2_RPZ65esmwohlSTZdBtBcPItEGaYw3O-ViC6Swe0Rp8BJd3tmBMIXc1Cb5-f58ZoCafawGvVv8QLANi4Sjrr7YIien3vw9I2a4OnpDLRvDRtyBu1oKaPlku2GXL5tuD-VI9cIEQte9DyuY0LXtxVduiD93NiBS3TmCZ6IIxJQP6xaEQkimrLx7_lTVtzbCbz5NiEbcWxzaYFWDjroRjR-_ZlKmdixqc0VQA==&c=icU7QXSchHojBit5pWmgYayxIngHWmvvmeDqB_CNfDtaBAglFjPzZw==&ch=ueZhcgcTX3ii2Ygr7EPlkjzNrMCxSGCCq0r8VyrEq5aHBltJtwnjDw== ]
The text of Zuckerberg's Facebook mea culpa testimony to Congress is here:
https://www.politico.com/story/2018/04/09/transcript-mark-zuckerberg-testimony-to-congress-on-cambridge-analytica-509978
https://www.politico.com/story/2018/04/09/transcript-mark-zuckerberg-testimony-to-congress-on-cambridge-analytica-509978
Towns cracking down on GPS app shortcuts; do apps risk legal liability when shortcuts cause harm?
- UPI.comhttps://www.upi.com/Towns-cracking-down-on-GPS-app.../4341517446997/
From the article:
When larger thoroughfares clog with heavy traffic, GPS apps like Waze, Google Maps and Apple Maps often will reroute drivers.
In the town of Leonia, N.J., a town with a population of just under 10,000 about a quarter-mile from the George Washington Bridge, a new ordinance went into effect there in January leveling a $200 fine against non-resident drivers who use the town as a shortcut.
"They should stay on the highway," resident Carlos Gomez told WCBS-TV in New York. "Why bother us?" Leonia Mayor Judah Zeigler said he hopes the legislation will inspire the app makers to remove the city's side streets from their rerouting algorithms.
"They will do that once this legislation takes effect," he said.
But with Google Maps, at least, those roads won't be removed from the apps so much as restrictions will be factored in.
"Municipalities and agencies responsible for managing roads and reducing traffic are free to take measures according to their individual needs (e.g. speed humps, changing speed limits, adding traffic lights)," a Google representative told UPI. "Google Maps will then strive to reflect that reality completely and accurately in our map model. And our automated routing optimization algorithm will inherently take those parameters into account in every route created in Google Maps."
Editor note: Does Google Maps and Wayz (now owned by Google) risk legal liability when the suggested shortcuts are dangerous and cause damage? See the report at https://www.cbsnews.com/news/los-angeles-baxter-street-accidents-waze-traffic/ showing accidents and damage caused by GPS induced shortcuts
- UPI.comhttps://www.upi.com/Towns-cracking-down-on-GPS-app.../4341517446997/
From the article:
When larger thoroughfares clog with heavy traffic, GPS apps like Waze, Google Maps and Apple Maps often will reroute drivers.
In the town of Leonia, N.J., a town with a population of just under 10,000 about a quarter-mile from the George Washington Bridge, a new ordinance went into effect there in January leveling a $200 fine against non-resident drivers who use the town as a shortcut.
"They should stay on the highway," resident Carlos Gomez told WCBS-TV in New York. "Why bother us?" Leonia Mayor Judah Zeigler said he hopes the legislation will inspire the app makers to remove the city's side streets from their rerouting algorithms.
"They will do that once this legislation takes effect," he said.
But with Google Maps, at least, those roads won't be removed from the apps so much as restrictions will be factored in.
"Municipalities and agencies responsible for managing roads and reducing traffic are free to take measures according to their individual needs (e.g. speed humps, changing speed limits, adding traffic lights)," a Google representative told UPI. "Google Maps will then strive to reflect that reality completely and accurately in our map model. And our automated routing optimization algorithm will inherently take those parameters into account in every route created in Google Maps."
Editor note: Does Google Maps and Wayz (now owned by Google) risk legal liability when the suggested shortcuts are dangerous and cause damage? See the report at https://www.cbsnews.com/news/los-angeles-baxter-street-accidents-waze-traffic/ showing accidents and damage caused by GPS induced shortcuts
From Open Markets Institute: Amazon poses many grave threats to the wellbeing of the American people
Editor's note: In the discussion and reading list that follows, OMI presents arguments that Amazon is a monopolist. The OMI discussion and many of the items on the reading list are controversial for some experienced antitrust enforcers. Some experienced antitrust enforcers feel it is painting with too broad a brush to say that the solution to Google, Facebook, and Amazon market power is a return to the politically popular antitrust enforcement spirit of an earlier day. Some enforcers take exception to antitrust approaches they see as more political than practical. They see politically oriented antitrust as ignoring antitrust enforcement principles that have won important cases in the Courts. For example, much recent antitrust enforcement has focused on concepts of "consumer welfare," with good results. My own opinion (for which I take full responsibility) is that there is room for OMI style politically oriented or popular antitrust to coexist with the more traditional sort of analysis that the USDOJ or private enforcers must use when they take cases to court. I see OMI as a force for good in the spirit of Barry Lynn, educating the public to the problems often caused by too-big companies. DR
The corporation was built to monopolize multiple markets vital to the functioning of our society and democracy. It uses its power in ways that harm the interests of workers, entrepreneurs, authors, musicians, and innovators, as well the public at large and communities from coast to coast. At Open Markets we began to shine a light on Amazon’s power a decade ago. As the following list of articles by our team and close allies details, over those years we helped Americans better understand the structure of Amazon and the nature of its power.
A steadily growing list of political leaders is speaking out against Amazon and its monopolies. This includes senators Elizabeth Warren (D-MA), Marco Rubio (S-FL), Bernie Sanders (D-VT), Cory Booker (D-NJ), and Orrin Hatch (R-UT). It also includes Representatives Keith Ellison (D-MN), Ro Khanna (D-CA) and many other members of Congress. Unfortunately, in recent years, antitrust law enforcers in the Department of Justice and the Federal Trade Commission not only ignored the pressing need to act, they sometimes used their power in ways that actually made Amazon more powerful.
During the last presidential campaign, then-candidate Donald Trump also began to target Amazon’s monopoly. He usually did so while also targeting the Washington Post, which has provided vitally important oversight of his candidacy and Administration, and which is personally owned by Amazon CEO Jeff Bezos. Until last week, the President’s comments had little practical effect. But when he began to threaten to use his power to raise the postal rates Amazon pays to deliver its packages, the corporation’s stock price fell suddenly and sharply.
At OMI we condemn the President’s targeting of specific newspapers and corporations in the strongest terms. Such comments are a threat to the rule of law. They are a threat to the freedom of the press. They have no place in the United States.
By the same reasoning, it is also vital that law enforcers and policymakers across America – at both the Federal and state levels – continue to move swiftly to address the clear and present threats posed by Amazon. To choose to ignore Amazon’s great and fast-growing threat to the American economy and the wellbeing of the American people – because Donald Trump verbally overstepped his constitutional bounds – obviously also amounts to a threat to the rule of law.
At OMI, we believe it is time for leaders in Congress to step up and fulfill their constitutional duty to provide a clear check on this Administration and thereby protect the integrity of America’s antimonopoly law enforcement regimes.
Recommended Articles for Understanding Amazon
Editor's note: In the discussion and reading list that follows, OMI presents arguments that Amazon is a monopolist. The OMI discussion and many of the items on the reading list are controversial for some experienced antitrust enforcers. Some experienced antitrust enforcers feel it is painting with too broad a brush to say that the solution to Google, Facebook, and Amazon market power is a return to the politically popular antitrust enforcement spirit of an earlier day. Some enforcers take exception to antitrust approaches they see as more political than practical. They see politically oriented antitrust as ignoring antitrust enforcement principles that have won important cases in the Courts. For example, much recent antitrust enforcement has focused on concepts of "consumer welfare," with good results. My own opinion (for which I take full responsibility) is that there is room for OMI style politically oriented or popular antitrust to coexist with the more traditional sort of analysis that the USDOJ or private enforcers must use when they take cases to court. I see OMI as a force for good in the spirit of Barry Lynn, educating the public to the problems often caused by too-big companies. DR
The corporation was built to monopolize multiple markets vital to the functioning of our society and democracy. It uses its power in ways that harm the interests of workers, entrepreneurs, authors, musicians, and innovators, as well the public at large and communities from coast to coast. At Open Markets we began to shine a light on Amazon’s power a decade ago. As the following list of articles by our team and close allies details, over those years we helped Americans better understand the structure of Amazon and the nature of its power.
A steadily growing list of political leaders is speaking out against Amazon and its monopolies. This includes senators Elizabeth Warren (D-MA), Marco Rubio (S-FL), Bernie Sanders (D-VT), Cory Booker (D-NJ), and Orrin Hatch (R-UT). It also includes Representatives Keith Ellison (D-MN), Ro Khanna (D-CA) and many other members of Congress. Unfortunately, in recent years, antitrust law enforcers in the Department of Justice and the Federal Trade Commission not only ignored the pressing need to act, they sometimes used their power in ways that actually made Amazon more powerful.
During the last presidential campaign, then-candidate Donald Trump also began to target Amazon’s monopoly. He usually did so while also targeting the Washington Post, which has provided vitally important oversight of his candidacy and Administration, and which is personally owned by Amazon CEO Jeff Bezos. Until last week, the President’s comments had little practical effect. But when he began to threaten to use his power to raise the postal rates Amazon pays to deliver its packages, the corporation’s stock price fell suddenly and sharply.
At OMI we condemn the President’s targeting of specific newspapers and corporations in the strongest terms. Such comments are a threat to the rule of law. They are a threat to the freedom of the press. They have no place in the United States.
By the same reasoning, it is also vital that law enforcers and policymakers across America – at both the Federal and state levels – continue to move swiftly to address the clear and present threats posed by Amazon. To choose to ignore Amazon’s great and fast-growing threat to the American economy and the wellbeing of the American people – because Donald Trump verbally overstepped his constitutional bounds – obviously also amounts to a threat to the rule of law.
At OMI, we believe it is time for leaders in Congress to step up and fulfill their constitutional duty to provide a clear check on this Administration and thereby protect the integrity of America’s antimonopoly law enforcement regimes.
Recommended Articles for Understanding Amazon
- Lina Khan, Amazon is a 21st-century railroad: Anti-trust expert, CNBC (2018)
- Stacy Mitchell, Amazon Doesn’t Just Want to Dominate the Market—It Wants to Become the Market, The Nation (2018)
- Matt Stoller, The Return of Monopoly, The New Republic (2017)
- Lina Khan, Amazon Bites Off Even More Monopoly Power, The New York Times (2017)
- David Dayen, The 238 Attempted Bribes of Amazon Should Be Illegal, The New Republic (2017)
- Lina Khan, Amazon's Antitrust Paradox, Yale Law Journal (2017)
- Stacy Mitchell and Olivia Lavecchia, How Amazon’s Tightening Grip on the Economy Is Stifling Competition, Eroding Jobs, and Threatening Communities, Institute for Local Self-Reliance (2016)
- Daniel Kolitz, Is Amazon Evil and Am I Evil for Using It?, Gizmodo(2016)
- David Streitfeld, Accusing Amazon of Antitrust Violations, Authors and Booksellers Demand Inquiry, The New York Times (2015)
- Lina Khan, What everyone’s getting wrong about Amazon, Quartz(2014)
- Frank Foer, Amazon Must Be Stopped, The New Republic (2014)
- Barry C. Lynn, The Real Bad Guy in the E-Book Price Fixing Case, Slate(2012)
- Barry C. Lynn, Killing the Competition, Harpers (2012)
California lawsuit says Toyota Prius cars have defects in the intelligent power modules (IPMs)
By David A. Wood
, CarComplaints.com February 5, 2018 — A Toyota Prius intelligent power module (IPM) recall and warranty extension weren't good enough for a California driver who filed a lawsuit against the automaker.
According to the lawsuit, 2010-2016 Toyota Prius cars have defects in the hybrid systems that cause the cars to stall, including while traveling at highway speeds.
The lawsuit references a 2014 Toyota warranty extension (ZE3) for about 711,000 model year 2010-2014 Prius cars nationwide. The extension involves the intelligent power module (IPM) located inside the inverter assembly and covers failure of the IPM and other internal inverter components potentially damaged by IPM failure.
This condition is indicated by diagnostic trouble codes P0A94, P324E, P3004 or P0A1A.
If any of those codes exist, Toyota says various warning lights will illuminate and the car will enter fail-safe mode, also called limp-home mode.
To qualify for the warranty extension, Prius owners must have had repairs made under a 2014 IPM recall.
Toyota recalled nearly 700,000 model year 2010-2014 Prius cars in 2014 because of the intelligent power modules (IPMs) with sensors that can become damaged by high temperatures.
As mentioned in the warranty extension, the recall described warning lights activating and the Prius going into limp-home mode. Toyota also said the hybrid system could completely shut down and cause the Prius to stall.
The recall, which began in March 2014, saw Toyota dealers update software for the motor/generator control and hybrid electronic control units. For a vehicle that had already experienced a failure of the inverter before the software update, the dealer replaced the inverter assembly.
The plaintiff says Toyota's previous actions didn't solve the IPM problems because the automaker wanted to save money on parts, and the software Toyota used allegedly did nothing but cause more problems.
According to the plaintiff, the software update affected the ability of the cars to accelerate properly. Calling the Toyota Prius recall a "sham," the plaintiff says drivers, occupants and others on the roads are at risk because the automaker took the cheap way out.
The California lawsuit also alleges replacing the IPM can cost thousands of dollars and replacing one bad module with another faulty IPM does nothing to help the car.
Included in the proposed class-action are current and former California owners and lessees of 2010-2016 Prius cars who paid their own money related to the intelligent power modules.
The Toyota Prius IPM lawsuit was filed in the Los Angeles County Superior Court of California - Jevdet Rexhepi, et al., v. Toyota Motor Sales USA Inc.
The plaintiff is represented by Beasley, Allen, Crow, Methvin, Portis, & Miles PC, Cuneo Gilbert & LaDuca LLP, DiCello Levitt & Casey, and Fazio Micheletti LLP.
CarComplaints.com has complaints submitted by owners of the Toyota Prius cars named in the IPM lawsuit.
By David A. Wood
, CarComplaints.com February 5, 2018 — A Toyota Prius intelligent power module (IPM) recall and warranty extension weren't good enough for a California driver who filed a lawsuit against the automaker.
According to the lawsuit, 2010-2016 Toyota Prius cars have defects in the hybrid systems that cause the cars to stall, including while traveling at highway speeds.
The lawsuit references a 2014 Toyota warranty extension (ZE3) for about 711,000 model year 2010-2014 Prius cars nationwide. The extension involves the intelligent power module (IPM) located inside the inverter assembly and covers failure of the IPM and other internal inverter components potentially damaged by IPM failure.
This condition is indicated by diagnostic trouble codes P0A94, P324E, P3004 or P0A1A.
If any of those codes exist, Toyota says various warning lights will illuminate and the car will enter fail-safe mode, also called limp-home mode.
To qualify for the warranty extension, Prius owners must have had repairs made under a 2014 IPM recall.
Toyota recalled nearly 700,000 model year 2010-2014 Prius cars in 2014 because of the intelligent power modules (IPMs) with sensors that can become damaged by high temperatures.
As mentioned in the warranty extension, the recall described warning lights activating and the Prius going into limp-home mode. Toyota also said the hybrid system could completely shut down and cause the Prius to stall.
The recall, which began in March 2014, saw Toyota dealers update software for the motor/generator control and hybrid electronic control units. For a vehicle that had already experienced a failure of the inverter before the software update, the dealer replaced the inverter assembly.
The plaintiff says Toyota's previous actions didn't solve the IPM problems because the automaker wanted to save money on parts, and the software Toyota used allegedly did nothing but cause more problems.
According to the plaintiff, the software update affected the ability of the cars to accelerate properly. Calling the Toyota Prius recall a "sham," the plaintiff says drivers, occupants and others on the roads are at risk because the automaker took the cheap way out.
The California lawsuit also alleges replacing the IPM can cost thousands of dollars and replacing one bad module with another faulty IPM does nothing to help the car.
Included in the proposed class-action are current and former California owners and lessees of 2010-2016 Prius cars who paid their own money related to the intelligent power modules.
The Toyota Prius IPM lawsuit was filed in the Los Angeles County Superior Court of California - Jevdet Rexhepi, et al., v. Toyota Motor Sales USA Inc.
The plaintiff is represented by Beasley, Allen, Crow, Methvin, Portis, & Miles PC, Cuneo Gilbert & LaDuca LLP, DiCello Levitt & Casey, and Fazio Micheletti LLP.
CarComplaints.com has complaints submitted by owners of the Toyota Prius cars named in the IPM lawsuit.
Analysts criticize Apple Pay nag, call it ‘antitrust behavior’
Excerpt from CPI on April 3, 2018, from WSJ article [https://www.competitionpolicyinternational.com/author/nancy-2/ ]
Apple is prompting users of its iPhone to enroll in Apple Pay. Critics said the strategy may give rivals some opportunity against the tech giant. Analysts and user-interface experts are criticizing this describing it as as “antitrust behavior.”
The prompts to enroll in Apple Pay are tied to the iPhone’s most recent operating system update. Users who do not enter their credit card information for Apple Pay upon setting up their phones will see a red circle that denotes incomplete setup. Some users also get notifications that stop only after entering the data.
Roger Kay, an analyst with Endpoint Technologies Associates, compared Apple Pay setup badges and notifications to Microsoft, bundling its Internet Explorer browser with Windows in the 1990s—a strategy the Justice Department successfully sued to stop on antitrust grounds saying it hurt rivals. “They used to have actual behavioral remedies and say you can’t do this,” Mr. Kay said.
The WSJ said only 34% of iPhone users link their cards to Apple Pay upon setup, with 18% having used the function in the past 90 days.
[DAR comment: the analogy to MS bundling is interesting, but arguably a stretch.]
Walmart's press release on new MoneyGram wire transfer service
Walmart Changes the Game Again with New Global Wire ServiceWalmart2World Offers Low Flat Fees to Send Money Anywhere in the World – Fast
BENTONVILLE, Ark. – WEBWIRE – Tuesday, April 3, 2018
Four years ago, Walmart changed the money transfer game with the introduction of Walmart2Walmart – a domestic money transfer service that offered dramatically lower costs that has since saved customers nearly $700 million in fees. Now, with MoneyGram International, Walmart is bringing its game-changing model to the global wire service market, with the launch of Walmart2World.
“We think sending money should cost the same regardless of where you send it; that’s why we’ve designed a brand new global wire service to send money to 200 countries with a consistently low fee,” said Kirsty Ward, vice president, Walmart Services. “There are millions of people sending money around the world to help loved ones with everyday needs or in times of emergency. Walmart2World, Powered by Moneygram helps customers get money to family and friends across the world in minutes, and the new low fees mean more of their hard-earned cash goes where it’s needed most.”
Scheduled to launch in all of Walmart’s 4,700 U.S. stores this month, three key features differentiate Walmart2World from other global wire service offerings:
In addition to saving money, customers using Walmart2World can also save time by using Mobile Express Money Services in the Walmart App. After a quick, one-time set-up, customers initiate their transfer from the Walmart App, and once at the store, fast-track through the Mobile Express Lane to quickly complete their transaction. Receipts and transaction details are saved electronically, helping to make future transactions even faster and easier.
Walmart Changes the Game Again with New Global Wire ServiceWalmart2World Offers Low Flat Fees to Send Money Anywhere in the World – Fast
BENTONVILLE, Ark. – WEBWIRE – Tuesday, April 3, 2018
Four years ago, Walmart changed the money transfer game with the introduction of Walmart2Walmart – a domestic money transfer service that offered dramatically lower costs that has since saved customers nearly $700 million in fees. Now, with MoneyGram International, Walmart is bringing its game-changing model to the global wire service market, with the launch of Walmart2World.
“We think sending money should cost the same regardless of where you send it; that’s why we’ve designed a brand new global wire service to send money to 200 countries with a consistently low fee,” said Kirsty Ward, vice president, Walmart Services. “There are millions of people sending money around the world to help loved ones with everyday needs or in times of emergency. Walmart2World, Powered by Moneygram helps customers get money to family and friends across the world in minutes, and the new low fees mean more of their hard-earned cash goes where it’s needed most.”
Scheduled to launch in all of Walmart’s 4,700 U.S. stores this month, three key features differentiate Walmart2World from other global wire service offerings:
- Unique Pricing Structure: Wherever you are in the United States, and to wherever you are sending money, the new, low fees for Walmart2World are the same – $4 to send up to $50, $8 to send $51 to $1,000, and $16 to send $1,001 to $2,500. This is unlike other international transfer services that change the fee to transfer money based on where sender and/or receiver are located.
- Highly Competitive Exchange Rates: Walmart is committed to ensuring customers receive a more competitive foreign exchange rate when transferring money using Walmart2World. The new Walmart2World low fees, combined with these great exchange rates deliver incredible value for international sends.
- Delivery Within Minutes to Worldwide Network: Compared to other international wire services that can take up to three days, Walmart2World will deliver funds in 10 minutes or less, whether the receiver opts to pick up the money at any one of MoneyGram’s agent locations in 200 countries, or an international bank or mobile wallet account.
In addition to saving money, customers using Walmart2World can also save time by using Mobile Express Money Services in the Walmart App. After a quick, one-time set-up, customers initiate their transfer from the Walmart App, and once at the store, fast-track through the Mobile Express Lane to quickly complete their transaction. Receipts and transaction details are saved electronically, helping to make future transactions even faster and easier.
Trump tweet seen as boost for Sinclair deal
By MARGARET HARDING MCGILL and JOHN HENDEL | 04/02/2018 05:47 PM EDT 4/5/2018
From - POLITICO https://www.politico.com/story/2018/04/02/trump-sinclair-merger-tweet-453014 3/7
President Donald Trump's tweet in support of Sinclair Broadcast Group leaves little question his administration will approve the conservative TV empire's bid for Tribune Media, according to the company's critics. Trump came to the broadcaster's defense after a viral video showing dozens of TV anchors at Sinclair-owned stations reciting the same Trump-like script bashing the media for spreading "fake news."
While the president didn't mention Sinclair's pending $3.9 billion acquisition of Tribune, opponents of the deal say Trump's comments send a message to regulators now reviewing the transaction. “If anybody didn’t understand that the green light was on for the Sinclair deal, I think it’s crystal clear now,” said Michael Copps, a former Democratic FCC commissioner who now serves as an adviser to public interest group Common Cause.
The Justice Department and the Federal Communications Commission are reviewing Sinclair’s bid to buy Tribune's stations, which would allow the company, known for injecting must-run conservative segments into local stations' programming, to reach nearly three out of every four households in the U.S.
By MARGARET HARDING MCGILL and JOHN HENDEL | 04/02/2018 05:47 PM EDT 4/5/2018
From - POLITICO https://www.politico.com/story/2018/04/02/trump-sinclair-merger-tweet-453014 3/7
President Donald Trump's tweet in support of Sinclair Broadcast Group leaves little question his administration will approve the conservative TV empire's bid for Tribune Media, according to the company's critics. Trump came to the broadcaster's defense after a viral video showing dozens of TV anchors at Sinclair-owned stations reciting the same Trump-like script bashing the media for spreading "fake news."
While the president didn't mention Sinclair's pending $3.9 billion acquisition of Tribune, opponents of the deal say Trump's comments send a message to regulators now reviewing the transaction. “If anybody didn’t understand that the green light was on for the Sinclair deal, I think it’s crystal clear now,” said Michael Copps, a former Democratic FCC commissioner who now serves as an adviser to public interest group Common Cause.
The Justice Department and the Federal Communications Commission are reviewing Sinclair’s bid to buy Tribune's stations, which would allow the company, known for injecting must-run conservative segments into local stations' programming, to reach nearly three out of every four households in the U.S.
US Chamber of Commerce criticizes White House attack on Amazon
By CPI on April 4, 2018 -- Full Content: PYMNTS [ https://www.pymnts.com/amazon/2018/chamber-of-commerce-criticizes-u-s-government-attack-amazon-trump-tweets/ ]
After President Donald Trump’s recent Twitter rants against eCommerce giant Amazon, the US Chamber of Commerce has criticized government officials for their attacks against American companies.
“It’s inappropriate for government officials to use their position to attack an American company,” said Neil Bradley, executive vice president and chief policy officer for the Chamber of Commerce, according to Reuters. “The U.S. economy is the world’s most powerful because it embraces the free enterprise system and the rule of law, whereby policy matters are handled through recognized policymaking processes. The record is clear: Deviating from those processes undermines economic growth and job creation.”
Trump criticized Amazon via Twitter on March 29, writing, “I have stated my concerns with Amazon long before the Election. Unlike others, they pay little or no taxes to state & local governments, use our Postal System as their Delivery Boy (causing tremendous loss to the U.S.), and are putting many thousands of retailers out of business!”
He followed up those comments a few days later, tweeting, “While we are on the subject, it is reported that the U.S. Post Office will lose $1.50 on average for each package it delivers for Amazon. That amounts to Billions of Dollars.”
Trump’s comments come after an Axios report revealed that the president is apparently “obsessed” with Amazon and has wondered out loud if the government could go after the company from an antitrust or competition standpoint.
By CPI on April 4, 2018 -- Full Content: PYMNTS [ https://www.pymnts.com/amazon/2018/chamber-of-commerce-criticizes-u-s-government-attack-amazon-trump-tweets/ ]
After President Donald Trump’s recent Twitter rants against eCommerce giant Amazon, the US Chamber of Commerce has criticized government officials for their attacks against American companies.
“It’s inappropriate for government officials to use their position to attack an American company,” said Neil Bradley, executive vice president and chief policy officer for the Chamber of Commerce, according to Reuters. “The U.S. economy is the world’s most powerful because it embraces the free enterprise system and the rule of law, whereby policy matters are handled through recognized policymaking processes. The record is clear: Deviating from those processes undermines economic growth and job creation.”
Trump criticized Amazon via Twitter on March 29, writing, “I have stated my concerns with Amazon long before the Election. Unlike others, they pay little or no taxes to state & local governments, use our Postal System as their Delivery Boy (causing tremendous loss to the U.S.), and are putting many thousands of retailers out of business!”
He followed up those comments a few days later, tweeting, “While we are on the subject, it is reported that the U.S. Post Office will lose $1.50 on average for each package it delivers for Amazon. That amounts to Billions of Dollars.”
Trump’s comments come after an Axios report revealed that the president is apparently “obsessed” with Amazon and has wondered out loud if the government could go after the company from an antitrust or competition standpoint.
NYT: Trump's public demeaning undermines US companies
Excerpt from https://www.nytimes.com/2018/04/03/us/politics/trump-amazon.html?hp&action=click&pgtype=Homepage&clickSource=story-heading&module=first-column-region®ion=top-news&WT.nav=top-news
President Trump once accused Verizon of making “a STUPID deal” for AOL. He ridiculed Coca-Cola as “garbage” — but said he would keep drinking it. He called both H&R Block and Nordstrom “terrible.” He said Sony had “really stupid leadership” and described executives at S&P Global, a financial firm, as “losers.”
Before and after he became president, Mr. Trump attacked tech firms, military contractors, carmakers, cellphone companies, financial firms, drug companies, air-conditioner makers, sports leagues, Wall Street giants — and many, many media companies, which he has labeled “shameful,” “dishonest,” “true garbage,” “really dumb,” “phony,” “failing” and, broadly, “the enemy of the American people.”
Lately, Mr. Trump’s antibusiness rants have become particularly menacing and caused the stocks of some companies to plunge. His Twitter posts have carried with them the threat, sometimes explicit, that he is prepared to use the power of the presidency to undermine the companies that anger him.
The U.S. Chamber of Commerce, long a booster of Republican presidents, is not happy. “It’s inappropriate for government officials to use their position to attack an American company,” said Neil Bradley, the executive vice president and chief policy officer of the chamber. Mr. Bradley, who did not specifically name Mr. Trump, added that criticism of companies from politicians “undermines economic growth and job creation.”
Excerpt from https://www.nytimes.com/2018/04/03/us/politics/trump-amazon.html?hp&action=click&pgtype=Homepage&clickSource=story-heading&module=first-column-region®ion=top-news&WT.nav=top-news
President Trump once accused Verizon of making “a STUPID deal” for AOL. He ridiculed Coca-Cola as “garbage” — but said he would keep drinking it. He called both H&R Block and Nordstrom “terrible.” He said Sony had “really stupid leadership” and described executives at S&P Global, a financial firm, as “losers.”
Before and after he became president, Mr. Trump attacked tech firms, military contractors, carmakers, cellphone companies, financial firms, drug companies, air-conditioner makers, sports leagues, Wall Street giants — and many, many media companies, which he has labeled “shameful,” “dishonest,” “true garbage,” “really dumb,” “phony,” “failing” and, broadly, “the enemy of the American people.”
Lately, Mr. Trump’s antibusiness rants have become particularly menacing and caused the stocks of some companies to plunge. His Twitter posts have carried with them the threat, sometimes explicit, that he is prepared to use the power of the presidency to undermine the companies that anger him.
The U.S. Chamber of Commerce, long a booster of Republican presidents, is not happy. “It’s inappropriate for government officials to use their position to attack an American company,” said Neil Bradley, the executive vice president and chief policy officer of the chamber. Mr. Bradley, who did not specifically name Mr. Trump, added that criticism of companies from politicians “undermines economic growth and job creation.”
Protect Democracy files amicus brief on political interference in law enforcement https://protectdemocracy.org/update/amicus-political-interference-law-enforcement/
From the Protect Democract statement:
Protect Democracy filed an amicus brief [https://www.scribd.com/document/373358295/US-vs-AT-T-BRIEF-OF-FORMER-DEPARTMENT-OF-JUSTICE-OFFICIALS-AS-AMICI-CURIAE-IN-SUPPORT-OF-NEITHER-PARTY ] in the USDOJ antitrust suit to block the AT&T/Time Warner merger. The brief was filed on behalf of a bipartisan group of former high-ranking DOJ officials, including former Nixon White House Counsel John Dean, former U.S. Attorneys Preet Bharara, Joyce Vance, and John McKay, and other former DOJ officials. Heidi Przybyla and Pete Williams at NBC reported on the brief late last night here [ https://www.nbcnews.com/politics/justice-department/top-attorneys-try-help-t-challenge-potential-trump-interference-n855036 ].
The brief is filed on behalf of neither party and takes no position on the underlying merits of the antitrust case. Rather, it explains that White House interference in law enforcement is likely unconstitutional in most circumstances. This principle applies generally, “President Trump’s claim to be able to direct federal law enforcement against specific parties is inconsistent with the Constitution.”
In the specific case of the AT&T/Time Warner merger, President Trump’s repeated attacks on CNN for perceived unfavorable coverage and his pledge, made when he was a candidate for president, to block the merger has created a perception—at least by some—that DOJ brought this case at the behest of President Trump in order to punish CNN. If so, that would amount to a constitutional violation of the highest order. The amicus brief asks the Court to allow further inquiry into the issue and, if it turns out that the president did intervene in the matter, to remedy the resulting constitutional violation.
We are also releasing a White Paper (along with an executive summary) [ https://protectdemocracy.org/independent-law-enforcement/grounded-in-the-constitution/ ]that describes the constitutional principles that prohibit political interference in law enforcement. As detailed in the white paper — and a related post on Lawfare — with the exception of certain narrow types of circumstances, it will likely conflict with the Constitution for the White House to intervene in the Justice Department’s handling of an enforcement matter involving specific parties. And if the White House intervention is based on personal or corrupted interests, such interventions will always be unconstitutional. So for example, it would be unconstitutional for the President or the White House to interfere with the Mueller investigation or to pressure the Justice Department to prosecute a political opponent.
Protect Democracy is also releasing a list of examples of White House political interference in law enforcement here.
This is part of Protect Democracy’s project to Protect Independent Law Enforcement.
From the Protect Democract statement:
Protect Democracy filed an amicus brief [https://www.scribd.com/document/373358295/US-vs-AT-T-BRIEF-OF-FORMER-DEPARTMENT-OF-JUSTICE-OFFICIALS-AS-AMICI-CURIAE-IN-SUPPORT-OF-NEITHER-PARTY ] in the USDOJ antitrust suit to block the AT&T/Time Warner merger. The brief was filed on behalf of a bipartisan group of former high-ranking DOJ officials, including former Nixon White House Counsel John Dean, former U.S. Attorneys Preet Bharara, Joyce Vance, and John McKay, and other former DOJ officials. Heidi Przybyla and Pete Williams at NBC reported on the brief late last night here [ https://www.nbcnews.com/politics/justice-department/top-attorneys-try-help-t-challenge-potential-trump-interference-n855036 ].
The brief is filed on behalf of neither party and takes no position on the underlying merits of the antitrust case. Rather, it explains that White House interference in law enforcement is likely unconstitutional in most circumstances. This principle applies generally, “President Trump’s claim to be able to direct federal law enforcement against specific parties is inconsistent with the Constitution.”
In the specific case of the AT&T/Time Warner merger, President Trump’s repeated attacks on CNN for perceived unfavorable coverage and his pledge, made when he was a candidate for president, to block the merger has created a perception—at least by some—that DOJ brought this case at the behest of President Trump in order to punish CNN. If so, that would amount to a constitutional violation of the highest order. The amicus brief asks the Court to allow further inquiry into the issue and, if it turns out that the president did intervene in the matter, to remedy the resulting constitutional violation.
We are also releasing a White Paper (along with an executive summary) [ https://protectdemocracy.org/independent-law-enforcement/grounded-in-the-constitution/ ]that describes the constitutional principles that prohibit political interference in law enforcement. As detailed in the white paper — and a related post on Lawfare — with the exception of certain narrow types of circumstances, it will likely conflict with the Constitution for the White House to intervene in the Justice Department’s handling of an enforcement matter involving specific parties. And if the White House intervention is based on personal or corrupted interests, such interventions will always be unconstitutional. So for example, it would be unconstitutional for the President or the White House to interfere with the Mueller investigation or to pressure the Justice Department to prosecute a political opponent.
Protect Democracy is also releasing a list of examples of White House political interference in law enforcement here.
This is part of Protect Democracy’s project to Protect Independent Law Enforcement.
President Harry Truman and limits on Presidential power to control the behavior of businesses
As people over the age of 85 may clearly recall, President Harry S Truman ordered the Secretary of Commerce on April 8, 1952, to seize and operate most of the country’s steel mills for the ostensible purpose of maintaining production of critical munitions. The Korean War required it, in the President's view.
Owners of the seized properties obtained a court injunction against the seizure, and an appeal of that injunction to the U.S. Supreme Court gave rise to one of the “great cases” in constitutional law, Youngstown Sheet & Tube Co. et al. v. Sawyer. (language drawn from Robert Higgs at http://www.independent.org/publications/article.asp?id=1394) The U.S. Supreme Court opinion is on line at https://supreme.justia.com/cases/federal/us/343/579/case.html#587
From the Youngstown opinion:
Nor can the seizure order be sustained because of the several constitutional provisions that grant executive power to the President. In the framework of our Constitution, the President's power to see that the laws are faithfully executed refutes the idea that he is to be a lawmaker. The Constitution limits his functions in the lawmaking process to the recommending of laws he thinks wise and the vetoing of laws he thinks bad. And the Constitution is neither silent nor equivocal about who shall make laws which the President is to execute. The first section of the first article says that "All legislative Powers herein granted shall be vested in a Congress of the United States. . . ." After granting many powers to the Congress, Article I goes on to provide that Congress may "make all Laws which shall be necessary and proper for carrying into Execution the foregoing Powers, and all other Powers vested by this Constitution in the Government of the United States, or in any Department or Officer thereof."
The President's order does not direct that a congressional policy be executed in a manner prescribed by Congress -- it directs that a presidential policy be executed in a manner prescribed by the President. The preamble of the order itself, like that of many statutes, sets out reasons why the President believes certain policies should be adopted, proclaims these policies as rules of conduct to be followed, and again, like a statute, authorizes a government official to promulgate additional rules and regulations consistent with the policy proclaimed and needed to carry that policy into execution. The power of Congress to adopt such public policies as those proclaimed by the order is beyond question. It can authorize the taking of private property for public use. It can make laws regulating the relationships between employers and employees, prescribing rules designed to settle labor disputes, and fixing wages and working conditions in certain fields of our economy. The Constitution does not subject this lawmaking power of Congress to presidential or military supervision or control.
It is said that other Presidents, without congressional authority, have taken possession of private business enterprises in order to settle labor disputes. But even if this be true, Congress has not thereby lost its exclusive constitutional authority to make laws necessary and proper to carry out the powers vested by the Constitution "in the Government of the United States, or any Department or Officer thereof."
The Founders of this Nation entrusted the lawmaking power to the Congress alone in both good and bad times. It would do no good to recall the historical events, the fears of power, and the hopes for freedom that lay behind their choice. Such a review would but confirm our holding that this seizure order cannot stand.
Here is part of what the Protect Democracy amicus brief in the AT&T/Times-Warner antitrust case [see prior posting] says about the Youngstown case:
The Take Care Clause [of the Constitution] subjects the president to the rule of law. See Youngstown Sheet &Tube Co. v. Sawyer, 343 U.S. 579 (1952). In Youngstown, the Supreme Court held that the president lacked the power to effectively enact his own laws by taking over the nation’s steelmills during the Korean War. Justice Black began with the premise that “[t]he president’s power . . . must stem either from an act of Congress or from the Constitution itself.” 343 U.S. at585. Rather than taking care that the laws be faithfully executed, the president had become a law unto himself—and, as Justice Black explained, that conduct summoned up all “the fears of power and the hopes for freedom that lay behind” the decision to “entrust the law making power to theCongress alone in both good and bad times.” Id. at 589.
Justice Jackson’s famous Youngstown concurrence further bolsters the view that the Take Care Clause imposes constraints on presidential power. Justice Jackson rejected the argument that Article II’s Vesting Clause constitutes “a grant of all the executive powers of which the Government is capable.’” 343 U.S. at 640 (Jackson, J., concurring). . . . Justice Jackson further explained that any authority conferred by the Take Care Clause“ must be matched against words of the Fifth Amendment that ‘No person shall be . . . deprived of life, liberty, or property, without due process of law . . . .’ One gives a governmental authority that reaches so far as there is law, the other gives a private right that authority shall go no farther.” Id . at 646 (alterations in original). This approach envisions a president constrained by law and doubly checked by the right of private citizens to enforce the requirements of due process. These two provisions, Justice Jackson added, “signify . . . that ours is a government of laws, not of men,” and that “we submit ourselves to rulers only if under rules.” Id.
This posting is by Don Allen Resnikoff, who takes full responsibility for its content.
Hospitals fear that the potential merger between Walmart and Humana could significantly hurt their bottom lines.
Sources told The Wall Street Journal last week that Walmart, the nation's largest employer and retail giant, was in talks to purchase Humana. Walmart has dipped its toes into healthcare in the past, opening a series of primary care clinics in its stores.
A merger with Humana would accelerate the corporation's entry into the healthcare space, a prospect that's worrying to providers, according to an article from the WSJ. [ https://www.wsj.com/articles/hospitals-fear-competitive-threat-from-potential-walmart-humana-deal-1522587600 ] The deal "should be a concern to everybody in healthcare," Randy Oostra, CEO of Ohio-based health system ProMedica, told the publication.
Oostra said Walmart would likely join the retail healthcare options that are pulling patients away from outpatient care provided by traditional hospitals—which often helps cover the cost of more expensive inpatient services.
"What worries us is death by a thousand cuts," Oostra said. "Another deal and another deal."
The mega-merger between CVS and Aetna rang similar alarm bells for providers. If the deal goes through, CVS intends to expand its MinuteClinics to become a one-stop shop for patient needs including primary care, pharmacy services and vision care.
Hospitals haven't lowered costs enough to meet the prices offered by these retail clinics, which can make them a less attractive option for patients.
Retail healthcare is also a major threat to primary care providers, leading some PCPs to open their own walk-in clinics to stay competitive.
Another wrinkle in the potential Walmart-Humana deal that could worry providers is how Walmart currently operates its employee benefits, according to the WSJ. It has increasingly formed direct contacts with specific hospitals.
This practice, combined with Humana's infrastructure, could lead the combined entity to build employer health plans with narrow networks that leave many hospitals out in the cold. Geisinger Health System, for example, currently contracts with Walmart and is paid notably lower rates—but it attracts potential patients it might not otherwise, according to the article.
The CVS-Aetna merger and a similar deal planned between Cigna and Express Scripts have faced criticism
that they would be anticompetitive, and both are under scrutiny from lawmakers and the Department of Justice.
From: https://www.fiercehealthcare.com/hospitals-health-systems/walmart-humana-merger-hospital-finances-retail-healthcare-outpatient-care?mkt_tok=eyJpIjoiWkdVd1pHUmtZamd3WXpRMyIsInQiOiIxS2ZqSFNjXC9TNUlSRDc2Y01KZlRtTllmaTRPbGtjeFZ5Q1oyakNlRXRWMjYzVE1GcFdRS0tGYWxyMmdRSUVneE80Z1BuMVQ3b3I0d1RYVjlcL3RVK0d5cWd0TXJaeFVUMlwvTGNXUk9cL2lNUG9PNG9qM0Ywc3V4UHhIT0tGMVR5MDUifQ%3D%3D&mrkid=730008
Sources told The Wall Street Journal last week that Walmart, the nation's largest employer and retail giant, was in talks to purchase Humana. Walmart has dipped its toes into healthcare in the past, opening a series of primary care clinics in its stores.
A merger with Humana would accelerate the corporation's entry into the healthcare space, a prospect that's worrying to providers, according to an article from the WSJ. [ https://www.wsj.com/articles/hospitals-fear-competitive-threat-from-potential-walmart-humana-deal-1522587600 ] The deal "should be a concern to everybody in healthcare," Randy Oostra, CEO of Ohio-based health system ProMedica, told the publication.
Oostra said Walmart would likely join the retail healthcare options that are pulling patients away from outpatient care provided by traditional hospitals—which often helps cover the cost of more expensive inpatient services.
"What worries us is death by a thousand cuts," Oostra said. "Another deal and another deal."
The mega-merger between CVS and Aetna rang similar alarm bells for providers. If the deal goes through, CVS intends to expand its MinuteClinics to become a one-stop shop for patient needs including primary care, pharmacy services and vision care.
Hospitals haven't lowered costs enough to meet the prices offered by these retail clinics, which can make them a less attractive option for patients.
Retail healthcare is also a major threat to primary care providers, leading some PCPs to open their own walk-in clinics to stay competitive.
Another wrinkle in the potential Walmart-Humana deal that could worry providers is how Walmart currently operates its employee benefits, according to the WSJ. It has increasingly formed direct contacts with specific hospitals.
This practice, combined with Humana's infrastructure, could lead the combined entity to build employer health plans with narrow networks that leave many hospitals out in the cold. Geisinger Health System, for example, currently contracts with Walmart and is paid notably lower rates—but it attracts potential patients it might not otherwise, according to the article.
The CVS-Aetna merger and a similar deal planned between Cigna and Express Scripts have faced criticism
that they would be anticompetitive, and both are under scrutiny from lawmakers and the Department of Justice.
From: https://www.fiercehealthcare.com/hospitals-health-systems/walmart-humana-merger-hospital-finances-retail-healthcare-outpatient-care?mkt_tok=eyJpIjoiWkdVd1pHUmtZamd3WXpRMyIsInQiOiIxS2ZqSFNjXC9TNUlSRDc2Y01KZlRtTllmaTRPbGtjeFZ5Q1oyakNlRXRWMjYzVE1GcFdRS0tGYWxyMmdRSUVneE80Z1BuMVQ3b3I0d1RYVjlcL3RVK0d5cWd0TXJaeFVUMlwvTGNXUk9cL2lNUG9PNG9qM0Ywc3V4UHhIT0tGMVR5MDUifQ%3D%3D&mrkid=730008
Reporting from the NYT on the aftermath of the 2010 merger of Live Nation-Ticketmaster merger
The report highlights the limitations of behavioral remedies in vertical mergers.
https://www.nytimes.com/2018/04/01/arts/music/live-nation-ticketmaster.html
The Royal Opera House Gets Sued By Its Own Viola Player — for Hearing Damage
No, this isn’t an early April joke, but the editorial comment that the case is frivolous is owned by DMN, the source of the article. We don't offer an editorial comment, although your editor plays in amateur orchestras and has used ear stopples, particularly when sitting just behind the French horns. DR
Viola player Chris Goldscheider has successfully sued the Royal Opera House (ROH) in a case that takes frivolity to new heights. Goldscheider accused the venue of being liable for the hearing damage he sustained during a rehearsal six years ago.
Goldscheider cited the responsibility of ROH under UK Noise Regulations. He claimed to have suffered from “acoustic shock” while rehearsing Wagner’s ‘Die Walkure’ in 2012. This after sound levels of the performance reached 130 decibels.
Read the rest here.
No, this isn’t an early April joke, but the editorial comment that the case is frivolous is owned by DMN, the source of the article. We don't offer an editorial comment, although your editor plays in amateur orchestras and has used ear stopples, particularly when sitting just behind the French horns. DR
Viola player Chris Goldscheider has successfully sued the Royal Opera House (ROH) in a case that takes frivolity to new heights. Goldscheider accused the venue of being liable for the hearing damage he sustained during a rehearsal six years ago.
Goldscheider cited the responsibility of ROH under UK Noise Regulations. He claimed to have suffered from “acoustic shock” while rehearsing Wagner’s ‘Die Walkure’ in 2012. This after sound levels of the performance reached 130 decibels.
Read the rest here.
When is regulation appropriate? Deaths linked to a common paint stripper chemical go back decades ...https://www.ecowatch.com/methylene-chloride-epa-health-risks-2553228197.html
Excerpt:
By Jamie Smith Hopkins
It might be surprising to learn that simply removing paint could be fatal, but the key ingredient in many paint-stripping products has felled dozens of people engaged in this run-of-the-mill task. In the waning days of the Obama administration, the U.S. Environmental Protection Agency (EPA) proposed to largely ban paint strippers containing the chemical methylene chloride so they would no longer sit on store shelves, widely available for anyone to buy.
What's happened since should be no shock to close observers of the Trump administration's pattern of regulatory rollbacks. The EPA, after hearing from both Americans in support of a ban and companies opposed to it, pushed back its timeline for finishing the rule to an unspecified date, saying it needed more time to weigh the issue.
Excerpt:
By Jamie Smith Hopkins
It might be surprising to learn that simply removing paint could be fatal, but the key ingredient in many paint-stripping products has felled dozens of people engaged in this run-of-the-mill task. In the waning days of the Obama administration, the U.S. Environmental Protection Agency (EPA) proposed to largely ban paint strippers containing the chemical methylene chloride so they would no longer sit on store shelves, widely available for anyone to buy.
What's happened since should be no shock to close observers of the Trump administration's pattern of regulatory rollbacks. The EPA, after hearing from both Americans in support of a ban and companies opposed to it, pushed back its timeline for finishing the rule to an unspecified date, saying it needed more time to weigh the issue.
Federal Judge pressures local Orange County CA officials to provide for homeless people
An agreement brokered by a federal judge to provide motel rooms to the 400 homeless people estimated to still be living next to the Santa Ana River received its final approval with unanimous votes from the county Board of Supervisors to ratify and implement the agreement. [The Court filing is at http://bit.ly/2EGLZDV ]
The agreement was the result of two straight days of morning-to-night pressure from U.S. District Judge David O. Carter for the county and attorneys for homeless people to quickly find a solution, after years of slow action in dealing with the growing number of homeless living along the riverbed.
Carter acted in response to a lawsuit challenging the county’s evictions of homeless people from the riverbed. He temporarily halted the evictions, and told the county he would allow them to clear the riverbed starting Tuesday morning – but only if they worked with the homeless people’s attorneys to find shelter for the people living there.
Under the agreement, the county will provide motel rooms for at least 30 days to those now living along the riverbed. People at the riverbed will have a choice of moving to a motel, leaving the riverbed, or facing arrest if they stay after the 9 a.m. Tuesday deadline.
Additionally, as part of the court-brokered deal, the county is working to add separate shelter for 300 to 400 people by erecting tents or other structures on county land and adding beds at existing shelters. The new space potentially could house people after their 30 days in motels
See https://voiceofoc.org/2018/02/plan-to-move-riverbed-homeless-to-motels-approved-by-oc-supervisors/
* * *
Subsequent articles note strong opposition to resettlement of the Orange County homeless people from local residents
See: https://www.wsj.com/articles/orange-county-was-set-to-house-the-homeless-and-there-was-a-popular-revolt-1522324800
How not to do antitrust policy:
Amazon shares fall after report Trump wants to curb its power
According to Reuters, Amazon.com Inc (AMZN.O) shares fell almost 5 percent on Wednesday, wiping more than $30 billion off its market value, after news website Axios reported that U.S. President Donald Trump is obsessed with the world’s largest online retailer and wants to rein in its growing power.
On Easter Sunday Trump tweeted hostile views about Jeff Bezos and Amazon.
The issue of Trump's personal intervention on antitrust or regulatory issues came up recently concerning AT&T/Time Warner:
As NBC News reported [ see https://www.nbcnews.com/politics/justice-department/top-attorneys-try-help-t-challenge-potential-trump-interference-n855036], Trump’s outspoken criticism of CNN and its coverage of his campaign and White House sparked concerns about potential White House influence on the AT&T/Time Warner deal. During a 2016 campaign rally, Trump said any AT&T-Time Warner deal is “a deal we will not approve in my administration.”
The DOJ says it brought the case through its antitrust division because it believes the deal will harm consumers and that it has nothing to do with the president’s personal griping about CNN.
A group of former USDOJ officials recently wrote that “President Trump’s claim to be able to direct federal law enforcement against specific parties is inconsistent with the Constitution.”
Late last month, a federal judge denied AT&T’s request for communications between the White House and the DOJ to determine if there was any inappropriate influence. The the former USDOJ attorneys quoted above insist the judge got it wrong, and have submitted a brief they hope will inform the AT&T/Time Warner trial.
This posting is by Don Allen Resnikoff, who takes full responsibility for its content.
Amazon shares fall after report Trump wants to curb its power
According to Reuters, Amazon.com Inc (AMZN.O) shares fell almost 5 percent on Wednesday, wiping more than $30 billion off its market value, after news website Axios reported that U.S. President Donald Trump is obsessed with the world’s largest online retailer and wants to rein in its growing power.
On Easter Sunday Trump tweeted hostile views about Jeff Bezos and Amazon.
The issue of Trump's personal intervention on antitrust or regulatory issues came up recently concerning AT&T/Time Warner:
As NBC News reported [ see https://www.nbcnews.com/politics/justice-department/top-attorneys-try-help-t-challenge-potential-trump-interference-n855036], Trump’s outspoken criticism of CNN and its coverage of his campaign and White House sparked concerns about potential White House influence on the AT&T/Time Warner deal. During a 2016 campaign rally, Trump said any AT&T-Time Warner deal is “a deal we will not approve in my administration.”
The DOJ says it brought the case through its antitrust division because it believes the deal will harm consumers and that it has nothing to do with the president’s personal griping about CNN.
A group of former USDOJ officials recently wrote that “President Trump’s claim to be able to direct federal law enforcement against specific parties is inconsistent with the Constitution.”
Late last month, a federal judge denied AT&T’s request for communications between the White House and the DOJ to determine if there was any inappropriate influence. The the former USDOJ attorneys quoted above insist the judge got it wrong, and have submitted a brief they hope will inform the AT&T/Time Warner trial.
This posting is by Don Allen Resnikoff, who takes full responsibility for its content.
Maurice Stucke says a few big tech companies holding our data is bad, and antitrust enforcement is the remedy:
Here Are All the Reasons It’s a Bad Idea to Let a Few Tech Companies Monopolize Our Data
MARCH 27, 2018
“It’s no good fighting an election campaign on the facts,” Cambridge Analytica’s managing director told an undercover reporter, “because actually it’s all about emotion.” To target U.S. voters and appeal to their hopes, neuroses, and fears, the political consulting firm needed to train its algorithm to predict and map personality traits. That required lots of personal data. So, to build these psychographic profiles, Cambridge Analytica enlisted a Cambridge University professor, whose app collected data on about 50 million Facebook users and their friends. Facebook, at that time, allowed app developers to collect this personal data. Facebook argued that Cambridge Analytica and the professor violated its data polices. But this was not the first time its policies were violated. Nor is it likely to be the last.
This scandal came on the heels of Russia’s using Facebook, Google, and Twitter “to sow discord in the U.S. political system, including the 2016 U.S. presidential election.” It heightened concerns over today’s tech giants and the influence they have.
That influence comes in part from data. Facebook, Google, Amazon, and similar companies are “data-opolies.” By that I mean companies that control a key platform which, like a coral reef, attracts to its ecosystem users, sellers, advertisers, software developers, apps, and accessory makers. Apple and Google, for example, each control a popular mobile phone operating system platform (and key apps on that platform), Amazon controls the largest online merchant platform, and Facebook controls the largest social network platform. Through their leading platforms, a significant volume and variety of personal data flows. The velocity in acquiring and exploiting this personal data can help these companies obtain significant market power.
Is it OK for a few firms to possess so much data and thereby wield so much power? In the U.S., at least, antitrust officials so far seem ambivalent about these data-opolies. They’re free, the thinking goes, so what’s the harm? But that reasoning is misguided. Data-opolies pose tremendous risks, for consumers, workers, competition, and the overall health of our democracy. Here’s why.
Why U.S. Antitrust Isn’t Worried About Data-opoliesThe European competition authorities have recently brought actions against four data-opolies: Google, Apple, Facebook, and Amazon (or GAFA for short). The European Commission, for example, fined Google a record €2.42 billion for leveraging its monopoly in search to advance its comparative shopping service. The Commission also preliminarily found Google to have abused its dominant position with both its Android mobile operating system and with AdSense. Facebook, Germany’s competition agency preliminarily found, abused its dominant position “by making the use of its social network conditional on its being allowed to limitlessly amass every kind of data generated by using third-party websites and merge it with the user’s Facebook account.”
We will likely see more fines and other remedies in the next few years from the Europeans. But in the U.S., the data-opolies have largely escaped antitrust scrutiny, under both the Obama and Bush administrations. Notably, while the European Commission found Google’s search bias to be anticompetitive, the U.S. Federal Trade Commission did not. From 2000 onward, the Department of Justice brought only one monopolization case in total, against anyone. (In contrast, the DOJ, between 1970 and 1972, brought 39 civil and 3 criminal cases against monopolies and oligopolies.)
The current head of the DOJ’s Antitrust Division recognized the enforcement gap between the U.S. and Europe. He noted his agency’s “particular concerns in digital markets.” But absent “demonstrable harm to competition and consumers,” the DOJ is “reluctant to impose special duties on digital platforms, out of [its] concern that special duties might stifle the very innovation that has created dynamic competition for the benefit of consumers.”
So, the divergence in antitrust enforcement may reflect differences over these data-opolies’ perceived harms.
Full article: https://hbr.org/2018/03/here-are-all-the-reasons-its-a-bad-idea-to-let-a-few-tech-companies-monopolize-our-data
Here Are All the Reasons It’s a Bad Idea to Let a Few Tech Companies Monopolize Our Data
MARCH 27, 2018
- Excerpt:
“It’s no good fighting an election campaign on the facts,” Cambridge Analytica’s managing director told an undercover reporter, “because actually it’s all about emotion.” To target U.S. voters and appeal to their hopes, neuroses, and fears, the political consulting firm needed to train its algorithm to predict and map personality traits. That required lots of personal data. So, to build these psychographic profiles, Cambridge Analytica enlisted a Cambridge University professor, whose app collected data on about 50 million Facebook users and their friends. Facebook, at that time, allowed app developers to collect this personal data. Facebook argued that Cambridge Analytica and the professor violated its data polices. But this was not the first time its policies were violated. Nor is it likely to be the last.
This scandal came on the heels of Russia’s using Facebook, Google, and Twitter “to sow discord in the U.S. political system, including the 2016 U.S. presidential election.” It heightened concerns over today’s tech giants and the influence they have.
That influence comes in part from data. Facebook, Google, Amazon, and similar companies are “data-opolies.” By that I mean companies that control a key platform which, like a coral reef, attracts to its ecosystem users, sellers, advertisers, software developers, apps, and accessory makers. Apple and Google, for example, each control a popular mobile phone operating system platform (and key apps on that platform), Amazon controls the largest online merchant platform, and Facebook controls the largest social network platform. Through their leading platforms, a significant volume and variety of personal data flows. The velocity in acquiring and exploiting this personal data can help these companies obtain significant market power.
Is it OK for a few firms to possess so much data and thereby wield so much power? In the U.S., at least, antitrust officials so far seem ambivalent about these data-opolies. They’re free, the thinking goes, so what’s the harm? But that reasoning is misguided. Data-opolies pose tremendous risks, for consumers, workers, competition, and the overall health of our democracy. Here’s why.
Why U.S. Antitrust Isn’t Worried About Data-opoliesThe European competition authorities have recently brought actions against four data-opolies: Google, Apple, Facebook, and Amazon (or GAFA for short). The European Commission, for example, fined Google a record €2.42 billion for leveraging its monopoly in search to advance its comparative shopping service. The Commission also preliminarily found Google to have abused its dominant position with both its Android mobile operating system and with AdSense. Facebook, Germany’s competition agency preliminarily found, abused its dominant position “by making the use of its social network conditional on its being allowed to limitlessly amass every kind of data generated by using third-party websites and merge it with the user’s Facebook account.”
We will likely see more fines and other remedies in the next few years from the Europeans. But in the U.S., the data-opolies have largely escaped antitrust scrutiny, under both the Obama and Bush administrations. Notably, while the European Commission found Google’s search bias to be anticompetitive, the U.S. Federal Trade Commission did not. From 2000 onward, the Department of Justice brought only one monopolization case in total, against anyone. (In contrast, the DOJ, between 1970 and 1972, brought 39 civil and 3 criminal cases against monopolies and oligopolies.)
The current head of the DOJ’s Antitrust Division recognized the enforcement gap between the U.S. and Europe. He noted his agency’s “particular concerns in digital markets.” But absent “demonstrable harm to competition and consumers,” the DOJ is “reluctant to impose special duties on digital platforms, out of [its] concern that special duties might stifle the very innovation that has created dynamic competition for the benefit of consumers.”
So, the divergence in antitrust enforcement may reflect differences over these data-opolies’ perceived harms.
Full article: https://hbr.org/2018/03/here-are-all-the-reasons-its-a-bad-idea-to-let-a-few-tech-companies-monopolize-our-data
States face challenge in curbing premiums after stabilization package fails
By Susannah Luthi | March 23, 2018
This week, Congress left states holding the baton in a lonely sprint to curb 2019 Obamacare premiums, with just a couple of months to get creative with legislation, waiver requests, and regulations before insurers file their rate requests.
After opposing Republican efforts to expand federal abortion funding prohibitions to Affordable Care Act cost-sharing reduction payments and other measures, Senate Democrats opposed the GOP-led stabilization package with its funding for CSRs and a $30 billion reinsurance pool. Without Democratic support, the measure was dropped this week from the $1.3 trillion omnibus spending bill, the last must-pass legislation of the year. To insurers' dismay, it isn't likely to come back.
Although their time and options are limited, state officials and policy analysts agree the best immediate opportunity to stem 2019 rate hikes lies in states seeking ACA Section 1332 waivers to set up reinsurance funds. Otherwise, premiums for ACA-compliant individual-market plans are expected to rise by about 30%.
But for the states, the challenge lies in the details as they race against the calendar. Carriers will begin filing their proposed rates as soon as May, and most state legislatures that remain in session have to wrap up their legislative business in April. The 1332 waiver required for a reinsurance fund must be approved by state legislatures.
Excerpt from http://www.modernhealthcare.com/article/20180323/NEWS/180329946?utm_source=modernhealthcare&utm_medium=email&utm_content=20180323-NEWS-180329946&utm_campaign=am
By Susannah Luthi | March 23, 2018
This week, Congress left states holding the baton in a lonely sprint to curb 2019 Obamacare premiums, with just a couple of months to get creative with legislation, waiver requests, and regulations before insurers file their rate requests.
After opposing Republican efforts to expand federal abortion funding prohibitions to Affordable Care Act cost-sharing reduction payments and other measures, Senate Democrats opposed the GOP-led stabilization package with its funding for CSRs and a $30 billion reinsurance pool. Without Democratic support, the measure was dropped this week from the $1.3 trillion omnibus spending bill, the last must-pass legislation of the year. To insurers' dismay, it isn't likely to come back.
Although their time and options are limited, state officials and policy analysts agree the best immediate opportunity to stem 2019 rate hikes lies in states seeking ACA Section 1332 waivers to set up reinsurance funds. Otherwise, premiums for ACA-compliant individual-market plans are expected to rise by about 30%.
But for the states, the challenge lies in the details as they race against the calendar. Carriers will begin filing their proposed rates as soon as May, and most state legislatures that remain in session have to wrap up their legislative business in April. The 1332 waiver required for a reinsurance fund must be approved by state legislatures.
Excerpt from http://www.modernhealthcare.com/article/20180323/NEWS/180329946?utm_source=modernhealthcare&utm_medium=email&utm_content=20180323-NEWS-180329946&utm_campaign=am
Tim Wu discusses Facebook as a regulatory recidivist
VC Roger McNamee says:
"Google, Facebook, Amazon are increasingly just super-monopolies, especially Google and Facebook. The share of the markets they operate in is literally on the same scale that Standard Oil had ... more than 100 years ago — with the big differences that their reach is now global, not just within a single country," he said on "Squawk Alley." https://www.cnbc.com/squawk-alley/
The New York Times editorial writers say:
"We must demand that legislators and regulators get tougher. They should go after Facebook on antitrust grounds. Facebook is by far the dominant social platform in the United States, with 68 percent of American adults using it, according to the Pew Research Center. That means Facebook can gobble up potential competitors, as it already has with Instagram, and crowd out upstarts in fields such as artificial intelligence and virtual reality. The Department of Justice should consider severing WhatsApp, Instagram and Messenger from Facebook, much as it broke up AT&T in 1982. That breakup unleashed creativity, improved phone service and lowered prices. It also limited the political power of AT&T." https://www.nytimes.com/2018/03/24/opinion/sunday/delete-facebook-does-not-fix-problem.html?action=click
Comments like these upset some experienced antitrust enforcers. The upset is caused by broad-brush suggestions that the solution to the size and behavior of Google, Facebook, and Amazon is a return to the antitrust enforcement spirit of the Teddy Roosevelt era. To some enforcers such broad-brush comments look more poliical than practical. The commenters ignore antitrust enforcement principles that have won important cases in the Courts. For example, much recent antitrust enforcement has focused on concepts of "consumer welfare," with good results.
It may be that there is no one-size-fits-all solution to problems that may be caused by the Google, Facebook, and Amazon giants. It may be that what is needed from law enforcers is the approach of a scientist studying the characteristics of a previously unknown creature. As a 20th century poet once pointed out, the right way to start a study of the biology of a previously unknown species of animal is to carefully study a specimen of the animal. The wrong way is to believe, like the medieval scholar Pliny, that general principles of animalism will lead to useful conclusions. (Pliny reasoned that since there were animals in Africa with two horns, and others with none, therefore there must also be one-horned Unicorns.)
Tim Wu seems to be in the school of studying particular industry specimens before suggesting regulatory solutions, if some of his comments about Facebook are an indicator.
Here is what he wrote about Facebook in 2015 in the New Yorker ( https://www.newyorker.com/business/currency/facebook-should-pay-all-of-us ):
Businesses we are paying with attention or data are conflicted. We are their customers, but we are also their products, ultimately resold to others. We are unlikely to stop loving free stuff. But we always pay in the end—and it is worth asking how.
When Tim Wu appeared on the PBS News Hour a few days ago, he said that the FTC has imposed a tailored regulatory solution on Facebook addressing privacy issues some years ago, and that the problem was in lack of Facebook compliance. He suggested that the relevance of Facebook's great size and scope of operations is simply that lack of compliance -- recidivism --- carries a high cost for the public.
See more of Wu's comments at https://www.pbs.org/.../mark-zuckerberg-promises-change-but-facebook-has- failed-to-follow-through-in-the-past
With regard to Tim Wu's point that Facebook is a recidivist in failing to comply with the 2011 FTC order, the following article provides a number of source documents concerning the FTC order:
https://epic.org/privacy/ftc/facebook/
This posting is by Don Allen Resnikoff, who takes full responsibility for its content
VC Roger McNamee says:
"Google, Facebook, Amazon are increasingly just super-monopolies, especially Google and Facebook. The share of the markets they operate in is literally on the same scale that Standard Oil had ... more than 100 years ago — with the big differences that their reach is now global, not just within a single country," he said on "Squawk Alley." https://www.cnbc.com/squawk-alley/
The New York Times editorial writers say:
"We must demand that legislators and regulators get tougher. They should go after Facebook on antitrust grounds. Facebook is by far the dominant social platform in the United States, with 68 percent of American adults using it, according to the Pew Research Center. That means Facebook can gobble up potential competitors, as it already has with Instagram, and crowd out upstarts in fields such as artificial intelligence and virtual reality. The Department of Justice should consider severing WhatsApp, Instagram and Messenger from Facebook, much as it broke up AT&T in 1982. That breakup unleashed creativity, improved phone service and lowered prices. It also limited the political power of AT&T." https://www.nytimes.com/2018/03/24/opinion/sunday/delete-facebook-does-not-fix-problem.html?action=click
Comments like these upset some experienced antitrust enforcers. The upset is caused by broad-brush suggestions that the solution to the size and behavior of Google, Facebook, and Amazon is a return to the antitrust enforcement spirit of the Teddy Roosevelt era. To some enforcers such broad-brush comments look more poliical than practical. The commenters ignore antitrust enforcement principles that have won important cases in the Courts. For example, much recent antitrust enforcement has focused on concepts of "consumer welfare," with good results.
It may be that there is no one-size-fits-all solution to problems that may be caused by the Google, Facebook, and Amazon giants. It may be that what is needed from law enforcers is the approach of a scientist studying the characteristics of a previously unknown creature. As a 20th century poet once pointed out, the right way to start a study of the biology of a previously unknown species of animal is to carefully study a specimen of the animal. The wrong way is to believe, like the medieval scholar Pliny, that general principles of animalism will lead to useful conclusions. (Pliny reasoned that since there were animals in Africa with two horns, and others with none, therefore there must also be one-horned Unicorns.)
Tim Wu seems to be in the school of studying particular industry specimens before suggesting regulatory solutions, if some of his comments about Facebook are an indicator.
Here is what he wrote about Facebook in 2015 in the New Yorker ( https://www.newyorker.com/business/currency/facebook-should-pay-all-of-us ):
Businesses we are paying with attention or data are conflicted. We are their customers, but we are also their products, ultimately resold to others. We are unlikely to stop loving free stuff. But we always pay in the end—and it is worth asking how.
When Tim Wu appeared on the PBS News Hour a few days ago, he said that the FTC has imposed a tailored regulatory solution on Facebook addressing privacy issues some years ago, and that the problem was in lack of Facebook compliance. He suggested that the relevance of Facebook's great size and scope of operations is simply that lack of compliance -- recidivism --- carries a high cost for the public.
See more of Wu's comments at https://www.pbs.org/.../mark-zuckerberg-promises-change-but-facebook-has- failed-to-follow-through-in-the-past
With regard to Tim Wu's point that Facebook is a recidivist in failing to comply with the 2011 FTC order, the following article provides a number of source documents concerning the FTC order:
https://epic.org/privacy/ftc/facebook/
This posting is by Don Allen Resnikoff, who takes full responsibility for its content
Increased privacy requirements looming for Facebook?
In interviews, Mr. Zuckerberg and Sheryl Sandberg, Facebook’s chief operating officer, seemed to accept the possibility of increased privacy regulation. See video at https://www.cnn.com/videos/cnnmoney/2018/03/22/zuckerberg-facebook-data-regulation-ac-sot.cnn
Zuckerberg: " I'm not sure we shouldn't be regulated . . . . The question is, what is the right regulation?"
It is not clear that Zuckerberg or Sandberg will like the regulation to come in the EU.In May, the European Union is instituting a comprehensive new privacy law, called the General Data Protection Regulation. The new rules treat personal data as proprietary, owned by an individual, and any use of that data must be accompanied by permission — opting in rather than opting out — after receiving a request written in clear language, not legalese. See https://www.eugdpr.org/key-changes.html A brief excerpt follows:
The aim of the GDPR is to protect all EU citizens from privacy and data breaches in an increasingly data-driven world that is vastly different from the time in which the 1995 directive was established. Although the key principles of data privacy still hold true to the previous directive, many changes have been proposed to the regulatory policies; the key points of the GDPR as well as information on the impacts it will have on business can be found below.
***
Consent
The conditions for consent have been strengthened, and companies will no longer be able to use long illegible terms and conditions full of legalese, as the request for consent must be given in an intelligible and easily accessible form, with the purpose for data processing attached to that consent. Consent must be clear and distinguishable from other matters and provided in an intelligible and easily accessible form, using clear and plain language. It must be as easy to withdraw consent as it is to give it.
In interviews, Mr. Zuckerberg and Sheryl Sandberg, Facebook’s chief operating officer, seemed to accept the possibility of increased privacy regulation. See video at https://www.cnn.com/videos/cnnmoney/2018/03/22/zuckerberg-facebook-data-regulation-ac-sot.cnn
Zuckerberg: " I'm not sure we shouldn't be regulated . . . . The question is, what is the right regulation?"
It is not clear that Zuckerberg or Sandberg will like the regulation to come in the EU.In May, the European Union is instituting a comprehensive new privacy law, called the General Data Protection Regulation. The new rules treat personal data as proprietary, owned by an individual, and any use of that data must be accompanied by permission — opting in rather than opting out — after receiving a request written in clear language, not legalese. See https://www.eugdpr.org/key-changes.html A brief excerpt follows:
The aim of the GDPR is to protect all EU citizens from privacy and data breaches in an increasingly data-driven world that is vastly different from the time in which the 1995 directive was established. Although the key principles of data privacy still hold true to the previous directive, many changes have been proposed to the regulatory policies; the key points of the GDPR as well as information on the impacts it will have on business can be found below.
***
Consent
The conditions for consent have been strengthened, and companies will no longer be able to use long illegible terms and conditions full of legalese, as the request for consent must be given in an intelligible and easily accessible form, with the purpose for data processing attached to that consent. Consent must be clear and distinguishable from other matters and provided in an intelligible and easily accessible form, using clear and plain language. It must be as easy to withdraw consent as it is to give it.
Does the internet fringe teach some people that Jews control the weather?
A few days ago the Washington Post reported on a A D.C. lawmaker who responded to a brief snowfall by publishing a video in which he espoused a conspiracy theory that Jewish financiers control the climate. See https://www.washingtonpost.com/local/dc-politics/dc-lawmaker-says-recent-snowfall-caused-byrothschilds-controlling-the-climate/2018/03/18/daeb0eae-2ae0-11e8-911f-ca7f68bff0fc_story.html
The Post article on this bizarre incident (most politicians would be more politic) points out that the internet can infect people's thinking with weird conspiracy theories.
An article in the Examiner put it this way:
It is unclear what White, currently the youngest representative on the 13-member D.C. Council, meant by "climate control," or where he picked up this narrative. But as the Washington Post, which was the first to report the video, points out, fringe Internet users have falsely linked the Rothschilds to weather changes.
Established by another dynastic family, the Rockefeller Foundation runs an initiative called 100 Resilient Cities to help cities adapt to major challenges. Conspiracies have also centered around the Rockefellers.
White has reportedly mused aloud about supposed connections between the Rothschilds and climate change before. At a February working breakfast between the D.C. Council and Mayor Muriel Bowser, he asked the Bowser administration about links between the Rothschilds, the Rockefellers, the World Bank, and D.C.'s recently created Office of Resilience, according to a District official who was present.
Weird and offensive conspiracy theories preceded the internet, but it seems that fringe internet users help spread them around.
This posting is by Don Allen Resnikoff, who takes full responsibility for its content
Regulatory controversy over what makes a chicken egg organic
The U.S. Department of Agriculture finalized a plan under the Obama administration that required chickens laying organic eggs to have access to soil, not just porch enclosures attached to hen houses. But before the rule could be implemented under the Trump administration it was reversed, raising regulatory controversy, and litigation, over the legal meaning of "organic."
https://www.pbs.org/newshour/show/what-makes-eggs-organic-it-depends-on-who-you-ask
The U.S. Department of Agriculture finalized a plan under the Obama administration that required chickens laying organic eggs to have access to soil, not just porch enclosures attached to hen houses. But before the rule could be implemented under the Trump administration it was reversed, raising regulatory controversy, and litigation, over the legal meaning of "organic."
https://www.pbs.org/newshour/show/what-makes-eggs-organic-it-depends-on-who-you-ask
Mass. AG Healey announces investigation into Cambridge Analytica, the data
firm used by Trump campaign
- From The Boston Globe
https://www.bostonglobe.com/metro/2018/03/17/maura-healey-announces-investigation-into-data-firm-used-trump-campaign/Njq4PGzF1IQC3ahtVCW… 1/2
By Eric Moskowitz
Responding to reports that a data firm employed by the Trump presidential campaign improperly harvested information on 50 million Facebook users, Massachusetts Attorney General Maura Healey on Saturday launched a state investigation into the matter.
Citing a New York Times investigation into Cambridge Analytica — a British data-analysis outfit funded by New York billionaire Robert Mercer, a major underwriter of right-wing candidates and campaigns — Healey retweeted the story and announced the investigation Saturday afternoon.
“Massachusetts residents deserve answers immediately from Facebook and Cambridge Analytica,” Healey wrote on Twitter, leading it with the “#BREAKING” hashtag. “We are launching an investigation.”
The attorney general’s office confirmed by e-mail Saturday evening that they were opening acivil investigation and had been in touch with Facebook already to inform the social-media giant.
State investigators intend to learn more about what happened, when it happened, and whether Massachusetts residents were affected, Healey spokeswoman Emily Snyder said in the e-mail. The attorney general’s office will examine whether the reported breach violated Facebook policies while evaluating possible legal implications as well, she said.
firm used by Trump campaign
- From The Boston Globe
https://www.bostonglobe.com/metro/2018/03/17/maura-healey-announces-investigation-into-data-firm-used-trump-campaign/Njq4PGzF1IQC3ahtVCW… 1/2
By Eric Moskowitz
Responding to reports that a data firm employed by the Trump presidential campaign improperly harvested information on 50 million Facebook users, Massachusetts Attorney General Maura Healey on Saturday launched a state investigation into the matter.
Citing a New York Times investigation into Cambridge Analytica — a British data-analysis outfit funded by New York billionaire Robert Mercer, a major underwriter of right-wing candidates and campaigns — Healey retweeted the story and announced the investigation Saturday afternoon.
“Massachusetts residents deserve answers immediately from Facebook and Cambridge Analytica,” Healey wrote on Twitter, leading it with the “#BREAKING” hashtag. “We are launching an investigation.”
The attorney general’s office confirmed by e-mail Saturday evening that they were opening acivil investigation and had been in touch with Facebook already to inform the social-media giant.
State investigators intend to learn more about what happened, when it happened, and whether Massachusetts residents were affected, Healey spokeswoman Emily Snyder said in the e-mail. The attorney general’s office will examine whether the reported breach violated Facebook policies while evaluating possible legal implications as well, she said.
Should CFIUS (Committee on Foreign Investment in the United States) be reformed?
The U.S. Government's Committee on Foreign Investment in the United State (CFIUS) reviews acquisitions, mergers and other foreign investments in the United States for national security risks. It recently and famously squelched the idea of a Qualcomm/Broadcom merger. It has taken similarly aggressive actions in the past. Reasons include protecting American technology companies like Qualcomm from aggressive competition from Chinese companies like Huawei.
There is a reason for CFIUS. Press reports indicate that the Chinese government keeps a tight reign on its companies. In February, the Chinese government seized Anbang Insurance, the owner of New York's Waldorf Astoria and other properties around the world. Chinese oil company CEFC is reportedly being constrained by the Chinese government because of its borrowing for foreign investments. The reasons for Chinese government constraints are not the point. The point is that Chinese companies appear to be subject to tight control by the Chinese Government.
CFIUS proceedings tend to be quick and lacking in transparency. The CFIUS process does not involve court review.
CFIUS market analysis can be superficial, as suggested by a recent Treasury letter to Qualcomm. The letter focuses on Qualcomm's role as a national champion and resource for the U.S. Government. The letter explains that “Qualcomm is a global leader in the development and commercialization of foundational technologies and products used in mobile devices and other wireless products. . . .” Further, that experience has “positioned Qualcomm as the current leading company in 5G technology development and standard setting.” The letter says that any diminishing of that role is a potential opening for China and, specifically, Huawei Technologies Co., a Chinese telecommunications-equipment maker that is also a big force in 5G. (The Wall Street Journal points out that Chinese companies, including Huawei, have increased their engagement in 5G standardization working groups as part of their efforts to build out a 5G technology, and that Huawei and Samsung are the main companies with 5G cell phone offerings.)
One reform suggested by Bert Foer in a paper he will present to a Waseda University conference in Japan is that CFIUS should allow USDOJ to complete its antitrust review before stepping in to consider national security issues. If, for example, USDOJ had been allowed to complete its review and blocked the merger of Qualcomm and Broadcom -- which seems quite possible--then CFIUS would need to take no further action. If USDOJ approved a merger, CFIUS could step in and have the benefit of a thorough antitrust oriented investigation and a factual record that could be relatively transparent. In Bert Foer's words:
Other countries have their own methods for bringing national security concerns into what would otherwise be antitrust investigations, assuring that, for better or worse, more than traditional microeconomic effects will be taken into account. The lack of transparency in these national security contexts can open the door for unfortunate decisions. One might suggest that it would be better policy to have the antitrust authority carry out a normal investigation and only utilize CFIUS if the authority has concluded there is no antitrust reason to stop it.
There is an underlying question about the relationship between CFIUS protectionist policies said to advance national security interests and usual considerations of competition policy, including antitrust. One view is that policies of national security and encouragement of domestic industry are very different from and entirely trump and preclude usual competition and antitrust policy concerns. A reason for that view is that competition policy may prefer international competition when national security concerns suggest protecting U.S. companies.
I prefer the view that competition policy is a relevant and useful complement to national security policy, and that antitrust expertise could be usefully brought to bear, as Bert Foer suggests, by having the USDOJ carry out the usual antitrust review before CFIUS steps in.
This posting is by Don Allen Resnikoff, who takes full responsibility for its content.
Competition policy concerns and the US move to a protectionist industrial policy for American tech companies like Qualcomm
Currently developing U.S. government policy linked to national security seeks to protect established American technology companies like Qualcomm from aggressive competition from Chinese companies like Huawei. For example, U.S. officials reportedly pressed AT&T not to distribute Huawei 5G cell phones, and AT&T complied. Huawei and and Samsung are identified by the Wall Street Journal as the principal
companies developing 5G technology for cell phones.
The Committee on Foreign Investment in the United State (CFIUS) reviews acquisitions, mergers and other foreign investments in the United States for national security risks. It recently and famously squelched the idea of a Qualcomm/Broadcom merger, and has taken similarly aggressive actions in the past. Reasons include protecting American technology companies like Qualcomm from aggressive competition from Chinese companies like Huawei.
Proposed legislation with bi-partisan support proposes expanding the jurisdiction of CFIUS. The legislation would give CFIUS jurisdiction over non-passive, minority position investments by a foreign person; also over joint ventures involving technology transfers in a foreign entity.
The CFIUS process does not involve court review. It does involve evaluation of competition in markets, as addressed in a recent Treasury letter to Qualcomm. As pointed out in a Wall Street Journal article, the letter says that “Qualcomm is a global leader in the development and commercialization of foundational technologies and products used in mobile devices and other wireless products, including network equipment, broadband gateway equipment, and consumer electronic devices.” Also, that experience has “positioned Qualcomm as the current leading company in 5G technology development and standard setting.” The letter says further that iQualcomm’s leadership role in the development of leading edge 5G technology is good for national security: “Qualcomm has become well-known to, and trusted by, the U.S. government. Having a well-known and trusted company hold the dominant role that Qualcomm does in the U.S. telecommunications infrastructure provides significant confidence in the integrity of such infrastructure as it relates to national security.” The letter says that any diminishing of that role is a potential opening for China and, specifically, Huawei Technologies Co., a Chinese telecommunications-equipment maker that is also a big force in 5G. The Wall Street Journal points out that Chinese companies, including Huawei, have increased their engagement in 5G standardization working groups as part of their efforts to build out a 5G technology.
A point that has gotten little public comment is the relationship between protectionist policies said to advance national security interests and usual considerations of competition policy, including antitrust. National security and encouragement of domestic industry may be seen as trumping competition and antitrust policy interests, but it does not follow that competition policy is irrelevant or that application of antitrust expertise would not be useful.
There is some analogy to U.S government policy toward banks following the 2008 financial markets. Banks were pressured by the government to merge, and thereafter were regulated with scant attention to competition policy or antitrust expertise. It may be reasonably argued that even in a financial crisis competition policy considerations and antitrust expertise should have been brought to bear. Similarly, today's strong concerns about national security and protection of domestic industry should not foreclose consideration of competition policy considerations and antitrust expertise.
Generally, competition policy concerns will push for encouraging healthy international competition, and encouraging domestic industry through R & D and other support, rather than attempting to discourage rivals.
****
Following is a Treasury letter that presaged the U.S. Government decision to block the Qualcomm/Broadcom merger, and describes the relevant competition between U.S. and Chinese companies:
https://www.qcomvalue.com/wp-content/uploads/2018/03/Letter-from-Treasury-Department-to-Broadcom-and-Qualcomm-regarding-CFIUS.pdf
Following is part of a discussion from the Reed-Smith law form web site of proposed legislation to expand U.S. government review of foreign financial invests in the interests of national security:
Proposed Legislation Would Expand CFIUS Jurisdiction Over Foreign Investment
Authors: Michael J. Lowell Jill Ottenberg Paula A. Salamoun
On November 8, 2017, a bipartisan bill was proposed in the Senate to “modernize and strengthen the process by which the Committee on Foreign Investment in the United State (CFIUS) reviews acquisitions, mergers and other foreign investments in the United States for national security risks.”1 Co-sponsored by Senators John Cornyn (R-TX), Dianne Feinstein (D-CA) and Richard Burr (R-NC), the Foreign Investment Risk Review Modernization Act (FIRRMA) is intended to “provide CFIUS with updated tools to address present and future security needs . . . [and] strengthen CFIUS by expanding its jurisdiction and moderniz[ing] its processes.” The legislative proposal follows a Senate hearing held in September before the Banking, Housing and Urban Affairs Committee, which sought to examine the CFIUS process and scope.
FIRRMA has been proposed as a means to address the “gaps in the current process [that] have allowed foreign adversaries to weaponize their investment in U.S. companies and transfer sensitive dual-use U.S. technologies, many of which have potential military applications.” FIRRMA comes at a time when there has been growing concern amongst Congress, the intelligence community, as well as the Trump administration, that the CFIUS process is outdated and in need of reform. Similar to Senator Cornyn’s concern, Secretary of Defense Jim Mattis has called the CFIUS process “outdated and overburdened”. The reform proposed by FIRRMA would serve to significantly alter the CFIUS process in a number of meaningful ways.
Background
CFIUS is an interagency organization that reviews inbound foreign investments for national security concerns, and advises the President on appropriate actions that may be necessary to suspend or prohibit foreign acquisitions, mergers, or takeovers which threaten to impair the national security of the United States. CFIUS has the authority to review all “covered transactions” for potential national security concerns. “Covered transaction” is a term of art defined by statute, and applies to any transaction that will result in “foreign control” of a U.S. business. A transaction will be found to result in foreign control of a U.S. business if the transaction will result in a foreign person or business having “power, direct or indirect, through the ownership of a majority or a dominant minority of the total outstanding voting interest in an entity, board representation, proxy voting, a special share, contractual arrangements, formal or informal arrangements to act in concert, or other means, to determine, direct, or decide important matters affecting an entity . . .” Under the current statutory construction governing CFIUS, a foreign person does not control an entity if it holds 10% or less of the voting interest in the entity and it holds that interest solely for the purpose of a passive investment.6 While the statute covering CFIUS does not define what constitutes a “national security concern,” it does include a list of factors that would contribute to a finding that a covered transaction has national security implications. These factors include, but are not limited to, whether the transaction will affect: national defense requirements; U.S. technological leadership in areas affecting national security; or U.S. critical technologies and infrastructure.
Under the current CFIUS process, parties to a covered transaction make a voluntary filing to begin CFIUS review of the transaction. CFIUS may also compel filings if it is determined that the transaction may pose a risk to national security. Following the filing of the initial notice, CFIUS will conduct an initial 30-day review, followed by an additional 45-day investigation period if it is determined that such an investigation is warranted. After the 45-day investigation, CFIUS may refer the transaction for a 15-day presidential review. The President makes the ultimate determination of whether to suspend or prohibit the transaction from proceeding. Even if CFIUS does not refer the transaction for presidential review, if it is determined that the transaction presents national security risks, CFIUS may impose mitigation measures as a condition of clearance.
FIRRMA Modifications to the CFIUS Process
If passed, FIRRMA will expand the scope of transactions that CFIUS has the authority to review, as well as alter the nature of the review process itself.
Expanding CFIUS’s Jurisdiction
FIRRMA would expand the definition of “covered transactions” to include a broader range of transactions that would be subject to CFIUS jurisdiction. Under FIRRMA, “covered transactions” would include:
FIRRMA would also expand the definition of “critical technology” to include “[o]ther emerging technologies that could be essential for maintaining or increasing the technological advantage of the United States over countries of special concern with respect to national defense, intelligence, or other areas of national security, or gaining such an advantage over such countries in areas where such an advantage may not currently exist.”
This posting is by Don Allen Resnikoff, who takes full responsibility for its content
Currently developing U.S. government policy linked to national security seeks to protect established American technology companies like Qualcomm from aggressive competition from Chinese companies like Huawei. For example, U.S. officials reportedly pressed AT&T not to distribute Huawei 5G cell phones, and AT&T complied. Huawei and and Samsung are identified by the Wall Street Journal as the principal
companies developing 5G technology for cell phones.
The Committee on Foreign Investment in the United State (CFIUS) reviews acquisitions, mergers and other foreign investments in the United States for national security risks. It recently and famously squelched the idea of a Qualcomm/Broadcom merger, and has taken similarly aggressive actions in the past. Reasons include protecting American technology companies like Qualcomm from aggressive competition from Chinese companies like Huawei.
Proposed legislation with bi-partisan support proposes expanding the jurisdiction of CFIUS. The legislation would give CFIUS jurisdiction over non-passive, minority position investments by a foreign person; also over joint ventures involving technology transfers in a foreign entity.
The CFIUS process does not involve court review. It does involve evaluation of competition in markets, as addressed in a recent Treasury letter to Qualcomm. As pointed out in a Wall Street Journal article, the letter says that “Qualcomm is a global leader in the development and commercialization of foundational technologies and products used in mobile devices and other wireless products, including network equipment, broadband gateway equipment, and consumer electronic devices.” Also, that experience has “positioned Qualcomm as the current leading company in 5G technology development and standard setting.” The letter says further that iQualcomm’s leadership role in the development of leading edge 5G technology is good for national security: “Qualcomm has become well-known to, and trusted by, the U.S. government. Having a well-known and trusted company hold the dominant role that Qualcomm does in the U.S. telecommunications infrastructure provides significant confidence in the integrity of such infrastructure as it relates to national security.” The letter says that any diminishing of that role is a potential opening for China and, specifically, Huawei Technologies Co., a Chinese telecommunications-equipment maker that is also a big force in 5G. The Wall Street Journal points out that Chinese companies, including Huawei, have increased their engagement in 5G standardization working groups as part of their efforts to build out a 5G technology.
A point that has gotten little public comment is the relationship between protectionist policies said to advance national security interests and usual considerations of competition policy, including antitrust. National security and encouragement of domestic industry may be seen as trumping competition and antitrust policy interests, but it does not follow that competition policy is irrelevant or that application of antitrust expertise would not be useful.
There is some analogy to U.S government policy toward banks following the 2008 financial markets. Banks were pressured by the government to merge, and thereafter were regulated with scant attention to competition policy or antitrust expertise. It may be reasonably argued that even in a financial crisis competition policy considerations and antitrust expertise should have been brought to bear. Similarly, today's strong concerns about national security and protection of domestic industry should not foreclose consideration of competition policy considerations and antitrust expertise.
Generally, competition policy concerns will push for encouraging healthy international competition, and encouraging domestic industry through R & D and other support, rather than attempting to discourage rivals.
****
Following is a Treasury letter that presaged the U.S. Government decision to block the Qualcomm/Broadcom merger, and describes the relevant competition between U.S. and Chinese companies:
https://www.qcomvalue.com/wp-content/uploads/2018/03/Letter-from-Treasury-Department-to-Broadcom-and-Qualcomm-regarding-CFIUS.pdf
Following is part of a discussion from the Reed-Smith law form web site of proposed legislation to expand U.S. government review of foreign financial invests in the interests of national security:
Proposed Legislation Would Expand CFIUS Jurisdiction Over Foreign Investment
Authors: Michael J. Lowell Jill Ottenberg Paula A. Salamoun
On November 8, 2017, a bipartisan bill was proposed in the Senate to “modernize and strengthen the process by which the Committee on Foreign Investment in the United State (CFIUS) reviews acquisitions, mergers and other foreign investments in the United States for national security risks.”1 Co-sponsored by Senators John Cornyn (R-TX), Dianne Feinstein (D-CA) and Richard Burr (R-NC), the Foreign Investment Risk Review Modernization Act (FIRRMA) is intended to “provide CFIUS with updated tools to address present and future security needs . . . [and] strengthen CFIUS by expanding its jurisdiction and moderniz[ing] its processes.” The legislative proposal follows a Senate hearing held in September before the Banking, Housing and Urban Affairs Committee, which sought to examine the CFIUS process and scope.
FIRRMA has been proposed as a means to address the “gaps in the current process [that] have allowed foreign adversaries to weaponize their investment in U.S. companies and transfer sensitive dual-use U.S. technologies, many of which have potential military applications.” FIRRMA comes at a time when there has been growing concern amongst Congress, the intelligence community, as well as the Trump administration, that the CFIUS process is outdated and in need of reform. Similar to Senator Cornyn’s concern, Secretary of Defense Jim Mattis has called the CFIUS process “outdated and overburdened”. The reform proposed by FIRRMA would serve to significantly alter the CFIUS process in a number of meaningful ways.
Background
CFIUS is an interagency organization that reviews inbound foreign investments for national security concerns, and advises the President on appropriate actions that may be necessary to suspend or prohibit foreign acquisitions, mergers, or takeovers which threaten to impair the national security of the United States. CFIUS has the authority to review all “covered transactions” for potential national security concerns. “Covered transaction” is a term of art defined by statute, and applies to any transaction that will result in “foreign control” of a U.S. business. A transaction will be found to result in foreign control of a U.S. business if the transaction will result in a foreign person or business having “power, direct or indirect, through the ownership of a majority or a dominant minority of the total outstanding voting interest in an entity, board representation, proxy voting, a special share, contractual arrangements, formal or informal arrangements to act in concert, or other means, to determine, direct, or decide important matters affecting an entity . . .” Under the current statutory construction governing CFIUS, a foreign person does not control an entity if it holds 10% or less of the voting interest in the entity and it holds that interest solely for the purpose of a passive investment.6 While the statute covering CFIUS does not define what constitutes a “national security concern,” it does include a list of factors that would contribute to a finding that a covered transaction has national security implications. These factors include, but are not limited to, whether the transaction will affect: national defense requirements; U.S. technological leadership in areas affecting national security; or U.S. critical technologies and infrastructure.
Under the current CFIUS process, parties to a covered transaction make a voluntary filing to begin CFIUS review of the transaction. CFIUS may also compel filings if it is determined that the transaction may pose a risk to national security. Following the filing of the initial notice, CFIUS will conduct an initial 30-day review, followed by an additional 45-day investigation period if it is determined that such an investigation is warranted. After the 45-day investigation, CFIUS may refer the transaction for a 15-day presidential review. The President makes the ultimate determination of whether to suspend or prohibit the transaction from proceeding. Even if CFIUS does not refer the transaction for presidential review, if it is determined that the transaction presents national security risks, CFIUS may impose mitigation measures as a condition of clearance.
FIRRMA Modifications to the CFIUS Process
If passed, FIRRMA will expand the scope of transactions that CFIUS has the authority to review, as well as alter the nature of the review process itself.
Expanding CFIUS’s Jurisdiction
FIRRMA would expand the definition of “covered transactions” to include a broader range of transactions that would be subject to CFIUS jurisdiction. Under FIRRMA, “covered transactions” would include:
- Non-passive, minority-position investments by a foreign person in a critical technology or infrastructure company. Even if such an investment does not result in foreign control of the U.S. business, under FIRRMA, it will still be considered a covered transaction and subject to CFIUS review.
- Joint ventures involving technology transfers to a foreign entity. Under FIRRMA, an IP licensing arrangement that includes “associated support” (e.g. technical cooperation or training) will be a covered transaction, even if it does not result in foreign control of a U.S. business. This jurisdiction would seemingly create a parallel requirement for U.S. government approval when the IP involved is subject to export control requirements, which already require prior U.S. government approval in many cases.
- Real estate investments near military or other national security facilities. Covered transactions under FIRRMA would include foreign investments in real estate even if it does not host an existing U.S. business.
FIRRMA would also expand the definition of “critical technology” to include “[o]ther emerging technologies that could be essential for maintaining or increasing the technological advantage of the United States over countries of special concern with respect to national defense, intelligence, or other areas of national security, or gaining such an advantage over such countries in areas where such an advantage may not currently exist.”
This posting is by Don Allen Resnikoff, who takes full responsibility for its content
J
Six top US intelligence chiefs caution against buying Huawei and other Chinese phones
Sara Salinas | @saracsalinas
Published 12:22 PM ET Tue, 13 Feb 2018 Updated 11:03 AM ET Thu, 15 Feb 2018CNBC.com
Six top U.S. intelligence chiefs told the Senate Intelligence Committee in February that they would not advise Americans to use products or services from Chinese smartphone maker Huawei.
The six — including the heads of the CIA, FBI, NSA and the director of national intelligence — first expressed their distrust of Apple-rival Huawei and fellow Chinese telecom company ZTE in reference to public servants and state agencies.
When prompted during the hearing, all six indicated they would not recommend private citizens use products from the Chinese companies.
"We're deeply concerned about the risks of allowing any company or entity that is beholden to foreign governments that don't share our values to gain positions of power inside our telecommunications networks," FBI Director Chris Wray testified.
"That provides the capacity to exert pressure or control over our telecommunications infrastructure," Wray said. "It provides the capacity to maliciously modify or steal information. And it provides the capacity to conduct undetected espionage."
In a response, Huawei said that it "poses no greater cybersecurity risk than any ICT vendor."
A spokesman said in a statement: "Huawei is aware of a range of U.S. government activities seemingly aimed at inhibiting Huawei's business in the U.S. market. Huawei is trusted by governments and customers in 170 countries worldwide and poses no greater cybersecurity risk than any ICT vendor, sharing as we do common global supply chains and production capabilities."
Huawei has been trying to enter the U.S. market, first through a partnership with AT&T that was ultimately called off. At the time, Huawei said its products would still launch on American markets.
Last month, Huawei CEO Richard Yu raged against American carriers, accusing them of depriving customers of choice. Reports said U.S. lawmakers urged AT&T to pull out of the deal.
ZTE said in a statement it "takes cybersecurity and privacy seriously" and that it remains a "trusted partner" to US suppliers and customers.
"As a publicly traded company, we are committed to adhering to all applicable laws and regulations of the United States, work with carriers to pass strict testing protocols, and adhere to the highest business standards," a ZTE spokesperson said.
At the hearing, the intelligence chiefs commended American telecom companies for their measured resistance to the Chinese companies.
"This is a challenge I think that is only going to increase, not lessen over time for us," said Adm. Michael Rogers, the NSA's director. "You need to look long and hard at companies like this."
https://www.cnbc.com/2018/02/13/chinas-hauwei-top-us-intelligence-chiefs-caution-americans-away.html
Another view: The WSJ editorializes, suggesting that the real reason for US government opposition to Huwei's 5G technology is fear that Huwei's technology advances will swamp less innovative US companies
3/9/2018 Why Washington Is So Obsessed With China’s Huawei - WSJ
Excerpts from WSJ article:
The world’s top cellular-equipment maker and a leading smartphone brand, Huawei in the past
three months has been the subject of a series of interventions, or attempted interventions, by
the Trump administration and Congress across the telecommunications industry.
***
5G is the next-generation mobile-network technology that the industry is preparing to roll out
around the world. American officials and some Western telecom companies worry that if China
gains widespread 5G before the U.S. does, it could have a head start in technologies that the new
networks’ speed and capacity are expected to kick-start, like self-driving cars.
Some Washington policy makers and industry executives have suggested a deeper worry that,
with Huawei’s help, China could displace Silicon Valley as the world’s innovation center and
lure top engineers there. Another concern: If Huawei extends its lead in the telecom-equipment
industry, these officials believe, American wireless carriers might have no choice but to use
Huawei gear in the future.
***
The extent to which the U.S. government shares that fear was laid bare in unusual clarity in the
CFIUS letter. The committee said it would probe whether a Broadcom-Qualcomm tie-up would
“leave an opening for China to expand its influence on the 5G standard setting process.” It cited
specifically Huawei’s 5G “engagement.”
***
Concern over Huawei isn’t new. Congress effectively barred major carriers from using the
company, after a 2012 report concluded Beijing could force Huawei to use knowledge of how its
own equipment is designed to spy or disable telecom networks.
***
Late last year, congressional pressure mounted on AT&T to drop plans to sell Huawei
smartphones in the U.S. In a surprise reversal, the company did just that in January; it declined
to cite a reason.
***
in December, President Donald Trump signed a defense-spending bill that will ban
equipment from Huawei and China’s ZTE Corp. from the Defense Department’s nuclear-weapon
infrastructure. Lawmakers in the House and Senate have also introduced separate bills to bar
the U.S. government and its contractors from using Huawei and ZTE equipment.
https://www.wsj.com/articles/why-washington-is-so-obsessed-with-chinas-huawei-1520373341
Six top US intelligence chiefs caution against buying Huawei and other Chinese phones
- The directors of the CIA, FBI, NSA and several other intelligence agencies express their distrust of Apple-rival Huawei and fellow Chinese telecom company ZTE.
- During a hearing, the intelligence chiefs commended American telecom companies for their measured resistance to the Chinese companies.
- Huawei has been trying to enter the U.S. market, first through a partnership with AT&T that was ultimately called off.
Sara Salinas | @saracsalinas
Published 12:22 PM ET Tue, 13 Feb 2018 Updated 11:03 AM ET Thu, 15 Feb 2018CNBC.com
Six top U.S. intelligence chiefs told the Senate Intelligence Committee in February that they would not advise Americans to use products or services from Chinese smartphone maker Huawei.
The six — including the heads of the CIA, FBI, NSA and the director of national intelligence — first expressed their distrust of Apple-rival Huawei and fellow Chinese telecom company ZTE in reference to public servants and state agencies.
When prompted during the hearing, all six indicated they would not recommend private citizens use products from the Chinese companies.
"We're deeply concerned about the risks of allowing any company or entity that is beholden to foreign governments that don't share our values to gain positions of power inside our telecommunications networks," FBI Director Chris Wray testified.
"That provides the capacity to exert pressure or control over our telecommunications infrastructure," Wray said. "It provides the capacity to maliciously modify or steal information. And it provides the capacity to conduct undetected espionage."
In a response, Huawei said that it "poses no greater cybersecurity risk than any ICT vendor."
A spokesman said in a statement: "Huawei is aware of a range of U.S. government activities seemingly aimed at inhibiting Huawei's business in the U.S. market. Huawei is trusted by governments and customers in 170 countries worldwide and poses no greater cybersecurity risk than any ICT vendor, sharing as we do common global supply chains and production capabilities."
Huawei has been trying to enter the U.S. market, first through a partnership with AT&T that was ultimately called off. At the time, Huawei said its products would still launch on American markets.
Last month, Huawei CEO Richard Yu raged against American carriers, accusing them of depriving customers of choice. Reports said U.S. lawmakers urged AT&T to pull out of the deal.
ZTE said in a statement it "takes cybersecurity and privacy seriously" and that it remains a "trusted partner" to US suppliers and customers.
"As a publicly traded company, we are committed to adhering to all applicable laws and regulations of the United States, work with carriers to pass strict testing protocols, and adhere to the highest business standards," a ZTE spokesperson said.
At the hearing, the intelligence chiefs commended American telecom companies for their measured resistance to the Chinese companies.
"This is a challenge I think that is only going to increase, not lessen over time for us," said Adm. Michael Rogers, the NSA's director. "You need to look long and hard at companies like this."
https://www.cnbc.com/2018/02/13/chinas-hauwei-top-us-intelligence-chiefs-caution-americans-away.html
Another view: The WSJ editorializes, suggesting that the real reason for US government opposition to Huwei's 5G technology is fear that Huwei's technology advances will swamp less innovative US companies
3/9/2018 Why Washington Is So Obsessed With China’s Huawei - WSJ
Excerpts from WSJ article:
The world’s top cellular-equipment maker and a leading smartphone brand, Huawei in the past
three months has been the subject of a series of interventions, or attempted interventions, by
the Trump administration and Congress across the telecommunications industry.
***
5G is the next-generation mobile-network technology that the industry is preparing to roll out
around the world. American officials and some Western telecom companies worry that if China
gains widespread 5G before the U.S. does, it could have a head start in technologies that the new
networks’ speed and capacity are expected to kick-start, like self-driving cars.
Some Washington policy makers and industry executives have suggested a deeper worry that,
with Huawei’s help, China could displace Silicon Valley as the world’s innovation center and
lure top engineers there. Another concern: If Huawei extends its lead in the telecom-equipment
industry, these officials believe, American wireless carriers might have no choice but to use
Huawei gear in the future.
***
The extent to which the U.S. government shares that fear was laid bare in unusual clarity in the
CFIUS letter. The committee said it would probe whether a Broadcom-Qualcomm tie-up would
“leave an opening for China to expand its influence on the 5G standard setting process.” It cited
specifically Huawei’s 5G “engagement.”
***
Concern over Huawei isn’t new. Congress effectively barred major carriers from using the
company, after a 2012 report concluded Beijing could force Huawei to use knowledge of how its
own equipment is designed to spy or disable telecom networks.
***
Late last year, congressional pressure mounted on AT&T to drop plans to sell Huawei
smartphones in the U.S. In a surprise reversal, the company did just that in January; it declined
to cite a reason.
***
in December, President Donald Trump signed a defense-spending bill that will ban
equipment from Huawei and China’s ZTE Corp. from the Defense Department’s nuclear-weapon
infrastructure. Lawmakers in the House and Senate have also introduced separate bills to bar
the U.S. government and its contractors from using Huawei and ZTE equipment.
https://www.wsj.com/articles/why-washington-is-so-obsessed-with-chinas-huawei-1520373341
NYT explains CFIUS and its ability to quash mergers on national security grounds
Qualcomm, one of the world’s largest chip makers, has spent the last four months fending off a hostile takeover from Broadcom, a Singaporean rival. The fate of the proposed takeover may now be in jeopardy because of a little-known committee of top administration officials who meet in secret, wielding power to kill the biggest multibillion-dollar global deals.
The Committee on Foreign Investment in the United States, or Cfius (pronounced Sif-e-us), investigates mergers that could result in control of an American business by a foreign individual or company, judging whether deals could threaten national interests. In a letter on Monday, the committee said that a deal for Qualcomm, whose semiconductors will be used in the next generation of ultrafast wireless networks known as 5G, could pose a risk to national security.
It appears to be the first time the committee has intervened on a deal before it has been finalized, a signal that Cfius may play a more prominent role in the Trump administration’s America First policymaking.
Cfius is the ‘ultimate regulatory bazooka’
The committee is made up of members of the State, Defense, Justice, Commerce, Energy and Homeland Security departments, and is led by the treasury secretary. These days, that means Steven Mnuchin.
When Cfius reviews a possible deal, the committee does not publicly disclose any information provided to it — nor does it even acknowledge that a party to a merger has submitted a deal to review. It also has the authority to intervene and review pending or completed transactions, without being asked by any of the companies involved, if members of the committee think a deal that could raise national security concerns.
The committee’s findings, which are not publicly announced, are sent to the president, who may suspend or prohibit the deal.
But cases do not often get that far: The rejection of a deal by the committee is usually enough to kill it.
Cfius “is the No. 1 weapon in the Trump administration’s protectionist arsenal, the ultimate regulatory bazooka,” said Hernan Cristerna, co-head of global mergers and acquisitions at JPMorgan Chase.
* * *
Cfius was empowered with reviewing mergers for potential threats.
China is a frequent element in the deals Cfius reviewsCfius reviews deals across a variety of industries and companies from dozens of different countries. It has often set its sites on deals involving Chinese companies, as the country’s economic might has grown in recent years. From 2013 to 2015, the latest years for which the committee has made data public, about 20 percent of the deals that Cfius reviewed involved investors from China.
Among the notable recent reviews were:
MONEYGRAM — ANT FINANCIAL Ant Financial, a Chinese electronic payments company, wanted to purchase MoneyGram, a money transfer company based in Dallas, for $1.2 billion. But the deal collapsed in January after both sides said Cfius refused to approve it. The collapse came despite a charm offensive by Jack Ma, the Chinese tycoon who controls Ant Financial, who had visited President-elect Donald Trump at Trump Tower and pledged to create one million American jobs. But he could not overcome the Trump administration’s concerns about Chinese acquisition of American know-how.
CANYON BRIDGE CAPITAL — LATTICE Canyon Bridge Capital, a private equity firm, wanted to acquire Lattice, a chip maker based in Portland, Ore. Canyon Bridge received investment from a group that included China Venture Capital Fund Corporation, which is owned by Chinese government-backed organizations. Lattice said Cfius objected to the deal, and the company tried to appeal to the president, offering to resolve national security concerns. But Mr. Trump formally blocked the deal in September 2017, prompting China’s commerce ministry to issue a statement saying countries should not push protectionism through security reviews.
GO SCALE — PHILIPS In 2015, the Dutch electronics giant Philips had an agreement to sell a controlling stake in its automotive and LED business for as much as $2.9 billion to GO Scale, an investment fund sponsored by GSR Ventures of China and Oak Investment Partners. Philips canceled the deal after it could not resolve Cfius’s concerns, and in December 2016 announced it would sell the unit to Apollo Global Management for $1.5 billion, almost half the amount of the earlier deal.
The Broadcom-Qualcomm deal does not involve China-based companies. But there has been concern that the acquisition could undermine the ability of the United States to compete with China in the race for telecommunications supremacy. Members of Cfius pointed to Broadcom’s statements that it would take a “‘private equity’-style” approach if it acquired Qualcomm, suggesting to the committee that Broadcom could reduce long-term investment on research and development in favor of focusing on short-term profits.
While the United States has remained a standard-bearer in mobile technology, the committee noted, “China would likely compete robustly to fill any void left by Qualcomm as a result of this hostile takeover.”
Lawmakers want to expand Cfius’s jurisdiction
A bipartisan group in Congress has proposed legislation that would greatly expand the number of deals reviewed by Cfius. In November, Senator John Cornyn, Republican of Texas, and Senator Dianne Feinstein, Democrat of California, introduced a bill that could add thousands of companies with foreign ties to the list of those reviewed each year by Cfius and provide more funding to deal with that increase. A similar House bill was also introduced by Representative Robert Pittenger, Republican of North Carolina. The measure would expand Cfius’s jurisdiction to include joint ventures, sales of minority stakes and real estate deals for property near military bases and other sensitive facilities.
“By exploiting gaps in the existing Cfius review process,” said Mr. Cornyn, “potential adversaries, such as China, have been effectively degrading our country’s military technological edge by acquiring, and otherwise investing in U.S. companies.”
The proposal has drawn objections from some businesses. IBM said the changes would limit “the ability of American firms to do business abroad while empowering foreign competitors to capture global markets.”
https://www.nytimes.com/2018/03/05/business/what-is-cfius.html?rref=collection%2Fsectioncollection%2Fbusiness&action=click&contentCollection=business®ion=rank&module=package&version=highlights&contentPlacement=1&pgtype=sectionfront
Qualcomm, one of the world’s largest chip makers, has spent the last four months fending off a hostile takeover from Broadcom, a Singaporean rival. The fate of the proposed takeover may now be in jeopardy because of a little-known committee of top administration officials who meet in secret, wielding power to kill the biggest multibillion-dollar global deals.
The Committee on Foreign Investment in the United States, or Cfius (pronounced Sif-e-us), investigates mergers that could result in control of an American business by a foreign individual or company, judging whether deals could threaten national interests. In a letter on Monday, the committee said that a deal for Qualcomm, whose semiconductors will be used in the next generation of ultrafast wireless networks known as 5G, could pose a risk to national security.
It appears to be the first time the committee has intervened on a deal before it has been finalized, a signal that Cfius may play a more prominent role in the Trump administration’s America First policymaking.
Cfius is the ‘ultimate regulatory bazooka’
The committee is made up of members of the State, Defense, Justice, Commerce, Energy and Homeland Security departments, and is led by the treasury secretary. These days, that means Steven Mnuchin.
When Cfius reviews a possible deal, the committee does not publicly disclose any information provided to it — nor does it even acknowledge that a party to a merger has submitted a deal to review. It also has the authority to intervene and review pending or completed transactions, without being asked by any of the companies involved, if members of the committee think a deal that could raise national security concerns.
The committee’s findings, which are not publicly announced, are sent to the president, who may suspend or prohibit the deal.
But cases do not often get that far: The rejection of a deal by the committee is usually enough to kill it.
Cfius “is the No. 1 weapon in the Trump administration’s protectionist arsenal, the ultimate regulatory bazooka,” said Hernan Cristerna, co-head of global mergers and acquisitions at JPMorgan Chase.
* * *
Cfius was empowered with reviewing mergers for potential threats.
China is a frequent element in the deals Cfius reviewsCfius reviews deals across a variety of industries and companies from dozens of different countries. It has often set its sites on deals involving Chinese companies, as the country’s economic might has grown in recent years. From 2013 to 2015, the latest years for which the committee has made data public, about 20 percent of the deals that Cfius reviewed involved investors from China.
Among the notable recent reviews were:
MONEYGRAM — ANT FINANCIAL Ant Financial, a Chinese electronic payments company, wanted to purchase MoneyGram, a money transfer company based in Dallas, for $1.2 billion. But the deal collapsed in January after both sides said Cfius refused to approve it. The collapse came despite a charm offensive by Jack Ma, the Chinese tycoon who controls Ant Financial, who had visited President-elect Donald Trump at Trump Tower and pledged to create one million American jobs. But he could not overcome the Trump administration’s concerns about Chinese acquisition of American know-how.
CANYON BRIDGE CAPITAL — LATTICE Canyon Bridge Capital, a private equity firm, wanted to acquire Lattice, a chip maker based in Portland, Ore. Canyon Bridge received investment from a group that included China Venture Capital Fund Corporation, which is owned by Chinese government-backed organizations. Lattice said Cfius objected to the deal, and the company tried to appeal to the president, offering to resolve national security concerns. But Mr. Trump formally blocked the deal in September 2017, prompting China’s commerce ministry to issue a statement saying countries should not push protectionism through security reviews.
GO SCALE — PHILIPS In 2015, the Dutch electronics giant Philips had an agreement to sell a controlling stake in its automotive and LED business for as much as $2.9 billion to GO Scale, an investment fund sponsored by GSR Ventures of China and Oak Investment Partners. Philips canceled the deal after it could not resolve Cfius’s concerns, and in December 2016 announced it would sell the unit to Apollo Global Management for $1.5 billion, almost half the amount of the earlier deal.
The Broadcom-Qualcomm deal does not involve China-based companies. But there has been concern that the acquisition could undermine the ability of the United States to compete with China in the race for telecommunications supremacy. Members of Cfius pointed to Broadcom’s statements that it would take a “‘private equity’-style” approach if it acquired Qualcomm, suggesting to the committee that Broadcom could reduce long-term investment on research and development in favor of focusing on short-term profits.
While the United States has remained a standard-bearer in mobile technology, the committee noted, “China would likely compete robustly to fill any void left by Qualcomm as a result of this hostile takeover.”
Lawmakers want to expand Cfius’s jurisdiction
A bipartisan group in Congress has proposed legislation that would greatly expand the number of deals reviewed by Cfius. In November, Senator John Cornyn, Republican of Texas, and Senator Dianne Feinstein, Democrat of California, introduced a bill that could add thousands of companies with foreign ties to the list of those reviewed each year by Cfius and provide more funding to deal with that increase. A similar House bill was also introduced by Representative Robert Pittenger, Republican of North Carolina. The measure would expand Cfius’s jurisdiction to include joint ventures, sales of minority stakes and real estate deals for property near military bases and other sensitive facilities.
“By exploiting gaps in the existing Cfius review process,” said Mr. Cornyn, “potential adversaries, such as China, have been effectively degrading our country’s military technological edge by acquiring, and otherwise investing in U.S. companies.”
The proposal has drawn objections from some businesses. IBM said the changes would limit “the ability of American firms to do business abroad while empowering foreign competitors to capture global markets.”
https://www.nytimes.com/2018/03/05/business/what-is-cfius.html?rref=collection%2Fsectioncollection%2Fbusiness&action=click&contentCollection=business®ion=rank&module=package&version=highlights&contentPlacement=1&pgtype=sectionfront
From Better Markets:Protecting Investors From Rip-Offs Must Be Priority for SECMarch 16, 2018
FOR IMMEDIATE RELEASE
Friday, March 16, 2018
Contact: Nick Jacobs, 202-618-6430 or njacobs@bettermarkets.com
Washington, D.C. – The executive directors of Public Citizen and Better Markets, two of the nation’s leading organizations protecting investors, called on U.S. Securities and Exchange Commission (SEC) Chair Jay Clayton to reject any proposals that would allow publicly traded companies to force their investors into mandatory arbitration, through obscure clauses in initial public offering (IPO) documents or otherwise. Such action would deprive investors of their right to access the justice system if they are scammed or cheated and would allow companies to pocket their ill-gotten gains, sometimes amounting to hundreds of millions of dollars.
“Corporations have invested a decade in a campaign to convince the SEC to permit them to slip forced arbitration clauses into IPOs, precisely because they know that only a tiny few will pursue cases on their own, before arbiters,” said Robert Weissman, president of Public Citizen.
Forced arbitration clauses, which use fine-print “take-it-or-leave it” agreements to rig the system, have become ubiquitous in modern society. These clauses deprive people of their day in court when they are harmed by violations of the law. Instead, people are forced into industry-biased, secretive arbitration proceedings with little right to appeal if arbitrators ignore the law or facts.
“Arbitration proceedings are like kangaroo courts where everything is stacked against the investor and the industry almost always wins. That’s why the industry has to force it on investors, who will be doubly victimized. First, when they are ripped off and, second, when they can’t get a fair hearing to recover their losses. Adding insult to injury, the company that rips them off will get to pocket a windfall of ill-gotten gains, often tens of millions of dollars. The SEC must not allow this,” stated Dennis M. Kelleher, president and CEO of Better Markets.
Industry and its allies, including at the regulatory agencies that are supposed to protect investors first and foremost, increasingly are pushing for this dramatic policy change.
Advocates for investors are resisting these attempts. Last month, U.S. Sen. Elizabeth Warren (D-Mass.) questioned Chairman Clayton on whether the SEC was prepared to allow companies to insert forced arbitration clauses into IPO documents. Also last month, SEC Commissioner Robert J. Jackson, Jr., and SEC Investor Advocate Rick Fleming both strongly and publicly cautioned the SEC against taking actions that would allow companies to force investors into arbitration.
The full letter to Clayton can be read here and here.
FOR IMMEDIATE RELEASE
Friday, March 16, 2018
Contact: Nick Jacobs, 202-618-6430 or njacobs@bettermarkets.com
Washington, D.C. – The executive directors of Public Citizen and Better Markets, two of the nation’s leading organizations protecting investors, called on U.S. Securities and Exchange Commission (SEC) Chair Jay Clayton to reject any proposals that would allow publicly traded companies to force their investors into mandatory arbitration, through obscure clauses in initial public offering (IPO) documents or otherwise. Such action would deprive investors of their right to access the justice system if they are scammed or cheated and would allow companies to pocket their ill-gotten gains, sometimes amounting to hundreds of millions of dollars.
“Corporations have invested a decade in a campaign to convince the SEC to permit them to slip forced arbitration clauses into IPOs, precisely because they know that only a tiny few will pursue cases on their own, before arbiters,” said Robert Weissman, president of Public Citizen.
Forced arbitration clauses, which use fine-print “take-it-or-leave it” agreements to rig the system, have become ubiquitous in modern society. These clauses deprive people of their day in court when they are harmed by violations of the law. Instead, people are forced into industry-biased, secretive arbitration proceedings with little right to appeal if arbitrators ignore the law or facts.
“Arbitration proceedings are like kangaroo courts where everything is stacked against the investor and the industry almost always wins. That’s why the industry has to force it on investors, who will be doubly victimized. First, when they are ripped off and, second, when they can’t get a fair hearing to recover their losses. Adding insult to injury, the company that rips them off will get to pocket a windfall of ill-gotten gains, often tens of millions of dollars. The SEC must not allow this,” stated Dennis M. Kelleher, president and CEO of Better Markets.
Industry and its allies, including at the regulatory agencies that are supposed to protect investors first and foremost, increasingly are pushing for this dramatic policy change.
Advocates for investors are resisting these attempts. Last month, U.S. Sen. Elizabeth Warren (D-Mass.) questioned Chairman Clayton on whether the SEC was prepared to allow companies to insert forced arbitration clauses into IPO documents. Also last month, SEC Commissioner Robert J. Jackson, Jr., and SEC Investor Advocate Rick Fleming both strongly and publicly cautioned the SEC against taking actions that would allow companies to force investors into arbitration.
The full letter to Clayton can be read here and here.
A California district attorney’s hiring of outside law firms on a contingency basis did not violate a defendant’s rights to due process, according to the first federal circuit court to address the issue.
In an opinion on Thursday, the U.S. Court of Appeals for the Ninth Circuit upheld the dismissal of a case that American Bankers Management Co. Inc. brought against the district attorney of Trinity County. The district attorney hired three law firms on contingency to pursue injunctive relief and civil penalties against the company under California consumer protection laws. The panel disagreed with American Bankers’ contention that the hiring of the law firms violated its due process rights under the Fourteenth Amendment.
The opinion is here:
https://images.law.com/contrib/content/uploads/documents/403/12061/Contingency-Ruling-3-16.pdf
Excerpt from The Recorder, Law.com
In an opinion on Thursday, the U.S. Court of Appeals for the Ninth Circuit upheld the dismissal of a case that American Bankers Management Co. Inc. brought against the district attorney of Trinity County. The district attorney hired three law firms on contingency to pursue injunctive relief and civil penalties against the company under California consumer protection laws. The panel disagreed with American Bankers’ contention that the hiring of the law firms violated its due process rights under the Fourteenth Amendment.
The opinion is here:
https://images.law.com/contrib/content/uploads/documents/403/12061/Contingency-Ruling-3-16.pdf
Excerpt from The Recorder, Law.com
From DMN: Mayors from 12 U.S. Cities Will Refuse Business from Any Company Opposed to Net Neutrality
“We will not do business with any vendor that does not honor net neutrality.”
— Bill de Blasio, mayor of New York City.
Now, there’s another front in the net neutrality rebellion: mayors from major U.S. cities. Already, twelve different mayors from some of the largest U.S. cities in America have vowed to sever business ties with any company that refuses to honor net neutrality provisions.
The just-formed Mayors for Net Neutrality Coalition already includes New York City mayor Bill de Blasio, San Francisco mayor Mark Farrell, Portland mayor Ted Wheeler, and San Jose mayor Sam Liccardo. The group just announced their existence at SXSW Interactive in Austin, drawing another layer of resistance for embattled Trump FCC chairman Ajit Pai.
The group is even talking about building certified ‘Net Neutrality Cities,’ and encouraging other mayors to sign their Cities Open Internet Pledge. That Pledge requires anyone doing business within the respective city to adhere to net neutrality principles — or take their business elsewhere. The end result is a net neutrality safe zone.
Read the rest here.
“We will not do business with any vendor that does not honor net neutrality.”
— Bill de Blasio, mayor of New York City.
Now, there’s another front in the net neutrality rebellion: mayors from major U.S. cities. Already, twelve different mayors from some of the largest U.S. cities in America have vowed to sever business ties with any company that refuses to honor net neutrality provisions.
The just-formed Mayors for Net Neutrality Coalition already includes New York City mayor Bill de Blasio, San Francisco mayor Mark Farrell, Portland mayor Ted Wheeler, and San Jose mayor Sam Liccardo. The group just announced their existence at SXSW Interactive in Austin, drawing another layer of resistance for embattled Trump FCC chairman Ajit Pai.
The group is even talking about building certified ‘Net Neutrality Cities,’ and encouraging other mayors to sign their Cities Open Internet Pledge. That Pledge requires anyone doing business within the respective city to adhere to net neutrality principles — or take their business elsewhere. The end result is a net neutrality safe zone.
Read the rest here.
A brief primer on bitcoin, blockchain, and banks
by Aziz Bin Zainuddin, founder and chief crypto officer, Master The Crypto
Some have dismissed blockchain and cryptocurrency as a fad that spells too much trouble for governments to become a mainstay in our everyday lives. Others believe it presents too many advantages for businesses and consumers for it to disappear.
Either way, the technology is too revolutionary for banks to ignore.
Here is a roundup of how blockchain works and how banks might utilize it in the future.
A brief history
Bitcoin is a borderless decentralized digital currency that was invented in 2008. Its founder, known only by the pseudonym Satoshi Nakamoto, cultivated it partly in response to the global financial crisis that unfolded in the same year.
One of Nakamoto's primary goals was to create a currency with a value that couldn't be affected by quantitative easing. To this end, he created an automated mining system that ensures there will only ever be 21 million bitcoins in existence. This means that the value of bitcoin will always be based on supply and demand.
Bitcoin transactions are stored in an immutable decentralized ledger called the blockchain. Instead of existing on a single server, it exists on every computer that can connect to the internet.
The decentralized nature of blockchain makes it more secure and reliable than traditional banking databases, as there is no single database that could to be compromised by hackers or suffer from system failure.
Blockchain transactions are pseudonymous and there is no central authority that can ban anyone from making bitcoin transactions.
The advantages of bitcoin over fiat currency have driven its remarkable growth in value since its creation.
The beauty of blockchain
Blockchain technology was invented simply as a ledger for bitcoin transactions. Eventually, though, it became clear that its decentralized, immutable, pseudonymous nature could be put to use in innumerable other industries.
The invention of Ethereum in 2015 was a historic moment for blockchain technology. This open-source platform allows developers to create any type of software on blockchain without limits.
Revolutionary blockchain technologies such as smart contracts and decentralized autonomous organizations seem to be poised to disrupt the banking industry in a major way.
How banks benefit
It is likely to be difficult for retail banks to ignore technology that is undeniably more secure and reliable than their current databases.
Firstly, its pseudonymous nature could help end identity fraud. Secondly, the decentralized nature of blockchain could help introduce faster payments than two centralized systems could ever manage.
While some blockchains (most notably bitcoin's) are notoriously slow, others that are lightning fast. Ripple, the second most-valuable cryptocurrency by market capitalization, can handle 1,500 transactions per second.
The use of smart contracts could improve the efficiency of banking transactions further still. Banks rely on contracts for all of their products, from credit cards to mortgages to checking and savings accounts.
Smart contracts can be applied to all of the processes detailed in these documents and, it is believed, massively reduce processing costs for banks. Indeed, smart contracts are expected to replace to replace the clunky and inefficient Know Your Customer identity management process soon rather than later.
Wasting no time
Several start-ups have received venture capital to develop the projects discussed above, but the majority of them are still just ideas at this stage.
However, several major banks have already moved to invest in and develop blockchain technology. A group of financial institutions led by Swiss bank UBS has agreed to use Ethereum to improve the quality of their reference data. Instead of entrusting it to a third party to review, they are happy to rely solely on blockchain.
Meanwhile, Santander will use Ripple to power its new mobile app and it has been widely predicted that central banks will hold bitcoin and Ether cryptocurrencies in their reserves for the first time this year.
The long view
Perhaps unsurprisingly, many central governments are doing their best to limit the growth of cryptocurrency on their shores.
This might be enough to halt the growth of bitcoin as the world's first truly global currency. It must overcome other hurdles as well, not least slow transaction times and wild fluctuations in value.
Whatever happens with bitcoin, though, it's difficult to dispute the advantages that blockchain is likely to bring to retail banking.
Aziz Bin Zainuddin is a blockchain expert and the founder and chief crypto officer of Master The Crypto (MasterTheCrypto.com), a knowledge hub and resource center for cryptocurrency investing and all things blockchain. In addition, Aziz runs C.M. Fund, a Singapore-based crypto hedge fund based that invests in cryptos with solid fundamentals and game-changing technology.
Credit: https://www.atmmarketplace.com/articles/could-bitcoin-and-blockchain-blow-up-banking-as-we-know-it/?utm_source=AMC&utm_medium=email&utm_campaign=EMNA&utm_content=2018-03-08%3Fstyle%3Dprint
by Aziz Bin Zainuddin, founder and chief crypto officer, Master The Crypto
Some have dismissed blockchain and cryptocurrency as a fad that spells too much trouble for governments to become a mainstay in our everyday lives. Others believe it presents too many advantages for businesses and consumers for it to disappear.
Either way, the technology is too revolutionary for banks to ignore.
Here is a roundup of how blockchain works and how banks might utilize it in the future.
A brief history
Bitcoin is a borderless decentralized digital currency that was invented in 2008. Its founder, known only by the pseudonym Satoshi Nakamoto, cultivated it partly in response to the global financial crisis that unfolded in the same year.
One of Nakamoto's primary goals was to create a currency with a value that couldn't be affected by quantitative easing. To this end, he created an automated mining system that ensures there will only ever be 21 million bitcoins in existence. This means that the value of bitcoin will always be based on supply and demand.
Bitcoin transactions are stored in an immutable decentralized ledger called the blockchain. Instead of existing on a single server, it exists on every computer that can connect to the internet.
The decentralized nature of blockchain makes it more secure and reliable than traditional banking databases, as there is no single database that could to be compromised by hackers or suffer from system failure.
Blockchain transactions are pseudonymous and there is no central authority that can ban anyone from making bitcoin transactions.
The advantages of bitcoin over fiat currency have driven its remarkable growth in value since its creation.
The beauty of blockchain
Blockchain technology was invented simply as a ledger for bitcoin transactions. Eventually, though, it became clear that its decentralized, immutable, pseudonymous nature could be put to use in innumerable other industries.
The invention of Ethereum in 2015 was a historic moment for blockchain technology. This open-source platform allows developers to create any type of software on blockchain without limits.
Revolutionary blockchain technologies such as smart contracts and decentralized autonomous organizations seem to be poised to disrupt the banking industry in a major way.
How banks benefit
It is likely to be difficult for retail banks to ignore technology that is undeniably more secure and reliable than their current databases.
Firstly, its pseudonymous nature could help end identity fraud. Secondly, the decentralized nature of blockchain could help introduce faster payments than two centralized systems could ever manage.
While some blockchains (most notably bitcoin's) are notoriously slow, others that are lightning fast. Ripple, the second most-valuable cryptocurrency by market capitalization, can handle 1,500 transactions per second.
The use of smart contracts could improve the efficiency of banking transactions further still. Banks rely on contracts for all of their products, from credit cards to mortgages to checking and savings accounts.
Smart contracts can be applied to all of the processes detailed in these documents and, it is believed, massively reduce processing costs for banks. Indeed, smart contracts are expected to replace to replace the clunky and inefficient Know Your Customer identity management process soon rather than later.
Wasting no time
Several start-ups have received venture capital to develop the projects discussed above, but the majority of them are still just ideas at this stage.
However, several major banks have already moved to invest in and develop blockchain technology. A group of financial institutions led by Swiss bank UBS has agreed to use Ethereum to improve the quality of their reference data. Instead of entrusting it to a third party to review, they are happy to rely solely on blockchain.
Meanwhile, Santander will use Ripple to power its new mobile app and it has been widely predicted that central banks will hold bitcoin and Ether cryptocurrencies in their reserves for the first time this year.
The long view
Perhaps unsurprisingly, many central governments are doing their best to limit the growth of cryptocurrency on their shores.
This might be enough to halt the growth of bitcoin as the world's first truly global currency. It must overcome other hurdles as well, not least slow transaction times and wild fluctuations in value.
Whatever happens with bitcoin, though, it's difficult to dispute the advantages that blockchain is likely to bring to retail banking.
Aziz Bin Zainuddin is a blockchain expert and the founder and chief crypto officer of Master The Crypto (MasterTheCrypto.com), a knowledge hub and resource center for cryptocurrency investing and all things blockchain. In addition, Aziz runs C.M. Fund, a Singapore-based crypto hedge fund based that invests in cryptos with solid fundamentals and game-changing technology.
Credit: https://www.atmmarketplace.com/articles/could-bitcoin-and-blockchain-blow-up-banking-as-we-know-it/?utm_source=AMC&utm_medium=email&utm_campaign=EMNA&utm_content=2018-03-08%3Fstyle%3Dprint
An elaborate system involving non-disclosure agreements has developed to silence women who level accusations against powerful men. One of those women is Stephanie Clifford, a pornographic actress who claims to have had an affair with Donald J. Trump.
On the NYT podcast (see URL below)
• Jim Rutenberg, The New York Times’s media columnist.
Background reading:
• President Trump’s lawyer secretly obtained a temporary restraining order to prevent a pornographic film actress from speaking out about her alleged affair with Mr. Trump.
• Beyond facilitating a $130,000 payment intended to silence Ms. Clifford, the lawyer, Michael D. Cohen, spent years making aggressive behind-the-scenes efforts to protect Mr. Trump.
Find the podcast here:
www.nytimes.com/2018/03/09/podcasts/the-daily/stormy-daniels-trump.html?rref=collection%2Fbyline%2Fjim-rutenberg&action=click&contentCollection=undefined®ion=stream&module=stream_unit&version=latest&contentPlacement=1&pgtype=collection
On the NYT podcast (see URL below)
• Jim Rutenberg, The New York Times’s media columnist.
Background reading:
• President Trump’s lawyer secretly obtained a temporary restraining order to prevent a pornographic film actress from speaking out about her alleged affair with Mr. Trump.
• Beyond facilitating a $130,000 payment intended to silence Ms. Clifford, the lawyer, Michael D. Cohen, spent years making aggressive behind-the-scenes efforts to protect Mr. Trump.
Find the podcast here:
www.nytimes.com/2018/03/09/podcasts/the-daily/stormy-daniels-trump.html?rref=collection%2Fbyline%2Fjim-rutenberg&action=click&contentCollection=undefined®ion=stream&module=stream_unit&version=latest&contentPlacement=1&pgtype=collection
From Public Citizen:
The problem of judges substituting their own opinions for facts
by Stephen Gardner
On February 27, the Northern District of California issued an opinion on a motion to dismiss in Becerra v. The Coca-Cola Company. The court got the law right, but then ruled based on incorrect conclusions on disputed facts.
There are two parts to the opinion. First, the court analyzed Coke’s various attempts to avoid liability under state law, based on preemption and safe harbor, and rejected each attempt. So far, so good.
But then the court turned to Rule 9(b). Here, too, the court was generally correct on the law, but ruled based on its own beliefs of what a reasonable consumer would think.
For example, the court said that “a reasonable consumer would simply not look at the brand name Diet Coke and assume that consuming it, absent any lifestyle change, would lead to weight loss.”
The court is wrong. Diet Coke’s name itself indeed suggests (really, outright says) that it’s part of a diet, and many consumers do not know that reduced calories alone will not likely lead to weight loss. Consumers are not nutrition scientists, and often turn (wrongly, but encouraged by companies like Coke) to quick fixes. The FTC’s many weight loss cases are evidence of this.
The court is expert on law, but not on consumer behavior, and it erred in substituting its opinion of the facts—at the motion to dismiss stage—for a disputed merits question.
The court compounded its error with the unsupported statement that “Reasonable consumers would understand that Diet Coke merely deletes the calories usually present in regular Coke, and that the caloric reduction will lead to weight loss only as part of an overall sensible diet and exercise regimen dependent on individual metabolism.”
Again, the court wrongfully draws its own conclusions as to how consumers reasonably behave. The court is also wrong on the facts—Diet Coke did not “merely delete[] the calories usually present in regular Coke.” It also added aspartame, which is an artificial non-nutritive sweetener.
Consumers are chary of artificial sweeteners, with good reason. The Center for Science in the Public Interest says, “Three key studies funded by an independent lab (rather than by a maker of aspartame) found that the sweetener caused lymphomas, leukemias, kidney, and other cancers in rats and mice. That should be reason enough for the Food and Drug Administration to ban aspartame from the food supply, says CSPI. In addition, aspartame might cause headaches or other neurological symptoms in a small number of people.” (For a longer discussion of risks, see this article from CSPI's excellent magazine Nutrition Action Healthletter.)
The court concluded, “In order to overcome the otherwise sensible view of reasonable consumers that Diet Coke consumption alone will not lead to weight loss, the complaint would need to cite far more powerful evidence than is now provided to make a claim of fraud plausible.”
The court gave plaintiff the chance to file an amended complaint, saying that “Plaintiff must plead her best case.”
Let’s hope she does.
Posted by Steve Gardner on Monday, March 05, 2018 at 04:45 PM Illustration of the problem of judges substituting their own opinions of factsby Stephen Gardner
http://pubcit.typepad.com/clpblog/2018/03/illustration-of-the-problem-of-judges-substituting-their-own-opinions-of-facts.html?utm_source=feedburner&utm_medium=email&utm_campaign=Feed%3A+ConsumerLawPolicyBlog+%28Consumer+Law+%26+Policy+Blog%29
From DMN: Washington has now become the first state in the nation to pass a law protecting net neutrality. Other states, including California and Oregon, are expected to follow suit.
In a bold statement against the Trump-led FCC, the State of Washington has officially passed a law protecting net neutrality. The bill, HB2282, received a lopsided 95-3 vote in the House earlier this month. Late today (Tuesday, Feb. 27th), the bill received a 35-14 vote in the state’s Senate.
Rep. Drew Hanson (D-Bainbridge Island), the bill’s prime sponsor, shared the development. “Today’s vote guarantees the net neutrality rules
that have protected a free and open internet will continue to remain in place in Washington state,” Hanson emailed. “Net neutrality is important to everyone – our constituents, small business owners, teachers, entrepreneurs, everyone. This is a cause with overwhelming bipartisan support; it’s always nice to see something where Democrats and Republicans can work together to maintain common-sense consumer protections.”
Hanson stressed that the bill was a bipartisan effort. Indeed, Republican Rep. Norma Smith (R-Clinton) was the bill’s co-sponsor.
Specifically, the bill makes it illegal for any ISP to:
Any ISP found violating any of those core tenets will face serious fines and penalties. Continued violations may result in a revocation of an ISP’s license to conduct business in the state.
Of course, those three tenets are expressly permitted by the FCC’s recent repeal of net neutrality. All of which sets the stage for a serious battle between Washington State and the FCC. In its rollback, the FCC attempted to make state laws protecting net neutrality null and void, though any ISP testing that power is likely to lose its business in Washington.
(Here’s the FCC’s Official 284-Page Order Repealing Net Neutrality — It’s Titled ‘Restoring Internet Freedom’)
Importantly, the Washington State law closely follows the FCC’s official submission of its net neutrality repeal into the Federal Register. That triggers a 60-day approval window before the rollback becomes federal law.
Meanwhile, Washington’s strong statement is likely to be followed by other powerful U.S. states. That includes California, whose House has already passed a net neutrality bill with passage likely from the Senate. In Oregon, a similar bill has also passed the lower House. Elsewhere, Nebraska recently introduced a bill, potentially making it the first red state to push back.
The developments in Washington are being cheered by the state’s considerable tech industry. “Today, Washington took a stand for internet freedoms and preserving an equal playing field for consumers and entrepreneurs,” remarked Sarah Bird, CEO of Seattle-based search engine optimization company MOZ. “Our internet economy is the envy of the world; Washington lawmakers are helping make sure that remains true.”
Governor Jay Inslee is expected to officially sign HB2282 this week.
A copy of the bill can be found here.
The DMN article is here: https://www.digitalmusicnews.com/2018/02/27/washington-state-law-net-neutrality/
In a bold statement against the Trump-led FCC, the State of Washington has officially passed a law protecting net neutrality. The bill, HB2282, received a lopsided 95-3 vote in the House earlier this month. Late today (Tuesday, Feb. 27th), the bill received a 35-14 vote in the state’s Senate.
Rep. Drew Hanson (D-Bainbridge Island), the bill’s prime sponsor, shared the development. “Today’s vote guarantees the net neutrality rules
that have protected a free and open internet will continue to remain in place in Washington state,” Hanson emailed. “Net neutrality is important to everyone – our constituents, small business owners, teachers, entrepreneurs, everyone. This is a cause with overwhelming bipartisan support; it’s always nice to see something where Democrats and Republicans can work together to maintain common-sense consumer protections.”
Hanson stressed that the bill was a bipartisan effort. Indeed, Republican Rep. Norma Smith (R-Clinton) was the bill’s co-sponsor.
Specifically, the bill makes it illegal for any ISP to:
- Block customers’ access to lawful content
- ‘Throttle’ or slowing down lawful content
- Favor certain content over others due to ‘paid prioritization’
Any ISP found violating any of those core tenets will face serious fines and penalties. Continued violations may result in a revocation of an ISP’s license to conduct business in the state.
Of course, those three tenets are expressly permitted by the FCC’s recent repeal of net neutrality. All of which sets the stage for a serious battle between Washington State and the FCC. In its rollback, the FCC attempted to make state laws protecting net neutrality null and void, though any ISP testing that power is likely to lose its business in Washington.
(Here’s the FCC’s Official 284-Page Order Repealing Net Neutrality — It’s Titled ‘Restoring Internet Freedom’)
Importantly, the Washington State law closely follows the FCC’s official submission of its net neutrality repeal into the Federal Register. That triggers a 60-day approval window before the rollback becomes federal law.
Meanwhile, Washington’s strong statement is likely to be followed by other powerful U.S. states. That includes California, whose House has already passed a net neutrality bill with passage likely from the Senate. In Oregon, a similar bill has also passed the lower House. Elsewhere, Nebraska recently introduced a bill, potentially making it the first red state to push back.
The developments in Washington are being cheered by the state’s considerable tech industry. “Today, Washington took a stand for internet freedoms and preserving an equal playing field for consumers and entrepreneurs,” remarked Sarah Bird, CEO of Seattle-based search engine optimization company MOZ. “Our internet economy is the envy of the world; Washington lawmakers are helping make sure that remains true.”
Governor Jay Inslee is expected to officially sign HB2282 this week.
A copy of the bill can be found here.
The DMN article is here: https://www.digitalmusicnews.com/2018/02/27/washington-state-law-net-neutrality/
5G Cell Service Is Coming. Who Decides Where It Goes?
There is a heated fight about when, where and how the next generation of cell service gets delivered. ... The prospect of their installation has many communities and their officials, from Woodbury, N.Y., to Olympia, Wash., insisting that local governments control the placement and look of the new equipment, not the federal government.
https://www.nytimes.com/2018/03/02/technology/5g-cellular-service.html (click title for link)
There is a heated fight about when, where and how the next generation of cell service gets delivered. ... The prospect of their installation has many communities and their officials, from Woodbury, N.Y., to Olympia, Wash., insisting that local governments control the placement and look of the new equipment, not the federal government.
https://www.nytimes.com/2018/03/02/technology/5g-cellular-service.html (click title for link)
D.C. Administration seeks to limit litigation opposing real estate development
From the Washington Post:
Activists seeking to thwart the breakneck speed of development across the District have turned with greater frequency to the city’s highest court, filing legal challenges that have delayed more than two dozen projects in the past two years and driven up their costs.
Now the Bowser administration wants to curtail those challenges, proposing to amend District policies in ways to reduce those avenues for protest.
District officials say that the changes would end nuisance legal challenges, reduce the cost of doing business in Washington, and expedite the construction of housing units that the city needs.
“We have thousands of new homes that are hung up in court, including hundreds of affordable homes,” said Cheryl Cort, policy director for the Coalition For Smarter Growth. “The courts seem much more willing to second-guess the process, and it has thrown everything into uncertainty.”
But activists counter that the city is making it more difficult to stave off gentrification. They say their ability to turn to the D.C. Court of Appeals is necessary to prevent District officials from violating their own policies to accommodate luxury projects that drive up housing prices in exchange for minimal benefits for neighborhoods.
“It’s the most basic part of our checks and review,” said Kirby Vining, an activist who successfully appealed the city’s approval of a project in his neighborhood. “Without it, we would have been stuck.” He called the administration’s proposals a “Christmas present for developers.”
The full article:
https://www.washingtonpost.com/local/dc-politics/dc-mayor-seeking-to-stop-costly-legal-delays-to-development-projects/2018/02/28/29855a06-1b14-11e8-b2d9-08e748f892c0_story.html?utm_term=.31ced0d73465
From the Washington Post:
Activists seeking to thwart the breakneck speed of development across the District have turned with greater frequency to the city’s highest court, filing legal challenges that have delayed more than two dozen projects in the past two years and driven up their costs.
Now the Bowser administration wants to curtail those challenges, proposing to amend District policies in ways to reduce those avenues for protest.
District officials say that the changes would end nuisance legal challenges, reduce the cost of doing business in Washington, and expedite the construction of housing units that the city needs.
“We have thousands of new homes that are hung up in court, including hundreds of affordable homes,” said Cheryl Cort, policy director for the Coalition For Smarter Growth. “The courts seem much more willing to second-guess the process, and it has thrown everything into uncertainty.”
But activists counter that the city is making it more difficult to stave off gentrification. They say their ability to turn to the D.C. Court of Appeals is necessary to prevent District officials from violating their own policies to accommodate luxury projects that drive up housing prices in exchange for minimal benefits for neighborhoods.
“It’s the most basic part of our checks and review,” said Kirby Vining, an activist who successfully appealed the city’s approval of a project in his neighborhood. “Without it, we would have been stuck.” He called the administration’s proposals a “Christmas present for developers.”
The full article:
https://www.washingtonpost.com/local/dc-politics/dc-mayor-seeking-to-stop-costly-legal-delays-to-development-projects/2018/02/28/29855a06-1b14-11e8-b2d9-08e748f892c0_story.html?utm_term=.31ced0d73465
Can CVS-Aetna merger squeeze hospitals by forcing customers to accept cheaper non-hospital care alternatives?
That is the premise of a Moody's study reported in a Modern Healthcare article titled: Hospitals pressured as insurers pursue more vertical integration
An article excerpt follows:
The artBy Alex Kacik | February 24, 2018
Hospitals that don't adapt could get squeezed out of the care continuum as insurers grow and direct more care to lower-cost settings, according to an analysis from Moody's Investors Service.
Both not-for-profit and for-profit hospitals are feeling the pressure of falling inpatient volumes and reimbursement levels from government payers along with rising drug costs and labor expenses, as well as regulatory changes to policies like the 340B drug discount program.
Those downward pressures on margins will continue if insurers' plans to vertically integrate with providers come to fruition, the ratings agency said. The Medicare Payment Advisory Commission estimated that hospital margins could sink to negative 10% in 2017, a drop from negative 7.1% in 2015.
Insurers have had to get creative since regulators blocked recent attempts to grow horizontally, including the thwarted mergers between Aetna and Humana, and Anthem and Cigna Corp. They now look to align with providers through proposed combinations between CVS Health and Aetna, UnitedHealth Group's Optum and DaVita Medical Group, and Humana and Kindred Healthcare—partnerships designed to prevent hospital visits through regular primary-care checkups and home healthcare.
Since they don't have to carry the hefty overhead of full-service hospitals, insurers that combine with physician groups and non-acute-care service providers can offer similar preventive, outpatient and post-acute care to their members at lower costs. Scale will also give them an upper hand in rate negotiations, denting providers' bottom lines.
The proposed deals could give insurers the power to direct care rather than doctors, said Juan Morado Jr., of counsel at law firm Benesch. But limiting patient choice is a risky proposition, he added.
As insurers grow their physician networks, they will be better able to carve out "high-cost" hospitals or certain services from contracts, which will mean lower volume and revenue for hospitals, Moody's said. Optum, which has been on a physician-acquisition binge, could funnel more care to cheaper, risk-bearing hospitals. Also, Anthem's policy to limit coverage of emergency visits in certain states will mean fewer patient visits, lower revenue and higher bad-debt rates for hospitals, the report said.
Full article: http://www.modernhealthcare.com/article/20180224/NEWS/180229944?utm_source=modernhealthcare&utm_medium=email&utm_content=20180224-NEWS-180229944&utm_campaign=am
_____________________________________________________
A related topic:
As Surgery Centers Boom, Patients Are Paying With Their LivesSIMPLE SURGERIES. TRAGIC RESULTSBy Christina Jewett, Kaiser Health News and Mark Alesia, USA TODAY Network
MARCH 2, 2018
This story also ran on USA Today. This story is at https://khn.org/news/medicare-certified-surgery-centers-are-expanding-but-deaths-question-safety/view/republish/
Excerpt:
The surgery went fine. Her doctors left for the day. Four hours later, Paulina Tam started gasping for air.
Internal bleeding was cutting off her windpipe, a well-known complication of the spine surgery she had undergone.
But a Medicare inspection report describing the event says that nobody who remained on duty that evening at the Northern California surgery center knew what to do.
How a push to cut costs and boost profits at surgery centers led to a trail of death.
A team of journalists based in California, Indiana, New Jersey, Florida, Washington, D.C., and Virginia worked to tell this story in a partnership between Kaiser Health News and USA TODAY Network.
Christina Jewett is a senior correspondent for Kaiser Health News. Mark Alesia is an investigative reporter for the Indianapolis Star.
Reporters pored through thousands of pages of court records and crisscrossed the U.S. to talk to injured patients or families of the deceased.
For more than a year, using federal and state open-records laws, reporters gathered more than 12,000 inspection records and 1,500 complaint reports, as well as autopsies and EMS documents and medical records, together forming the foundation for this report.
In desperation, a nurse did something that would not happen in a hospital.
She dialed 911.
By the time an ambulance delivered Tam to the emergency room, the 58-year-old mother of three was lifeless, according to the report.
If Tam had been operated on at a hospital, a few simple steps could have saved her life.
But like hundreds of thousands of other patients each year, Tam went to one of the nation’s 5,600-plus surgery centers.
Such centers started nearly 50 years ago as low-cost alternatives for minor surgeries. They now outnumber hospitals as federal regulators have signed off on an ever-widening array of outpatient procedures in an effort to cut federal health care costs.
Thousands of times each year, these centers call 911 as patients experience complications ranging from minor to fatal. Yet no one knows how many people die as a result, because no national authority tracks the tragic outcomes. An investigation by Kaiser Health News and the USA TODAY Network has discovered that more than 260 patients have died since 2013 after in-and-out procedures at surgery centers across the country. Dozens — some as young as 2 — have perished after routine operations, such as colonoscopies and tonsillectomies.
Reporters examined autopsy records, legal filings and more than 12,000 state and Medicare inspection records, and interviewed dozens of doctors, health policy experts and patients throughout the industry, in the most extensive examination of these records to date.
The investigation revealed:
Most operations done in surgery centers go off without a hitch. And surgery carries risk, no matter where it’s done. Some centers have state-of-the-art equipment and highly trained staff that are better prepared to handle emergencies.
But Kaiser Health News and the USA TODAY Network found more than a dozen cases where the absence of trained staff or emergency equipment appears to have put patients in peril.
That is the premise of a Moody's study reported in a Modern Healthcare article titled: Hospitals pressured as insurers pursue more vertical integration
An article excerpt follows:
The artBy Alex Kacik | February 24, 2018
Hospitals that don't adapt could get squeezed out of the care continuum as insurers grow and direct more care to lower-cost settings, according to an analysis from Moody's Investors Service.
Both not-for-profit and for-profit hospitals are feeling the pressure of falling inpatient volumes and reimbursement levels from government payers along with rising drug costs and labor expenses, as well as regulatory changes to policies like the 340B drug discount program.
Those downward pressures on margins will continue if insurers' plans to vertically integrate with providers come to fruition, the ratings agency said. The Medicare Payment Advisory Commission estimated that hospital margins could sink to negative 10% in 2017, a drop from negative 7.1% in 2015.
Insurers have had to get creative since regulators blocked recent attempts to grow horizontally, including the thwarted mergers between Aetna and Humana, and Anthem and Cigna Corp. They now look to align with providers through proposed combinations between CVS Health and Aetna, UnitedHealth Group's Optum and DaVita Medical Group, and Humana and Kindred Healthcare—partnerships designed to prevent hospital visits through regular primary-care checkups and home healthcare.
Since they don't have to carry the hefty overhead of full-service hospitals, insurers that combine with physician groups and non-acute-care service providers can offer similar preventive, outpatient and post-acute care to their members at lower costs. Scale will also give them an upper hand in rate negotiations, denting providers' bottom lines.
The proposed deals could give insurers the power to direct care rather than doctors, said Juan Morado Jr., of counsel at law firm Benesch. But limiting patient choice is a risky proposition, he added.
As insurers grow their physician networks, they will be better able to carve out "high-cost" hospitals or certain services from contracts, which will mean lower volume and revenue for hospitals, Moody's said. Optum, which has been on a physician-acquisition binge, could funnel more care to cheaper, risk-bearing hospitals. Also, Anthem's policy to limit coverage of emergency visits in certain states will mean fewer patient visits, lower revenue and higher bad-debt rates for hospitals, the report said.
Full article: http://www.modernhealthcare.com/article/20180224/NEWS/180229944?utm_source=modernhealthcare&utm_medium=email&utm_content=20180224-NEWS-180229944&utm_campaign=am
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A related topic:
As Surgery Centers Boom, Patients Are Paying With Their LivesSIMPLE SURGERIES. TRAGIC RESULTSBy Christina Jewett, Kaiser Health News and Mark Alesia, USA TODAY Network
MARCH 2, 2018
This story also ran on USA Today. This story is at https://khn.org/news/medicare-certified-surgery-centers-are-expanding-but-deaths-question-safety/view/republish/
Excerpt:
The surgery went fine. Her doctors left for the day. Four hours later, Paulina Tam started gasping for air.
Internal bleeding was cutting off her windpipe, a well-known complication of the spine surgery she had undergone.
But a Medicare inspection report describing the event says that nobody who remained on duty that evening at the Northern California surgery center knew what to do.
How a push to cut costs and boost profits at surgery centers led to a trail of death.
A team of journalists based in California, Indiana, New Jersey, Florida, Washington, D.C., and Virginia worked to tell this story in a partnership between Kaiser Health News and USA TODAY Network.
Christina Jewett is a senior correspondent for Kaiser Health News. Mark Alesia is an investigative reporter for the Indianapolis Star.
Reporters pored through thousands of pages of court records and crisscrossed the U.S. to talk to injured patients or families of the deceased.
For more than a year, using federal and state open-records laws, reporters gathered more than 12,000 inspection records and 1,500 complaint reports, as well as autopsies and EMS documents and medical records, together forming the foundation for this report.
In desperation, a nurse did something that would not happen in a hospital.
She dialed 911.
By the time an ambulance delivered Tam to the emergency room, the 58-year-old mother of three was lifeless, according to the report.
If Tam had been operated on at a hospital, a few simple steps could have saved her life.
But like hundreds of thousands of other patients each year, Tam went to one of the nation’s 5,600-plus surgery centers.
Such centers started nearly 50 years ago as low-cost alternatives for minor surgeries. They now outnumber hospitals as federal regulators have signed off on an ever-widening array of outpatient procedures in an effort to cut federal health care costs.
Thousands of times each year, these centers call 911 as patients experience complications ranging from minor to fatal. Yet no one knows how many people die as a result, because no national authority tracks the tragic outcomes. An investigation by Kaiser Health News and the USA TODAY Network has discovered that more than 260 patients have died since 2013 after in-and-out procedures at surgery centers across the country. Dozens — some as young as 2 — have perished after routine operations, such as colonoscopies and tonsillectomies.
Reporters examined autopsy records, legal filings and more than 12,000 state and Medicare inspection records, and interviewed dozens of doctors, health policy experts and patients throughout the industry, in the most extensive examination of these records to date.
The investigation revealed:
- Surgery centers have steadily expanded their business by taking on increasingly risky surgeries. At least 14 patients have died after complex spinal surgeries like those that federal regulators at Medicare recently approved for surgery centers. Even as the risks of doing such surgeries off a hospital campus can be great, so is the reward. Doctors who own a share of the center can earn their own fee and a cut of the facility’s fee, a meaningful sum for operations that can cost $100,000 or more.
- To protect patients, Medicare requires surgery centers to line up a local hospital to take their patients when emergencies arise. In rural areas, centers can be 15 or more miles away. Even when the hospital is close, 20 to 30 minutes can pass between a 911 call and arrival at an ER.
- Some surgery centers are accused of overlooking high-risk health problems and treat patients who experts say should be operated on only in hospitals, if at all. At least 25 people with underlying medical conditions have left surgery centers and died within minutes or days. They include an Ohio woman with out-of-control blood pressure, a 49-year-old West Virginia man awaiting a heart transplant and several children with sleep apnea.
- Some surgery centers risk patient lives by skimping on training or lifesaving equipment. Others have sent patients home before they were fully recovered. On their drives home, shocked family members in Arkansas, Oklahoma and Georgia discovered their loved ones were not asleep but on the verge of death. Surgery centers have been criticized in cases where staff didn’t have the tools to open a difficult airway or skills to save a patient from bleeding to death.
Most operations done in surgery centers go off without a hitch. And surgery carries risk, no matter where it’s done. Some centers have state-of-the-art equipment and highly trained staff that are better prepared to handle emergencies.
But Kaiser Health News and the USA TODAY Network found more than a dozen cases where the absence of trained staff or emergency equipment appears to have put patients in peril.
Data breach class action with small individual recoveries, many attorneys, and big fees = irritated judge
By Daniel R. Stoller - Bloomberg Law
February 6, 2018
• Federal judge orders more oversight of $37.95 million attorneys’ fees request
• Case grew out of 2015 Anthem breach that exposed 78.8 million consumers’ data
Anthem Inc. can’t dispose of consumer class claims stemming from a 2015 data breach for now, after a federal judge raised concerns about nearly $38 million in proposed attorneys’ fees.
A class counsel request for $37.95 million in attorneys’ fees, out of a $115 million settlement, is getting an extra layer of oversight, Judge Lucy Koh of the U.S. District Court for the Northern District of California wrote in a Feb. 2 order.
The court is concerned with the attorneys’ fee request because the class counsel assigned tasks “across 53 law firms and 331 billers,” wrote Koh, who granted a motion to appoint a special master to oversee the attorneys’ fees award.
Such billing could be “duplicative or inefficient,” Koh wrote. James Kleinberg, a retired California state judge, will likely be named special master to review the fee request because the parties didn’t object to his possible appointment, Koh said in her order. Although the settlement is beneficial to the class, Koh refused to give final approval before the special master’s decision on attorneys’ fees.
The case stems from a hacking attack in 2015 where cybercriminals were able to obtain data on 78.8 million Anthem customers, including Social Security numbers, birth dates, and health-care data. Anthem settled with consumers June 23 but didn’t acknowledge any wrongdoing.
After the settlement, plaintiffs filed a motion for the attorneys’ fees. But Jan. 4, class member objector Adam Shulman filed a motion to appoint a special master to oversee the fees award.
The special master will review “the extensive billing in the case” because the current attorneys’ fees and expenses request would account for 45 percent of the settlement class—higher than the 33 percent generally awarded, Koh wrote.
Hogan Lovells represents Anthem. Altshuler Berzon LLP and Cohen Milstein Sellers & Told Pllc are class counsel.
The case is In Re Anthem, Inc. Data Breach Litig., N.D. Cal., No. 15-md-02617, motion granted 2/2/18, link address http://www.bloomberglaw.com/public/document/In_re_Anthem_Inc_Data_Breach_Litigation_Docket_No_515md02617_ND_C/3?doc_id=X1Q6NUUSFT82
To contact the reporter on
By Daniel R. Stoller - Bloomberg Law
February 6, 2018
• Federal judge orders more oversight of $37.95 million attorneys’ fees request
• Case grew out of 2015 Anthem breach that exposed 78.8 million consumers’ data
Anthem Inc. can’t dispose of consumer class claims stemming from a 2015 data breach for now, after a federal judge raised concerns about nearly $38 million in proposed attorneys’ fees.
A class counsel request for $37.95 million in attorneys’ fees, out of a $115 million settlement, is getting an extra layer of oversight, Judge Lucy Koh of the U.S. District Court for the Northern District of California wrote in a Feb. 2 order.
The court is concerned with the attorneys’ fee request because the class counsel assigned tasks “across 53 law firms and 331 billers,” wrote Koh, who granted a motion to appoint a special master to oversee the attorneys’ fees award.
Such billing could be “duplicative or inefficient,” Koh wrote. James Kleinberg, a retired California state judge, will likely be named special master to review the fee request because the parties didn’t object to his possible appointment, Koh said in her order. Although the settlement is beneficial to the class, Koh refused to give final approval before the special master’s decision on attorneys’ fees.
The case stems from a hacking attack in 2015 where cybercriminals were able to obtain data on 78.8 million Anthem customers, including Social Security numbers, birth dates, and health-care data. Anthem settled with consumers June 23 but didn’t acknowledge any wrongdoing.
After the settlement, plaintiffs filed a motion for the attorneys’ fees. But Jan. 4, class member objector Adam Shulman filed a motion to appoint a special master to oversee the fees award.
The special master will review “the extensive billing in the case” because the current attorneys’ fees and expenses request would account for 45 percent of the settlement class—higher than the 33 percent generally awarded, Koh wrote.
Hogan Lovells represents Anthem. Altshuler Berzon LLP and Cohen Milstein Sellers & Told Pllc are class counsel.
The case is In Re Anthem, Inc. Data Breach Litig., N.D. Cal., No. 15-md-02617, motion granted 2/2/18, link address http://www.bloomberglaw.com/public/document/In_re_Anthem_Inc_Data_Breach_Litigation_Docket_No_515md02617_ND_C/3?doc_id=X1Q6NUUSFT82
To contact the reporter on
Private Equity Meets Antitrust….Complications Ensue
By CPI on February 27, 2018
Posted by Social Science Research Network
Private Equity Meets Antitrust….Complications Ensue
By Kent Bernard
Private Equity is simply a way in which an investment company is structured. What the term usually means, however, is an entity that seeks to make an investment, quickly make changes in the company, and then sell out. Antitrust gets involved to determine whether the acquisition of stock or assets leads to a lessening of competition in any market. As part of that process, potential acquirers must give notice to the antitrust agencies and observe a waiting period. The private equity business model seeks to minimize, or avoid, such waiting. The approaches taken by private equity investors, and the agencies’ responses, have created an interesting legal landscape.
Continue Reading…https://papers.ssrn.com/sol3/papers.cfm?abstract_id=3123183
By CPI on February 27, 2018
Posted by Social Science Research Network
Private Equity Meets Antitrust….Complications Ensue
By Kent Bernard
Private Equity is simply a way in which an investment company is structured. What the term usually means, however, is an entity that seeks to make an investment, quickly make changes in the company, and then sell out. Antitrust gets involved to determine whether the acquisition of stock or assets leads to a lessening of competition in any market. As part of that process, potential acquirers must give notice to the antitrust agencies and observe a waiting period. The private equity business model seeks to minimize, or avoid, such waiting. The approaches taken by private equity investors, and the agencies’ responses, have created an interesting legal landscape.
Continue Reading…https://papers.ssrn.com/sol3/papers.cfm?abstract_id=3123183
From the U.S. Office of Government Ethics: A Refresher on the Impartiality Rule
January 25, 2017
On January 1, 2017, new government ethics training regulations went into effect. These regulations now require agencies to train more employees than in the past. They also place a new emphasis on four core topics: conflicts of interest, impartiality, misuse of position, and gifts. Earlier “Director’s Notes” have discussedconflicts of interest, misuse of position, and gifts. To round out the set, this Director’s note focuses on the impartiality rule.
As explained in my most recentnote, executive branch employees are subject to an important set of ethics rules contained in the Standards of Ethical Conduct for Employees of the Executive Branch. Underlying these rules is a principle that employees must avoid even the appearance of impropriety. The impartiality rule breathes life into this principle.
Under the primary conflict of interest law, an employee must not participate in any particular matter affecting the employee’s financial interests, and the impartiality rule goes even further by focusing on appearance issues. This rule applies even when the employee is free of financial conflicts of interest.
Briefly stated, the impartiality rule requires an employee to consider appearance concerns before participating in a particular matter if someone close to the employee is involved as a party to that matter. This requirement to refrain from participating (or “recuse”) is designed to avoid the appearance of favoritism in government decision-making.
The rule is not implicated by everyone the employee knows, for example, mere friends and neighbors. Instead, the rule focuses on professional and family relationships. Among others, the rule arises based on the employee’s relationship with any member of the employee’s household, an outside employer, a spouse’s employer, any relative with whom the employee has a close personal relationship, or an outside organization in which the employee is an “active” member. The rule is also triggered by the employee’s relationship with individuals, clients, and organizations the employee has served professionally as an employee, attorney, contractor, etc., in the past year.
The duty to recuse comes up if one of these individuals and organizations is involved and if a reasonable person with knowledge of the relevant facts would be concerned about the employee’s impartiality. Because the rule is somewhat technical, employees should attend required ethics training to ensure that they understand how to make impartial decisions when performing their government jobs. Employees should also contact their agency ethics officials for assistance in applying the rule in specific cases.
See https://www.oge.gov/web/oge.nsf/Resources/A+Refresher+on+the+Impartiality+Rule
Editor's note: For a long-time federal employee, there is some poignancy in this reminder. A line attorney with a federal agency would risk serious jeopardy by participating in review of a bank merger involving a bank with which the employee had significant business dealings. For a long-time federal employee, it seems obvious that at least the same standard should apply to high level federal executives. Perhaps that will happen. DR
January 25, 2017
On January 1, 2017, new government ethics training regulations went into effect. These regulations now require agencies to train more employees than in the past. They also place a new emphasis on four core topics: conflicts of interest, impartiality, misuse of position, and gifts. Earlier “Director’s Notes” have discussed
As explained in my most recent
Under the primary conflict of interest law, an employee must not participate in any particular matter affecting the employee’s financial interests, and the impartiality rule goes even further by focusing on appearance issues. This rule applies even when the employee is free of financial conflicts of interest.
Briefly stated, the impartiality rule requires an employee to consider appearance concerns before participating in a particular matter if someone close to the employee is involved as a party to that matter. This requirement to refrain from participating (or “recuse”) is designed to avoid the appearance of favoritism in government decision-making.
The rule is not implicated by everyone the employee knows, for example, mere friends and neighbors. Instead, the rule focuses on professional and family relationships. Among others, the rule arises based on the employee’s relationship with any member of the employee’s household, an outside employer, a spouse’s employer, any relative with whom the employee has a close personal relationship, or an outside organization in which the employee is an “active” member. The rule is also triggered by the employee’s relationship with individuals, clients, and organizations the employee has served professionally as an employee, attorney, contractor, etc., in the past year.
The duty to recuse comes up if one of these individuals and organizations is involved and if a reasonable person with knowledge of the relevant facts would be concerned about the employee’s impartiality. Because the rule is somewhat technical, employees should attend required ethics training to ensure that they understand how to make impartial decisions when performing their government jobs. Employees should also contact their agency ethics officials for assistance in applying the rule in specific cases.
See https://www.oge.gov/web/oge.nsf/Resources/A+Refresher+on+the+Impartiality+Rule
Editor's note: For a long-time federal employee, there is some poignancy in this reminder. A line attorney with a federal agency would risk serious jeopardy by participating in review of a bank merger involving a bank with which the employee had significant business dealings. For a long-time federal employee, it seems obvious that at least the same standard should apply to high level federal executives. Perhaps that will happen. DR
Takata airbags settlement: After the array of legal proceedings and prodigious enforcement efforts that followed the bad behavior of auto makers and Takata: criminal proceedings, National Highway Traffic Safety Administration agreement, "darn good" class action settlements, and the State AG actions, were consumers well served?
Press reports, including one in the New York Times, indicate that State AGs that sued Takata over auto airbag defects have reached a settlement involved $650 million dollars and behavioral restraints.
Takata, which became the auto airbag supplier of choice for many car makers, has been the topic of a number of legal proceedings.
As part of a criminal plea agreement with the U.S. Justice Department, Takata agreed to pay $125 million to victims and $850 million in restitution to automakers who bought its inflaters and were stuck with recall and litigation costs.
Conduct restraints were included in an agreement by Takata with the National Highway Traffic Safety Administration.
In 2017 Japanese automaker Honda agreed to a $605 million class-action settlement covering economic losses suffered by the U.S. owners of vehicles fitted with Takata air bags. Particular Honda owners reportedly received a promise to be paid $500 each. The deal was similar to agreements between Takata air bag vehicle owners and Nissan, Toyota, BMW, Mazda and Subaru.
“It's a darn good settlement,” lead class counsel Peter Prieto of Podhurst Orseck PA said at the time about the class action deals reached with Toyota Motor Corp., BMW of North America LLC, Subaru of America Inc. and Mazda North American Operations, during the final fairness hearing in Miami. $166 million was to be reserved to pay the class attorneys, 22 percent of the total value.
Takata has been through a bankruptcy proceeding. Under a restructuring plan, Takata will sell most of its assets unrelated to airbags to a Chinese-owned rival for $1.6 billion.
The recent press release issued by the lead state AG, Alan Wilson of South Carolina, says, in part:
TK Holdings, Inc. has also agreed to reimburse the multistate for its investigative costs, and for the entry of stipulated civil penalty in the amount of 650 million dollars. Since the company has filed for bankruptcy protection and cannot pay its debts, the multistate agreed not to collect this civil penalty in order to maximize the recovery available to consumers who were the victims of this airbag defect.
http://www.scag.gov/archives/34760
At the end of this story is a question: After the array of legal proceedings and prodigious enforcement efforts that followed the bad behavior of auto makers and Takata: criminal proceedings, National Highway Traffic Safety Administration agreement, "darn good" class action settlements, and the State AG actions, were consumers well served?
Posted by Don Allen Resnikoff, who takes responsibility for the content.
Press reports, including one in the New York Times, indicate that State AGs that sued Takata over auto airbag defects have reached a settlement involved $650 million dollars and behavioral restraints.
Takata, which became the auto airbag supplier of choice for many car makers, has been the topic of a number of legal proceedings.
As part of a criminal plea agreement with the U.S. Justice Department, Takata agreed to pay $125 million to victims and $850 million in restitution to automakers who bought its inflaters and were stuck with recall and litigation costs.
Conduct restraints were included in an agreement by Takata with the National Highway Traffic Safety Administration.
In 2017 Japanese automaker Honda agreed to a $605 million class-action settlement covering economic losses suffered by the U.S. owners of vehicles fitted with Takata air bags. Particular Honda owners reportedly received a promise to be paid $500 each. The deal was similar to agreements between Takata air bag vehicle owners and Nissan, Toyota, BMW, Mazda and Subaru.
“It's a darn good settlement,” lead class counsel Peter Prieto of Podhurst Orseck PA said at the time about the class action deals reached with Toyota Motor Corp., BMW of North America LLC, Subaru of America Inc. and Mazda North American Operations, during the final fairness hearing in Miami. $166 million was to be reserved to pay the class attorneys, 22 percent of the total value.
Takata has been through a bankruptcy proceeding. Under a restructuring plan, Takata will sell most of its assets unrelated to airbags to a Chinese-owned rival for $1.6 billion.
The recent press release issued by the lead state AG, Alan Wilson of South Carolina, says, in part:
TK Holdings, Inc. has also agreed to reimburse the multistate for its investigative costs, and for the entry of stipulated civil penalty in the amount of 650 million dollars. Since the company has filed for bankruptcy protection and cannot pay its debts, the multistate agreed not to collect this civil penalty in order to maximize the recovery available to consumers who were the victims of this airbag defect.
http://www.scag.gov/archives/34760
At the end of this story is a question: After the array of legal proceedings and prodigious enforcement efforts that followed the bad behavior of auto makers and Takata: criminal proceedings, National Highway Traffic Safety Administration agreement, "darn good" class action settlements, and the State AG actions, were consumers well served?
Posted by Don Allen Resnikoff, who takes responsibility for the content.
See Judge Leon's opinion blocking AT&T's assertion of selective merger enforcement
From the opinion:
Defendants have fallen far short of establishing that this enforcement action was selective, that is, that there exist persons similarly situated who have not been prosecuted. . . . It is . . . difficult to even conceptualize how a selective enforcement claim applies in the antitrust context, where each merger must be functionally viewed in the context of its particular industry and in light of a variety of factors including the transaction's size, structure, and potential to generate efficiencies or enable evasion of rate regulation, are relevant in determining whether a transaction is likely to lessen competition.
See the full opinion here: https://www.nytimes.com/interactive/2018/02/20/technology/document-Court-Order-Re-TWX-T-Motion-Re-Political.html
From the opinion:
Defendants have fallen far short of establishing that this enforcement action was selective, that is, that there exist persons similarly situated who have not been prosecuted. . . . It is . . . difficult to even conceptualize how a selective enforcement claim applies in the antitrust context, where each merger must be functionally viewed in the context of its particular industry and in light of a variety of factors including the transaction's size, structure, and potential to generate efficiencies or enable evasion of rate regulation, are relevant in determining whether a transaction is likely to lessen competition.
See the full opinion here: https://www.nytimes.com/interactive/2018/02/20/technology/document-Court-Order-Re-TWX-T-Motion-Re-Political.html
Make rock music great again? Changing music tastes appear to be driving iconic Gibson Guitar toward bankruptcy
Only a few years ago Gibson and Fender were dominant as guitar manufacturers, and the FTC was concerned about price fixing in the musical instrument market place.
In 2010 Gibson was listed in 30 lawsuits and had been the subject of a Federal Trade Commission investigation involving Fender Musical Instruments Corp., the Guitar Center and the International Music Products Association, known as NAMM.
The FTC investigation spun off of a previous probe of NAMM, which the FTC accused of organizing meetings where various retailers worked out pricing strategies.
That investigation ended with NAMM admitting no wrongdoing, but being prohibited from working with retailers in any anti-competitive fashion.
At that time Gibson stated: "The allegation that Gibson participated in any scheme to artificially inflate or fix prices is wholly without merit."
But now Gibson may be going the way of the leather sole Hanover Shoe, and becoming obsolete as musical tastes turn away from guitar based music, and guitar sales decline.
For more details on the declining fortunes of Gibson, see
https://www.digitalmusicnews.com/2018/02/16/gibson-guitar-bankruptcy/
Only a few years ago Gibson and Fender were dominant as guitar manufacturers, and the FTC was concerned about price fixing in the musical instrument market place.
In 2010 Gibson was listed in 30 lawsuits and had been the subject of a Federal Trade Commission investigation involving Fender Musical Instruments Corp., the Guitar Center and the International Music Products Association, known as NAMM.
The FTC investigation spun off of a previous probe of NAMM, which the FTC accused of organizing meetings where various retailers worked out pricing strategies.
That investigation ended with NAMM admitting no wrongdoing, but being prohibited from working with retailers in any anti-competitive fashion.
At that time Gibson stated: "The allegation that Gibson participated in any scheme to artificially inflate or fix prices is wholly without merit."
But now Gibson may be going the way of the leather sole Hanover Shoe, and becoming obsolete as musical tastes turn away from guitar based music, and guitar sales decline.
For more details on the declining fortunes of Gibson, see
https://www.digitalmusicnews.com/2018/02/16/gibson-guitar-bankruptcy/
From Maryland Consumer Rights Coalition: de facto debtor prisons
Media contact: Marceline White, 410-624-8980
Maryland has created a system of de facto debtors prisons. Maryland's Constitution says that "no person shall be imprisoned for debt," but each month, the Maryland District Court issues about 130 arrest warrants for consumers who are being sued for debt.
The arrest warrant, or body attachment, is an order for law enforcement to arrest the person in question and bring him or her in front of a court or commissioner in order to address the debt for which they are being sued.
The average underlying debt in these cases is less than $4,400. However, the addition of attorneys’ fees (78% of the time), interest (56% of the time) and court costs add, on average one-fifth to the amount of the original debt. When arrested, defendants may be required to pay bail or a bond which ranges from $200 to $3,000. In one case, bail was set at $5,000 for a $2,800 debt. In another case, bail was set at $10,000. If a defendant cannot pay this bail, he or she can end up languishing in prison for days or weeks until she or he can arrange to pay the bail bond set in the case.
Today [2-21-2018], the House Judiciary and Senate Judicial Proceedings committees will hear HB 1081 and SB 1050, bills that would ensure low-income Marylanders are treated with respect and fairness within the debt collection process, while still allowing creditors to obtain the information they need to collect the debt.
Under this proposal, when Marylanders are picked up, they complete the required forms and are released. No one is jailed for debt. This reduces the burden on the sheriffs’ departments, jails, taxpayers, and judges and creates a more fundamentally fair process for indigent consumers.
Because many of the Marylanders who are being sued for debt never received court summons, which is a causal factor in body attachments, we are recommending amending HB 1081/ SB 1050 to strengthen the service requirements.
We need you to tell your Delegates and Senators: No Prison for Poverty. Click here, to check if your elected officials serve on the Judiciary or Judicial Proceedings committees, and shoot them a note telling them to support the bill and the amendment.
These de facto debtors prisons criminalize poverty and create a two-tiered system of justice: those who can afford to pay do not go to jail, while those who can’t afford to pay remain in jail. Jailing someone for an underlying debt serves no constructive purpose: the individual is not violent nor a danger to the community, will be harmed-possibly losing their job if they are incarcerated, thereby making it more difficult to repay a debt, has no need for rehabilitation nor for punishment.
Take three minutes today to make sure your representatives know you oppose debtor’s prisons, and support HB 1081 and SB 1050 with our amendments!
Best,
Marceline
Media contact: Marceline White, 410-624-8980
Maryland has created a system of de facto debtors prisons. Maryland's Constitution says that "no person shall be imprisoned for debt," but each month, the Maryland District Court issues about 130 arrest warrants for consumers who are being sued for debt.
The arrest warrant, or body attachment, is an order for law enforcement to arrest the person in question and bring him or her in front of a court or commissioner in order to address the debt for which they are being sued.
The average underlying debt in these cases is less than $4,400. However, the addition of attorneys’ fees (78% of the time), interest (56% of the time) and court costs add, on average one-fifth to the amount of the original debt. When arrested, defendants may be required to pay bail or a bond which ranges from $200 to $3,000. In one case, bail was set at $5,000 for a $2,800 debt. In another case, bail was set at $10,000. If a defendant cannot pay this bail, he or she can end up languishing in prison for days or weeks until she or he can arrange to pay the bail bond set in the case.
Today [2-21-2018], the House Judiciary and Senate Judicial Proceedings committees will hear HB 1081 and SB 1050, bills that would ensure low-income Marylanders are treated with respect and fairness within the debt collection process, while still allowing creditors to obtain the information they need to collect the debt.
Under this proposal, when Marylanders are picked up, they complete the required forms and are released. No one is jailed for debt. This reduces the burden on the sheriffs’ departments, jails, taxpayers, and judges and creates a more fundamentally fair process for indigent consumers.
Because many of the Marylanders who are being sued for debt never received court summons, which is a causal factor in body attachments, we are recommending amending HB 1081/ SB 1050 to strengthen the service requirements.
We need you to tell your Delegates and Senators: No Prison for Poverty. Click here, to check if your elected officials serve on the Judiciary or Judicial Proceedings committees, and shoot them a note telling them to support the bill and the amendment.
These de facto debtors prisons criminalize poverty and create a two-tiered system of justice: those who can afford to pay do not go to jail, while those who can’t afford to pay remain in jail. Jailing someone for an underlying debt serves no constructive purpose: the individual is not violent nor a danger to the community, will be harmed-possibly losing their job if they are incarcerated, thereby making it more difficult to repay a debt, has no need for rehabilitation nor for punishment.
Take three minutes today to make sure your representatives know you oppose debtor’s prisons, and support HB 1081 and SB 1050 with our amendments!
Best,
Marceline
PBS News hour on modern real estate loan redlining in Philadelphia and elsewhere
From PBS: Ten years since the economic recession, lending has returned for many Americans. Yet the gap between white and black homeownership is wider now than it was in 1960, with signs of modern-day redlining showing up across the country. Special correspondent Aaron Glantz reports as part of a year-long investigation by Reveal from The Center for Investigative Reporting.
Excerpt from the News hour report:
Go to: https://www.pbs.org/newshour/show/struggle-for-black-and-latino-mortgage-applicants-suggests-modern-day-redlining
From PBS: Ten years since the economic recession, lending has returned for many Americans. Yet the gap between white and black homeownership is wider now than it was in 1960, with signs of modern-day redlining showing up across the country. Special correspondent Aaron Glantz reports as part of a year-long investigation by Reveal from The Center for Investigative Reporting.
Excerpt from the News hour report:
- Emmanuel Martinez:
We looked at nearly 31 million mortgage records, nearly every loan application filed with the government in 2015 and 2016. In 61 metros across the country, applicants of color are more likely to be denied a conventional mortgage. - Aaron Glantz:
Banks don’t share credit scores. They say that is proprietary. But by using other information the government requires be disclosed, Reveal found statistically significant differences by race. - Emmanuel Martinez:
My analysis includes nine different factors. Among them are the applicant’s income, the size of the loan, and specific information about the neighborhood that they are looking to buy in.
Here, we have the likelihood of denial. So, black applicants in Philadelphia are almost three times as likely to be denied a conventional mortgage. - Aaron Glantz:
Reveal found this pattern in dozens of cities. Philadelphia was one of the largest. That means that a black applicant and a white one with similar financial profiles will likely have very different outcomes.
This wasn’t true for just for one bank, but for the lending industry as a whole. The Mortgage Bankers Association wouldn’t go on camera for this story, but in a statement, it said that the data available under the Home Mortgage Disclosure Act is not sufficient to make a determination regarding fair lending.
And the American Bankers Association said that without access to borrowers’ credit history, the data cannot paint a complete picture. - Emmanuel Martinez:
Unfortunately, credit score and an applicant’s total debt-to-income ratio aren’t part of this publicly available data set, but it’s those same financial institutions that have lobbied from keeping it away from researchers, from academics, from journalists like me, who want to study those disparities.
Go to: https://www.pbs.org/newshour/show/struggle-for-black-and-latino-mortgage-applicants-suggests-modern-day-redlining
Warren Buffett's real investment strategy: own companies with great power to charge high prices
From article in the Nation:
“The single most important decision in evaluating a business is pricing power,” Buffett said. “If you’ve got the power to raise prices without losing business to a competitor, you’ve got a very good business.” The “big three” rating agencies—Moody’s, Standard & Poor’s, and Fitch--controlled 95 percent of the rating-agency market, an insurmountable advantage over would-be competitors. “If you’ve got a good enough business, if you have a monopoly newspaper or if you have a network television station,” Buffett concluded, “your idiot nephew could run it.”
For the article, and a podcast by the author: https://www.thenation.com/article/special-investigation-the-dirty-secret-behind-warren-buffetts-billions/
Warren Buffett's real investment strategy: own companies with great power to charge high prices
From article in the Nation:
“The single most important decision in evaluating a business is pricing power,” Buffett said. “If you’ve got the power to raise prices without losing business to a competitor, you’ve got a very good business.” The “big three” rating agencies—Moody’s, Standard & Poor’s, and Fitch--controlled 95 percent of the rating-agency market, an insurmountable advantage over would-be competitors. “If you’ve got a good enough business, if you have a monopoly newspaper or if you have a network television station,” Buffett concluded, “your idiot nephew could run it.”
For the article, and a podcast by the author: https://www.thenation.com/article/special-investigation-the-dirty-secret-behind-warren-buffetts-billions/
Student Outcry on Guns; the Emma Gonzalez video
Students used Twitter, the news media and a courthouse rally to pressure lawmakers for gun control after a deadly shooting at a Florida high school.
Feb. 18, 2018FORT LAUDERDALE, Fla. — They shouted into a microphone until their voices became hoarse. They waved handmade signs. They chanted.
At the federal courthouse here on Saturday, students — including many of the very people who had to endure the trauma of a shooting on campus — continued to speak out about guns. Since Wednesday, when a gunman killed 14 students and three staff members at Marjory Stoneman Douglas High School in Parkland, Fla., their youthful voices have resonated where those of longtime politicians have largely fallen flat.
And on Saturday, another young woman’s words captivated the nation.
Speaking publicly at the rally, Emma González, a senior, pledged that her school would be the site of the nation’s last mass shooting. How could she know? Because, she said, she and her peers would take it upon themselves to “change the law.”
“The people in the government who are voted into power are lying to us,” she said. “And us kids seem to be the only ones who notice and are prepared to call B.S.”
“They say that tougher gun laws do not decrease gun violence — we call B.S.!” she continued as a chorus of supporters echoed her. “They say a good guy with a gun stops a bad guy with a gun — we call B.S.! They say guns are just tools like knives and are as dangerous as cars — we call B.S.! They say that no laws could have been able to prevent the hundreds of senseless tragedies that have occurred — we call B.S.! That us kids don’t know what we’re talking about, that we’re too young to understand how the government works — we call B.S.!”
She wiped her eyes aggressively. Then, she urged the people in the crowd to register to vote — and to give their elected officials “a piece of your mind.”
Just hours later, one video of the speech had been viewed more than 100,000 times.
The video is here: youtu.be/ZxD3o-9H1lY
NYT article: https://www.nytimes.com/2018/02/18/us/emma-gonzalez-florida-shooting.html?action=click&module=RelatedCoverage&pgtype=Article®ion=Footer&contentCollection=Related
Students used Twitter, the news media and a courthouse rally to pressure lawmakers for gun control after a deadly shooting at a Florida high school.
Feb. 18, 2018FORT LAUDERDALE, Fla. — They shouted into a microphone until their voices became hoarse. They waved handmade signs. They chanted.
At the federal courthouse here on Saturday, students — including many of the very people who had to endure the trauma of a shooting on campus — continued to speak out about guns. Since Wednesday, when a gunman killed 14 students and three staff members at Marjory Stoneman Douglas High School in Parkland, Fla., their youthful voices have resonated where those of longtime politicians have largely fallen flat.
And on Saturday, another young woman’s words captivated the nation.
Speaking publicly at the rally, Emma González, a senior, pledged that her school would be the site of the nation’s last mass shooting. How could she know? Because, she said, she and her peers would take it upon themselves to “change the law.”
“The people in the government who are voted into power are lying to us,” she said. “And us kids seem to be the only ones who notice and are prepared to call B.S.”
“They say that tougher gun laws do not decrease gun violence — we call B.S.!” she continued as a chorus of supporters echoed her. “They say a good guy with a gun stops a bad guy with a gun — we call B.S.! They say guns are just tools like knives and are as dangerous as cars — we call B.S.! They say that no laws could have been able to prevent the hundreds of senseless tragedies that have occurred — we call B.S.! That us kids don’t know what we’re talking about, that we’re too young to understand how the government works — we call B.S.!”
She wiped her eyes aggressively. Then, she urged the people in the crowd to register to vote — and to give their elected officials “a piece of your mind.”
Just hours later, one video of the speech had been viewed more than 100,000 times.
The video is here: youtu.be/ZxD3o-9H1lY
NYT article: https://www.nytimes.com/2018/02/18/us/emma-gonzalez-florida-shooting.html?action=click&module=RelatedCoverage&pgtype=Article®ion=Footer&contentCollection=Related
New York’s top regulator is planning to investigate insurance companies after a bombshell report showed that gay men were being denied life insurance coverage because they were taking HIV prevention medications
Dr. Philip J. Cheng, a Harvard-educated urologist, said he was denied a life insurance policy and was offered a five-year policy instead after telling his insurer that he used Truvada, a drug that prevents the transmission of HIV, according to the New York Times. [https://www.nytimes.com/2018/02/12/health/truvada-hiv-insurance.html]
The treatments, referred to as PrEP (short for pre-exposure prophylaxis), are nearly 100 percent effective, studies have shown — but that wasn’t good enough for some insurers.
Maria T. Vullo, superintendent of the state’s Department of Financial Services, said that the practice amounts to discrimination.
“Insurers cannot choose to deny life and disability insurance coverage based on discriminatory reasons,” she said.
“This is tantamount to penalizing applicants based on sexual orientation. DFS will not tolerate discriminatory treatment in the approval or denial of life, long-term care and disability insurance policies and will hold companies that discriminate accountable,” she added
Dr. Philip J. Cheng, a Harvard-educated urologist, said he was denied a life insurance policy and was offered a five-year policy instead after telling his insurer that he used Truvada, a drug that prevents the transmission of HIV, according to the New York Times. [https://www.nytimes.com/2018/02/12/health/truvada-hiv-insurance.html]
The treatments, referred to as PrEP (short for pre-exposure prophylaxis), are nearly 100 percent effective, studies have shown — but that wasn’t good enough for some insurers.
Maria T. Vullo, superintendent of the state’s Department of Financial Services, said that the practice amounts to discrimination.
“Insurers cannot choose to deny life and disability insurance coverage based on discriminatory reasons,” she said.
“This is tantamount to penalizing applicants based on sexual orientation. DFS will not tolerate discriminatory treatment in the approval or denial of life, long-term care and disability insurance policies and will hold companies that discriminate accountable,” she added
FTC press release:
FTC Sues Dental Products Distributors for Alleged Conspiracy Not to Provide Discounts to a Customer Segment
Complaint names nation’s three largest dental suppliers: Benco Dental Supply Company, Henry Schein, Inc. and Patterson Companies, Inc.
The Federal Trade Commission filed a complaint against the nation’s three largest dental supply companies, a public version of which will be linked to this news release shortly, alleging that they violated U.S. antitrust laws by conspiring to refuse to provide discounts to or otherwise serve buying groups representing dental practitioners. These buying groups sought lower prices for dental supplies and equipment on behalf of solo and small-group dental practices seeking to gain discounts by aggregating and leveraging the collective purchasing power and bargaining skills of the individual practices. The complaint also alleges an FTC Act Section 5 violation against Benco for inviting a fourth competing distributor to join the conspiracy.
The alleged agreement among Benco, Henry Schein and Patterson deprived independent dentists of the benefits of participating in buying groups that purchase dental supplies from national, full-service distributors. As full-service dental distributors, Benco, Henry Schein and Patterson offer gloves, cements, sterilization products and a range of other consumable supplies, as well as equipment, such as dental chairs and lights. Collectively, the big three control more than 85 percent of all distributor sales of dental products and services nationwide. The U.S. market for dental products is valued at approximately $10 billion. The dental practices that would have benefited from the discounts achieved by these buying groups were small businesses comprised of solo or small groups of dentists.
Benco and Henry Schein allegedly entered into an agreement refusing to provide discounts to or compete for the business of buying groups. The complaint details communications between executives of the two companies evidencing the agreement, as well as attempts to monitor and ensure compliance with the agreement. The complaint also asserts that Patterson joined the agreement. The complaint charges Benco, Henry Schein and Patterson of conspiring in violation of Section 5 of the FTC Act.
The complaint also alleges that on multiple occasions, Benco invited Burkhart Dental Supply – a regional distributor and the fourth largest full-service distributor in the United States – to refuse to provide discounts to buying groups. As a result of this conduct, the complaint separately charges Benco with a Section 5 invitation to collude count.
Based on the agreement among the distributors, the complaint contends that Benco, Henry Schein and Patterson unreasonably restrained price competition for dental products in the United States; distorted prices and undermined the ability of independent dentists to obtain lower prices and discounts for dental products; deprived independent dentists of the benefits of vigorous price and service competition among full-service, national dental distributors; unreasonably reduced output of dental products to dental buying groups; and eliminated or reduced the competitive bidding process for sales to these buying groups. This case reflects the Commission’s ongoing efforts to ensure competition in the healthcare industry.
The Commission vote to issue the administrative complaint was 2-0. The administrative trial is scheduled to begin on Oct. 16, 2018.
https://www.ftc.gov/news-events/press-releases/2018/02/ftc-sues-dental-products-distributors-alleged-conspiracy-not
FTC Sues Dental Products Distributors for Alleged Conspiracy Not to Provide Discounts to a Customer Segment
Complaint names nation’s three largest dental suppliers: Benco Dental Supply Company, Henry Schein, Inc. and Patterson Companies, Inc.
The Federal Trade Commission filed a complaint against the nation’s three largest dental supply companies, a public version of which will be linked to this news release shortly, alleging that they violated U.S. antitrust laws by conspiring to refuse to provide discounts to or otherwise serve buying groups representing dental practitioners. These buying groups sought lower prices for dental supplies and equipment on behalf of solo and small-group dental practices seeking to gain discounts by aggregating and leveraging the collective purchasing power and bargaining skills of the individual practices. The complaint also alleges an FTC Act Section 5 violation against Benco for inviting a fourth competing distributor to join the conspiracy.
The alleged agreement among Benco, Henry Schein and Patterson deprived independent dentists of the benefits of participating in buying groups that purchase dental supplies from national, full-service distributors. As full-service dental distributors, Benco, Henry Schein and Patterson offer gloves, cements, sterilization products and a range of other consumable supplies, as well as equipment, such as dental chairs and lights. Collectively, the big three control more than 85 percent of all distributor sales of dental products and services nationwide. The U.S. market for dental products is valued at approximately $10 billion. The dental practices that would have benefited from the discounts achieved by these buying groups were small businesses comprised of solo or small groups of dentists.
Benco and Henry Schein allegedly entered into an agreement refusing to provide discounts to or compete for the business of buying groups. The complaint details communications between executives of the two companies evidencing the agreement, as well as attempts to monitor and ensure compliance with the agreement. The complaint also asserts that Patterson joined the agreement. The complaint charges Benco, Henry Schein and Patterson of conspiring in violation of Section 5 of the FTC Act.
The complaint also alleges that on multiple occasions, Benco invited Burkhart Dental Supply – a regional distributor and the fourth largest full-service distributor in the United States – to refuse to provide discounts to buying groups. As a result of this conduct, the complaint separately charges Benco with a Section 5 invitation to collude count.
Based on the agreement among the distributors, the complaint contends that Benco, Henry Schein and Patterson unreasonably restrained price competition for dental products in the United States; distorted prices and undermined the ability of independent dentists to obtain lower prices and discounts for dental products; deprived independent dentists of the benefits of vigorous price and service competition among full-service, national dental distributors; unreasonably reduced output of dental products to dental buying groups; and eliminated or reduced the competitive bidding process for sales to these buying groups. This case reflects the Commission’s ongoing efforts to ensure competition in the healthcare industry.
The Commission vote to issue the administrative complaint was 2-0. The administrative trial is scheduled to begin on Oct. 16, 2018.
https://www.ftc.gov/news-events/press-releases/2018/02/ftc-sues-dental-products-distributors-alleged-conspiracy-not
Two states are scrutinizing Aetna's processes for approving or denying payment for medical care
The scrutiny cpmes after a former Aetna medical director admitted he never reviewed patient medical records when deciding whether to authorize treatment.
The states' inquiries and the medical director's admission, which drew scorn from the medical community, are a public relations nightmare for Hartford, Conn.-based Aetna, and puts a microscope on the insurance industry's pre-authorization and appeals processes. It could also hamper the national insurer's ability to merge with pharmacy giant CVS Health.
California Insurance Commissioner Dave Jones on Monday confirmed he is launching an investigation into Aetna's processes in denying claims and requests for prior authorization for care, as well as its utilization review process. Later that day, Colorado's insurance department said it would be asking questions about Aetna's compliance with state law regarding consumers' rights to appeal a coverage decision.
The two insurance departments were reacting to an October 2016 deposition of Dr. Jay Iinuma, who worked as Aetna's medical director for Southern California from 2012 to 2015, in a lawsuit concerning Aetna's denial of coverage for treatment of a patient's autoimmune disease in 2014.
In the deposition, Iinuma said that although he was responsible for overseeing the preauthorization of care, he never looked at patients' medical records during his tenure. Instead, he relied on nurses employed by Aetna to review the medical records and feed him pertinent information, such as lab values.
The deposition was first reported by Kaiser Health News in June 2017, but spurred an investigation after CNN showed the deposition to Jones.
"I wouldn't look at the medical records. I'd look at what the nurse provided, the information that the nurse provided," Iinuma said in his deposition. He also said Aetna trained him to make pre-authorization decisions this way.
In a statement, Aetna said its medical directors "review all necessary available medical information for cases that they are asked to evaluate. That is how they are trained, as physicians and as Aetna employees. In fact, adherence to those guidelines, which are based on health outcomes and not financial considerations, is an integral part of their yearly review process."
But state insurance departments worry that Aetna's pre-authorization and appeals processes could harm patients.
"If a health insurer is making decisions to deny coverage without a physician ever reviewing medical records that is a significant concern and could be a violation of the law," Jones said in a statement.
Iinuma's deposition drew scorn from the medical community, and the states' investigations into Aetna's internal processes are bad optics for a company hoping to merge with CVS Health. The U.S. Justice Department is now reviewing the proposed $69 billion merger.
http://www.modernhealthcare.com/article/20180213/NEWS/180219975?utm_source=modernhealthcare&utm_medium=email&utm_content=20180213-NEWS-180219975&utm_campaign=am
http://www.modernhealthcare.com/article/20180213/NEWS/180219975?utm_source=modernhealthcare&utm_medium=email&utm_content=20180213-NEWS-180219975&utm_campaign=am
The scrutiny cpmes after a former Aetna medical director admitted he never reviewed patient medical records when deciding whether to authorize treatment.
The states' inquiries and the medical director's admission, which drew scorn from the medical community, are a public relations nightmare for Hartford, Conn.-based Aetna, and puts a microscope on the insurance industry's pre-authorization and appeals processes. It could also hamper the national insurer's ability to merge with pharmacy giant CVS Health.
California Insurance Commissioner Dave Jones on Monday confirmed he is launching an investigation into Aetna's processes in denying claims and requests for prior authorization for care, as well as its utilization review process. Later that day, Colorado's insurance department said it would be asking questions about Aetna's compliance with state law regarding consumers' rights to appeal a coverage decision.
The two insurance departments were reacting to an October 2016 deposition of Dr. Jay Iinuma, who worked as Aetna's medical director for Southern California from 2012 to 2015, in a lawsuit concerning Aetna's denial of coverage for treatment of a patient's autoimmune disease in 2014.
In the deposition, Iinuma said that although he was responsible for overseeing the preauthorization of care, he never looked at patients' medical records during his tenure. Instead, he relied on nurses employed by Aetna to review the medical records and feed him pertinent information, such as lab values.
The deposition was first reported by Kaiser Health News in June 2017, but spurred an investigation after CNN showed the deposition to Jones.
"I wouldn't look at the medical records. I'd look at what the nurse provided, the information that the nurse provided," Iinuma said in his deposition. He also said Aetna trained him to make pre-authorization decisions this way.
In a statement, Aetna said its medical directors "review all necessary available medical information for cases that they are asked to evaluate. That is how they are trained, as physicians and as Aetna employees. In fact, adherence to those guidelines, which are based on health outcomes and not financial considerations, is an integral part of their yearly review process."
But state insurance departments worry that Aetna's pre-authorization and appeals processes could harm patients.
"If a health insurer is making decisions to deny coverage without a physician ever reviewing medical records that is a significant concern and could be a violation of the law," Jones said in a statement.
Iinuma's deposition drew scorn from the medical community, and the states' investigations into Aetna's internal processes are bad optics for a company hoping to merge with CVS Health. The U.S. Justice Department is now reviewing the proposed $69 billion merger.
http://www.modernhealthcare.com/article/20180213/NEWS/180219975?utm_source=modernhealthcare&utm_medium=email&utm_content=20180213-NEWS-180219975&utm_campaign=am
http://www.modernhealthcare.com/article/20180213/NEWS/180219975?utm_source=modernhealthcare&utm_medium=email&utm_content=20180213-NEWS-180219975&utm_campaign=am
NYT on the decline of EPA enforcement under Trump
Excerpt:
The data from the E.P.A. represented activity during the government’s 2017 fiscal year, which ended on Sept. 30, meaning the totals included the final three and half months of the Obama administration, when some of the E.P.A.’s biggest cases were settled. The data also reflected cases that were resolved during the Trump administration but had been initiated and largely handled under President Obama.
The New York Times in December did its own analysis of the E.P.A.’s civil enforcement action initiated in the first nine months under Scott Pruitt, the administrator appointed by President Trump. During that time frame, the agency sought civil penalties of about $50.4 million from polluters, which, adjusted for inflation, was about 39 percent of what the Obama administration sought in the same time period under its first E.P.A. director and about 70 percent of what the Bush administration sought in the same period.
The tally released Thursday showed a total of $1.6 billion in civil judicial and administrative penalties — money paid to punish polluters — the second largest amount in the last decade, with the single biggest amount of that coming from Volkswagen, which agreed to pay a $1.45 billion penalty at the end of the Obama administration. The prior peak was in fiscal year 2016, when BP agreed to pay $5.7 billion in penalties for the 2010 Deepwater Horizon disaster in the Gulf of Mexico.
In her statement, Ms. Bodine, who became enforcement director in December, said that the agency had focused its enforcement efforts during fiscal 2017 on speeding up the cleanup of contaminated sites, “deterring noncompliance” as well as a philosophy of “cooperative federalism,” which has meant turning over enforcement responsibilities to states.
The $20 billion in commitments by polluters to correct problems was up from $14 billion in 2016, the E.P.A. said.
But the analysis by The Times showed that during the first nine months of Mr. Pruitt’s tenure, demands for such fixes dropped sharply. The agency sought about $1.2 billion worth of fixes, known as injunctive relief, in civil cases initiated during that period. Adjusted for inflation, that was about 12 percent of what was sought under Mr. Obama and 48 percent under Mr. Bush. Overall, The Times’s analysis said, cases started under Mr. Pruitt’s leadership dropped significantly from both of the previous administrations.
Cynthia Giles, who was the assistant administrator for the E.P.A.’s enforcement office during the Obama administration, said the data released Thursday should not be interpreted as the Trump administration being tough on polluters.
“Nearly all of the large cases included in E.P.A.’s annual enforcement report were essentially over before the new administration arrived at E.P.A.,” said Ms. Giles, who had reviewed The Times’s analysis. “Without an unprecedented disavowal of an already negotiated and public agreement, there is nothing Administrator Pruitt’s team could have done to change the outcome. In no sense do these cases reflect the intentions or actions of the new administration.”
https://www.nytimes.com/2018/02/08/business/epa-penalties-polluters.html?rref=collection%2Fsectioncollection%2Fbusiness&action=click&contentCollection=business®ion=stream&module=stream_unit&version=latest&contentPlacement=16&pgtype=sectionfront
Excerpt:
The data from the E.P.A. represented activity during the government’s 2017 fiscal year, which ended on Sept. 30, meaning the totals included the final three and half months of the Obama administration, when some of the E.P.A.’s biggest cases were settled. The data also reflected cases that were resolved during the Trump administration but had been initiated and largely handled under President Obama.
The New York Times in December did its own analysis of the E.P.A.’s civil enforcement action initiated in the first nine months under Scott Pruitt, the administrator appointed by President Trump. During that time frame, the agency sought civil penalties of about $50.4 million from polluters, which, adjusted for inflation, was about 39 percent of what the Obama administration sought in the same time period under its first E.P.A. director and about 70 percent of what the Bush administration sought in the same period.
The tally released Thursday showed a total of $1.6 billion in civil judicial and administrative penalties — money paid to punish polluters — the second largest amount in the last decade, with the single biggest amount of that coming from Volkswagen, which agreed to pay a $1.45 billion penalty at the end of the Obama administration. The prior peak was in fiscal year 2016, when BP agreed to pay $5.7 billion in penalties for the 2010 Deepwater Horizon disaster in the Gulf of Mexico.
In her statement, Ms. Bodine, who became enforcement director in December, said that the agency had focused its enforcement efforts during fiscal 2017 on speeding up the cleanup of contaminated sites, “deterring noncompliance” as well as a philosophy of “cooperative federalism,” which has meant turning over enforcement responsibilities to states.
The $20 billion in commitments by polluters to correct problems was up from $14 billion in 2016, the E.P.A. said.
But the analysis by The Times showed that during the first nine months of Mr. Pruitt’s tenure, demands for such fixes dropped sharply. The agency sought about $1.2 billion worth of fixes, known as injunctive relief, in civil cases initiated during that period. Adjusted for inflation, that was about 12 percent of what was sought under Mr. Obama and 48 percent under Mr. Bush. Overall, The Times’s analysis said, cases started under Mr. Pruitt’s leadership dropped significantly from both of the previous administrations.
Cynthia Giles, who was the assistant administrator for the E.P.A.’s enforcement office during the Obama administration, said the data released Thursday should not be interpreted as the Trump administration being tough on polluters.
“Nearly all of the large cases included in E.P.A.’s annual enforcement report were essentially over before the new administration arrived at E.P.A.,” said Ms. Giles, who had reviewed The Times’s analysis. “Without an unprecedented disavowal of an already negotiated and public agreement, there is nothing Administrator Pruitt’s team could have done to change the outcome. In no sense do these cases reflect the intentions or actions of the new administration.”
https://www.nytimes.com/2018/02/08/business/epa-penalties-polluters.html?rref=collection%2Fsectioncollection%2Fbusiness&action=click&contentCollection=business®ion=stream&module=stream_unit&version=latest&contentPlacement=16&pgtype=sectionfront
Trump Council of Economic Advisors on lowering pharma prices
oThe Report is here: https://www.whitehouse.gov/wp-content/uploads/2017/11/CEA-Rx-White-Paper-Final2.pdf
The following excerpt discusses Medicaid and Medicare Policy:
To promote patient welfare, government policy should induce price competition. In the two primary U.S. insurance programs, Medicaid and Medicare, current policies dampen price competition, thereby artificially raising prices.
Medicaid Manufacturers that choose to enter the Medicaid Drug Rebate Program are required to offer state Medicaid programs their prescription medications at a price that either includes a minimum rebate of 23.1 percent of the average manufacturer price (AMP – the average price paid to manufacturers by wholesalers and retail pharmacies that buy direct net of prompt pay discounts) for brand drugs or, if lower, the “best price” the manufacturers offer to any other purchaser (“Medicaid Drug Rebate Program”). In exchange for these discounted rates, states are then required to cover the manufacturer's drugs in their Medicaid programs.
In fiscal year 2014, Medicaid programs spent $42 billion on prescription drugs and collected about $20 billion back in rebates so that net expenditures equaled about $22 billion (Baghdadi et al. 2017). The practice of mimicking public relative prices to private relative prices is partly beneficial because it allows the private market rather than bureaucrats to determine relative prices based on patient value.
While this basic approach of using market prices is sound, as currently implemented, the Medicaid Best Price program can create artificially high prices in the private sector under certain conditions. If a large share of a given drug’s market is enrolled in Medicaid (e.g., for HIV or mental health drugs), a pharmaceutical firm has an incentive to inflate prices in the private sector so that it can collect higher post-rebate prices from its large Medicaid customer base. Similarly, the mandated price discrimination implicit in this program prevents price discounts to lower-income patients in the private sector. Lower-income, private patient populations cannot be charged low prices as that jeopardizes the Medicaid price.
Reforms could help prevent the inflated private sector prices the program induces while at the same time allowing the government to use pricing information from the private sector to determine value. While CMS rules require that best prices be determined on a unit basis, Medicaid statutes do not (42 C.F.R. 477.506(e)(2)) (Sachs et al. 2017). CMS could revise rules to specify how manufacturers calculate best prices determined after the sale and the patient’s recovery. This may encourage competition and lower prices. It would also incentivize better adherence regimens and lower the risk to the government that it pays money for something that turns out to be less effective than expected. CMS could also provide more guidance on how value-based contracts and price reporting would affect other price regulations. This would encourage drug purchasers to negotiate, thus increasing competition and lowering prices.
Medicare Medicare Part B Physician Administered Drugs Medicare Part B drugs are those administered by physicians in their outpatient clinics to Medicare recipients. From 2006 through 2013, twenty-eight percent of this spending was for newly approved drugs that were concentrated among a small number of conditions, such as cancer, blood diseases, and ophthalmology (GAO 2015). According to the GAO, over time, expensive specialty drugs and biologics approved through expedited pathways have come to represent a higher proportion of newly approved drugs that are administered by physicians.
In the Medicare Part B program, through which many specialty drugs are reimbursed, drugs administered in physicians’ offices and hospital outpatient departments are reimbursed based on a 6 percent markup (now 4.3 percent due to the sequester) above the Average Sales Price (ASP), that manufacturers receive net of any price discounts. For example, with a 6 percent markup above ASP the doctor receives $600 for administering a $10,000 drug and $60 for a $1,000 drug. As is true in any cost-plus reimbursement environment, this leads to a lack of incentive to control costs and instead an incentive to raise costs. The current policy mutes the incentives for doctors to prescribe cheaper drugs and therefore for manufacturers to engage in price competition.
While there may be larger costs to providers for prescribing more expensive drugs, such as storing expensive drugs and the lower probability of collecting reimbursement or copays, these costs are routinely handled in other healthcare markets without resorting to distorted cost-plus reimbursements. While some private payers have responded to this type of perverse incentive problem through alternative reimbursement procedures for drugs delivered in clinics, similar reforms have not been made for the Medicare Part B program. The Medicare Payment Advisory Commission (MedPAC), the Government Accountability Office (GAO), the Department of Health and Human Services (HHS) Office of the Inspector General (OIG), and others have all proposed solutions for how Medicare could remove perverse incentives for prescribing higher-priced drugs and instead provide an incentive for doctors to prescribe cheaper drugs, putting competitive pressure on manufacturers to reduce their prices.
Options for reform include: i. Introducing physician reimbursement that is not tied to drug prices, ii. Moving Medicare Part B drug coverage into Medicare Part D, where price-competition over drug prices is better structured, and iii. Changing how pricing data is reported to increase transparency. By moving Part B coverage into Part D, the 71 percent of Medicare beneficiaries who participate in Part D would receive prescriptions that they would fill and their physicians would administer, thereby removing any economic incentive from prescribing decisions.
There are additional reforms to consider that increase price transparency and reduce incentives for more spending.
First, require better and more accurate sales data from drugs that are older than six months since launch. This is important because drug makers have an incentive to exclude discount prices from the sales price they report, since the higher the average sales price, the more they are paid.
Second, for new drugs that do not have much sales data, cut the doctor’s payment. This removes the incentive of prescribing a high-priced drug when physicians write prescriptions, and elevates clinical competition as a decision-making factor.
Medicare Part D Outpatient Drugs Medicare Part D reimburses outpatient drugs, and the program has several provisions that artificially raise costs for patients. The Social Security Act requires Medicare Part D plan formularies to include drugs within each category and class of covered drugs. CMS has previously interpreted the Social Security Act’s requirement to include drugs within each therapeutic category and class to mean the inclusion of at least two non-therapeutically equivalent drugs. This requirement eliminates the ability of Part D sponsors to negotiate for lower prices when there are only two drugs on the market since drug manufacturers know that CMS must cover both. The two-drug requirement leads to more spending.
Another problem resulting from Medicare Part D is the overpricing of low value drugs. The Social Security Act §1860D-14A stipulates cost-sharing amounts for low-income subsidy enrollees that vary by income and are adjusted by projected program cost growth. The use of formulary tier-based cost-sharing is prohibited, which eliminates the ability of sponsor plans to price and discount drugs according to value for patients. Low-income subsidy enrollees and sponsor plans should have incentives to use high value drugs. The Medicare Payment Advisory Commission (MedPAC 2016) has highlighted this problem by reporting that 17.3 percent of lowincome subsidy enrollees are high-cost compared to just 2.8 percent of other enrollees. The Medicare Part D Coverage Gap Discount Program requires drug manufacturers to provide a 50 percent discount to enrollees while in the coverage gap. The 50 percent discount is then counted toward the calculation of an enrollee’s true out-of-pocket cost, accelerating them through the coverage gap into the catastrophic phase of benefit where Medicare pays 80 percent of all drug costs and the sponsor and enrollee are responsible for the remaining 15 and 5 percent, respectively. With such discounts, enrollees may have an incentive to use brand drugs and reference biologics when less expensive generics and biosimilars are available, since the large discounted payment counts toward the true out-of-pocket cost. The overall Part D benefit structure creates perverse incentives for plan sponsors and pharmacy benefit managers (PBMs) to generate formularies that favor high-price, high-rebate drugs that speeds patients through the early phases of the benefit structure where plans are most liable for costs.
The Medicare Part D program has unintended consequences that have resulted in higher drug prices for consumers. MedPAC and OIG, among others, have each produced various policy CEA • Reforming Biopharmaceutical Pricing at Home and Abroad 9 options to address these misaligned incentives within the program. Solutions to overcome these problems could include:
i. Requiring plans to share drug manufacturer discounts with patients.;
ii. Allowing plans to manage formularies to negotiate better prices for patients;
iii. Lowering co-pays for generic drugs for patients; and
iv. Discouraging plan formulary design that speeds patients to the catastrophic coverage phase of benefit and increases overall spending.
oThe Report is here: https://www.whitehouse.gov/wp-content/uploads/2017/11/CEA-Rx-White-Paper-Final2.pdf
The following excerpt discusses Medicaid and Medicare Policy:
To promote patient welfare, government policy should induce price competition. In the two primary U.S. insurance programs, Medicaid and Medicare, current policies dampen price competition, thereby artificially raising prices.
Medicaid Manufacturers that choose to enter the Medicaid Drug Rebate Program are required to offer state Medicaid programs their prescription medications at a price that either includes a minimum rebate of 23.1 percent of the average manufacturer price (AMP – the average price paid to manufacturers by wholesalers and retail pharmacies that buy direct net of prompt pay discounts) for brand drugs or, if lower, the “best price” the manufacturers offer to any other purchaser (“Medicaid Drug Rebate Program”). In exchange for these discounted rates, states are then required to cover the manufacturer's drugs in their Medicaid programs.
In fiscal year 2014, Medicaid programs spent $42 billion on prescription drugs and collected about $20 billion back in rebates so that net expenditures equaled about $22 billion (Baghdadi et al. 2017). The practice of mimicking public relative prices to private relative prices is partly beneficial because it allows the private market rather than bureaucrats to determine relative prices based on patient value.
While this basic approach of using market prices is sound, as currently implemented, the Medicaid Best Price program can create artificially high prices in the private sector under certain conditions. If a large share of a given drug’s market is enrolled in Medicaid (e.g., for HIV or mental health drugs), a pharmaceutical firm has an incentive to inflate prices in the private sector so that it can collect higher post-rebate prices from its large Medicaid customer base. Similarly, the mandated price discrimination implicit in this program prevents price discounts to lower-income patients in the private sector. Lower-income, private patient populations cannot be charged low prices as that jeopardizes the Medicaid price.
Reforms could help prevent the inflated private sector prices the program induces while at the same time allowing the government to use pricing information from the private sector to determine value. While CMS rules require that best prices be determined on a unit basis, Medicaid statutes do not (42 C.F.R. 477.506(e)(2)) (Sachs et al. 2017). CMS could revise rules to specify how manufacturers calculate best prices determined after the sale and the patient’s recovery. This may encourage competition and lower prices. It would also incentivize better adherence regimens and lower the risk to the government that it pays money for something that turns out to be less effective than expected. CMS could also provide more guidance on how value-based contracts and price reporting would affect other price regulations. This would encourage drug purchasers to negotiate, thus increasing competition and lowering prices.
Medicare Medicare Part B Physician Administered Drugs Medicare Part B drugs are those administered by physicians in their outpatient clinics to Medicare recipients. From 2006 through 2013, twenty-eight percent of this spending was for newly approved drugs that were concentrated among a small number of conditions, such as cancer, blood diseases, and ophthalmology (GAO 2015). According to the GAO, over time, expensive specialty drugs and biologics approved through expedited pathways have come to represent a higher proportion of newly approved drugs that are administered by physicians.
In the Medicare Part B program, through which many specialty drugs are reimbursed, drugs administered in physicians’ offices and hospital outpatient departments are reimbursed based on a 6 percent markup (now 4.3 percent due to the sequester) above the Average Sales Price (ASP), that manufacturers receive net of any price discounts. For example, with a 6 percent markup above ASP the doctor receives $600 for administering a $10,000 drug and $60 for a $1,000 drug. As is true in any cost-plus reimbursement environment, this leads to a lack of incentive to control costs and instead an incentive to raise costs. The current policy mutes the incentives for doctors to prescribe cheaper drugs and therefore for manufacturers to engage in price competition.
While there may be larger costs to providers for prescribing more expensive drugs, such as storing expensive drugs and the lower probability of collecting reimbursement or copays, these costs are routinely handled in other healthcare markets without resorting to distorted cost-plus reimbursements. While some private payers have responded to this type of perverse incentive problem through alternative reimbursement procedures for drugs delivered in clinics, similar reforms have not been made for the Medicare Part B program. The Medicare Payment Advisory Commission (MedPAC), the Government Accountability Office (GAO), the Department of Health and Human Services (HHS) Office of the Inspector General (OIG), and others have all proposed solutions for how Medicare could remove perverse incentives for prescribing higher-priced drugs and instead provide an incentive for doctors to prescribe cheaper drugs, putting competitive pressure on manufacturers to reduce their prices.
Options for reform include: i. Introducing physician reimbursement that is not tied to drug prices, ii. Moving Medicare Part B drug coverage into Medicare Part D, where price-competition over drug prices is better structured, and iii. Changing how pricing data is reported to increase transparency. By moving Part B coverage into Part D, the 71 percent of Medicare beneficiaries who participate in Part D would receive prescriptions that they would fill and their physicians would administer, thereby removing any economic incentive from prescribing decisions.
There are additional reforms to consider that increase price transparency and reduce incentives for more spending.
First, require better and more accurate sales data from drugs that are older than six months since launch. This is important because drug makers have an incentive to exclude discount prices from the sales price they report, since the higher the average sales price, the more they are paid.
Second, for new drugs that do not have much sales data, cut the doctor’s payment. This removes the incentive of prescribing a high-priced drug when physicians write prescriptions, and elevates clinical competition as a decision-making factor.
Medicare Part D Outpatient Drugs Medicare Part D reimburses outpatient drugs, and the program has several provisions that artificially raise costs for patients. The Social Security Act requires Medicare Part D plan formularies to include drugs within each category and class of covered drugs. CMS has previously interpreted the Social Security Act’s requirement to include drugs within each therapeutic category and class to mean the inclusion of at least two non-therapeutically equivalent drugs. This requirement eliminates the ability of Part D sponsors to negotiate for lower prices when there are only two drugs on the market since drug manufacturers know that CMS must cover both. The two-drug requirement leads to more spending.
Another problem resulting from Medicare Part D is the overpricing of low value drugs. The Social Security Act §1860D-14A stipulates cost-sharing amounts for low-income subsidy enrollees that vary by income and are adjusted by projected program cost growth. The use of formulary tier-based cost-sharing is prohibited, which eliminates the ability of sponsor plans to price and discount drugs according to value for patients. Low-income subsidy enrollees and sponsor plans should have incentives to use high value drugs. The Medicare Payment Advisory Commission (MedPAC 2016) has highlighted this problem by reporting that 17.3 percent of lowincome subsidy enrollees are high-cost compared to just 2.8 percent of other enrollees. The Medicare Part D Coverage Gap Discount Program requires drug manufacturers to provide a 50 percent discount to enrollees while in the coverage gap. The 50 percent discount is then counted toward the calculation of an enrollee’s true out-of-pocket cost, accelerating them through the coverage gap into the catastrophic phase of benefit where Medicare pays 80 percent of all drug costs and the sponsor and enrollee are responsible for the remaining 15 and 5 percent, respectively. With such discounts, enrollees may have an incentive to use brand drugs and reference biologics when less expensive generics and biosimilars are available, since the large discounted payment counts toward the true out-of-pocket cost. The overall Part D benefit structure creates perverse incentives for plan sponsors and pharmacy benefit managers (PBMs) to generate formularies that favor high-price, high-rebate drugs that speeds patients through the early phases of the benefit structure where plans are most liable for costs.
The Medicare Part D program has unintended consequences that have resulted in higher drug prices for consumers. MedPAC and OIG, among others, have each produced various policy CEA • Reforming Biopharmaceutical Pricing at Home and Abroad 9 options to address these misaligned incentives within the program. Solutions to overcome these problems could include:
i. Requiring plans to share drug manufacturer discounts with patients.;
ii. Allowing plans to manage formularies to negotiate better prices for patients;
iii. Lowering co-pays for generic drugs for patients; and
iv. Discouraging plan formulary design that speeds patients to the catastrophic coverage phase of benefit and increases overall spending.
From Publtic Citizen: Jeff Sovern on the new CFPB and payday lending
How Mulvaney Can Sabotage the CFPB's Payday Lending Ruleby Jeff Sovern
Last month, Interim Director Mulvaney announced that the Bureau may reconsider the Bureau's payday lending rule. But he can't just rescind it. That would require a full notice-and-comment rulemaking, and that would take longer than Mulvaney will be at the CFPB (under the Vacancies Act, he is limited to 210 days). True, Mulvaney could start that process and a successor could finish it. But even then, the Bureau would have to to meet the requirements of the APA and not appear to be acting arbitrarily and capriciously, which would be hard to do after it already promulgated a rule on the subject.
But according to a Kate Berry article in the American Banker, Mulvaney can’t just kill CFPB payday rule, but here’s what he can do, Mulvaney could delay implementation of the existing rule and then a successor could amend the rule to make it less protective of consumers. One scenario would shift the rule from prohibiting a payday lender from making certain loans unless the lender verified that the consumer could repay the loan to a rule that obliged lenders to provide disclosures.
The problem with that approach is that consumers all too often ignore disclosures, as Omri Ben-Shahar and Carl E. Schneider demonstrated in their book, More Than You Wanted to Know: The Failure of Mandated Disclosure. For example, a study by Marianne Bertrand and Adair Morse, both of Chicago's Booth School of Business, Information Disclosure, Cognitive Biases and Payday Borrowing and Payday Borrowing, that displayed the image below to payday borrowers, found that it reduced payday borrowing by 11% in later pay cycles and the amount borrowed by 23%. That doesn't seem like much when you look at some of the comparisons below, such as that a three-month credit card loan would cost $15, versus $270 for a payday loan. So the difference between regulation and disclosure for some--perhaps many--consumers is the difference between being caught in a debt trap, or not.
[see original for graphic]
Posted by Jeff Sovern on Saturday, February 10, 2018 at 04:45 PM in Consumer Financial Protection Bureau, Predatory Lending |Permalink
How Mulvaney Can Sabotage the CFPB's Payday Lending Ruleby Jeff Sovern
Last month, Interim Director Mulvaney announced that the Bureau may reconsider the Bureau's payday lending rule. But he can't just rescind it. That would require a full notice-and-comment rulemaking, and that would take longer than Mulvaney will be at the CFPB (under the Vacancies Act, he is limited to 210 days). True, Mulvaney could start that process and a successor could finish it. But even then, the Bureau would have to to meet the requirements of the APA and not appear to be acting arbitrarily and capriciously, which would be hard to do after it already promulgated a rule on the subject.
But according to a Kate Berry article in the American Banker, Mulvaney can’t just kill CFPB payday rule, but here’s what he can do, Mulvaney could delay implementation of the existing rule and then a successor could amend the rule to make it less protective of consumers. One scenario would shift the rule from prohibiting a payday lender from making certain loans unless the lender verified that the consumer could repay the loan to a rule that obliged lenders to provide disclosures.
The problem with that approach is that consumers all too often ignore disclosures, as Omri Ben-Shahar and Carl E. Schneider demonstrated in their book, More Than You Wanted to Know: The Failure of Mandated Disclosure. For example, a study by Marianne Bertrand and Adair Morse, both of Chicago's Booth School of Business, Information Disclosure, Cognitive Biases and Payday Borrowing and Payday Borrowing, that displayed the image below to payday borrowers, found that it reduced payday borrowing by 11% in later pay cycles and the amount borrowed by 23%. That doesn't seem like much when you look at some of the comparisons below, such as that a three-month credit card loan would cost $15, versus $270 for a payday loan. So the difference between regulation and disclosure for some--perhaps many--consumers is the difference between being caught in a debt trap, or not.
[see original for graphic]
Posted by Jeff Sovern on Saturday, February 10, 2018 at 04:45 PM in Consumer Financial Protection Bureau, Predatory Lending |Permalink
The LA Times on what the Mick Mulvaney CFPB will do, and not do
Excerpt:
Between the bevy of recent moves by the bureau and the launch of a wide-ranging review of its practices ordered by Mulvaney, a picture is emerging of what a Trump-era CFPB will look like — and it appears it will not the resemble the agency that developed a pugnacious reputation over the last six years.
Mulvaney outlined his view in a memo [http://www.documentcloud.org/documents/4357880-Mulvaney-Memo.html], obtained by news site ProPublica, criticizing the bureau for being overly aggressive under Cordray and saying it would now serve not only consumers but the financial-services companies it was created to regulate.
"We don't just work for the government, we work for the people. And that means everyone: those who use credit cards and those who provide those cards; those who take loans and those who make them; those who buy cards and whose who sell them," wrote Mulvaney, a free-market advocate who once called the CFPB a "sad, sick joke."
For Lauren Saunders, associate director of the National Consumer Law Center, such a mission statement simply means unwinding consumer protections.
"I think we'll see a lot of rollbacks," she said.
For now, the practical implications of the pullback appear to be limited to the agency's more aggressive interpretations of consumer-protection law.
The lawsuit against Golden Valley Lending and other firms owned by the Habematolel Pomo of Upper Lake tribe is an example.
In that case and others, the agency relied on what industry attorneys have described as a novel argument: that lenders broke federal consumer protection laws that forbid unfair, deceptive or abusive practices by collecting on loans that carried interest rates higher than state laws allow, in some cases as high as 950%. In other words, the argument goes, the bureau piggybacked on state laws to allege a violation of federal laws.
Saunders said dropping the case looks to her like a clear sign that Mulvaney, who accepted contributions from high-interest lenders while serving in the House of Representatives, plans to go easy on players in that industry. Mulvaney in 2016 was one of a group of House members who argued in a 2016 letter to Cordray that federal regulation of the payday loan industry ignored states' rights and would cut off access to credit for many Americans.
http://www.latimes.com/business/la-fi-cfpb-overhaul-20180205-story.html
Excerpt:
Between the bevy of recent moves by the bureau and the launch of a wide-ranging review of its practices ordered by Mulvaney, a picture is emerging of what a Trump-era CFPB will look like — and it appears it will not the resemble the agency that developed a pugnacious reputation over the last six years.
Mulvaney outlined his view in a memo [http://www.documentcloud.org/documents/4357880-Mulvaney-Memo.html], obtained by news site ProPublica, criticizing the bureau for being overly aggressive under Cordray and saying it would now serve not only consumers but the financial-services companies it was created to regulate.
"We don't just work for the government, we work for the people. And that means everyone: those who use credit cards and those who provide those cards; those who take loans and those who make them; those who buy cards and whose who sell them," wrote Mulvaney, a free-market advocate who once called the CFPB a "sad, sick joke."
For Lauren Saunders, associate director of the National Consumer Law Center, such a mission statement simply means unwinding consumer protections.
"I think we'll see a lot of rollbacks," she said.
For now, the practical implications of the pullback appear to be limited to the agency's more aggressive interpretations of consumer-protection law.
The lawsuit against Golden Valley Lending and other firms owned by the Habematolel Pomo of Upper Lake tribe is an example.
In that case and others, the agency relied on what industry attorneys have described as a novel argument: that lenders broke federal consumer protection laws that forbid unfair, deceptive or abusive practices by collecting on loans that carried interest rates higher than state laws allow, in some cases as high as 950%. In other words, the argument goes, the bureau piggybacked on state laws to allege a violation of federal laws.
Saunders said dropping the case looks to her like a clear sign that Mulvaney, who accepted contributions from high-interest lenders while serving in the House of Representatives, plans to go easy on players in that industry. Mulvaney in 2016 was one of a group of House members who argued in a 2016 letter to Cordray that federal regulation of the payday loan industry ignored states' rights and would cut off access to credit for many Americans.
http://www.latimes.com/business/la-fi-cfpb-overhaul-20180205-story.html
The federal government lacks even basic information about the quality of assisted living services provided to low-income people on Medicaid, according to the Government Accountability Office
From the NYT:
.
Billions of dollars in government spending is flowing to the industry even as it operates under a patchwork of vague standards and limited supervision by federal and state authorities. States reported spending more than $10 billion a year in federal and state funds for assisted living services for more than 330,000 Medicaid beneficiaries, an average of more than $30,000 a person, the Government Accountability Office found in a survey of states.
States are supposed to keep track of cases involving the abuse, neglect, exploitation or unexplained death of Medicaid beneficiaries in assisted living facilities. But, the report said, more than half of the states were unable to provide information on the number or nature of such cases.
Just 22 states were able to provide data on “critical incidents — cases of potential or actual harm.” In one year, those states reported a total of more than 22,900 incidents, including the physical, emotional or sexual abuse of residents.
Many of those people are “particularly vulnerable,” the report said, like older adults and people with physical or intellectual disabilities. More than a third of residents are believed to have Alzheimer’s or other forms of dementia.
The report provides the most detailed look to date at the role of assisted living in Medicaid, one of the nation’s largest health care programs. Titled “Improved Federal Oversight of Beneficiary Health and Welfare Is Needed,” it grew out of a two-year study requested by a bipartisan group of four senators.
Assisted living communities are intended to be a bridge between living at home and living in a nursing home. Residents can live in apartments or houses, with a high degree of independence, but can still receive help managing their medications and performing daily activities like bathing, dressing and eating.
Nothing in the report disputes the fact that some assisted living facilities provide high-quality, compassionate care.
The National Center for Assisted Living, a trade group for providers, said states already had “a robust oversight system” to ensure proper care for residents. In the last two years, it said, several states, including California, Oregon, Rhode Island and Virginia, have adopted laws to enhance licensing requirements and penalties for poor performance.
Continue reading the NYT story at https://www.nytimes.com/2018/02/03/us/politics/assisted-living-gaps.html#story-continues-3
From the NYT:
.
Billions of dollars in government spending is flowing to the industry even as it operates under a patchwork of vague standards and limited supervision by federal and state authorities. States reported spending more than $10 billion a year in federal and state funds for assisted living services for more than 330,000 Medicaid beneficiaries, an average of more than $30,000 a person, the Government Accountability Office found in a survey of states.
States are supposed to keep track of cases involving the abuse, neglect, exploitation or unexplained death of Medicaid beneficiaries in assisted living facilities. But, the report said, more than half of the states were unable to provide information on the number or nature of such cases.
Just 22 states were able to provide data on “critical incidents — cases of potential or actual harm.” In one year, those states reported a total of more than 22,900 incidents, including the physical, emotional or sexual abuse of residents.
Many of those people are “particularly vulnerable,” the report said, like older adults and people with physical or intellectual disabilities. More than a third of residents are believed to have Alzheimer’s or other forms of dementia.
The report provides the most detailed look to date at the role of assisted living in Medicaid, one of the nation’s largest health care programs. Titled “Improved Federal Oversight of Beneficiary Health and Welfare Is Needed,” it grew out of a two-year study requested by a bipartisan group of four senators.
Assisted living communities are intended to be a bridge between living at home and living in a nursing home. Residents can live in apartments or houses, with a high degree of independence, but can still receive help managing their medications and performing daily activities like bathing, dressing and eating.
Nothing in the report disputes the fact that some assisted living facilities provide high-quality, compassionate care.
The National Center for Assisted Living, a trade group for providers, said states already had “a robust oversight system” to ensure proper care for residents. In the last two years, it said, several states, including California, Oregon, Rhode Island and Virginia, have adopted laws to enhance licensing requirements and penalties for poor performance.
Continue reading the NYT story at https://www.nytimes.com/2018/02/03/us/politics/assisted-living-gaps.html#story-continues-3
Federal Reserve documents on Wells Fargo
Press Release February 02, 2018
Responding to recent and widespread consumer abuses and other compliance breakdowns by Wells Fargo, the Federal Reserve Board on Friday announced that it would restrict the growth of the firm until it sufficiently improves its governance and controls. Concurrently with the Board's action, Wells Fargo will replace three current board members by April and a fourth board member by the end of the year.
In addition to the growth restriction, the Board's consent cease and desist order with Wells Fargo requires the firm to improve its governance and risk management processes, including strengthening the effectiveness of oversight by its board of directors. Until the firm makes sufficient improvements, it will be restricted from growing any larger than its total asset size as of the end of 2017. The Board required each current director to sign the cease and desist order.
"We cannot tolerate pervasive and persistent misconduct at any bank and the consumers harmed by Wells Fargo expect that robust and comprehensive reforms will be put in place to make certain that the abuses do not occur again," Chair Janet L. Yellen said. "The enforcement action we are taking today will ensure that Wells Fargo will not expand until it is able to do so safely and with the protections needed to manage all of its risks and protect its customers."
In recent years, Wells Fargo pursued a business strategy that prioritized its overall growth without ensuring appropriate management of all key risks. The firm did not have an effective firm-wide risk management framework in place that covered all key risks. This prevented the proper escalation of serious compliance breakdowns to the board of directors.
The Board's action will restrict Wells Fargo's growth until its governance and risk management sufficiently improves but will not require the firm to cease current activities, including accepting customer deposits or making consumer loans.
Emphasizing the need for improved director oversight of the firm, the Board has sent letters to each current Wells Fargo board member confirming that the firm's board of directors, during the period of compliance breakdowns, did not meet supervisory expectations. Letters were also sent to former Chairman and Chief Executive Officer John Stumpf and past lead independent director Stephen Sanger stating that their performance in those roles, in particular, did not meet the Federal Reserve's expectations.
See https://www.federalreserve.gov/newsevents/pressreleases/enforcement20180202a.htm
The consent cease and desist order and Fed letters are available at the same URL
WTF Independent repair geek rants on the planned obsolescence of Apple products
Louis Rossmann is an independent service technician in New York City who has repaired Apple products for years.
In this video, Rossman uses passionate and remarkably profane language to argue that Apple withholds crucial repair information from independent repair technicians, and refuses to do repairs itself, thereby forcing product replacement rather than repair. He points out that auto manufacturers face government regulations that discourage withholding of repair information. He then goes on to explain in great detail (maybe a lot more than you want) how he is able to effect particular repairs that Apple refuses to do -- notably, he can fix a common faulty sensor problem with $2 worth of parts, a repair that Apple charges $750 for (Rossman charges less than half of that, and in cheaper markets, you can get it done for as little as $75).
Rossman has testified to lawmakers in support of "right to repair" legislation. See https://repair.org/legislation/ for a description of the legislative proposals.
The video is at https://boingboing.net/2017/04/17/right-to-repair.html
This posting is by Don Allen Resnikoff, who takes responsibility for the content.
Louis Rossmann is an independent service technician in New York City who has repaired Apple products for years.
In this video, Rossman uses passionate and remarkably profane language to argue that Apple withholds crucial repair information from independent repair technicians, and refuses to do repairs itself, thereby forcing product replacement rather than repair. He points out that auto manufacturers face government regulations that discourage withholding of repair information. He then goes on to explain in great detail (maybe a lot more than you want) how he is able to effect particular repairs that Apple refuses to do -- notably, he can fix a common faulty sensor problem with $2 worth of parts, a repair that Apple charges $750 for (Rossman charges less than half of that, and in cheaper markets, you can get it done for as little as $75).
Rossman has testified to lawmakers in support of "right to repair" legislation. See https://repair.org/legislation/ for a description of the legislative proposals.
The video is at https://boingboing.net/2017/04/17/right-to-repair.html
This posting is by Don Allen Resnikoff, who takes responsibility for the content.
A Geek guide to the technology and economics supporting disinformation on the internet:
#DigitalDeceit: The Technologies Behind Precision Propaganda on the Internet
By Dipayan Ghosh, Shorenstein Fellow, and Ben Scott, Senior Advisor to the Open Technology Institute at New America. Co-published by the New America Foundation and the Shorenstein Center.
See https://shorensteincenter.org/digital-deceit-precision-propaganda/
The introduction to the piece:
Over the past year, there has been rising pressure on Facebook, Google and Twitter to account for how bad actors are exploiting their platforms. The catalyst of this so-called “tech-lash” was the revelation in summer 2017 that agents of the Russian government engaged in disinformation operations using these services to influence the 2016 presidential campaigns.
The investigation into the Russian operation pulled back the curtain on a modern Internet marketplace that enables widespread disinformation over online channels. Questionable digital advertisements, social media bots, and viral internet memes carrying toxic messages have featured heavily in the news. But we have only begun to scratch the surface of a much larger ecosystem of digital advertising and marketing technologies. To truly address the specter of future nefarious interventions in the American political process, we need to broaden the lens and assess all of the tools available to online commercial advertisers. Disinformation operators in the future will replicate all of these techniques, using the full suite of platforms and technologies. These tools grow more powerful all the time as new advances in algorithmic technologies and artificial intelligence are integrated into the marketplace for digital marketing and advertising.
The central problem of disinformation corrupting American political culture is not Russian spies or a particular social media platform. The central problem is that the entire industry is built to leverage sophisticated technology to aggregate user attention and sell advertising. There is an alignment of interests between advertisers and the platforms. And disinformation operators are typically indistinguishable from any other advertiser. Any viable policy solutions must start here.
To inform and support this important public debate, this paper analyzes the technologies of digital advertising and marketing in order to deepen our understanding of precision propaganda.
#DigitalDeceit: The Technologies Behind Precision Propaganda on the Internet
By Dipayan Ghosh, Shorenstein Fellow, and Ben Scott, Senior Advisor to the Open Technology Institute at New America. Co-published by the New America Foundation and the Shorenstein Center.
See https://shorensteincenter.org/digital-deceit-precision-propaganda/
The introduction to the piece:
Over the past year, there has been rising pressure on Facebook, Google and Twitter to account for how bad actors are exploiting their platforms. The catalyst of this so-called “tech-lash” was the revelation in summer 2017 that agents of the Russian government engaged in disinformation operations using these services to influence the 2016 presidential campaigns.
The investigation into the Russian operation pulled back the curtain on a modern Internet marketplace that enables widespread disinformation over online channels. Questionable digital advertisements, social media bots, and viral internet memes carrying toxic messages have featured heavily in the news. But we have only begun to scratch the surface of a much larger ecosystem of digital advertising and marketing technologies. To truly address the specter of future nefarious interventions in the American political process, we need to broaden the lens and assess all of the tools available to online commercial advertisers. Disinformation operators in the future will replicate all of these techniques, using the full suite of platforms and technologies. These tools grow more powerful all the time as new advances in algorithmic technologies and artificial intelligence are integrated into the marketplace for digital marketing and advertising.
The central problem of disinformation corrupting American political culture is not Russian spies or a particular social media platform. The central problem is that the entire industry is built to leverage sophisticated technology to aggregate user attention and sell advertising. There is an alignment of interests between advertisers and the platforms. And disinformation operators are typically indistinguishable from any other advertiser. Any viable policy solutions must start here.
To inform and support this important public debate, this paper analyzes the technologies of digital advertising and marketing in order to deepen our understanding of precision propaganda.
From Public Citizen Consumer Law & Policy Blog
CFPB Has No Update on Enforcement Freeze After Not Announcing Enforcement Action in More Than 2 MonthsPosted: 24 Jan 2018 11:45 AM PST
by Jeff Sovern
In response to my inquiry, a CFPB representative, Brenda Muniz, informed me today that "There are no updates with respect to the freeze on enforcement actions or the issuance of CIDs," and that the CFPB has not announced an enforcement action since its November 21 announcement about Citibank. Though the Bureau's press releases say that it is “consistently enforcing federal consumer financial law," and Mr. Mulvaney released a statement yesterday, which Allison linked to, in which he said the Bureau would enforce consumer laws on his watch, it's hard to find evidence of it, unless he means that the Bureau will continue to litigate cases Mulvaney's predecessor commenced, though even that is not always happening. Meanwhile, today the Bureau issued the promised Request for Information Regarding Bureau Civil Investigative Demands and Associated Processes.
CFPB Has No Update on Enforcement Freeze After Not Announcing Enforcement Action in More Than 2 MonthsPosted: 24 Jan 2018 11:45 AM PST
by Jeff Sovern
In response to my inquiry, a CFPB representative, Brenda Muniz, informed me today that "There are no updates with respect to the freeze on enforcement actions or the issuance of CIDs," and that the CFPB has not announced an enforcement action since its November 21 announcement about Citibank. Though the Bureau's press releases say that it is “consistently enforcing federal consumer financial law," and Mr. Mulvaney released a statement yesterday, which Allison linked to, in which he said the Bureau would enforce consumer laws on his watch, it's hard to find evidence of it, unless he means that the Bureau will continue to litigate cases Mulvaney's predecessor commenced, though even that is not always happening. Meanwhile, today the Bureau issued the promised Request for Information Regarding Bureau Civil Investigative Demands and Associated Processes.
The Post's View
Opinion
A D.C. statute bars redeveloping land with a gas station on it. That’s absurd.
By Editorial Board January 21
SELF-GOVERNMENT, alas, does not guarantee sensible government. Exhibit A: the District’s strange statute that effectively prohibits the redevelopment of any land containing a full-service gas station. If you own the ground under one of the city’s roughly four dozen such establishments, you’re stuck: You can’t tear the garage down and put up condos; you really can’t even reduce it to a leaner “gas-and-go” operation. Ostensibly intended to protect an urban amenity for car owners, the ban can be waived, case by case, by the mayor — but only with the prior approval of the Gas Station Advisory Board. Alas, this august body has no members. In fact, a succession of mayors has declined to appoint any for the past 11 years.
John C. Formant is tired of this Catch-22. He owns the site of a full-service Shell station at a major intersection in booming Petworth. He would like to sell the land for construction of a residential-commercial building, including 57 condos, and even has permission from a different part of the District bureaucracy for the plan. Unless and until he can get out from under the gas-station conversion ban, however, his plans are not worth the paper they’re printed on — and his land’s market value may be suffering, too. On Jan. 2, Mr. Formant filed a lawsuit asking the U.S. District Court for the District of Columbia to declare D.C.’s law unconstitutional, as an uncompensated “taking” of his property and a form of involuntary servitude, to boot.
Those are sweeping claims, regarding which we would not hazard a legal analysis. On the essential absurdity of the District’s law, however, Mr. Formant appears to have an open-and-shut case. There’s a long history to the D.C. Council’s micromanagement of the city’s gas stations, some of it reflecting council members’ well-intentioned but exaggerated concerns about preserving a balanced commercial landscape — and a lot of it involving petty political rivalries and rent-seeking business interests too arcane to enumerate.
Complete editorial: https://www.washingtonpost.com/opinions/a-dc-statute-bars-redeveloping-land-with-a-gas-station-on-it-thats-insensible/2018/01/21/ac496ef2-fc7c-11e7-a46b-a3614530bd87_story.html?utm_term=.dbec22d78342
A copy of the lawsuit Complaint is here: https://www.scribd.com/document/368429732/Gas-Station-Lawsuit
Opinion
A D.C. statute bars redeveloping land with a gas station on it. That’s absurd.
By Editorial Board January 21
SELF-GOVERNMENT, alas, does not guarantee sensible government. Exhibit A: the District’s strange statute that effectively prohibits the redevelopment of any land containing a full-service gas station. If you own the ground under one of the city’s roughly four dozen such establishments, you’re stuck: You can’t tear the garage down and put up condos; you really can’t even reduce it to a leaner “gas-and-go” operation. Ostensibly intended to protect an urban amenity for car owners, the ban can be waived, case by case, by the mayor — but only with the prior approval of the Gas Station Advisory Board. Alas, this august body has no members. In fact, a succession of mayors has declined to appoint any for the past 11 years.
John C. Formant is tired of this Catch-22. He owns the site of a full-service Shell station at a major intersection in booming Petworth. He would like to sell the land for construction of a residential-commercial building, including 57 condos, and even has permission from a different part of the District bureaucracy for the plan. Unless and until he can get out from under the gas-station conversion ban, however, his plans are not worth the paper they’re printed on — and his land’s market value may be suffering, too. On Jan. 2, Mr. Formant filed a lawsuit asking the U.S. District Court for the District of Columbia to declare D.C.’s law unconstitutional, as an uncompensated “taking” of his property and a form of involuntary servitude, to boot.
Those are sweeping claims, regarding which we would not hazard a legal analysis. On the essential absurdity of the District’s law, however, Mr. Formant appears to have an open-and-shut case. There’s a long history to the D.C. Council’s micromanagement of the city’s gas stations, some of it reflecting council members’ well-intentioned but exaggerated concerns about preserving a balanced commercial landscape — and a lot of it involving petty political rivalries and rent-seeking business interests too arcane to enumerate.
Complete editorial: https://www.washingtonpost.com/opinions/a-dc-statute-bars-redeveloping-land-with-a-gas-station-on-it-thats-insensible/2018/01/21/ac496ef2-fc7c-11e7-a46b-a3614530bd87_story.html?utm_term=.dbec22d78342
A copy of the lawsuit Complaint is here: https://www.scribd.com/document/368429732/Gas-Station-Lawsuit
The Supreme Court rules that D.C. police officers acted reasonably in arresting 21 people at a late-night house party a decade ago in a case that featured women in garter belts stuffed with cash and a mystery hostess named “Peaches.”
The court ruled unanimously that the officers could not be held liable for making the arrests after they came upon a scene of “utter Bacchanalia,” as Justice Clarence Thomas described it in announcing the decision, at a house party where the homeowner was not present and it was unclear whether the guests had been invited.
“Based on the vagueness and implausibility of the partygoers’ stories, the officers could have reasonably inferred that they were lying and that their lies suggested a guilty mind,” Thomas wrote in his decision for the court. At any rate, the officers had qualified immunity for their actions, the court said.
From U.S. Supreme Court opinion syllabus:
District of Columbia police officers responded to a complaint about loud music and illegal activities in a vacant house. Inside, they found the house nearly barren and in disarray. The officers smelled marijuana and observed beer bottles and cups of liquor on the floor, which was dirty. They found a make-shift strip club in the living room, and a naked woman and several men in an upstairs bedroom. Many partygoers scattered when they saw the uniformed officers, and some hid. The officers questioned everyone and got inconsistent stories. Two women identified “Peaches” as the house’s tenant and said that she had given the partygoers permission to have the party. But Peaches was not there. When the officers spoke by phone to Peaches, she was nervous, agitated, and evasive. At first, she claimed that she was renting the house and had given the partygoers permission to have the party, but she eventually admitted that she did not have permission to use the house. The owner confirmed that he had not given anyone permission to be there. The officers then arrested the partygoers for unlawful entry. Several partygoers sued for false arrest under the Fourth Amendment and District law. The District Court concluded that the officers lacked probable cause to arrest the partygoers for unlawful entry and that two of the officers, petitioners here, were not entitled to qualified immunity. A divided panel of the D. C. Circuit affirmed.
Held: 1. The officers had probable cause to arrest the partygoers.
The U.S. Supreme Court decision is here: https://www.supremecourt.gov/opinions/17pdf/15-1485_1qm2.pdf
The Washington Post story is here: https://www.washingtonpost.com/local/public-safety/supreme-court-rules-for-police-officers-in-dc-house-party-case-that-involved-mystery-hostess-called-peaches/2018/01/22/87e5eb4a-fed3-11e7-bb03-722769454f82_story.html?hpid=hp_local-news_court-1050a%3Ahomepage%2Fstory&utm_term=.a30451c8eedb
The court ruled unanimously that the officers could not be held liable for making the arrests after they came upon a scene of “utter Bacchanalia,” as Justice Clarence Thomas described it in announcing the decision, at a house party where the homeowner was not present and it was unclear whether the guests had been invited.
“Based on the vagueness and implausibility of the partygoers’ stories, the officers could have reasonably inferred that they were lying and that their lies suggested a guilty mind,” Thomas wrote in his decision for the court. At any rate, the officers had qualified immunity for their actions, the court said.
From U.S. Supreme Court opinion syllabus:
District of Columbia police officers responded to a complaint about loud music and illegal activities in a vacant house. Inside, they found the house nearly barren and in disarray. The officers smelled marijuana and observed beer bottles and cups of liquor on the floor, which was dirty. They found a make-shift strip club in the living room, and a naked woman and several men in an upstairs bedroom. Many partygoers scattered when they saw the uniformed officers, and some hid. The officers questioned everyone and got inconsistent stories. Two women identified “Peaches” as the house’s tenant and said that she had given the partygoers permission to have the party. But Peaches was not there. When the officers spoke by phone to Peaches, she was nervous, agitated, and evasive. At first, she claimed that she was renting the house and had given the partygoers permission to have the party, but she eventually admitted that she did not have permission to use the house. The owner confirmed that he had not given anyone permission to be there. The officers then arrested the partygoers for unlawful entry. Several partygoers sued for false arrest under the Fourth Amendment and District law. The District Court concluded that the officers lacked probable cause to arrest the partygoers for unlawful entry and that two of the officers, petitioners here, were not entitled to qualified immunity. A divided panel of the D. C. Circuit affirmed.
Held: 1. The officers had probable cause to arrest the partygoers.
The U.S. Supreme Court decision is here: https://www.supremecourt.gov/opinions/17pdf/15-1485_1qm2.pdf
The Washington Post story is here: https://www.washingtonpost.com/local/public-safety/supreme-court-rules-for-police-officers-in-dc-house-party-case-that-involved-mystery-hostess-called-peaches/2018/01/22/87e5eb4a-fed3-11e7-bb03-722769454f82_story.html?hpid=hp_local-news_court-1050a%3Ahomepage%2Fstory&utm_term=.a30451c8eedb
WSJ's Greg Ip on the future prospects of antitrust enforcement against Google and other similar companies
Greg Ip's front page Wall Street Journal article is remarkable for several reasons. One is that it is good journalism: The introductory paragraphs offer some of the flavor of the piece:
Standard Oil and Co. and American Telephone and Telegraph Co. were the technological titans of their day, commanding more than 80% of their markets.
Today's tech giants are just as dominant: In the U.S., Alphabet Inc.'s Google drives 89% of internet search; 95% of young adults on the internet use a Facebook Inc. product; and Amazon.com Inc. now accounts for 75% of electronic book sales. Those firms that aren't monopolists are duopolists: Google and Facebook absorbed 63% of online ad spending last year; Google and Apple Inc. provide 99% of mobile phone operating systems; while Apple and Microsoft Corp. supply 95% of desktop operating systems.
A growing number of critics think these tech giants need to be broken up or regulated as Standard Oil and AT&T once were. Their alleged sins run the gamut from disseminating fake news and fostering addiction to laying waste to small towns' shopping districts. But antitrust regulators have a narrow test: Does their size leave consumers worse off?
That may not be true in the future: if market dominance means fewer competitors and less innovation, consumers will be worse off than if those companies had been restrained. "The impact on innovation can be the most important competitive effect" in an antitrust case, says Fiona Scott Morton, a Yale University economist who served in the Justice Department's antitrust division under Barack Obama.
The Ip article can be found behind a paywall at https://www.wsj.com/articles/the-antitrust-case-against-facebook-google-amazon-and-apple-1516121561
The article is available without a subscription at http://www.foxbusiness.com/features/2018/01/16/antitrust-case-against-facebook-google-2.html
Greg Ip has made several TV appearances to discuss his article. A video of his appearance on Fox News is here:
https://eblnews.com/video/antitrust-action-looms-over-techs-biggest-names-307425
The Greg Ip article is remarkable for another reason. It demonstrates that competition policy arguments raising concerns about Google and similar companies are no longer evangelical exhortations of a few. The idea that Google and Facebook can be harmful in a manner analogous to Standard Oil and AT&T in the past and be targets for future regulation has become mainstream, at least for those who would read the Wall Street Journal or watch Fox Business News.
The mainstream attention to market power issues concerning tech companies with product prices of zero is a reminder to antitrust insiders that antitrust law is not just something chiseled in stone in Chicago some time ago, or just the ideas that practicing lawyers can take to court today. Market power issues are public policy, and have a political dimension. What the public thinks about competition policy issues will influence future government action.
Some may think that discussions that touch on aspects of competition policy and antitrust with political overtones are "claptrap," either because they prefer that antitrust be static rather than dynamic, or they believe that antitrust and competition policy should exist in separate worlds. The Greg Ip article suggests that such retrograde views will not stop the progress of public debate of competition policy issues.
Posted by Don Allen Resnikoff, who takes personal responsibility for the content.
Greg Ip's front page Wall Street Journal article is remarkable for several reasons. One is that it is good journalism: The introductory paragraphs offer some of the flavor of the piece:
Standard Oil and Co. and American Telephone and Telegraph Co. were the technological titans of their day, commanding more than 80% of their markets.
Today's tech giants are just as dominant: In the U.S., Alphabet Inc.'s Google drives 89% of internet search; 95% of young adults on the internet use a Facebook Inc. product; and Amazon.com Inc. now accounts for 75% of electronic book sales. Those firms that aren't monopolists are duopolists: Google and Facebook absorbed 63% of online ad spending last year; Google and Apple Inc. provide 99% of mobile phone operating systems; while Apple and Microsoft Corp. supply 95% of desktop operating systems.
A growing number of critics think these tech giants need to be broken up or regulated as Standard Oil and AT&T once were. Their alleged sins run the gamut from disseminating fake news and fostering addiction to laying waste to small towns' shopping districts. But antitrust regulators have a narrow test: Does their size leave consumers worse off?
That may not be true in the future: if market dominance means fewer competitors and less innovation, consumers will be worse off than if those companies had been restrained. "The impact on innovation can be the most important competitive effect" in an antitrust case, says Fiona Scott Morton, a Yale University economist who served in the Justice Department's antitrust division under Barack Obama.
The Ip article can be found behind a paywall at https://www.wsj.com/articles/the-antitrust-case-against-facebook-google-amazon-and-apple-1516121561
The article is available without a subscription at http://www.foxbusiness.com/features/2018/01/16/antitrust-case-against-facebook-google-2.html
Greg Ip has made several TV appearances to discuss his article. A video of his appearance on Fox News is here:
https://eblnews.com/video/antitrust-action-looms-over-techs-biggest-names-307425
The Greg Ip article is remarkable for another reason. It demonstrates that competition policy arguments raising concerns about Google and similar companies are no longer evangelical exhortations of a few. The idea that Google and Facebook can be harmful in a manner analogous to Standard Oil and AT&T in the past and be targets for future regulation has become mainstream, at least for those who would read the Wall Street Journal or watch Fox Business News.
The mainstream attention to market power issues concerning tech companies with product prices of zero is a reminder to antitrust insiders that antitrust law is not just something chiseled in stone in Chicago some time ago, or just the ideas that practicing lawyers can take to court today. Market power issues are public policy, and have a political dimension. What the public thinks about competition policy issues will influence future government action.
Some may think that discussions that touch on aspects of competition policy and antitrust with political overtones are "claptrap," either because they prefer that antitrust be static rather than dynamic, or they believe that antitrust and competition policy should exist in separate worlds. The Greg Ip article suggests that such retrograde views will not stop the progress of public debate of competition policy issues.
Posted by Don Allen Resnikoff, who takes personal responsibility for the content.
AAI Digital Platforms Roundtable
DATE: MARCH 22, 2018
LOCATION: NATIONAL PRESS CLUB, WASHINGTON DC
Questions about the efficacy of the antitrust laws in overseeing large technology platforms are a prominent theme in public policy discourse. Many advocates contend that the antitrust laws are fully able to handle anticompetitive conduct or mergers that may arise in digital markets. Others question whether the existing laws and the prevailing consumer welfare standard are up to this important task.
AAI’s Digital Platforms Roundtable will address the growth of digital platforms and advance the state of thinking about competition in this important domain. The Roundtable will explore the central question: What does an analysis of digital platforms under the antitrust laws look like?
The Roundtable will bring together experts in competition law from government, industry, academia, and the public interest community. They will participate in discussions about the elements of antitrust approaches to mergers and strategic competitive conduct and advance the debate on the applicability of the antitrust laws to digital platforms. The half-day program will include opening remarks, two panels, and a roundtable discussion.
More information: http://www.antitrustinstitute.org/events/aai-digital-platforms-roundtable
DATE: MARCH 22, 2018
LOCATION: NATIONAL PRESS CLUB, WASHINGTON DC
Questions about the efficacy of the antitrust laws in overseeing large technology platforms are a prominent theme in public policy discourse. Many advocates contend that the antitrust laws are fully able to handle anticompetitive conduct or mergers that may arise in digital markets. Others question whether the existing laws and the prevailing consumer welfare standard are up to this important task.
AAI’s Digital Platforms Roundtable will address the growth of digital platforms and advance the state of thinking about competition in this important domain. The Roundtable will explore the central question: What does an analysis of digital platforms under the antitrust laws look like?
The Roundtable will bring together experts in competition law from government, industry, academia, and the public interest community. They will participate in discussions about the elements of antitrust approaches to mergers and strategic competitive conduct and advance the debate on the applicability of the antitrust laws to digital platforms. The half-day program will include opening remarks, two panels, and a roundtable discussion.
More information: http://www.antitrustinstitute.org/events/aai-digital-platforms-roundtable
From DMN: 117 Colorado Cities & Counties Have Voted In Favor of Locally-Owned ISPs
Paul Resnikoff
January 17, 2018
Tech giants, Democrats in Congress, and more than 22 states are fighting the FCC to protect net neutrality. But the most powerful weapon could be municipal governments themselves. The FCC has been criticized for gutting net neutrality despite overwhelming demand to protect it. Even worse, FCC commissioner Ajit Pai has been assailed by accusations of cronyism and corruption, especially given his strong ties to mega-ISP Verizon.
But what if ISPs weren’t so easily controlled by the FCC?
Enter the State of Colorado, which could become ground zero for the net neutrality resistance. Earlier this month, the municipality of Fort Collins, CO approved a $150 million budget to initiate a homegrown, locally-controlled ISP network. That homegrown ISP, in turn, would determine rules like net neutrality, not to mention fees charged to its citizens.
But that looks like the tip of the iceberg.
Fort Collins is just one of dozens of municipalities in Colorado that voted to protect their ability to create a local ISP.
Amazingly, municipal internet networks are illegal in Colorado. Back in 2005, Senate Bill 152 was passed. It made it illegal to use taxpayer dollars to construct a local broadband network. Of course, that bill was largely created by the lobbying efforts of major ISPs like Comcast and CenturyLink, both entrenched Colorado broadband providers.
Now, a total of 117 communities within Colorado have successfully voted against Senate Bill 152. As a result, they have protected their ability to develop their own broadband networks.
Last November, as the FCC prepared to gut net neutrality, another 19 joined the group. Fort Collins is simply one of the first communities to seriously act on that right.
According to the Institute for Local Self-Reliance, the latest batch of votes were a landslide. More than 83 percent of voters wanted out of Senate Bill 152 in the November round. “These cities and counties recognize that they cannot count on Comcast and CenturyLink alone to meet local needs, which is why you see overwhelming support even in an off-year election,” said Christopher Mitchell, director of the Community Broadband Networks initiative at the Institute for Local Self-Reliance.
All of which spells a major problem for entrenched ISPs — in Colorado and beyond. Instead of enjoying outright monopolies and elevated rates, the presence of a local ‘utility ISP’ spells serious competition.
The biggest reason is that a municipally-created ISP is designed to meet the needs of its citizens, both in terms of service and price. That means that if a local community wants net neutrality and affordable speeds, then the locally-created network will strive to deliver just that.
It also means that citizens less capable of paying for internet access have a greater chance of receiving it.
Actually, there’s another Colorado municipality that offers its own broadband. Back in 2011, the town of Longmont started offering a high-speed, 1 gigabyte/second service for $49.95. That crushed the next competitor, which offers a 20Mbps connection.
As of last summer, the Longmont service had 90,000 takers. That’s more than half of all residents, according to the city.
So who’s next?
Importantly, voting against Senate Bill 152 merely gives cities and counties the right to build their own networks. But given enough outcry over issues like net neutrality, bad service, and high prices, it’s likely a few other homegrown ISPs will appear in the coming months and years.
Source: https://www.digitalmusicnews.com/2018/01/17/colorado-municipalities-net-neutrality/
New York and Connecticut sue EPA in New York federal court for failing to meet a Clean Air Act deadline for curbing smog pollution from other states
States Complaint: https://www.law360.com/articles/1002928/attachments/0
Law 360 article (paywall): https://www.law360.com/energy/articles/1002928/ny-conn-sue-epa-over-lax-upwind-smog-enforcement?nl_pk=9fa8806b-1d9f-4443-911f-ca2a2f4a32a7&utm_source=newsletter&utm_medium=email&utm_campaign=energy
States Complaint: https://www.law360.com/articles/1002928/attachments/0
Law 360 article (paywall): https://www.law360.com/energy/articles/1002928/ny-conn-sue-epa-over-lax-upwind-smog-enforcement?nl_pk=9fa8806b-1d9f-4443-911f-ca2a2f4a32a7&utm_source=newsletter&utm_medium=email&utm_campaign=energy
States, environmental groups asked the D.C. Circuit to restart litigation over Government Clean Power Plan
EPA asks to hold case in suspense.
States brief:
https://www.law360.com/articles/1002846/attachments/0
Environmental organizations brief:
https://www.law360.com/articles/1002846/attachments/1
Law 360 article (paywall) at https://www.law360.com/energy/articles/1002846/states-oppose-epa-bid-for-time-in-clean-power-plan-row?nl_pk=9fa8806b-1d9f-4443-911f-ca2a2f4a32a7&utm_source=newsletter&utm_medium=email&utm_campaign=energy
EPA asks to hold case in suspense.
States brief:
https://www.law360.com/articles/1002846/attachments/0
Environmental organizations brief:
https://www.law360.com/articles/1002846/attachments/1
Law 360 article (paywall) at https://www.law360.com/energy/articles/1002846/states-oppose-epa-bid-for-time-in-clean-power-plan-row?nl_pk=9fa8806b-1d9f-4443-911f-ca2a2f4a32a7&utm_source=newsletter&utm_medium=email&utm_campaign=energy
The legal fight against the Federal Communications Commission’s recent repeal of so-called net neutrality regulations began on Tuesday [1/16], with a flurry of lawsuits filed to block the agency’s action
One suit, filed by 21 state attorneys general, said the agency’s actions broke federal law. The commission’s rollback of net neutrality rules were “arbitrary and capricious,” the attorneys general said, and a reversal of the agency’s longstanding policy to prevent internet service providers from blocking or charging websites for faster delivery of content to consumers.
Mozilla, the nonprofit organization behind the Firefox web browser, said the new F.C.C. rules would harm internet entrepreneurs who could be forced to pay fees for faster delivery of their content and services to consumers. A similar argument was made by another group that filed a suit, the Open Technology Institute, a part of a liberal think tank, the New America Foundation.
Suits were also filed on Tuesday by Free Press and Public Knowledge, two public interest groups. Four of the suits were filed in the United States Court of Appeals for the District of Columbia Circuit. The Free Press suit was filed in the United States Court of Appeals for the First Circuit.
From https://www.nytimes.com/2018/01/16/technology/net-neutrality-lawsuit-attorneys-general.html?dlbk=&emc=edit_dk_20180117&nl=dealbook&nlid=67075843&te=1&_r=0
One suit, filed by 21 state attorneys general, said the agency’s actions broke federal law. The commission’s rollback of net neutrality rules were “arbitrary and capricious,” the attorneys general said, and a reversal of the agency’s longstanding policy to prevent internet service providers from blocking or charging websites for faster delivery of content to consumers.
Mozilla, the nonprofit organization behind the Firefox web browser, said the new F.C.C. rules would harm internet entrepreneurs who could be forced to pay fees for faster delivery of their content and services to consumers. A similar argument was made by another group that filed a suit, the Open Technology Institute, a part of a liberal think tank, the New America Foundation.
Suits were also filed on Tuesday by Free Press and Public Knowledge, two public interest groups. Four of the suits were filed in the United States Court of Appeals for the District of Columbia Circuit. The Free Press suit was filed in the United States Court of Appeals for the First Circuit.
From https://www.nytimes.com/2018/01/16/technology/net-neutrality-lawsuit-attorneys-general.html?dlbk=&emc=edit_dk_20180117&nl=dealbook&nlid=67075843&te=1&_r=0
From Wolters-Kluwer AntitrustConnect Blog:
Three Antitrust Cases To Be Heard by High Court
(CLICK TITLE FOR LINK)
JEFFREY MAY
January 15, 2018
It’s shaping up to be a busy term for antitrust issues at the U.S. Supreme Court. The Court on January 12 decided to review a third antitrust case.
In the context of a price fixing action against foreign vitamin C manufacturers, the Court will consider “whether a court may exercise independent review of an appearing foreign sovereign’s interpretation of its domestic law” or must defer to the foreign government’s legal statement. Earlier this term, the justices agreed to weigh in on the appealability of a denial of state action immunity, and consider a joint state effort to challenge so-called “anti-steering” rules that prohibited merchants who accepted American Express cards from directing customers to alternative credit card brands.
Foreign compulsion, comity. The most recent issue to be taken up by the Court involves a Second Circuit decision that vacated a district court judgment against Chinese vitamin C manufacturers for fixing prices. Animal Science Products and other U.S. purchasers of vitamin C alleged that Hebei Welcome Pharmaceutical and other Chinese manufacturers and exporters of vitamin C conspired to fix the price and supply of vitamin C sold to U.S. companies on the international market in violation of the Sherman Act. The federal district court in New York City rejected the defendants’ motion for judgment as a matter of law, ruling that that the doctrines of act of state and international comity did not bar plaintiffs’ suit. After a jury trial, the court entered judgment, awarding the plaintiffs approximately $147 million in damages and enjoining the defendants from engaging in future anticompetitive behavior.
In September 2016, the U.S. Court of Appeals in New York City vacated the judgment and reversed the order denying the manufacturers’ motion to dismiss. It said that the case presented the question of what laws and standards control when U.S. antitrust laws are violated by foreign companies that claim to be acting at the express direction or mandate of a foreign government. The appellate court addressed how a federal court should respond when a foreign government, through its official agencies, appears before that court and represents that it has compelled an action that resulted in the violation of U.S. antitrust laws.
The Second Circuit concluded, that because the Chinese government had filed a formal statement in the district court asserting that Chinese law required the defendants to set prices and reduce quantities of vitamin C sold abroad and because the manufacturers could not simultaneously comply with Chinese law and U.S. antitrust laws, the principles of international comity required the district court to abstain from exercising jurisdiction in this case.
Animal Science petitioned the Supreme Court for review, arguing that the Chinese government had mischaracterized its own law in asserting that the Chinese companies’ anti-competitive behavior was required by Chinese law. The petitioners pointed to statements that the manufacturers’ anti-competitive agreement was self-regulated and voluntarily adopted without government intervention.
The petition presented three questions for the Supreme Court: (1) whether the Second Circuit, in conflict with decisions of three courts of appeals, erred in exercising jurisdiction under 28 U.S.C. §1291 over a pre-trial order denying a motion to dismiss following a full trial on the merits; (2) whether a court may exercise independent review of an appearing foreign sovereign’s interpretation of its domestic law (as held by the Fifth, Sixth, Seventh, Eleventh, and D.C. Circuits), or whether a court is “bound to defer” to a foreign government’s legal statement, as a matter of international comity, whenever the foreign government appears before the court (as held by the opinion below in accord with the Ninth Circuit); and (3) whether a court may abstain from exercising jurisdiction on a case-by-case basis, as a matter of discretionary international comity, over an otherwise valid Sherman Antitrust Act claim involving purely domestic injury.
The Court said that it would consider the second question presented. The U.S. Solicitor General filed an amicus brief in November 2017, arguing that the Court should grant the petition solely on the question of whether a federal court determining foreign law under Fed. R. Civ. P. 44.1 is required to treat as conclusive a submission from the foreign government characterizing its own law. The Solicitor General argued that a foreign government’s characterization of its own law is entitled to substantial weight, but was not conclusive. The government said that the case raised an important and recurring issue (Animal Science Products, Inc. v. Hebei Welcome Pharmaceutical Co. Ltd., Dkt. 16-1220).
State action immunity. The Supreme Court also agreed to review of a decision of the U.S. Court of Appeals in San Francisco rejecting an interlocutory appeal of a federal district court order denying a motion to dismiss monopolization charges on state action immunity grounds
because the collateral order doctrine did not allow immediate appeal of such an order as it was not considered a final decision.
The petition for certiorari asks whether orders denying state action immunity to public entities are immediately appealable under the collateral-order doctrine and highlights a split among the circuits on this issue. The Fifth and Eleventh Circuits have held that state action immunity is an immunity against suit rather than a mere defense against liability, and concluded that if a denial of state action immunity cannot be appealed immediately, then in effect it cannot be appealed at all. The Fourth and Sixth Circuits, and the Ninth Circuit in this case, have held that the interlocutory denial of state action immunity to a public entity is not immediately appealable (SolarCity Corp. v. Salt River Project Agricultural Improvement and Power District, Dkt. 17-368).
Anti-steering rules. In October 2017, the Court granted a petition brought by 11 states seeking a review of a Second Circuit ruling that the Department of Justice and the states failed to prove that “anti-steering” rules that prohibited merchants who accepted American Express cards from directing customers to alternative credit card brands violated Section 1 of the Sherman Act.
In 2010, the Justice Department and 17 states filed suit against the country’s three largest credit and charge card transaction networks. A February 2015 decision of the federal district court in Brooklyn, New York, in favor of the Justice Department and the states, and an order prohibiting American Express (AmEx) from enforcing these nondiscriminatory provisions (NDPs) in contracts with merchants, were reversed and remanded by the Second Circuit in September 2016, with instructions to enter judgment in favor of AmEx.
The petition asked: “Under the ‘rule of reason,’ did the government’s showing that AmEx’s anti-steering provisions stifled price competition on the merchant side of the credit-card platform suffice to prove anticompetitive effects and thereby shift the burden of establishing any procompetitive benefits from the provisions?”
The Justice Department declined to participate in the appeal and initially asked the Supreme Court to reject the states’ petition, arguing that the case does not satisfy the Court’s traditional certiorari standards. While the Justice Department agreed with the states that the district court’s findings established a prima facie case that the anti-steering rules unreasonably restrain trade, and that the Second Circuit had erred in holding otherwise, it nevertheless argued against the Supreme Court taking the cases. Specifically, the Justice Department argued that the decision was based almost entirely on the “two-sided” nature of the credit-card industry, and neither the Supreme Court nor any other circuit had squarely considered the application of the antitrust laws to two-sided platforms, as such.
After the Court agreed to hear the case, the Justice Department filed a brief, contending that the Court should vacate the judgment holding that the government failed to establish a prima facie case. On remand, the appellate court could consider any challenges that Amex properly preserved to the district court’s holding that Amex failed to establish
sufficient procompetitive justifications for the anti-steering rules, according to the Justice Department.
The case is set for argument on February 26, 2018 (State of Ohio v. American ExpressCompany, Dkt. 16-1454).
Three Antitrust Cases To Be Heard by High Court
(CLICK TITLE FOR LINK)
JEFFREY MAY
January 15, 2018
It’s shaping up to be a busy term for antitrust issues at the U.S. Supreme Court. The Court on January 12 decided to review a third antitrust case.
In the context of a price fixing action against foreign vitamin C manufacturers, the Court will consider “whether a court may exercise independent review of an appearing foreign sovereign’s interpretation of its domestic law” or must defer to the foreign government’s legal statement. Earlier this term, the justices agreed to weigh in on the appealability of a denial of state action immunity, and consider a joint state effort to challenge so-called “anti-steering” rules that prohibited merchants who accepted American Express cards from directing customers to alternative credit card brands.
Foreign compulsion, comity. The most recent issue to be taken up by the Court involves a Second Circuit decision that vacated a district court judgment against Chinese vitamin C manufacturers for fixing prices. Animal Science Products and other U.S. purchasers of vitamin C alleged that Hebei Welcome Pharmaceutical and other Chinese manufacturers and exporters of vitamin C conspired to fix the price and supply of vitamin C sold to U.S. companies on the international market in violation of the Sherman Act. The federal district court in New York City rejected the defendants’ motion for judgment as a matter of law, ruling that that the doctrines of act of state and international comity did not bar plaintiffs’ suit. After a jury trial, the court entered judgment, awarding the plaintiffs approximately $147 million in damages and enjoining the defendants from engaging in future anticompetitive behavior.
In September 2016, the U.S. Court of Appeals in New York City vacated the judgment and reversed the order denying the manufacturers’ motion to dismiss. It said that the case presented the question of what laws and standards control when U.S. antitrust laws are violated by foreign companies that claim to be acting at the express direction or mandate of a foreign government. The appellate court addressed how a federal court should respond when a foreign government, through its official agencies, appears before that court and represents that it has compelled an action that resulted in the violation of U.S. antitrust laws.
The Second Circuit concluded, that because the Chinese government had filed a formal statement in the district court asserting that Chinese law required the defendants to set prices and reduce quantities of vitamin C sold abroad and because the manufacturers could not simultaneously comply with Chinese law and U.S. antitrust laws, the principles of international comity required the district court to abstain from exercising jurisdiction in this case.
Animal Science petitioned the Supreme Court for review, arguing that the Chinese government had mischaracterized its own law in asserting that the Chinese companies’ anti-competitive behavior was required by Chinese law. The petitioners pointed to statements that the manufacturers’ anti-competitive agreement was self-regulated and voluntarily adopted without government intervention.
The petition presented three questions for the Supreme Court: (1) whether the Second Circuit, in conflict with decisions of three courts of appeals, erred in exercising jurisdiction under 28 U.S.C. §1291 over a pre-trial order denying a motion to dismiss following a full trial on the merits; (2) whether a court may exercise independent review of an appearing foreign sovereign’s interpretation of its domestic law (as held by the Fifth, Sixth, Seventh, Eleventh, and D.C. Circuits), or whether a court is “bound to defer” to a foreign government’s legal statement, as a matter of international comity, whenever the foreign government appears before the court (as held by the opinion below in accord with the Ninth Circuit); and (3) whether a court may abstain from exercising jurisdiction on a case-by-case basis, as a matter of discretionary international comity, over an otherwise valid Sherman Antitrust Act claim involving purely domestic injury.
The Court said that it would consider the second question presented. The U.S. Solicitor General filed an amicus brief in November 2017, arguing that the Court should grant the petition solely on the question of whether a federal court determining foreign law under Fed. R. Civ. P. 44.1 is required to treat as conclusive a submission from the foreign government characterizing its own law. The Solicitor General argued that a foreign government’s characterization of its own law is entitled to substantial weight, but was not conclusive. The government said that the case raised an important and recurring issue (Animal Science Products, Inc. v. Hebei Welcome Pharmaceutical Co. Ltd., Dkt. 16-1220).
State action immunity. The Supreme Court also agreed to review of a decision of the U.S. Court of Appeals in San Francisco rejecting an interlocutory appeal of a federal district court order denying a motion to dismiss monopolization charges on state action immunity grounds
because the collateral order doctrine did not allow immediate appeal of such an order as it was not considered a final decision.
The petition for certiorari asks whether orders denying state action immunity to public entities are immediately appealable under the collateral-order doctrine and highlights a split among the circuits on this issue. The Fifth and Eleventh Circuits have held that state action immunity is an immunity against suit rather than a mere defense against liability, and concluded that if a denial of state action immunity cannot be appealed immediately, then in effect it cannot be appealed at all. The Fourth and Sixth Circuits, and the Ninth Circuit in this case, have held that the interlocutory denial of state action immunity to a public entity is not immediately appealable (SolarCity Corp. v. Salt River Project Agricultural Improvement and Power District, Dkt. 17-368).
Anti-steering rules. In October 2017, the Court granted a petition brought by 11 states seeking a review of a Second Circuit ruling that the Department of Justice and the states failed to prove that “anti-steering” rules that prohibited merchants who accepted American Express cards from directing customers to alternative credit card brands violated Section 1 of the Sherman Act.
In 2010, the Justice Department and 17 states filed suit against the country’s three largest credit and charge card transaction networks. A February 2015 decision of the federal district court in Brooklyn, New York, in favor of the Justice Department and the states, and an order prohibiting American Express (AmEx) from enforcing these nondiscriminatory provisions (NDPs) in contracts with merchants, were reversed and remanded by the Second Circuit in September 2016, with instructions to enter judgment in favor of AmEx.
The petition asked: “Under the ‘rule of reason,’ did the government’s showing that AmEx’s anti-steering provisions stifled price competition on the merchant side of the credit-card platform suffice to prove anticompetitive effects and thereby shift the burden of establishing any procompetitive benefits from the provisions?”
The Justice Department declined to participate in the appeal and initially asked the Supreme Court to reject the states’ petition, arguing that the case does not satisfy the Court’s traditional certiorari standards. While the Justice Department agreed with the states that the district court’s findings established a prima facie case that the anti-steering rules unreasonably restrain trade, and that the Second Circuit had erred in holding otherwise, it nevertheless argued against the Supreme Court taking the cases. Specifically, the Justice Department argued that the decision was based almost entirely on the “two-sided” nature of the credit-card industry, and neither the Supreme Court nor any other circuit had squarely considered the application of the antitrust laws to two-sided platforms, as such.
After the Court agreed to hear the case, the Justice Department filed a brief, contending that the Court should vacate the judgment holding that the government failed to establish a prima facie case. On remand, the appellate court could consider any challenges that Amex properly preserved to the district court’s holding that Amex failed to establish
sufficient procompetitive justifications for the anti-steering rules, according to the Justice Department.
The case is set for argument on February 26, 2018 (State of Ohio v. American ExpressCompany, Dkt. 16-1454).
French prosecutor launches probe into Apple planned obsolescence: judicial source
Reuters Staff
PARIS (Reuters) - A French prosecutor has launched a preliminary investigation of U.S. tech giant Apple (AAPL.O) over alleged deception and planned obsolescence of its products following a complaint by a consumer organization, a judicial source said on Monday.
The investigation, opened on Friday, will be led by French consumer fraud watchdog DGCCRF, part of the Economy Ministry, the source said.
Apple acknowledged last month that it takes some measures to reduce power demands - which can have the effect of slowing the processor - in some older iPhone models when a phone’s battery is having trouble supplying the peak current that the processor demands.
The French watchdog’s preliminary investigation could take months, and depending on its findings, the case could be dropped or handed to a judge for an in-depth investigation.
Under French law, companies risk fines of up to 5 percent of their annual sales for deliberately shortening the life of their products to spur demand to replace them.
An Apple spokeswoman in the United States declined to comment on the French investigation, pointing to a Dec. 28 statement in which the company apologized over its handling of the battery issue and said it would never do anything to intentionally shorten the life of any Apple product.
An Apple spokesman in France could not immediately be reached for comment.
* * * *
A French consumer association called “HOP” -- standing for “Stop Planned Obsolescence” -- filed a legal complaint against Apple.
Apple already faces lawsuits in the United States over accusations of defrauding iPhone users by slowing down devices without warning to compensate for poor battery performance.
Apple also said on Dec. 28 it was slashing prices for battery replacements and would change its software to show users whether their phone battery was good.
Reporting by Yann Le Guernigou; Additional reporting by Stephen Nellis in San Francisco; Writing by Bate Felix; Editing by Adrian Croft
From: https://www.reuters.com/article/us-apple-france-investigation/french-prosecutor-launches-probe-into-apple-planned-obsolescence-judicial-source-idUSKBN1EX27V
Reuters Staff
PARIS (Reuters) - A French prosecutor has launched a preliminary investigation of U.S. tech giant Apple (AAPL.O) over alleged deception and planned obsolescence of its products following a complaint by a consumer organization, a judicial source said on Monday.
The investigation, opened on Friday, will be led by French consumer fraud watchdog DGCCRF, part of the Economy Ministry, the source said.
Apple acknowledged last month that it takes some measures to reduce power demands - which can have the effect of slowing the processor - in some older iPhone models when a phone’s battery is having trouble supplying the peak current that the processor demands.
The French watchdog’s preliminary investigation could take months, and depending on its findings, the case could be dropped or handed to a judge for an in-depth investigation.
Under French law, companies risk fines of up to 5 percent of their annual sales for deliberately shortening the life of their products to spur demand to replace them.
An Apple spokeswoman in the United States declined to comment on the French investigation, pointing to a Dec. 28 statement in which the company apologized over its handling of the battery issue and said it would never do anything to intentionally shorten the life of any Apple product.
An Apple spokesman in France could not immediately be reached for comment.
* * * *
A French consumer association called “HOP” -- standing for “Stop Planned Obsolescence” -- filed a legal complaint against Apple.
Apple already faces lawsuits in the United States over accusations of defrauding iPhone users by slowing down devices without warning to compensate for poor battery performance.
Apple also said on Dec. 28 it was slashing prices for battery replacements and would change its software to show users whether their phone battery was good.
Reporting by Yann Le Guernigou; Additional reporting by Stephen Nellis in San Francisco; Writing by Bate Felix; Editing by Adrian Croft
From: https://www.reuters.com/article/us-apple-france-investigation/french-prosecutor-launches-probe-into-apple-planned-obsolescence-judicial-source-idUSKBN1EX27V
Sally Hubbard on the connection between market power issues and fake news problems
Excerpt:
I. INTRODUCTION
The public and political outcry over fake news — and what to do about it — has generated abundant commentary. Yet few commentators have focused on how concentrated market power in online platforms contributes to the crisis. This essay expands on my view, originally set forth in Washington Bytes in January, that fake news is, in part, an antitrust problem.2
Fake news can be challenging to define. In this essay, fake news means stories that are simply made up for profit or propaganda without using trained journalists, conducting research or expending resources. Articles written according to journalistic practices from a particular political perspective or containing factual errors do not meet the definition of fake news used here.
This essay will explore two primary reasons why fake news is an antitrust problem.
First, Facebook and Google compete against legitimate news publishers for user attention, data and advertising dollars. The tech platforms’ business incentives run counter to the interests of legitimate news publishers, and the platforms pull technological levers that harm publishers’ business models and advantage their own. Such levers keep users within Facebook’s and Google’s digital walls and reduce traffic to news publishers’ properties, depriving publishers of the revenue essential to fund legitimate journalism and to counter fake news.
Second, Facebook and Google lack meaningful competition in their primary spheres of social media and online search, respectively. As a result, their algorithms have an outsized impact on the flow of information, and fake news purveyors can deceive hundreds of millions of users simply by gaming a single algorithm. Weak competition in social media platforms means Facebook can tailor its news feed to serve its financial interests, prioritizing engagement on the platform over veracity. Lack of competition in online search means Google does not face competitive pressure to drastically change its algorithm to stem the spread of fake news. Consumers and advertisers unhappy about the spread of fake news on Facebook and Google, or publishers dissatisfied with the two platforms’ terms of dealing, have limited options for taking their business elsewhere. If eliminating fake news were necessary to keep users, advertisers and content creators from defecting to competitive platforms – if profits were at stake – Facebook and Google would find a way to truly fix the problem.3
Facebook and Google, like all corporations, have fiduciary duties to maximize profits for their shareholders. Distinguishing content based on quality or veracity runs counter to the platforms’ profit motives because any content they cannot advertise around is a lost revenue opportunity. And because fake news is more likely to gain attention and foster engagement, it better serves both platforms’ advertising-based business models. The problem is not that Facebook and Google are bad corporations, as corporations are designed to place profits over socio-political concerns, even democracy. The problem rather is that the normal checks and balances of a free, competitive market do not constrain Facebook and Google from pursuing profits.
The full article is at https://www.competitionpolicyinternational.com/wp-content/uploads/2017/12/CPI-Hubbard.pdf
Excerpt:
I. INTRODUCTION
The public and political outcry over fake news — and what to do about it — has generated abundant commentary. Yet few commentators have focused on how concentrated market power in online platforms contributes to the crisis. This essay expands on my view, originally set forth in Washington Bytes in January, that fake news is, in part, an antitrust problem.2
Fake news can be challenging to define. In this essay, fake news means stories that are simply made up for profit or propaganda without using trained journalists, conducting research or expending resources. Articles written according to journalistic practices from a particular political perspective or containing factual errors do not meet the definition of fake news used here.
This essay will explore two primary reasons why fake news is an antitrust problem.
First, Facebook and Google compete against legitimate news publishers for user attention, data and advertising dollars. The tech platforms’ business incentives run counter to the interests of legitimate news publishers, and the platforms pull technological levers that harm publishers’ business models and advantage their own. Such levers keep users within Facebook’s and Google’s digital walls and reduce traffic to news publishers’ properties, depriving publishers of the revenue essential to fund legitimate journalism and to counter fake news.
Second, Facebook and Google lack meaningful competition in their primary spheres of social media and online search, respectively. As a result, their algorithms have an outsized impact on the flow of information, and fake news purveyors can deceive hundreds of millions of users simply by gaming a single algorithm. Weak competition in social media platforms means Facebook can tailor its news feed to serve its financial interests, prioritizing engagement on the platform over veracity. Lack of competition in online search means Google does not face competitive pressure to drastically change its algorithm to stem the spread of fake news. Consumers and advertisers unhappy about the spread of fake news on Facebook and Google, or publishers dissatisfied with the two platforms’ terms of dealing, have limited options for taking their business elsewhere. If eliminating fake news were necessary to keep users, advertisers and content creators from defecting to competitive platforms – if profits were at stake – Facebook and Google would find a way to truly fix the problem.3
Facebook and Google, like all corporations, have fiduciary duties to maximize profits for their shareholders. Distinguishing content based on quality or veracity runs counter to the platforms’ profit motives because any content they cannot advertise around is a lost revenue opportunity. And because fake news is more likely to gain attention and foster engagement, it better serves both platforms’ advertising-based business models. The problem is not that Facebook and Google are bad corporations, as corporations are designed to place profits over socio-political concerns, even democracy. The problem rather is that the normal checks and balances of a free, competitive market do not constrain Facebook and Google from pursuing profits.
The full article is at https://www.competitionpolicyinternational.com/wp-content/uploads/2017/12/CPI-Hubbard.pdf
Industry complaints about Intel chips followed by class action filings
Meltdown and Spectre exploit an architectural flaw with the way processors handle speculative execution, a technique that most modern CPUs use to increase speed. Both classes of vulnerability could expose protected kernel memory, potentially allowing hackers to gain access to the inner workings of any unpatched system or penetrate security measures. The flaw can’t be fixed with a microcode update, meaning that developers for major OSes and platforms have had to devise workarounds that could seriously hurt performance.
In an email to a Linux list this week, Torvalds questioned the competence of Intel engineers and suggested that they were knowingly selling flawed products to the public. He also seemed particularly irritated that users could expect a five to 30 percent projected performance hit from the fixes.
“I think somebody inside of Intel needs to really take a long hard look at their CPU’s, and actually admit that they have issues instead of writing PR blurbs that say that everything works as designed,” Torvalds wrote. “.. and that really means that all these mitigation patches should be written with ‘not all CPU’s are crap’ in mind.”
“Or is Intel basically saying ‘we are committed to selling you shit forever and ever, and never fixing anything’?” he added. “Because if that’s the case, maybe we should start looking towards the ARM64 people more.”
“Please talk to management,” Torvalds concluded. “Because I really see exactly two possibibilities:—Intel never intends to fix anything OR—these workarounds should have a way to disable them. Which of the two is it?”
As Business Insider noted, as the person in charge of the open-source Linux kernel, Torvalds may be freer to share his opinion on Intel’s explanation for the issue than engineers working for the company’s business partners. Intel is currently being hit by a series of class action lawsuits citing the flaws and its handling of the security disclosure.
From: https://gizmodo.com/linus-torvalds-is-not-happy-about-intels-meltdown-and-s-1821845198
A copy of a California class action filing complaining about recent Intel CPU chip defects is here: https://images.law.com/contrib/content/uploads/documents/403/8058/GarciavIntel.pdf
Meltdown and Spectre exploit an architectural flaw with the way processors handle speculative execution, a technique that most modern CPUs use to increase speed. Both classes of vulnerability could expose protected kernel memory, potentially allowing hackers to gain access to the inner workings of any unpatched system or penetrate security measures. The flaw can’t be fixed with a microcode update, meaning that developers for major OSes and platforms have had to devise workarounds that could seriously hurt performance.
In an email to a Linux list this week, Torvalds questioned the competence of Intel engineers and suggested that they were knowingly selling flawed products to the public. He also seemed particularly irritated that users could expect a five to 30 percent projected performance hit from the fixes.
“I think somebody inside of Intel needs to really take a long hard look at their CPU’s, and actually admit that they have issues instead of writing PR blurbs that say that everything works as designed,” Torvalds wrote. “.. and that really means that all these mitigation patches should be written with ‘not all CPU’s are crap’ in mind.”
“Or is Intel basically saying ‘we are committed to selling you shit forever and ever, and never fixing anything’?” he added. “Because if that’s the case, maybe we should start looking towards the ARM64 people more.”
“Please talk to management,” Torvalds concluded. “Because I really see exactly two possibibilities:—Intel never intends to fix anything OR—these workarounds should have a way to disable them. Which of the two is it?”
As Business Insider noted, as the person in charge of the open-source Linux kernel, Torvalds may be freer to share his opinion on Intel’s explanation for the issue than engineers working for the company’s business partners. Intel is currently being hit by a series of class action lawsuits citing the flaws and its handling of the security disclosure.
From: https://gizmodo.com/linus-torvalds-is-not-happy-about-intels-meltdown-and-s-1821845198
A copy of a California class action filing complaining about recent Intel CPU chip defects is here: https://images.law.com/contrib/content/uploads/documents/403/8058/GarciavIntel.pdf
- Internet Association: Statement Announcing Intention To Intervene In Judicial Action To Preserve Net Neutrality Protections
Washington, DC -- Internet Association President & CEO Michael Beckerman issued the following statement on the publication of the “Restoring Internet Freedom Order” that will gut net neutrality protections for consumers, startups, and other stakeholders:
“The final version of Chairman Pai’s rule, as expected, dismantles popular net neutrality protections for consumers. This rule defies the will of a bipartisan majority of Americans and fails to preserve a free and open internet. IA intends to act as an intervenor in judicial action against this order and, along with our member companies, will continue our push to restore strong, enforceable net neutrality protections through a legislative solution.”
A longer statement of the Internet Association position is here:
https://internetassociation.org/reports/an-empirical-investigation-of-the-impacts-of-net-neutrality/
A judge has given preliminary approval of a class-action settlement with Southwest Airlines for $15 million and “significant cooperation” in proving a cartel case against co-defendants American, Delta and United airlines
The Court order is here, through ABA Journal: www.abajournal.com/images/main_images/Preliminary_Settlement.pdf
The lawsuit alleges that the nation’s top four carriers “participated in an unlawful conspiracy” to artificially hold down passenger capacity to increase fare prices.
Southwest was the first defendant to settle in this case, which was consolidated from 103 actions from around the country, according to a court order from December 2015, and is being heard in the U.S. District Court for the District of Columbia.
The Court order is here, through ABA Journal: www.abajournal.com/images/main_images/Preliminary_Settlement.pdf
The lawsuit alleges that the nation’s top four carriers “participated in an unlawful conspiracy” to artificially hold down passenger capacity to increase fare prices.
Southwest was the first defendant to settle in this case, which was consolidated from 103 actions from around the country, according to a court order from December 2015, and is being heard in the U.S. District Court for the District of Columbia.
From Public Citizen Consumer Law & Policy Blog:
Bank Trade Group Fears Industry Will Capture CFPB
Posted: 05 Jan 2018 11:22 AM PST
by Jeff Sovern
Camden R. Fine is the president and CEO of the Independent Community Bankers of America, a trade group for community bankers. The American Banker recently published his op-ed, Don’t let a credit union regulator run the CFPB, opposing the candidacy of National Credit Union Administration Chairman J. Mark McWatters to head the CFPB. Here's an excerpt:
[A]mid concerns that the CFPB lacks sufficient checks on its regulatory authority, the NCUA’s willingness to flout Congress in its rulemakings makes its chairman suspect for leading the bureau. McWatters and others at the NCUA have been strident advocates for expanding the credit union charter far beyond what Congress intended when it established the industry in the 1930s.
* * *
The CFPB should not be led by the head of an agency that has acted as a cheerleader for the industry under its oversight.
* * *
if Washington is willing to settle for single-director governance at the CFPB, then let’s advance a director with meaningful experience in the full range of regulations for which the CFPB is responsible. And let’s choose a leader not with a track record of cheerleading for the industry he is charged with overseeing and regulating, but rather a commitment to the laws by which our agencies are established by Congress.
Mr. Fine should be commended for pointing out that regulatory capture is a problem, especially when it comes to the CFPB (Mr. Fine's position appears to be rooted in the fact that credit unions compete with community banks). Regulatory capture has been endemic among banking regulators, most notably at the OCC. Indeed, it was the fear of regulatory capture that prompted Congress to structure the CFPB the way it did. It would be great if the next CFPB director, whomever that person may be, avoids regulatory capture, not only by credit unions, but also by banks and other financial institutions. One place the president could look for a director who would be unlikely to be captured by the industry, of course, would be among consumer advocates. Yes, I know, but a person's reach should exceed his grasp, or what's a heaven for?
Bank Trade Group Fears Industry Will Capture CFPB
Posted: 05 Jan 2018 11:22 AM PST
by Jeff Sovern
Camden R. Fine is the president and CEO of the Independent Community Bankers of America, a trade group for community bankers. The American Banker recently published his op-ed, Don’t let a credit union regulator run the CFPB, opposing the candidacy of National Credit Union Administration Chairman J. Mark McWatters to head the CFPB. Here's an excerpt:
[A]mid concerns that the CFPB lacks sufficient checks on its regulatory authority, the NCUA’s willingness to flout Congress in its rulemakings makes its chairman suspect for leading the bureau. McWatters and others at the NCUA have been strident advocates for expanding the credit union charter far beyond what Congress intended when it established the industry in the 1930s.
* * *
The CFPB should not be led by the head of an agency that has acted as a cheerleader for the industry under its oversight.
* * *
if Washington is willing to settle for single-director governance at the CFPB, then let’s advance a director with meaningful experience in the full range of regulations for which the CFPB is responsible. And let’s choose a leader not with a track record of cheerleading for the industry he is charged with overseeing and regulating, but rather a commitment to the laws by which our agencies are established by Congress.
Mr. Fine should be commended for pointing out that regulatory capture is a problem, especially when it comes to the CFPB (Mr. Fine's position appears to be rooted in the fact that credit unions compete with community banks). Regulatory capture has been endemic among banking regulators, most notably at the OCC. Indeed, it was the fear of regulatory capture that prompted Congress to structure the CFPB the way it did. It would be great if the next CFPB director, whomever that person may be, avoids regulatory capture, not only by credit unions, but also by banks and other financial institutions. One place the president could look for a director who would be unlikely to be captured by the industry, of course, would be among consumer advocates. Yes, I know, but a person's reach should exceed his grasp, or what's a heaven for?
The American Law Institute is engaged in a project to draft a Restatement of Consumer Contracts that takes arguably limited views related to unconscionability
From an advocacy letter to the ALI signed by a number of consumer groups, including DCCRC:
We are writing to express our deep concerns regarding the current Council Draft of this proposed Restatement. If followed by courts, it would tilt the marketplace dramatically toward businesses at the expense of consumers. Instead of respecting precedent, it undermines the well-accepted factors that courts and legislatures have developed to determine whether contract terms are procedurally unconscionable, and replaces them with a theory spun out in a law review article that cites not a single judicial decision in its support.
We write as organizations that work to protect consumers from unfairness in the marketplace every day. We have a keen on-the-ground feel for how some businesses treat consumers fairly and reasonably and how other businesses do not. We are also painfully aware of the dearth of legal resources available to consumers to defend themselves from mistreatment by businesses. The combined legal resources available to assist consumers are very limited and are able to help very few people.
We have a number of concerns about the assent, addition of new terms, and modification of terms provisions (Sections 2-4). These sections take an extremely loose view of the terms to which the consumer has agreed. Moreover, the Draft would allow a business to insert new terms after the fact as long as the consumer was told beforehand that it might do so, and the consumer has an opportunity to review the new terms and either continue under the existing terms or terminate the contract. Notably, the consumer is not given the same right to impose new terms upon the business.
The Draft justifies these lenient standards for courts to construct consumer assent on the ground that the doctrines of unconscionability and deception will act as a counterbalance to predatory terms, abuse, and overreaching by businesses. The entire premise of this proposed Restatement is that the unconscionability and deception doctrines are essential to “police” the market in light of the permissive assent rules found throughout. However, Sections 5 and 6 of the Draft undermine rather than strengthen these doctrines.
There are four primary problems with the Draft’s approach: (1) the definitions of procedural and substantive unconscionability are too restrictive; (2) the Draft fails to state that unconscionability and deception can be raised affirmatively to challenge the specific terms or the contract as a whole; (3) the Draft severely limits the remedies available once a court finds a term or contract to be unconscionable or that the business engaged in deception; and 4) the Draft places the burden of proof on consumers even though only businesses have access to most of that proof. In sum, the proposed Restatement embodies an expressly preferential treatment of businesses over consumers.
I. The Draft Undermines the Critically Important Doctrine of Unconscionability
Restatements consist of three parts: the “black letter,” which is intended to be the essential law on the subject; the Comments, which are regarded as an integral part of the section to which they belong and are consulted in order to understand the background and rationale of the black letter and the details of its application; and the Reporters’ Notes, which are regarded as the product of the Reporters (not the Institute) and discuss the legal and other sources they relied upon in formulating the black letter and the comments.
The black letter of the current Draft states that a term is procedurally unconscionable—i.e. that consumer’s agreement to the term was obtained in an unconscionable way—when it causes unfair surprise or results from the lack of meaningful choice of the part of the consumer.
Section 5(b)(2).
We do not object to this general statement. However, the Restatement also proposes to abandon—or drastically recast—the well-accepted set of factors that courts use to determine procedural unconscionability: (1) the consumer’s lack of financial sophistication (including cognitive biases); (2) the business’s exploitation of consumer disadvantages; (3) unequal bargaining power; (4) the use of incomprehensible language; (5) high pressure tactics and misrepresentations; and (5) whether economic, social, or practical duress compelled a party to execute the contract.
Comment 6 and the Reporters’ Notes seek to replace this set of factors with a new concept, “salience.”
The Reporters’ Notes define a contract term as salient “if it can affect the contracting decisions of a substantial number of consumers,” and then take the remarkable position that, if a term can affect the contracting decisions of a substantial number of consumers, then the market will police the term and the courts need not evaluate whether it was imposed on the consumer in an unconscionable way. The Reporters, however, do not cite any judicial decisions that define or apply the concept of “salience” in the unconscionability context, and there is not one reported or unreported decision on Westlaw that takes this approach. Instead, the Reporters’ Comments appear to rely entirely on a law review article that spins out this theory, again without citing any judicial decisions that support it.
This attempt to inject an entirely new approach contravenes the methodology that ALI claims to follow of ascertaining the majority and minority rules, determining which rule is the better one, and providing the rationale for choosing it. But of greater concern is its unfounded reliance on the marketplace to prevent overreaching and unfairness toward consumers. Recent history, including the vast wave of irresponsible lending that caused the mortgage meltdown ten years ago, demonstrates that overreaching and unfairness flourish in the marketplace.
The Draft also expresses an overly restrictive standard for whether a contract term is substantively unconscionable. While Section 5(b)(1) states that a term is substantively unconscionable if it is “fundamentally unfair” or “unreasonably one-sided,” the Comments state that: “the doctrine is to be used only when the one-sidedness of a term in the contract is extreme.” This test sets an overly high standard. Many fine print terms in consumer contracts today are unreasonable and unfair, but might not be viewed as “unconscionable” under this definition. For example, a fine print $35 charge might not seem “fundamentally” unfair in isolation. But when a $35 charge is repeatedly imposed, is high when compared to the cost of the contract, exceeds the cost to the business that the charge is intended to offset, or is imposed repeatedly, the fee should be declared unreasonable and unfair even though a court might not find it “extreme.”
Moreover, non-mutual enforcement clauses—clauses that deny the consumer the right to a remedy that the business is allowed to invoke—were not added to the list of contract terms that are prima facie unconscionable in the text of Section 5. It is common for businesses to place non-mutual clauses in consumer contracts that allow the business to sue the consumer in court, but relegate the consumer to mandatory binding arbitration. Although court decisions are split on whether “one-sided” or “non-mutual” enforcement clauses are unconscionable in the arbitration context, the better rule is that they are prima facie substantively unconscionable. The role of a Restatement is to “propose the better rule and provide the rationale for choosing it.” The Draft’s failure to apply the presumption of substantive unconscionability to such clauses, whether or not they involve mandatory arbitration, also undermines the critical role that the unconscionability doctrine is supposed to contribute to the success of the Restatement’s approach.
II. The Draft Cripples the Enforcement of Unconscionability and Deception
Our second concern about the Draft’s approach to the unconscionability doctrine is the failure to provide for robust consumer enforcement. The unconscionability doctrine will provide little or no counterweight to the permissive assent rules if consumers can raise it only as defense to a lawsuit to enforce the contract. Traditionally, common law unconscionability could be raised only as a defense to an action brought against a consumer. A court could permit a suit seeking a declaration that a term or the contract is unconscionable if the suit does not seek damages or other affirmative relief. The black letter of this Draft does not address the limited enforcement options available to consumers. Neither the Comments nor Reporters’ Notes discuss any judicial rulings on this point. Enforcement of the doctrine of deception suffers the same fate.
In the context of state and federal statutory protections, optimal policing of marketplace behavior occurs when state, federal, and private attorneys are acting as cops on the beat. In the context of the common law, however, there is little or no governmental enforcement, leaving consumers and their attorneys to bear this burden. Consumers should not be put in the position of having to default on the contract and subject themselves to negative credit reporting in order to raise unconscionability or deception. Moreover, the threat of enforcement is insignificant and will not significantly affect market behavior if only a small percentage of consumers (those who default and are sued) can raise the issue. Businesses will be well aware that they have little to fear from consumers.
In light of these practical and legal restrictions to private enforcement found in this Draft, the pivotal roles that unconscionability and deception are called upon to play in policing the marketplace are severely undermined. To remedy this, the black letter of Sections 5 and 6 must include a provision stating that a consumer can raise unconscionability affirmatively and defensively by seeking a declaration that the contract is void in part or in its entirety, providing for restitution for the costs incurred by virtue of the void provisions, and allowing class action relief.
The current Draft addresses this critical question just in Comment 12 to Section 5 and Comment 7 to Section 6, not in the black letter. And the two Comments are entirely inadequate. They reject the use of these doctrines affirmatively except in the limited circumstance where the consumer paid an unconscionable fee and seeks to recover it.
III. The Draft Severely Limits Remedies Related to Unconscionability and Deception
The only remedies available in this Draft in the event of a finding of unconscionability or deception are found in Section 9. This Section instructs the courts to refuse to enforce the offending term or the contract or replace the offending provisions with other terms. These provisions, without more, do not realistically deter business overreaching at contract inception or police the marketplace after the fact. These remedies are especially feeble when considered in conjunction with the lack of affirmative enforcement, the burdens of proof imposed on consumers, and silence regarding standards of proof.
IV. The Drafts Fails to Address Burdens of Proof and Standards of Proof
The allocation of burdens of proof and the level of evidence the consumer must present to prove unconscionability and deception also reduce the effectiveness of the roles that these doctrines are supposed to play. According to the Draft, the consumer bears the initial burden of proving the elements of unconscionability. Businesses, however, have access to nearly all of the relevant evidence. For example, only businesses are “recording this call to for quality assurance,” and therefore control the recordings which would show that telemarketers pressure and deceive consumers into agreeing to bad deals. Only businesses draft the contracts and only they know “the commercial setting, purpose, and effect” of the terms they impose on consumers.
Regarding procedural unconscionability related to a contract term, the Draft takes the position that a consumer must show that the term did not affect the contracting decisions of a substantial group of consumers, i.e., the term is not salient. To meet this burden a consumer would have to commission a study of consumers—an unrealistic task for a consumer to perform given the cost involved. Such a study lacks validity in any event because, if conducted by consumers once unconscionability has become an issue, the study would take place well after consummation of the contract, rather than at the time of contracting. A prior draft added a Comment to Section 5 that placed the burden on the business to prove that the standard contract terms were presented in a way that affected consumers’ contracting decisions to rebut a finding of procedural unconscionability. It also addressed burdens related to substantive unconscionability. Council Draft No. 4 removed that Comment, taking a big step backwards.
Neither Section 5 nor Section 6 address the standard of proof a court should apply in cases raising these claims. In both contexts, the black letter should state that the standard of proof is preponderance of the evidence. The application of a stricter standard reduces the deterrence and policing role of these doctrines. This is especially so where the remedy is limited to unenforceability and replacement with a substitute term and deterrence damages are not available for business deception, as would be the case with common law fraud.
IV. Conclusion
Unfortunately, this Draft unnecessarily restricts the scope of procedural and substantive unconscionability, fails to provide that unconscionability and deception can be raised affirmatively, circumscribes the remedies available for violations of these doctrines well beyond what the general common law otherwise provides, and fails to address burdens and standards of proof. As a result, the Restatement collapses under the weight of “freedom to contract” due to the lack of any meaningful consumer protections.
For these reasons, we urge the Council to not approve this Draft. Thank you for your consideration.
Editor's note: The ALI proposal, if followed by the courts, would undermine protections of local law, including the law of the District of Columbia. We will explore articulating that concern in greater detail. DR
From an advocacy letter to the ALI signed by a number of consumer groups, including DCCRC:
We are writing to express our deep concerns regarding the current Council Draft of this proposed Restatement. If followed by courts, it would tilt the marketplace dramatically toward businesses at the expense of consumers. Instead of respecting precedent, it undermines the well-accepted factors that courts and legislatures have developed to determine whether contract terms are procedurally unconscionable, and replaces them with a theory spun out in a law review article that cites not a single judicial decision in its support.
We write as organizations that work to protect consumers from unfairness in the marketplace every day. We have a keen on-the-ground feel for how some businesses treat consumers fairly and reasonably and how other businesses do not. We are also painfully aware of the dearth of legal resources available to consumers to defend themselves from mistreatment by businesses. The combined legal resources available to assist consumers are very limited and are able to help very few people.
We have a number of concerns about the assent, addition of new terms, and modification of terms provisions (Sections 2-4). These sections take an extremely loose view of the terms to which the consumer has agreed. Moreover, the Draft would allow a business to insert new terms after the fact as long as the consumer was told beforehand that it might do so, and the consumer has an opportunity to review the new terms and either continue under the existing terms or terminate the contract. Notably, the consumer is not given the same right to impose new terms upon the business.
The Draft justifies these lenient standards for courts to construct consumer assent on the ground that the doctrines of unconscionability and deception will act as a counterbalance to predatory terms, abuse, and overreaching by businesses. The entire premise of this proposed Restatement is that the unconscionability and deception doctrines are essential to “police” the market in light of the permissive assent rules found throughout. However, Sections 5 and 6 of the Draft undermine rather than strengthen these doctrines.
There are four primary problems with the Draft’s approach: (1) the definitions of procedural and substantive unconscionability are too restrictive; (2) the Draft fails to state that unconscionability and deception can be raised affirmatively to challenge the specific terms or the contract as a whole; (3) the Draft severely limits the remedies available once a court finds a term or contract to be unconscionable or that the business engaged in deception; and 4) the Draft places the burden of proof on consumers even though only businesses have access to most of that proof. In sum, the proposed Restatement embodies an expressly preferential treatment of businesses over consumers.
I. The Draft Undermines the Critically Important Doctrine of Unconscionability
Restatements consist of three parts: the “black letter,” which is intended to be the essential law on the subject; the Comments, which are regarded as an integral part of the section to which they belong and are consulted in order to understand the background and rationale of the black letter and the details of its application; and the Reporters’ Notes, which are regarded as the product of the Reporters (not the Institute) and discuss the legal and other sources they relied upon in formulating the black letter and the comments.
The black letter of the current Draft states that a term is procedurally unconscionable—i.e. that consumer’s agreement to the term was obtained in an unconscionable way—when it causes unfair surprise or results from the lack of meaningful choice of the part of the consumer.
Section 5(b)(2).
We do not object to this general statement. However, the Restatement also proposes to abandon—or drastically recast—the well-accepted set of factors that courts use to determine procedural unconscionability: (1) the consumer’s lack of financial sophistication (including cognitive biases); (2) the business’s exploitation of consumer disadvantages; (3) unequal bargaining power; (4) the use of incomprehensible language; (5) high pressure tactics and misrepresentations; and (5) whether economic, social, or practical duress compelled a party to execute the contract.
Comment 6 and the Reporters’ Notes seek to replace this set of factors with a new concept, “salience.”
The Reporters’ Notes define a contract term as salient “if it can affect the contracting decisions of a substantial number of consumers,” and then take the remarkable position that, if a term can affect the contracting decisions of a substantial number of consumers, then the market will police the term and the courts need not evaluate whether it was imposed on the consumer in an unconscionable way. The Reporters, however, do not cite any judicial decisions that define or apply the concept of “salience” in the unconscionability context, and there is not one reported or unreported decision on Westlaw that takes this approach. Instead, the Reporters’ Comments appear to rely entirely on a law review article that spins out this theory, again without citing any judicial decisions that support it.
This attempt to inject an entirely new approach contravenes the methodology that ALI claims to follow of ascertaining the majority and minority rules, determining which rule is the better one, and providing the rationale for choosing it. But of greater concern is its unfounded reliance on the marketplace to prevent overreaching and unfairness toward consumers. Recent history, including the vast wave of irresponsible lending that caused the mortgage meltdown ten years ago, demonstrates that overreaching and unfairness flourish in the marketplace.
The Draft also expresses an overly restrictive standard for whether a contract term is substantively unconscionable. While Section 5(b)(1) states that a term is substantively unconscionable if it is “fundamentally unfair” or “unreasonably one-sided,” the Comments state that: “the doctrine is to be used only when the one-sidedness of a term in the contract is extreme.” This test sets an overly high standard. Many fine print terms in consumer contracts today are unreasonable and unfair, but might not be viewed as “unconscionable” under this definition. For example, a fine print $35 charge might not seem “fundamentally” unfair in isolation. But when a $35 charge is repeatedly imposed, is high when compared to the cost of the contract, exceeds the cost to the business that the charge is intended to offset, or is imposed repeatedly, the fee should be declared unreasonable and unfair even though a court might not find it “extreme.”
Moreover, non-mutual enforcement clauses—clauses that deny the consumer the right to a remedy that the business is allowed to invoke—were not added to the list of contract terms that are prima facie unconscionable in the text of Section 5. It is common for businesses to place non-mutual clauses in consumer contracts that allow the business to sue the consumer in court, but relegate the consumer to mandatory binding arbitration. Although court decisions are split on whether “one-sided” or “non-mutual” enforcement clauses are unconscionable in the arbitration context, the better rule is that they are prima facie substantively unconscionable. The role of a Restatement is to “propose the better rule and provide the rationale for choosing it.” The Draft’s failure to apply the presumption of substantive unconscionability to such clauses, whether or not they involve mandatory arbitration, also undermines the critical role that the unconscionability doctrine is supposed to contribute to the success of the Restatement’s approach.
II. The Draft Cripples the Enforcement of Unconscionability and Deception
Our second concern about the Draft’s approach to the unconscionability doctrine is the failure to provide for robust consumer enforcement. The unconscionability doctrine will provide little or no counterweight to the permissive assent rules if consumers can raise it only as defense to a lawsuit to enforce the contract. Traditionally, common law unconscionability could be raised only as a defense to an action brought against a consumer. A court could permit a suit seeking a declaration that a term or the contract is unconscionable if the suit does not seek damages or other affirmative relief. The black letter of this Draft does not address the limited enforcement options available to consumers. Neither the Comments nor Reporters’ Notes discuss any judicial rulings on this point. Enforcement of the doctrine of deception suffers the same fate.
In the context of state and federal statutory protections, optimal policing of marketplace behavior occurs when state, federal, and private attorneys are acting as cops on the beat. In the context of the common law, however, there is little or no governmental enforcement, leaving consumers and their attorneys to bear this burden. Consumers should not be put in the position of having to default on the contract and subject themselves to negative credit reporting in order to raise unconscionability or deception. Moreover, the threat of enforcement is insignificant and will not significantly affect market behavior if only a small percentage of consumers (those who default and are sued) can raise the issue. Businesses will be well aware that they have little to fear from consumers.
In light of these practical and legal restrictions to private enforcement found in this Draft, the pivotal roles that unconscionability and deception are called upon to play in policing the marketplace are severely undermined. To remedy this, the black letter of Sections 5 and 6 must include a provision stating that a consumer can raise unconscionability affirmatively and defensively by seeking a declaration that the contract is void in part or in its entirety, providing for restitution for the costs incurred by virtue of the void provisions, and allowing class action relief.
The current Draft addresses this critical question just in Comment 12 to Section 5 and Comment 7 to Section 6, not in the black letter. And the two Comments are entirely inadequate. They reject the use of these doctrines affirmatively except in the limited circumstance where the consumer paid an unconscionable fee and seeks to recover it.
III. The Draft Severely Limits Remedies Related to Unconscionability and Deception
The only remedies available in this Draft in the event of a finding of unconscionability or deception are found in Section 9. This Section instructs the courts to refuse to enforce the offending term or the contract or replace the offending provisions with other terms. These provisions, without more, do not realistically deter business overreaching at contract inception or police the marketplace after the fact. These remedies are especially feeble when considered in conjunction with the lack of affirmative enforcement, the burdens of proof imposed on consumers, and silence regarding standards of proof.
IV. The Drafts Fails to Address Burdens of Proof and Standards of Proof
The allocation of burdens of proof and the level of evidence the consumer must present to prove unconscionability and deception also reduce the effectiveness of the roles that these doctrines are supposed to play. According to the Draft, the consumer bears the initial burden of proving the elements of unconscionability. Businesses, however, have access to nearly all of the relevant evidence. For example, only businesses are “recording this call to for quality assurance,” and therefore control the recordings which would show that telemarketers pressure and deceive consumers into agreeing to bad deals. Only businesses draft the contracts and only they know “the commercial setting, purpose, and effect” of the terms they impose on consumers.
Regarding procedural unconscionability related to a contract term, the Draft takes the position that a consumer must show that the term did not affect the contracting decisions of a substantial group of consumers, i.e., the term is not salient. To meet this burden a consumer would have to commission a study of consumers—an unrealistic task for a consumer to perform given the cost involved. Such a study lacks validity in any event because, if conducted by consumers once unconscionability has become an issue, the study would take place well after consummation of the contract, rather than at the time of contracting. A prior draft added a Comment to Section 5 that placed the burden on the business to prove that the standard contract terms were presented in a way that affected consumers’ contracting decisions to rebut a finding of procedural unconscionability. It also addressed burdens related to substantive unconscionability. Council Draft No. 4 removed that Comment, taking a big step backwards.
Neither Section 5 nor Section 6 address the standard of proof a court should apply in cases raising these claims. In both contexts, the black letter should state that the standard of proof is preponderance of the evidence. The application of a stricter standard reduces the deterrence and policing role of these doctrines. This is especially so where the remedy is limited to unenforceability and replacement with a substitute term and deterrence damages are not available for business deception, as would be the case with common law fraud.
IV. Conclusion
Unfortunately, this Draft unnecessarily restricts the scope of procedural and substantive unconscionability, fails to provide that unconscionability and deception can be raised affirmatively, circumscribes the remedies available for violations of these doctrines well beyond what the general common law otherwise provides, and fails to address burdens and standards of proof. As a result, the Restatement collapses under the weight of “freedom to contract” due to the lack of any meaningful consumer protections.
For these reasons, we urge the Council to not approve this Draft. Thank you for your consideration.
Editor's note: The ALI proposal, if followed by the courts, would undermine protections of local law, including the law of the District of Columbia. We will explore articulating that concern in greater detail. DR
The Geek explanation of design flaw (what the British media calls a "cockup") in Intel chips
From: https://www.theregister.co.uk/2018/01/02/intel_cpu_design_flaw/
DAR summary: Intel CPU chips have a serious design flaw not shared by rival AMD. Intel CPUs speculatively execute code potentially without performing security checks. AMD CPUs do not --they do not have the Intel design flaw.
The bug is present in modern Intel processors produced in the past decade. It allows normal user programs – from database applications to JavaScript in web browsers – to discern to some extent the layout or contents of protected kernel memory areas.
The fix is to separate the kernel's memory completely from user processes using what's called Kernel Page Table Isolation, or KPTI. At one point, Forcefully Unmap Complete Kernel With Interrupt Trampolines, aka FUCKWIT, was mulled by the Linux kernel team, giving you an idea of how annoying this has been for the developers.
Whenever a running program needs to do anything useful – such as write to a file or open a network connection – it has to temporarily hand control of the processor to the kernel to carry out the job. To make the transition from user mode to kernel mode and back to user mode as fast and efficient as possible, the kernel is present in all processes' virtual memory address spaces, although it is invisible to these programs. When the kernel is needed, the program makes a system call, the processor switches to kernel mode and enters the kernel. When it is done, the CPU is told to switch back to user mode, and reenter the process. While in user mode, the kernel's code and data remains out of sight but present in the process's page tables.
Think of the kernel as God sitting on a cloud, looking down on Earth. It's there, and no normal being can see it, yet they can pray to it.
* * *
In an email to the Linux kernel mailing list over Christmas, AMD said it is not affected. The wording of that message, though, rather gives the game away as to what the underlying cockup is:
AMD processors are not subject to the types of attacks that the kernel page table isolation feature protects against. The AMD microarchitecture does not allow memory references, including speculative references, that access higher privileged data when running in a lesser privileged mode when that access would result in a page fault.
A key word here is "speculative." Modern processors, like Intel's, perform speculative execution. In order to keep their internal pipelines primed with instructions to obey, the CPU cores try their best to guess what code is going to be run next, fetch it, and execute it.
It appears, from what AMD software engineer Tom Lendacky was suggesting above, that Intel's CPUs speculatively execute code potentially without performing security checks.
* * *
Here is the email from AMD:
FromTom Lendacky <>
Subject[PATCH] x86/cpu, x86/pti: Do not enable PTI on AMD processors
DateTue, 26 Dec 2017 23:43:54 -0600· share 0
· share 2k
AMD processors are not subject to the types of attacks that the kernel
page table isolation feature protects against. The AMD microarchitecture
does not allow memory references, including speculative references, that
access higher privileged data when running in a lesser privileged mode
when that access would result in a page fault.
Disable page table isolation by default on AMD processors by not setting
the X86_BUG_CPU_INSECURE feature, which controls whether X86_FEATURE_PTI
is set.
Signed-off-by: Tom Lendacky <thomas.lendacky@amd.com>
---
arch/x86/kernel/cpu/common.c | 4 ++--
1 file changed, 2 insertions(+), 2 deletions(-)
diff --git a/arch/x86/kernel/cpu/common.c b/arch/x86/kernel/cpu/common.c
index c47de4e..7d9e3b0 100644
--- a/arch/x86/kernel/cpu/common.c
+++ b/arch/x86/kernel/cpu/common.c
@@ -923,8 +923,8 @@ static void __init early_identify_cpu(struct cpuinfo_x86 *c)
setup_force_cpu_cap(X86_FEATURE_ALWAYS);
- /* Assume for now that ALL x86 CPUs are insecure */
- setup_force_cpu_bug(X86_BUG_CPU_INSECURE);
+ if (c->x86_vendor != X86_VENDOR_AMD)
+ setup_force_cpu_bug(X86_BUG_CPU_INSECURE);
fpu__init_system(c);
A Message from People for Fairness Coalition, sponsor of a campaign supporting public restrooms in DC:
Support Bill 22-0223 Public Restroom Facilities Installation & Promotion Act of 2017
Let members of the DC City Council know that you are in favor of:
CLEAN, SAFE, AVAILABLE PUBLIC RESTROOMS FOR EVERYONE in needed areas of DC
A DC Council hearing on Bill 22-0223 is scheduled for January 10 2018
Bill 22-0223 was introduced April of this year by Council Members Nadeau, Grosso, Silverman, and R White. It is inspired by lessons learned and best practices from cities in the US and elsewhere that have successfully installed clean, safe, available public restrooms for everyone.
The Bill:
Proposes the establishment of a working group consisting of DC Water, DDOT, DGS, DHS, DPR, and DPW. They will be responsible for:
It is very hard, when you have to go, to find a clean, safe restrooms in Washington DC:
See https://actionnetwork.org/letters/support-bill-22-0223-public-restroom-facilities-installation-promotion-act-of-2017?source=direct_link
Support Bill 22-0223 Public Restroom Facilities Installation & Promotion Act of 2017
Let members of the DC City Council know that you are in favor of:
CLEAN, SAFE, AVAILABLE PUBLIC RESTROOMS FOR EVERYONE in needed areas of DC
A DC Council hearing on Bill 22-0223 is scheduled for January 10 2018
Bill 22-0223 was introduced April of this year by Council Members Nadeau, Grosso, Silverman, and R White. It is inspired by lessons learned and best practices from cities in the US and elsewhere that have successfully installed clean, safe, available public restrooms for everyone.
The Bill:
Proposes the establishment of a working group consisting of DC Water, DDOT, DGS, DHS, DPR, and DPW. They will be responsible for:
- Identifying -- in close consultation with ANCs, BIDs, and community associations -- at least 10 sites in areas of the District with limited access to public restroom facilities where stand alone public restrooms available 24/7 can be installed;
- Authorizing the creation of a subsidy program for private entities to open their restrooms to the public
It is very hard, when you have to go, to find a clean, safe restrooms in Washington DC:
- Only 3 public restrooms open 24/7 and no signs
- Off the Mall, only 5 public restrooms open during the day for limited hours, and there are no signs
- Private facilities are increasingly closing their restrooms to the public.
See https://actionnetwork.org/letters/support-bill-22-0223-public-restroom-facilities-installation-promotion-act-of-2017?source=direct_link
FTC "has gone dark" on fighting hidden resort fees, D.C. attorney general says
An attempted crackdown on hidden hotel charges now faces a potential roadblock in Washington, as a growing number of travelers complain that resort, urban or facility fees can add up to $50 to your bill. Even lower-priced hotels are adding the fees to room charges. One watchdog says the number of hotels charging extra fees has grown 26 percent year-over-year. The size of the fees has risen 12 percent.
District of Columbia Attorney General Karl Racine is helping lead an investigation, along with the attorneys general in 47 states, into a dozen major hotel chains.
"What these lodging companies do is they hook the would-be buyer with a lower rate … then spring the additional charge on them," Racine said.
We found one Las Vegas hotel charging a room rate of $26 with a "resort fee" of $34. One San Francisco hotel adds a $20 "urban facility fee" and another hotel in Arizona listed its resort fee of $50 underneath taxes.
"What's illegal about it is that it misleads consumers as to what the actual price of a hotel room is," Racine said.
Even properties with a certain famous name make money off resort fees. We found three Trump hotels in Florida and Las Vegas charge resort fees of $35, $20 and $24 for a potential $66,000 in charges per day.
The American Hotel and Lodging Association told CBS News, "The hotel industry provides guests full disclosure for mandatory resort fees charged up front" and said the hotels wanted to "provide consumers with the best value by grouping amenity fees into one cost" following the FTC's guidance.
But in January this year, the FTC found charging resort fees separately without first disclosing the total hotel price likely harms consumers. Racine said the FTC was working with the states on their investigation – at least, he said, until the Trump administration came in.
"The FTC in a way has gone dark and I think that to be honest, that has given some confidence to the hospitality industry perhaps they're going to be able to wait out or otherwise evade the efforts of the 47 states because the FTC is no longer our partner," Racine said.
"You're saying the FTC backed off?" Werner asked.
"That is the case," Racine said.
Backed off, he claimed, during a crucial time in negotiations with the hotel chains.
"We were headed towards what I thought would be a pretty fair settlement... The election hit and then all of a sudden, the hospitality industry sort of dug in against our position," Racine said.
We asked the FTC about Racine's allegations. Officials responded with a statement saying the agency was "never a co-plaintiff" with the attorneys general but "has worked with the industry and state AGs to try improve disclosures about resort fees." We asked the Trump Organization and the White House if they had any comments but did not receive any response.
Excerpts are from https://www.cbsnews.com/news/resort-fee-investigation-ftc-allegedly-backing-off-trump-administration/
An attempted crackdown on hidden hotel charges now faces a potential roadblock in Washington, as a growing number of travelers complain that resort, urban or facility fees can add up to $50 to your bill. Even lower-priced hotels are adding the fees to room charges. One watchdog says the number of hotels charging extra fees has grown 26 percent year-over-year. The size of the fees has risen 12 percent.
District of Columbia Attorney General Karl Racine is helping lead an investigation, along with the attorneys general in 47 states, into a dozen major hotel chains.
"What these lodging companies do is they hook the would-be buyer with a lower rate … then spring the additional charge on them," Racine said.
We found one Las Vegas hotel charging a room rate of $26 with a "resort fee" of $34. One San Francisco hotel adds a $20 "urban facility fee" and another hotel in Arizona listed its resort fee of $50 underneath taxes.
"What's illegal about it is that it misleads consumers as to what the actual price of a hotel room is," Racine said.
Even properties with a certain famous name make money off resort fees. We found three Trump hotels in Florida and Las Vegas charge resort fees of $35, $20 and $24 for a potential $66,000 in charges per day.
The American Hotel and Lodging Association told CBS News, "The hotel industry provides guests full disclosure for mandatory resort fees charged up front" and said the hotels wanted to "provide consumers with the best value by grouping amenity fees into one cost" following the FTC's guidance.
But in January this year, the FTC found charging resort fees separately without first disclosing the total hotel price likely harms consumers. Racine said the FTC was working with the states on their investigation – at least, he said, until the Trump administration came in.
"The FTC in a way has gone dark and I think that to be honest, that has given some confidence to the hospitality industry perhaps they're going to be able to wait out or otherwise evade the efforts of the 47 states because the FTC is no longer our partner," Racine said.
"You're saying the FTC backed off?" Werner asked.
"That is the case," Racine said.
Backed off, he claimed, during a crucial time in negotiations with the hotel chains.
"We were headed towards what I thought would be a pretty fair settlement... The election hit and then all of a sudden, the hospitality industry sort of dug in against our position," Racine said.
We asked the FTC about Racine's allegations. Officials responded with a statement saying the agency was "never a co-plaintiff" with the attorneys general but "has worked with the industry and state AGs to try improve disclosures about resort fees." We asked the Trump Organization and the White House if they had any comments but did not receive any response.
Excerpts are from https://www.cbsnews.com/news/resort-fee-investigation-ftc-allegedly-backing-off-trump-administration/
A federal judge on Friday allowed the CMS to move forward with its planned $1.6 billion cut to a federal drug discount program.
U.S. District Judge Rudolph Contreras ruled that the American Hospital Association, Association of American Medical Colleges, America's Essential Hospitals and three hospitals prematurely sued the CMS, since the proposed 340B program cuts have not gone into effect yet.
Starting Jan. 1, providers participating in 340B are scheduled to begin receiving smaller reimbursements for purchased drugs. Under the old calculation, providers received 6% on top of the average sales price of the drug. Starting next week, the CMS will pay approximately $65,000 for a drug that costs $84,000.
The hospital associations sued the HHS in November, shortly after the CMS issued its final rule changing the 340B payment calculations.
The groups said Friday that they will continue to pursue their lawsuit, noting that Contreras did not rule on the merits of the case. They will have the opportunity to refile their complaint after the reimbursement cuts go into effect.
"Making cuts to the program, like those CMS has put forward, will dramatically threaten access to healthcare for many communities with vulnerable patients," AHA president and CEO Rick Pollack said in a statement. "We are disappointed in this decision from the court and will continue our efforts in the courts and the Congress to reverse these significant cuts to the 340B program."
HHS has said it is well within its authority to make the 340B changes, calling the final rule a redistribution of funds to all hospitals that received reimbursement under Medicare's outpatient fee schedule rather than a cut to 340B.
Although Judge Contreras said last week during a hearing that it would be difficult to "unscramble eggs" after the cuts go into effect, he determined that the associations' and hospitals' comments on the proposed rule weren't enough to give them standing to sue. They will have to have to cite specific reimbursement claims in order for a renewed suit to move forward.
"Plaintiffs' failure to present any concrete claim for reimbursement to the (HHS) secretary for a final decision is a fundamental jurisdictional impediment to judicial review," the judge wrote.
From http://www.modernhealthcare.com/article/20171229/NEWS/171229919?utm_source=modernhealthcare&utm_medium=email&utm_content=20171229-NEWS-171229919&utm_campaign=mh-alert
U.S. District Judge Rudolph Contreras ruled that the American Hospital Association, Association of American Medical Colleges, America's Essential Hospitals and three hospitals prematurely sued the CMS, since the proposed 340B program cuts have not gone into effect yet.
Starting Jan. 1, providers participating in 340B are scheduled to begin receiving smaller reimbursements for purchased drugs. Under the old calculation, providers received 6% on top of the average sales price of the drug. Starting next week, the CMS will pay approximately $65,000 for a drug that costs $84,000.
The hospital associations sued the HHS in November, shortly after the CMS issued its final rule changing the 340B payment calculations.
The groups said Friday that they will continue to pursue their lawsuit, noting that Contreras did not rule on the merits of the case. They will have the opportunity to refile their complaint after the reimbursement cuts go into effect.
"Making cuts to the program, like those CMS has put forward, will dramatically threaten access to healthcare for many communities with vulnerable patients," AHA president and CEO Rick Pollack said in a statement. "We are disappointed in this decision from the court and will continue our efforts in the courts and the Congress to reverse these significant cuts to the 340B program."
HHS has said it is well within its authority to make the 340B changes, calling the final rule a redistribution of funds to all hospitals that received reimbursement under Medicare's outpatient fee schedule rather than a cut to 340B.
Although Judge Contreras said last week during a hearing that it would be difficult to "unscramble eggs" after the cuts go into effect, he determined that the associations' and hospitals' comments on the proposed rule weren't enough to give them standing to sue. They will have to have to cite specific reimbursement claims in order for a renewed suit to move forward.
"Plaintiffs' failure to present any concrete claim for reimbursement to the (HHS) secretary for a final decision is a fundamental jurisdictional impediment to judicial review," the judge wrote.
From http://www.modernhealthcare.com/article/20171229/NEWS/171229919?utm_source=modernhealthcare&utm_medium=email&utm_content=20171229-NEWS-171229919&utm_campaign=mh-alert
From the Office of the Inspector General: The Food and Drug Administration's Food-Recall Process Did Not Always Ensure the Safety of the Nation's Food Supply
Prior Office of Inspector General (OIG) reviews focused on U.S. Food and Drug Administration (FDA) oversight of food recalls. Food recalls are the most effective means of protecting public health when a widely consumed food product is either defective or potentially harmful. At the time of those OIG reviews, FDA did not have statutory authority to require food manufacturers to initiate recalls of most foods.
After those reviews, enactment of the FDA Food Safety Modernization Act gave FDA new authority to order a mandatory recall and require firms to recall certain harmful foods. We conducted this review to determine whether FDA is fulfilling its responsibility in safeguarding the Nation's food supply now that it has mandatory recall authority.
Our objective was to determine whether FDA had an efficient and effective food-recall process that ensured the safety of the Nation's food supply. Specifically, we focused on FDA's (1) oversight of firms' initiation of food recalls, (2) monitoring of firm-initiated recalls, and (3) maintenance of food-
Prior Office of Inspector General (OIG) reviews focused on U.S. Food and Drug Administration (FDA) oversight of food recalls. Food recalls are the most effective means of protecting public health when a widely consumed food product is either defective or potentially harmful. At the time of those OIG reviews, FDA did not have statutory authority to require food manufacturers to initiate recalls of most foods.
After those reviews, enactment of the FDA Food Safety Modernization Act gave FDA new authority to order a mandatory recall and require firms to recall certain harmful foods. We conducted this review to determine whether FDA is fulfilling its responsibility in safeguarding the Nation's food supply now that it has mandatory recall authority.
Our objective was to determine whether FDA had an efficient and effective food-recall process that ensured the safety of the Nation's food supply. Specifically, we focused on FDA's (1) oversight of firms' initiation of food recalls, (2) monitoring of firm-initiated recalls, and (3) maintenance of food-