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Our primary focus is on consumer and antitrust issues where local action in support of consumers can be relevant
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How Banks and Private Equity Cash In When Patients Can’t Pay Their Medical Bills
Excerpt from https://khn.org/news/article/how-banks-and-private-equity-cash-in-when-patients-cant-pay-their-medical-bills/?utm_campaign=KFF-2022
As Americans are overwhelmed with medical bills, patient financing is now a multibillion-dollar business, with private equity and big banks lined up to cash in when patients and their families can’t pay for care. By one estimate from research firm IBISWorld, profit margins top 29% in the patient financing industry, seven times what is considered a solid hospital margin.
Hospitals and other providers, which historically put their patients in interest-free payment plans, have welcomed the financing, signing contracts with lenders and enrolling patients in financing plans with rosy promises about convenient bills and easy payments.
For patients, the payment plans often mean something more ominous: yet more debt. Millions of people are paying interest on these plans.
Excerpt from https://khn.org/news/article/how-banks-and-private-equity-cash-in-when-patients-cant-pay-their-medical-bills/?utm_campaign=KFF-2022
As Americans are overwhelmed with medical bills, patient financing is now a multibillion-dollar business, with private equity and big banks lined up to cash in when patients and their families can’t pay for care. By one estimate from research firm IBISWorld, profit margins top 29% in the patient financing industry, seven times what is considered a solid hospital margin.
Hospitals and other providers, which historically put their patients in interest-free payment plans, have welcomed the financing, signing contracts with lenders and enrolling patients in financing plans with rosy promises about convenient bills and easy payments.
For patients, the payment plans often mean something more ominous: yet more debt. Millions of people are paying interest on these plans.
Should national crypto laws look lke New York's?
I watched the recent two hour Brookings session on crypto regulation (still available at https://youtu.be/Q4telYRIwn) and came to the conclusion that New York is ahead of other States and the federal government concerning regulation of crypto companies liked the recently failed FTX. To New York's credit, it did not approve FTX operation in New York, so New York residents were insulated from harm from FTX. That is not to say that possible criminal activity sounding in fraud would have been prevented had FTX been subject to New York's regulatory scheme.
The gist of the story of New York as local regulatory hero is well captured in a story by reporter David Attlee at US national crypto laws should look like New York’s, says state regulator (cointelegraph.com) https://cointelegraph.com/news/us-national-crypto-laws-should-look-like-new-york-s-says-state-regulator:
The superintendent of the New York Department of Financial Services (DFS) joined a nationwide regulatory discussion in the aftermath of the FTX collapse with a fresh take. Adrienne Harris believes that any federal crypto legislation to come should not override state regulatory regimes.
During her speech under the headline “Digital asset regulation: The state perspective,” Harris proposed that lawmakers in Washington take a closer look at the New York state regulatory regime:
“We would like for there to be a framework nationally that looks like what New York has, because I think it is proving itself to be a very robust and sustainable regime.”There is a need for more, not less, regulation, though, Harris added. She highlighted the extensive registration process in New York, which includes the assessment of the company’s organizational structure, the fitness of its executives, financial statements, and Anti-Money Laundering and Know Your Customer regimes as the guarantor of investors’ financial safety.
During the same panel, Harris’s colleague, NYDFS virtual currency chief Peter Marton, reminded the public that FTX has never been granted a BitLicense to operate in the state.
Introduced in 2015, the New York state BitLicense is notoriously difficult to obtain and drew harsh criticism even from New York City Mayor Eric Adams, who has been planning to make NYC the “center of the cryptocurrency industry” for a while.
In June 2022, the DFS released regulatory guidance for United States dollar-backed stablecoins. Per the framework, a stablecoin must be fully backed by reserves as of the end of every business day and the issuer must have a redemption policy approved in advance by the DFS that gives the holder the right to redeem the stablecoin for U.S. dollars.
I watched the recent two hour Brookings session on crypto regulation (still available at https://youtu.be/Q4telYRIwn) and came to the conclusion that New York is ahead of other States and the federal government concerning regulation of crypto companies liked the recently failed FTX. To New York's credit, it did not approve FTX operation in New York, so New York residents were insulated from harm from FTX. That is not to say that possible criminal activity sounding in fraud would have been prevented had FTX been subject to New York's regulatory scheme.
The gist of the story of New York as local regulatory hero is well captured in a story by reporter David Attlee at US national crypto laws should look like New York’s, says state regulator (cointelegraph.com) https://cointelegraph.com/news/us-national-crypto-laws-should-look-like-new-york-s-says-state-regulator:
The superintendent of the New York Department of Financial Services (DFS) joined a nationwide regulatory discussion in the aftermath of the FTX collapse with a fresh take. Adrienne Harris believes that any federal crypto legislation to come should not override state regulatory regimes.
During her speech under the headline “Digital asset regulation: The state perspective,” Harris proposed that lawmakers in Washington take a closer look at the New York state regulatory regime:
“We would like for there to be a framework nationally that looks like what New York has, because I think it is proving itself to be a very robust and sustainable regime.”There is a need for more, not less, regulation, though, Harris added. She highlighted the extensive registration process in New York, which includes the assessment of the company’s organizational structure, the fitness of its executives, financial statements, and Anti-Money Laundering and Know Your Customer regimes as the guarantor of investors’ financial safety.
During the same panel, Harris’s colleague, NYDFS virtual currency chief Peter Marton, reminded the public that FTX has never been granted a BitLicense to operate in the state.
Introduced in 2015, the New York state BitLicense is notoriously difficult to obtain and drew harsh criticism even from New York City Mayor Eric Adams, who has been planning to make NYC the “center of the cryptocurrency industry” for a while.
In June 2022, the DFS released regulatory guidance for United States dollar-backed stablecoins. Per the framework, a stablecoin must be fully backed by reserves as of the end of every business day and the issuer must have a redemption policy approved in advance by the DFS that gives the holder the right to redeem the stablecoin for U.S. dollars.
WSJ: Local prosecutors may charge crypto execs
After years of debate about the need for government regulation of crypto currency to protect consumers, the recent collapse of the FTX exchange has changed part of the discussion of crypto to the possibility of local prosecution of executives. Following is an excerpt from a WSJ article on the point. [FTX, Sam Bankman-Fried Sit in the Crosshairs of U.S. Prosecutors - WSJ https://www.wsj.com/articles/ftx-sam-bankman-fried-sit-in-the-crosshairs-of-u-s-prosecutors-11668398012?mod=hp_lead_pos1 (paywall)]
The Manhattan U.S. attorney’s office is investigating FTX’s collapse, according to people familiar with the matter. One focus for prosecutors, at least initially, is likely to be examining reports that FTX lent customer funds to Alameda Research, a crypto-trading firm that traded on FTX and other exchanges. FTX founder Sam Bankman-Fried, who resigned as chief executive on Friday, also founded and owns Alameda Research.
* * *
Using customer funds for proprietary trading or lending them out—without an investor’s consent—is generally forbidden in the regulated securities and derivatives markets.
* * *
In the unregulated crypto market, no such customer-protection rules exist. Still, using customer funds for a purpose that wasn’t disclosed can constitute fraud or embezzlement, according to former prosecutors and other legal experts.
“What this will boil down to is, were there deliberate lies to convince depositors or investors to part with their assets?” said Samson Enzer, a former Manhattan federal prosecutor. “Were there statements made that were false, and the maker of those statements knew they were false and made with the intent to deceive the investor?”
After years of debate about the need for government regulation of crypto currency to protect consumers, the recent collapse of the FTX exchange has changed part of the discussion of crypto to the possibility of local prosecution of executives. Following is an excerpt from a WSJ article on the point. [FTX, Sam Bankman-Fried Sit in the Crosshairs of U.S. Prosecutors - WSJ https://www.wsj.com/articles/ftx-sam-bankman-fried-sit-in-the-crosshairs-of-u-s-prosecutors-11668398012?mod=hp_lead_pos1 (paywall)]
The Manhattan U.S. attorney’s office is investigating FTX’s collapse, according to people familiar with the matter. One focus for prosecutors, at least initially, is likely to be examining reports that FTX lent customer funds to Alameda Research, a crypto-trading firm that traded on FTX and other exchanges. FTX founder Sam Bankman-Fried, who resigned as chief executive on Friday, also founded and owns Alameda Research.
* * *
Using customer funds for proprietary trading or lending them out—without an investor’s consent—is generally forbidden in the regulated securities and derivatives markets.
* * *
In the unregulated crypto market, no such customer-protection rules exist. Still, using customer funds for a purpose that wasn’t disclosed can constitute fraud or embezzlement, according to former prosecutors and other legal experts.
“What this will boil down to is, were there deliberate lies to convince depositors or investors to part with their assets?” said Samson Enzer, a former Manhattan federal prosecutor. “Were there statements made that were false, and the maker of those statements knew they were false and made with the intent to deceive the investor?”
DC AG Karl Racine sues Albertsons, Kroger over $4 billion dividend payout (cnbc.com)
https://www.cnbc.com/video/2022/11/03/dc-ag-karl-racine-sues-albertsons-kroger-over-4-billion-dividend-payout.html
Karl Racine, attorney general for Washington D.C., joins CNBC’s ‘Squawk Box’ to explain why he is suing to block Albertsons’ $4 billion dividend payout to shareholders ahead of its planned merger with Kroger.
https://www.cnbc.com/video/2022/11/03/dc-ag-karl-racine-sues-albertsons-kroger-over-4-billion-dividend-payout.html
Karl Racine, attorney general for Washington D.C., joins CNBC’s ‘Squawk Box’ to explain why he is suing to block Albertsons’ $4 billion dividend payout to shareholders ahead of its planned merger with Kroger.
DC AG Press release:
Racine Sues Albertsons and Kroger in Federal Court to Halt $4 Billion Cash Handout to Shareholders
November 2, 2022
Lawsuit and Temporary Restraining Order Follow Albertsons’ & Kroger’s’ Refusal to Stop the Private Equity Cash-Grab that Would Hamstring Albertsons’ Ability to Compete & Hurt Jobs of Safeway Employees
WASHINGTON, D.C. – Attorney General Karl A. Racine today announced a new lawsuit in federal court against Albertsons Companies Inc. and The Kroger Co. (Albertsons and Kroger) and is seeking a temporary restraining order (TRO) to stop a nearly $4 billion payout to Albertsons’ shareholders—a payout 57 times greater than the historic dividends Albertsons has provided—until a full review of their proposed merger is complete.
Albertsons owns Safeway, which operates 13 grocery stores across the District and is a critical source of affordable fresh food for District residents. Kroger owns Harris Teeter, also prevalent in the District and a close competitor to Safeway. This lawsuit follows AG Racine’s effort last week in leading a bipartisan group of state attorneys general to call on Albertsons to stop the payout until the proposed merger’s impact on workers, consumers, and competition can be fully assessed. Albertsons and Kroger told the attorneys general they would continue with the payout. On October 14, Albertsons announced the special dividend in direct connection with their merger with Kroger.
“Albertsons’ rush to secure a record-setting payday for its investors threatens District residents’ jobs and access to affordable food and groceries in neighborhoods where no alternatives exist,” said AG Racine. “This would have a particularly devastating impact on struggling people and families with access to fewer grocery stores during a time of historically high inflation. My office will use all our authority to stop this cash grab and protect District workers, families, and consumers.”
District residents depend on close and ready access to fresh food and also depend on employment by these companies. Organizations knowledgeable about labor conditions, including the UFCW local 400 (which represents Safeway workers in the District), have raised substantial concerns that this dividend will make it more difficult for Albertsons to compete for labor by reducing Albertsons’ ability to offer wage increases, pensions, or store improvements.
“As the union of grocery workers in the District of Columbia and beyond, we applaud Attorney General Karl Racine for taking action to halt the brazen attempt to loot Albertsons through an unprecedented special dividend payment,” said Mark Federici, President of United Food & Commercial Workers Local 400. “If allowed to occur, this payout will leave Albertsons largely depleted of liquid assets and put the livelihoods of countless grocery workers in jeopardy. Instead of using their increased profits on exorbitant executive compensation packages and enriching Wall Street investors, Albertsons should invest in the essential workers who make the grocery company successful in the first place – the same workers who risked their lives to keep food on America’s tables throughout the pandemic.”
On October 14, when Albertsons and Kroger announced their proposed merger, Albertsons also announced a “special dividend” to go out to shareholders on November 7 at $6.85 per share—totaling nearly $4 billion, which is more than two years of profits for the company. The “special dividend” risks significantly limiting their ability to operate and properly compete with Kroger and other supermarkets, which could seriously impact consumers, workers, and the grocery industry writ-large before regulators even have the chance to review the deal.
The giveaway to private equity would severely limit Albertsons’ cash-on-hand and deprive it of money needed to compete effectively. In the District, because of the essential and constant need for food, even a short-term reduction in competition in the District’s neighborhoods, especially those where Harris Teeter and Safeway compete, can result in higher prices and reductions in quality that can significantly harm consumers. This impact intensifies with inflation at historically high levels, as consumers’ grocery prices rose 12.2% from last summer to this summer, the biggest jump in over 40 years. Meanwhile, the private equity investors who control the grocery chains will have gained profits nine times larger than their original investments in 2006, if the merger is approved.
OAG’s allegations against Albertsons & Kroger
The Office of the Attorney General (OAG) alleges that the proposed special dividend would violate federal and District antitrust law because:
Last week, AG Racine also announced that OAG is starting a formal investigation into the Albertsons-Kroger proposed merger and its impact on workers and consumers, separate from the lawsuit being filed today. Kroger and Albertsons have more than 710,000 employees in nearly 5,000 stores across 48 states and D.C., reinforcing that all corners of the country would feel the effects of the proposed merger.
This lawsuit was joined by the Office of the Attorney General for the States of California and Illinois and filed under seal in the U.S. District Court for the District of Columbia.
This case was handled by Kathleen Konopka, Senior Advisor to the Attorney General for Competition Policy, Section Chief Adam Gitlin of OAG’s Public Integrity Section, Assistant Attorneys General William Margrabe, Geoffrey Comber, and Elizabeth Arthur, and Paralegals Jesse Zweben and Amanda Bangle.
Read the complaint.https://oag.dc.gov/sites/default/files/2022-11/DC%20et%20al%20v.%20Kroger%20et%20al%20Redacted%20Complaint.pdf
Racine Sues Albertsons and Kroger in Federal Court to Halt $4 Billion Cash Handout to Shareholders
November 2, 2022
Lawsuit and Temporary Restraining Order Follow Albertsons’ & Kroger’s’ Refusal to Stop the Private Equity Cash-Grab that Would Hamstring Albertsons’ Ability to Compete & Hurt Jobs of Safeway Employees
WASHINGTON, D.C. – Attorney General Karl A. Racine today announced a new lawsuit in federal court against Albertsons Companies Inc. and The Kroger Co. (Albertsons and Kroger) and is seeking a temporary restraining order (TRO) to stop a nearly $4 billion payout to Albertsons’ shareholders—a payout 57 times greater than the historic dividends Albertsons has provided—until a full review of their proposed merger is complete.
Albertsons owns Safeway, which operates 13 grocery stores across the District and is a critical source of affordable fresh food for District residents. Kroger owns Harris Teeter, also prevalent in the District and a close competitor to Safeway. This lawsuit follows AG Racine’s effort last week in leading a bipartisan group of state attorneys general to call on Albertsons to stop the payout until the proposed merger’s impact on workers, consumers, and competition can be fully assessed. Albertsons and Kroger told the attorneys general they would continue with the payout. On October 14, Albertsons announced the special dividend in direct connection with their merger with Kroger.
“Albertsons’ rush to secure a record-setting payday for its investors threatens District residents’ jobs and access to affordable food and groceries in neighborhoods where no alternatives exist,” said AG Racine. “This would have a particularly devastating impact on struggling people and families with access to fewer grocery stores during a time of historically high inflation. My office will use all our authority to stop this cash grab and protect District workers, families, and consumers.”
District residents depend on close and ready access to fresh food and also depend on employment by these companies. Organizations knowledgeable about labor conditions, including the UFCW local 400 (which represents Safeway workers in the District), have raised substantial concerns that this dividend will make it more difficult for Albertsons to compete for labor by reducing Albertsons’ ability to offer wage increases, pensions, or store improvements.
“As the union of grocery workers in the District of Columbia and beyond, we applaud Attorney General Karl Racine for taking action to halt the brazen attempt to loot Albertsons through an unprecedented special dividend payment,” said Mark Federici, President of United Food & Commercial Workers Local 400. “If allowed to occur, this payout will leave Albertsons largely depleted of liquid assets and put the livelihoods of countless grocery workers in jeopardy. Instead of using their increased profits on exorbitant executive compensation packages and enriching Wall Street investors, Albertsons should invest in the essential workers who make the grocery company successful in the first place – the same workers who risked their lives to keep food on America’s tables throughout the pandemic.”
On October 14, when Albertsons and Kroger announced their proposed merger, Albertsons also announced a “special dividend” to go out to shareholders on November 7 at $6.85 per share—totaling nearly $4 billion, which is more than two years of profits for the company. The “special dividend” risks significantly limiting their ability to operate and properly compete with Kroger and other supermarkets, which could seriously impact consumers, workers, and the grocery industry writ-large before regulators even have the chance to review the deal.
The giveaway to private equity would severely limit Albertsons’ cash-on-hand and deprive it of money needed to compete effectively. In the District, because of the essential and constant need for food, even a short-term reduction in competition in the District’s neighborhoods, especially those where Harris Teeter and Safeway compete, can result in higher prices and reductions in quality that can significantly harm consumers. This impact intensifies with inflation at historically high levels, as consumers’ grocery prices rose 12.2% from last summer to this summer, the biggest jump in over 40 years. Meanwhile, the private equity investors who control the grocery chains will have gained profits nine times larger than their original investments in 2006, if the merger is approved.
OAG’s allegations against Albertsons & Kroger
The Office of the Attorney General (OAG) alleges that the proposed special dividend would violate federal and District antitrust law because:
- Issuing the payout will render Albertsons less able to compete effectively with other supermarkets, including Kroger, and restrain trade in violation of Section 1 of the Sherman Act and D.C. Code § 28–4502.
- Albertson being strapped for cash will likely hamper its ability to advertise, provide promotions, price competitively, and maintain staffing and staff wages and benefits.
Last week, AG Racine also announced that OAG is starting a formal investigation into the Albertsons-Kroger proposed merger and its impact on workers and consumers, separate from the lawsuit being filed today. Kroger and Albertsons have more than 710,000 employees in nearly 5,000 stores across 48 states and D.C., reinforcing that all corners of the country would feel the effects of the proposed merger.
This lawsuit was joined by the Office of the Attorney General for the States of California and Illinois and filed under seal in the U.S. District Court for the District of Columbia.
This case was handled by Kathleen Konopka, Senior Advisor to the Attorney General for Competition Policy, Section Chief Adam Gitlin of OAG’s Public Integrity Section, Assistant Attorneys General William Margrabe, Geoffrey Comber, and Elizabeth Arthur, and Paralegals Jesse Zweben and Amanda Bangle.
Read the complaint.https://oag.dc.gov/sites/default/files/2022-11/DC%20et%20al%20v.%20Kroger%20et%20al%20Redacted%20Complaint.pdf
The video podcast featuring Kathleen Konopka, Office of the Attorney General for the District of Columbia, is
here:
https://youtu.be/xkGey9x0eq4
Kathleen discusses the affirmative antitrust civil enforcement case work of the DC Attorney General’s Office, both locally and with federal and state partners nationally.
here:
https://youtu.be/xkGey9x0eq4
Kathleen discusses the affirmative antitrust civil enforcement case work of the DC Attorney General’s Office, both locally and with federal and state partners nationally.
Sunshine Act video podcast
The link to the Sunshine Act video podcast is https://youtu.be/U_8QzcHo8cU It is an offering on the Youtube channel DCCRCORG. The podcast is the video recording of the program held on October 27 -- see below
The link to the Sunshine Act video podcast is https://youtu.be/U_8QzcHo8cU It is an offering on the Youtube channel DCCRCORG. The podcast is the video recording of the program held on October 27 -- see below
Canadian Watchdog Probes Price Hikes In Grocery Sector
CPI
-
October 24, 2022
Canada’s Competition Bureau is launching a study of grocery store competition in the country amid a growing outcry over surging prices for food.
While extreme weather, higher input costs, supply chain disruptions and Russia’s invasion of Ukraine may have contributed to higher food inflation, the antitrust watchdog said it wants to better understand whether lack of competition is also at play, according to a statement released Monday. [https://www.canada.ca/en/competition-bureau/news/2022/10/competition-bureau-to-study-competition-in-canadas-grocery-sector.html]
Canada’s food-retail sector is dominated by industry giants such as Loblaw Cos., owned by the billionaire Weston family, Nova Scotia-based Sobeys Inc. and Walmart.
Read also: Canadian Conservatives Vow To Crack Down On Food Price-Fixing [https://www.competitionpolicyinternational.com/canadian-conservatives-vow-to-crack-down-on-food-price-fixing/]
With inflation hovering at four-decade highs, Canadian consumers are facing a massive decline in their purchasing power. Last month, prices for food purchased from stores were up 11% from a year ago, the fastest annual gain since August 1981.
The bureau said more competition could mean “lower prices, more choices, and better convenience for consumers.”
The study will examine three main questions:
SOURCE Detroit News -- original sorce (paywall)
CPI
-
October 24, 2022
Canada’s Competition Bureau is launching a study of grocery store competition in the country amid a growing outcry over surging prices for food.
While extreme weather, higher input costs, supply chain disruptions and Russia’s invasion of Ukraine may have contributed to higher food inflation, the antitrust watchdog said it wants to better understand whether lack of competition is also at play, according to a statement released Monday. [https://www.canada.ca/en/competition-bureau/news/2022/10/competition-bureau-to-study-competition-in-canadas-grocery-sector.html]
Canada’s food-retail sector is dominated by industry giants such as Loblaw Cos., owned by the billionaire Weston family, Nova Scotia-based Sobeys Inc. and Walmart.
Read also: Canadian Conservatives Vow To Crack Down On Food Price-Fixing [https://www.competitionpolicyinternational.com/canadian-conservatives-vow-to-crack-down-on-food-price-fixing/]
With inflation hovering at four-decade highs, Canadian consumers are facing a massive decline in their purchasing power. Last month, prices for food purchased from stores were up 11% from a year ago, the fastest annual gain since August 1981.
The bureau said more competition could mean “lower prices, more choices, and better convenience for consumers.”
The study will examine three main questions:
- To what extent are higher grocery prices a result of changing competitive dynamics?
- What can we learn from steps that other countries have taken to increase competition in the sector?
- How can governments lower barriers to entry and expansion to stimulate competition for consumers?
SOURCE Detroit News -- original sorce (paywall)
The proposed DC Sunshine Act would restrain courts from entering orders restricting public disclosure of a public hazard at issue in civil actions involving defective products or dangerous environmental conditions.
This FREE remote Zoom program will be held October 27, 2022 12:15-1:45 PM To sign up for the program and get a Zoom link, send a request by email to: DCConsumerProgram@zohomail.com with “Sunshine Act Program" in the subject line.
Hosted by the DC Consumer Rights Coalition and co-sponsored by the DC Bar’s Antitrust and Consumer Community. .
This FREE remote Zoom program will be held October 27, 2022 12:15-1:45 PM To sign up for the program and get a Zoom link, send a request by email to: DCConsumerProgram@zohomail.com with “Sunshine Act Program" in the subject line.
Hosted by the DC Consumer Rights Coalition and co-sponsored by the DC Bar’s Antitrust and Consumer Community. .
DCBar DCCRC podcast:
Sunshine for Consumers: How Proposed DC Law can Limit Court Secrecy Orders about Dangerous Products
Speaker: Naomi Claxton
Listen to the episode and subscribe to Brief Encounters at https://anchor.fm/dcbar or wherever you access your podcasts.
Sunshine for Consumers: How Proposed DC Law can Limit Court Secrecy Orders about Dangerous Products
Speaker: Naomi Claxton
Listen to the episode and subscribe to Brief Encounters at https://anchor.fm/dcbar or wherever you access your podcasts.
DC Consumer Rights Coalition Remote Program announcement, Tuesday, October 18, 12:15 PM,
by Zoom
Kathleen Konopka, Deputy Attorney General, Office of the Attorney General for the District of Columbia,
will discuss the affirmative antitrust civil enforcement case work of the DC Attorney General’s Office, both locally and with federal and state partners nationally.
DC Bar Antitrust and Consumer Law Community members will participate and moderate
+++++
The free remote Zoom program will be held on Tuesday, October18, 2022 12:15-1:15 PM (duration 60 minutes)--
Hosted by DC Consumer Rights Coalition and co-sponsored by the DC Bar’s
Antitrust and Consumer Law Community.
.
This is a free program – there is no charge for attendance.
To sign up for the program and get a Zoom link, send a request by email to DCConsumerProgram@zohomail.com with “Konopka program” in the subject line.
by Zoom
Kathleen Konopka, Deputy Attorney General, Office of the Attorney General for the District of Columbia,
will discuss the affirmative antitrust civil enforcement case work of the DC Attorney General’s Office, both locally and with federal and state partners nationally.
DC Bar Antitrust and Consumer Law Community members will participate and moderate
+++++
The free remote Zoom program will be held on Tuesday, October18, 2022 12:15-1:15 PM (duration 60 minutes)--
Hosted by DC Consumer Rights Coalition and co-sponsored by the DC Bar’s
Antitrust and Consumer Law Community.
.
This is a free program – there is no charge for attendance.
To sign up for the program and get a Zoom link, send a request by email to DCConsumerProgram@zohomail.com with “Konopka program” in the subject line.
Fom Business Journals:
Oregon scores $1.1B in Medicaid funding for broader health care programs
Oregon's health care sector will be a proving ground for $1.1 billion in new federal Medicaid funding to address food and housing insecurity, reports Elizabeth Hayes of the Portland Business Journal.
A federal regulator approved a five-year waiver that broadens what Oregon is allowed to cover so it can test programs meant to address a wider range of health-related issues. Massachusetts also got the waiver.
The agreement gives these states more tools to tackle issues related to health care such as food and housing insecurity, said Oregon Health Authority Director Pat Allen.
Oregon scores $1.1B in Medicaid funding for broader health care programs
Oregon's health care sector will be a proving ground for $1.1 billion in new federal Medicaid funding to address food and housing insecurity, reports Elizabeth Hayes of the Portland Business Journal.
A federal regulator approved a five-year waiver that broadens what Oregon is allowed to cover so it can test programs meant to address a wider range of health-related issues. Massachusetts also got the waiver.
The agreement gives these states more tools to tackle issues related to health care such as food and housing insecurity, said Oregon Health Authority Director Pat Allen.
From DMN: California Governor Newsom Signs Bill to Assist Live Music Venues In the State
California Governor Newsom Signs Bill to Assist Live Music Venues (digitalmusicnews.com) https://www.digitalmusicnews.com/2022/09/27/california-bill-live-music-venues-newsom/?utm_source=Daily+Snapshot&utm_campaign=0d7c40ceb5-Daily_Snapshot_September_28_2022&utm_medium=email&utm_term=0_2fb43ebd24-0d7c40ceb5-13024573&mc_cid=0d7c40ceb5&mc_eid=83b90a0323
DAR: An idea for DC and other States?
California Governor Newsom Signs Bill to Assist Live Music Venues (digitalmusicnews.com) https://www.digitalmusicnews.com/2022/09/27/california-bill-live-music-venues-newsom/?utm_source=Daily+Snapshot&utm_campaign=0d7c40ceb5-Daily_Snapshot_September_28_2022&utm_medium=email&utm_term=0_2fb43ebd24-0d7c40ceb5-13024573&mc_cid=0d7c40ceb5&mc_eid=83b90a0323
DAR: An idea for DC and other States?
Statement of Karl A. Racine, Attorney General
Office of the Attorney General for the District of Columbia
As Prepared for Delivery
Before the Committee on Government Operations & Facilities
Councilmember, Robert White, Chairperson
Public Hearing
Bill 24-558 – Stop Discrimination by Algorithms Act of 2021
September 22, 2022
Introduction
Thank you, Chairperson White, Councilmembers, and staff for holding today’s hearing on this pathbreaking digital civil rights legislation, “The Stop Discrimination by Algorithms Act of 2021.”
OAG has expertise in civil rights, consumer protection, and tech accountability
Discrimination and bias can change peoples’ lives—impacting the schools they can go to, the homes they can purchase, the loans they get approved, and the jobs they are hired for. Our country has taken critical steps to help prevent discrimination and support equity and fairness in in these areas, for example by passing laws like the landmark civil rights laws of the 1960s. Building on these federal laws, in the 1970s, the District passed the Human Rights Act, one of the strongest civil rights laws in the country. It outlaws discrimination based on 21 traits, including race, religion, national origin, sexual orientation, gender identity or expression, and disability.
But one of the unfulfilled promises of these civil rights laws is the prevention of discrimination through tools that could not have been predicted nearly fifty years ago: modern technologies like algorithms that many companies and institutions now use to make important decisions. These algorithms—tools that use machine learning and personal data to make predictions about people—can determine who to hire for a new job, how much interest to charge for a loan, and whether to approve a tenant for an apartment. Without laws in place to clearly address discrimination in these tools, they will continue to result in widespread but nearly invisible bias and discrimination against marginalized communities. That is why our legislation is needed—it will modernize our civil rights laws for the 21st century and ensure that discrimination isn’t allowed in any form.
At the Office of Attorney General (OAG), we are committed to enforcing the law to stop discrimination in the District. In 2019, our office established a robust civil rights enforcement practice to investigate and bring lawsuits to challenge discriminatory policies and practices. Our work has included taking action to stop discrimination in areas ranging from denials of fair housing accommodations to denials of services to residents east of the Anacostia River.
OAG has also led the nation in protecting consumers by scrutinizing new technology practices and reining in Big Tech giants. We have sued Amazon and Google for anti-trust violations, and we took Facebook to court for data privacy violations. On top of that, in the last year alone, our Office of Consumer Protection has handled more than 2,500 consumer complaints, returned more than $600,000 to consumers through mediation and more than $5 million through lawsuits, and levied nearly $5 million in penalties against large tech-driven companies like DoorDash, GetARound, and Instacart.
These experiences have equipped us to recognize when we face a new civil rights frontier like the algorithmic discrimination challenge we now confront. Yes, algorithmic systems can expand possibilities for some, but, for many marginalized communities, they unfairly foreclose options for the future. This startling inequity requires us to adapt our laws for the digital age, which is why we are proposing action now, before it’s too late.
Algorithms can perpetuate hidden bias on a massive scale
People often assume that algorithmic decisions are more fair or accurate because they are driven by data and machine-learning. But that isn’t the case. Unfortunately, algorithmic decision-making systems are not always neutral. Instead, they can inherit bias or systemic discrimination that is baked into historical data or that results from a designer’s blind spots and then replicate it at a large scale. When this happens, automated decision algorithms can change lives for the worse and lock people—especially members of marginalized groups—out of important life opportunities.
For instance, housing advertisers on Facebook have targeted housing ads to renters and buyers based on race, religion, sex, and familial status. And tenant-screening companies use algorithms to generate automated tenant scoring reports for nine out of 10 landlords in the U.S., with some scoring reports making conclusory “accept” or “deny” recommendations with little information about how those determinations were made. Yet these scoring algorithms can incorrectly sweep in criminal or eviction records tied to people with similar names and are especially error-prone in Latino communities, which share a smaller set of unique surnames.
Lending algorithms have calculated higher interest rates for borrowers who attended Historically Black Colleges and Universities or Hispanic-Serving Institutions. And in the health care space, an algorithm used by many hospitals and insurers has suggested that healthier white patients should receive more services to manage their health conditions than sicker Black patients. Meanwhile, software that schedules doctors’ appointments disproportionately double-books Black patients, forcing them to sit in the waiting room longer and experience more hurried appointments than other patients.
Employment algorithms can filter applicants by how closely their resumés match a business’s current workers. After being trained on one workplace’s data, one such screening tool suggested that applicants who were named Jared and played lacrosse were the best candidates for the job. Several years ago, Amazon found its AI hiring software downgraded resumés that included the word “women” and candidates from all-women’s colleges. Other interview software uses video analysis that screens out applicants with disabilities.
These are just some of the many examples that scholars, advocates, and legal researchers have uncovered, and you have heard about many others today.
A digital civil rights solution is needed
These problems are unlikely to change without government intervention. That’s because, while some corporate actors are starting to take a closer look at their practices, there is currently no uniform requirement that any kind of bias testing be performed. And without uniform requirements, many companies will not do this critical work. In fact, there is an inherent misalignment of incentives when it comes to companies’ scrutinizing their algorithms for bias. Companies that design or use algorithms don’t always know what factors go into their decision-making processes. And right now, they have little reason to find out. Compounding the problem, it is not always clear to consumers when algorithms are in use or when they have been excluded from an opportunity because of some aspect of their identity. And even when consumers suspect bias in an automated process, they likely lack the technological expertise and access to the algorithm to prove what happened and why. Congressional lawmakers have put forward proposals to promote digital transparency, but none has gained traction yet, and the algorithmic space remains largely unregulated.
So, rather than asking individual residents to take on the near-impossible task of identifying and combatting digital discrimination one instance at a time, we have put forward a comprehensive, public civil rights solution to protect District residents. It sets standards that all companies must follow to ensure that their algorithmic systems are not perpetuating bias in the first place, and it recognizes the responsibility of the government to monitor for problems and remedy them when they arise.
The bill we propose today is an effort to create equity in the 21st century by ensuring that institutions have incentives to prevent automated discrimination and promote transparency about their processes. It was developed over the course of several years in consultation with civil rights and technology experts—including at the District’s own Georgetown University Law Center, federal lawmakers and regulators, and representatives from the business sector. Though it offers the country’s most comprehensive digital civil rights package to date, it is built on a foundation of principles common to many model algorithmic governance documents and frameworks under consideration in Congress and other state governments.
First, the legislation clarifies how the District’s civil rights law applies in the digital space by explicitly outlawing discrimination in targeted advertising and automated decision-making in core areas of life: education, employment, housing, and important services like health care and insurance. Second, the legislation would require companies to do work on the front end to ensure their algorithms are fair and to share information about this work with OAG in the form of annual bias audits. And third, the legislation would increase transparency for consumers by requiring companies to disclose when algorithms are in use and to offer a more robust explanation if an unfavorable decision—like denying a mortgage or charging a higher interest rate—is made and to explain how consumers can correct any misuse of data.
Together, these provisions implement commonsense guardrails to prevent some of the most pernicious harms of discrimination on an automated scale to promote a more equitable future for all of us.
We encourage companies that use these algorithms to support this effort. We met with business sector representatives when drafting this legislation to ensure we incorporated their perspectives. These conversations prompted us to, for instance, reduce duplication of effort by allowing a bias audit submitted to another state or federal government to substitute for the report this legislation requires. We also ensured that the bill applies only to larger entities with at least $15 million in annual revenue or to companies processing a significant amount of data on District residents. This means that most small business should not be affected by this law. The standards we propose here should not be prohibitive for organizations that are following the District’s current civil rights laws. In fact, some of the businesses we spoke to are already undertaking algorithmic bias audits, and they welcome the competitive advantage that this early compliance will give them over entities that have not yet prioritized digital fairness.
Institutions that have yet to begin this work now have an opportunity to be part of the solution, rather fighting to retain the status quo. Sadly, today we’ve heard much of the latter. Many companies fought other civil rights advancements like the Americans with Disabilities Act, and ended up on the wrong side of history. Companies should heed those past mistakes and instead work with us to support this important civil rights bill.
Conclusion
For decades, the District has been a leader in passing and enforcing civil rights laws. We can continue that leadership—both locally and nationally—by enacting this legislation as a model for uniform digital civil rights standards. Considering the number of national businesses that do work here, this legislation will establish a baseline for how companies across the country root out biases in the algorithms they use. And there is no reason that other states should not seek to adopt this same model. In fact, we are proud to have more and more localities, states, and even the White House, joining us on this path already. Let’s continue to be the leaders we are.
My team and I would be happy to answer any questions you may have.
Office of the Attorney General for the District of Columbia
As Prepared for Delivery
Before the Committee on Government Operations & Facilities
Councilmember, Robert White, Chairperson
Public Hearing
Bill 24-558 – Stop Discrimination by Algorithms Act of 2021
September 22, 2022
Introduction
Thank you, Chairperson White, Councilmembers, and staff for holding today’s hearing on this pathbreaking digital civil rights legislation, “The Stop Discrimination by Algorithms Act of 2021.”
OAG has expertise in civil rights, consumer protection, and tech accountability
Discrimination and bias can change peoples’ lives—impacting the schools they can go to, the homes they can purchase, the loans they get approved, and the jobs they are hired for. Our country has taken critical steps to help prevent discrimination and support equity and fairness in in these areas, for example by passing laws like the landmark civil rights laws of the 1960s. Building on these federal laws, in the 1970s, the District passed the Human Rights Act, one of the strongest civil rights laws in the country. It outlaws discrimination based on 21 traits, including race, religion, national origin, sexual orientation, gender identity or expression, and disability.
But one of the unfulfilled promises of these civil rights laws is the prevention of discrimination through tools that could not have been predicted nearly fifty years ago: modern technologies like algorithms that many companies and institutions now use to make important decisions. These algorithms—tools that use machine learning and personal data to make predictions about people—can determine who to hire for a new job, how much interest to charge for a loan, and whether to approve a tenant for an apartment. Without laws in place to clearly address discrimination in these tools, they will continue to result in widespread but nearly invisible bias and discrimination against marginalized communities. That is why our legislation is needed—it will modernize our civil rights laws for the 21st century and ensure that discrimination isn’t allowed in any form.
At the Office of Attorney General (OAG), we are committed to enforcing the law to stop discrimination in the District. In 2019, our office established a robust civil rights enforcement practice to investigate and bring lawsuits to challenge discriminatory policies and practices. Our work has included taking action to stop discrimination in areas ranging from denials of fair housing accommodations to denials of services to residents east of the Anacostia River.
OAG has also led the nation in protecting consumers by scrutinizing new technology practices and reining in Big Tech giants. We have sued Amazon and Google for anti-trust violations, and we took Facebook to court for data privacy violations. On top of that, in the last year alone, our Office of Consumer Protection has handled more than 2,500 consumer complaints, returned more than $600,000 to consumers through mediation and more than $5 million through lawsuits, and levied nearly $5 million in penalties against large tech-driven companies like DoorDash, GetARound, and Instacart.
These experiences have equipped us to recognize when we face a new civil rights frontier like the algorithmic discrimination challenge we now confront. Yes, algorithmic systems can expand possibilities for some, but, for many marginalized communities, they unfairly foreclose options for the future. This startling inequity requires us to adapt our laws for the digital age, which is why we are proposing action now, before it’s too late.
Algorithms can perpetuate hidden bias on a massive scale
People often assume that algorithmic decisions are more fair or accurate because they are driven by data and machine-learning. But that isn’t the case. Unfortunately, algorithmic decision-making systems are not always neutral. Instead, they can inherit bias or systemic discrimination that is baked into historical data or that results from a designer’s blind spots and then replicate it at a large scale. When this happens, automated decision algorithms can change lives for the worse and lock people—especially members of marginalized groups—out of important life opportunities.
For instance, housing advertisers on Facebook have targeted housing ads to renters and buyers based on race, religion, sex, and familial status. And tenant-screening companies use algorithms to generate automated tenant scoring reports for nine out of 10 landlords in the U.S., with some scoring reports making conclusory “accept” or “deny” recommendations with little information about how those determinations were made. Yet these scoring algorithms can incorrectly sweep in criminal or eviction records tied to people with similar names and are especially error-prone in Latino communities, which share a smaller set of unique surnames.
Lending algorithms have calculated higher interest rates for borrowers who attended Historically Black Colleges and Universities or Hispanic-Serving Institutions. And in the health care space, an algorithm used by many hospitals and insurers has suggested that healthier white patients should receive more services to manage their health conditions than sicker Black patients. Meanwhile, software that schedules doctors’ appointments disproportionately double-books Black patients, forcing them to sit in the waiting room longer and experience more hurried appointments than other patients.
Employment algorithms can filter applicants by how closely their resumés match a business’s current workers. After being trained on one workplace’s data, one such screening tool suggested that applicants who were named Jared and played lacrosse were the best candidates for the job. Several years ago, Amazon found its AI hiring software downgraded resumés that included the word “women” and candidates from all-women’s colleges. Other interview software uses video analysis that screens out applicants with disabilities.
These are just some of the many examples that scholars, advocates, and legal researchers have uncovered, and you have heard about many others today.
A digital civil rights solution is needed
These problems are unlikely to change without government intervention. That’s because, while some corporate actors are starting to take a closer look at their practices, there is currently no uniform requirement that any kind of bias testing be performed. And without uniform requirements, many companies will not do this critical work. In fact, there is an inherent misalignment of incentives when it comes to companies’ scrutinizing their algorithms for bias. Companies that design or use algorithms don’t always know what factors go into their decision-making processes. And right now, they have little reason to find out. Compounding the problem, it is not always clear to consumers when algorithms are in use or when they have been excluded from an opportunity because of some aspect of their identity. And even when consumers suspect bias in an automated process, they likely lack the technological expertise and access to the algorithm to prove what happened and why. Congressional lawmakers have put forward proposals to promote digital transparency, but none has gained traction yet, and the algorithmic space remains largely unregulated.
So, rather than asking individual residents to take on the near-impossible task of identifying and combatting digital discrimination one instance at a time, we have put forward a comprehensive, public civil rights solution to protect District residents. It sets standards that all companies must follow to ensure that their algorithmic systems are not perpetuating bias in the first place, and it recognizes the responsibility of the government to monitor for problems and remedy them when they arise.
The bill we propose today is an effort to create equity in the 21st century by ensuring that institutions have incentives to prevent automated discrimination and promote transparency about their processes. It was developed over the course of several years in consultation with civil rights and technology experts—including at the District’s own Georgetown University Law Center, federal lawmakers and regulators, and representatives from the business sector. Though it offers the country’s most comprehensive digital civil rights package to date, it is built on a foundation of principles common to many model algorithmic governance documents and frameworks under consideration in Congress and other state governments.
First, the legislation clarifies how the District’s civil rights law applies in the digital space by explicitly outlawing discrimination in targeted advertising and automated decision-making in core areas of life: education, employment, housing, and important services like health care and insurance. Second, the legislation would require companies to do work on the front end to ensure their algorithms are fair and to share information about this work with OAG in the form of annual bias audits. And third, the legislation would increase transparency for consumers by requiring companies to disclose when algorithms are in use and to offer a more robust explanation if an unfavorable decision—like denying a mortgage or charging a higher interest rate—is made and to explain how consumers can correct any misuse of data.
Together, these provisions implement commonsense guardrails to prevent some of the most pernicious harms of discrimination on an automated scale to promote a more equitable future for all of us.
We encourage companies that use these algorithms to support this effort. We met with business sector representatives when drafting this legislation to ensure we incorporated their perspectives. These conversations prompted us to, for instance, reduce duplication of effort by allowing a bias audit submitted to another state or federal government to substitute for the report this legislation requires. We also ensured that the bill applies only to larger entities with at least $15 million in annual revenue or to companies processing a significant amount of data on District residents. This means that most small business should not be affected by this law. The standards we propose here should not be prohibitive for organizations that are following the District’s current civil rights laws. In fact, some of the businesses we spoke to are already undertaking algorithmic bias audits, and they welcome the competitive advantage that this early compliance will give them over entities that have not yet prioritized digital fairness.
Institutions that have yet to begin this work now have an opportunity to be part of the solution, rather fighting to retain the status quo. Sadly, today we’ve heard much of the latter. Many companies fought other civil rights advancements like the Americans with Disabilities Act, and ended up on the wrong side of history. Companies should heed those past mistakes and instead work with us to support this important civil rights bill.
Conclusion
For decades, the District has been a leader in passing and enforcing civil rights laws. We can continue that leadership—both locally and nationally—by enacting this legislation as a model for uniform digital civil rights standards. Considering the number of national businesses that do work here, this legislation will establish a baseline for how companies across the country root out biases in the algorithms they use. And there is no reason that other states should not seek to adopt this same model. In fact, we are proud to have more and more localities, states, and even the White House, joining us on this path already. Let’s continue to be the leaders we are.
My team and I would be happy to answer any questions you may have.
Cancer victims urge court to end J&J bankruptcy roadblock to lawsuits
Sep 19, 2022 | 7:56 PM
By Dietrich Knauth
EXCERPTS FROM ARTICLE
(Reuters) – People suing Johnson & Johnson over the company’s talc products urged an appeals court on Monday to revive their claims, saying the profitable company should not be allowed to use a bankrupt subsidiary to block lawsuits alleging the products cause cancer.
They asked a panel of the Philadelphia-based 3rd U.S. Circuit Court of Appeals to dismiss the bankruptcy of J&J’s subsidiary LTL Management, saying that LTL is a “concocted” corporation set up solely to stop them from getting their day in court.
J&J spun off LTL in October, assigned its talc liabilities to it and placed the newly created subsidiary into bankruptcy days later.
That restructuring strategy, known as the “Texas two-step,” paused about 38,000 lawsuits J&J was facing alleging that its baby powder and other talc-based products contain asbestos and caused mesothelioma and ovarian cancer.
Critics, including lawmakers and legal experts, say J&J’s bankruptcy maneuver could provide a blueprint for other big companies to avoid juries in mass tort lawsuits.
David Frederick, representing a separate group of cancer plaintiffs, said the bankruptcy allows LTL to pay “less money, more slowly.”
“Not a dime will be paid until the last appeal of the last objector is resolved,” Frederick said.
But J&J countered bankruptcy court allows all current and future talc lawsuits to be settled together, which it says is the fastest and fairest way.
The company has set aside $2 billion to settle talc claims, which LTL executives describe as a starting point rather than a “cap”.
Before the bankruptcy filing, J&J faced costs from $3.5 billion in verdicts and settlements, including one in which 22 women were awarded a judgment of more than $2 billion, according to bankruptcy court records.
But more than 1,500 talc lawsuits have been dismissed without J&J paying anything and the majority of cases that have gone to trial have resulted in defense verdicts, mistrials or judgments for the company on appeal, according to LTL’s court filings.
The cancer victims are asking the appeals court to overrule a New Jersey bankruptcy judge who allowed LTL’s bankruptcy to continue. LTL’s bankruptcy filing automatically stopped lawsuits from proceeding against it, and U.S. Bankruptcy Judge Michael Kaplan in Trenton, New Jersey ruled in February that LTL’s bankruptcy should also stop talc lawsuits from proceeding against parent company J&J.
FULL ARTICLE: Cancer victims urge court to end J&J bankruptcy roadblock to lawsuits | 102.7 WBOW | The Valley's Greatest Hits | Terre Haute, IN (1027wbow.com) https://1027wbow.com/2022/09/19/cancer-victims-urge-court-to-end-jj-bankruptcy-roadblock-to-lawsuits/
Sep 19, 2022 | 7:56 PM
By Dietrich Knauth
EXCERPTS FROM ARTICLE
(Reuters) – People suing Johnson & Johnson over the company’s talc products urged an appeals court on Monday to revive their claims, saying the profitable company should not be allowed to use a bankrupt subsidiary to block lawsuits alleging the products cause cancer.
They asked a panel of the Philadelphia-based 3rd U.S. Circuit Court of Appeals to dismiss the bankruptcy of J&J’s subsidiary LTL Management, saying that LTL is a “concocted” corporation set up solely to stop them from getting their day in court.
J&J spun off LTL in October, assigned its talc liabilities to it and placed the newly created subsidiary into bankruptcy days later.
That restructuring strategy, known as the “Texas two-step,” paused about 38,000 lawsuits J&J was facing alleging that its baby powder and other talc-based products contain asbestos and caused mesothelioma and ovarian cancer.
Critics, including lawmakers and legal experts, say J&J’s bankruptcy maneuver could provide a blueprint for other big companies to avoid juries in mass tort lawsuits.
David Frederick, representing a separate group of cancer plaintiffs, said the bankruptcy allows LTL to pay “less money, more slowly.”
“Not a dime will be paid until the last appeal of the last objector is resolved,” Frederick said.
But J&J countered bankruptcy court allows all current and future talc lawsuits to be settled together, which it says is the fastest and fairest way.
The company has set aside $2 billion to settle talc claims, which LTL executives describe as a starting point rather than a “cap”.
Before the bankruptcy filing, J&J faced costs from $3.5 billion in verdicts and settlements, including one in which 22 women were awarded a judgment of more than $2 billion, according to bankruptcy court records.
But more than 1,500 talc lawsuits have been dismissed without J&J paying anything and the majority of cases that have gone to trial have resulted in defense verdicts, mistrials or judgments for the company on appeal, according to LTL’s court filings.
The cancer victims are asking the appeals court to overrule a New Jersey bankruptcy judge who allowed LTL’s bankruptcy to continue. LTL’s bankruptcy filing automatically stopped lawsuits from proceeding against it, and U.S. Bankruptcy Judge Michael Kaplan in Trenton, New Jersey ruled in February that LTL’s bankruptcy should also stop talc lawsuits from proceeding against parent company J&J.
FULL ARTICLE: Cancer victims urge court to end J&J bankruptcy roadblock to lawsuits | 102.7 WBOW | The Valley's Greatest Hits | Terre Haute, IN (1027wbow.com) https://1027wbow.com/2022/09/19/cancer-victims-urge-court-to-end-jj-bankruptcy-roadblock-to-lawsuits/
California Files Antitrust Lawsuit Against Amazon that resembles recently dismissed case brought by DC AG Racine
As reported by the New York Times, Bob Bonta, California’s attorney general, has brought a lawsuit alleging that Amazon punishes companies that offer lower prices on other websites.
California’s attorney general filed an antitrust lawsuit against Amazon on Wednesday, claiming the retailer stifles competition and increases the prices that consumers pay across the internet.
The suit is limited to California, where officials said Amazon had around 25 million customers, but if it succeeds it could have a broad impact across the country.
The NY Times explains that lawsuit largely focuses on the way Amazon penalizes sellers for listing products at lower prices on other websites. If Amazon spots a product listed cheaper on a competitor’s website, it often will remove important buttons like “Buy Now” and “Add to Cart” from a product listing page.
Those buttons are a major driver of sales for companies selling through Amazon, and losing them can quickly hurt their businesses.
The NY Times explains: “That creates a dilemma for marketplace sellers. At times, they can offer products for lower prices on sites other than Amazon because the cost of using those sites can be lower. But because Amazon is by far the largest online retailer, the sellers would rather raise their prices on other sites than risk losing their sales on Amazon, the complaint said, citing interviews with sellers, competitors and industry consultants.”
The California Complaint alleges that
“Without basic price competition, without different online sites trying to outdo each other with lower prices, prices artificially stabilize at levels higher than would be the case in a competitive market.”
The NY Times observes that the California suit is the latest in a string of increasingly aggressive efforts by states and regulators in Washington and Europe to curb the influence of the technology industry’s biggest companies. Also on Wednesday, a European Union court gave its blessing to a record multibillion-dollar fine issued against Google in 2018.
The lawsuit echoes a case that was brought by Karl A. Racine, the attorney general for the District of Columbia, and that was thrown out this spring. Judge Hiram E. Puig-Lugo of Superior Court of the District of Columbia found that Mr. Racine had not provided sufficient evidence that Amazon’s policies were anticompetitive. Mr. Racine is appealing the ruling.
Tha California Complaint is at 2022-09-14 California v. Amazon Complaint-redacted.pdf, 2022-09-14 California v. Amazon Complaint-redacted.pdf
As reported by the New York Times, Bob Bonta, California’s attorney general, has brought a lawsuit alleging that Amazon punishes companies that offer lower prices on other websites.
California’s attorney general filed an antitrust lawsuit against Amazon on Wednesday, claiming the retailer stifles competition and increases the prices that consumers pay across the internet.
The suit is limited to California, where officials said Amazon had around 25 million customers, but if it succeeds it could have a broad impact across the country.
The NY Times explains that lawsuit largely focuses on the way Amazon penalizes sellers for listing products at lower prices on other websites. If Amazon spots a product listed cheaper on a competitor’s website, it often will remove important buttons like “Buy Now” and “Add to Cart” from a product listing page.
Those buttons are a major driver of sales for companies selling through Amazon, and losing them can quickly hurt their businesses.
The NY Times explains: “That creates a dilemma for marketplace sellers. At times, they can offer products for lower prices on sites other than Amazon because the cost of using those sites can be lower. But because Amazon is by far the largest online retailer, the sellers would rather raise their prices on other sites than risk losing their sales on Amazon, the complaint said, citing interviews with sellers, competitors and industry consultants.”
The California Complaint alleges that
“Without basic price competition, without different online sites trying to outdo each other with lower prices, prices artificially stabilize at levels higher than would be the case in a competitive market.”
The NY Times observes that the California suit is the latest in a string of increasingly aggressive efforts by states and regulators in Washington and Europe to curb the influence of the technology industry’s biggest companies. Also on Wednesday, a European Union court gave its blessing to a record multibillion-dollar fine issued against Google in 2018.
The lawsuit echoes a case that was brought by Karl A. Racine, the attorney general for the District of Columbia, and that was thrown out this spring. Judge Hiram E. Puig-Lugo of Superior Court of the District of Columbia found that Mr. Racine had not provided sufficient evidence that Amazon’s policies were anticompetitive. Mr. Racine is appealing the ruling.
Tha California Complaint is at 2022-09-14 California v. Amazon Complaint-redacted.pdf, 2022-09-14 California v. Amazon Complaint-redacted.pdf
From Matt Stoller: States Taking the Lead on Regulating Google?
In a little noticed but important big tech case, Republican Ohio Attorney General David Yost is suing Google. He’s not doing it via antitrust. Instead, he’s using common carrier law, asserting that the firm has public obligations under Ohio law to carry all comers on equal terms. His claim is that it’s illegal for Google to downgrade links to rivals like Yelp, below its own reviews of restaurants, or place its own travel search results higher than those of Expedia. It’s the ‘self-preferencing’ idea that Congress is wrestling with right now, only done through common law at a state level.
This lawsuit comes directly out of Clarence Thomas’s anti-Google arguments in 2021. In a series of opinions and statements, Thomas, responding to Donald Trump’s removal from key internet speech platforms, began creating the legal infrastructure for conservatives to place public obligations onto big tech platforms. Yost took that argument and ran with it.
Recently, Yost won an important procedural motion to treat the determination that Google is a common carrier and the remedy for that status separately. Had they been handled together, as Google sought, it would have been a messy and difficult process, and the judge might have simply thrown up his hands. Now, Google’s legal position as a common carrier, and the remedy for that position, will be separate questions. One of my favorite Wall Street analysts, Paul Gallant, made an excellent point on the politics of this case.
While this sounds like a long shot, recall Justice Thomas in 2Q 2021 signaled lower courts that major digital platforms may well fit the legal definition of common carriers and thus can be forbidden from unreasonable discrimination. If the Ohio AG wins, we'd expect other states to pursue similar regimes, particularly if Congress fails to pass the "no self-preferencing" antitrust bill by the end of Sept. before the midterm recess.
See https://nam12.safelinks.protection.outlook.com/?url=https%3A%2F%2Fsubstack.com%2Fredirect%2F898ca799-be9b-496c-8f8b-ff512b1b42ee%3Fr%3D4w6ql&data=05%7C01%7C%7Cc5c66e68e14f412d85f608da934789d4%7C84df9e7fe9f640afb435aaaaaaaaaaaa%7C1%7C0%7C637984232725966752%7CUnknown%7CTWFpbGZsb3d8eyJWIjoiMC4wLjAwMDAiLCJQIjoiV2luMzIiLCJBTiI6Ik1haWwiLCJXVCI6Mn0%3D%7C3000%7C%7C%7C&sdata=GLbidLiC2dFw8WiiemlJ7RUyn2JHHXuV0ohdjEamwTM%3D&reserved=0
In a little noticed but important big tech case, Republican Ohio Attorney General David Yost is suing Google. He’s not doing it via antitrust. Instead, he’s using common carrier law, asserting that the firm has public obligations under Ohio law to carry all comers on equal terms. His claim is that it’s illegal for Google to downgrade links to rivals like Yelp, below its own reviews of restaurants, or place its own travel search results higher than those of Expedia. It’s the ‘self-preferencing’ idea that Congress is wrestling with right now, only done through common law at a state level.
This lawsuit comes directly out of Clarence Thomas’s anti-Google arguments in 2021. In a series of opinions and statements, Thomas, responding to Donald Trump’s removal from key internet speech platforms, began creating the legal infrastructure for conservatives to place public obligations onto big tech platforms. Yost took that argument and ran with it.
Recently, Yost won an important procedural motion to treat the determination that Google is a common carrier and the remedy for that status separately. Had they been handled together, as Google sought, it would have been a messy and difficult process, and the judge might have simply thrown up his hands. Now, Google’s legal position as a common carrier, and the remedy for that position, will be separate questions. One of my favorite Wall Street analysts, Paul Gallant, made an excellent point on the politics of this case.
While this sounds like a long shot, recall Justice Thomas in 2Q 2021 signaled lower courts that major digital platforms may well fit the legal definition of common carriers and thus can be forbidden from unreasonable discrimination. If the Ohio AG wins, we'd expect other states to pursue similar regimes, particularly if Congress fails to pass the "no self-preferencing" antitrust bill by the end of Sept. before the midterm recess.
See https://nam12.safelinks.protection.outlook.com/?url=https%3A%2F%2Fsubstack.com%2Fredirect%2F898ca799-be9b-496c-8f8b-ff512b1b42ee%3Fr%3D4w6ql&data=05%7C01%7C%7Cc5c66e68e14f412d85f608da934789d4%7C84df9e7fe9f640afb435aaaaaaaaaaaa%7C1%7C0%7C637984232725966752%7CUnknown%7CTWFpbGZsb3d8eyJWIjoiMC4wLjAwMDAiLCJQIjoiV2luMzIiLCJBTiI6Ik1haWwiLCJXVCI6Mn0%3D%7C3000%7C%7C%7C&sdata=GLbidLiC2dFw8WiiemlJ7RUyn2JHHXuV0ohdjEamwTM%3D&reserved=0
The Washington Post Reports:
Washington Hebrew school says parents waived right to sue over sex abuse
By Lauren Lumpkin
Updated September 13, 2022 at 9:48 p.m. EDT|Published September 13, 2022 at 7:35 p.m. EDT
[Excerpts, slightly modified by DAR]
A group of parents in 2019 sued Washington Hebrew Congregation, claiming that leaders at Edlavitch-Tyser Early Childhood Center ignored warning signs as a teacher sexually abused toddlers. The suit also said the employee was allowed to be alone with students despite District regulations that require at least two adults to be present with toddlers in licensed child development centers.
The synagogue has argued that parents suing over alleged child sex abuse surrendered their right to bring a lawsuit when they signed activity waivers upon enrolling their children in school, court documents show.
In July, attorneys for Washington Hebrew Congregation filed a motion for summary judgment, a request for the court to make a ruling before a trial. The school’s attorneys argued that, in the paperwork parents signed, they gave up their right to sue.
Among those documents that parents completed was a consent and liability waiver that stated “neither parents nor their children will bring claims against WHC or any of its employees for personal injuries sustained ‘as a result of’ a child’s ‘participation in these activities [of the Washington Hebrew Congregation’s Edlavitch-Tyser Early Childhood Center].’”
But parents understood those “activities” to include “typical preschool activities,” parents’ attorneys responded in court records. “Not a single plaintiff parent who signed the release contemplated that it would cover injuries sustained as a result of their children being sexually abused by a trusted WHC employee.”
Karen Dunn, a lawyer for nine of the plaintiff families, urged the court to deny Washington Hebrew Congregation’s motion for summary judgment.
“Among other absurdities, WHC’s reading of the release’s text would require the court to find that damage caused by sexual abuse was damage caused by participation in a school activity,” Dunn stated in the filing.
The employee was also not properly vetted, the families — who are not identified in the lawsuit — claim.
+++
DAR comment:
The commonly stated rule for DC is that waivers of liability are generally enforceable, with some exceptions. One exception is where reckless behavior caused the injury: Liability waivers in Washington, D.C. are not enforceable if the injury suffered was due to the willful, wanton, and reckless negligence of the other party. See Richard J. MOORE, Appellant v. Terrell WALLER and Square 345 Limited Partnership t/a Grand Hyatt Hotel, Appellees.No. 05-CV-695, Decided: August 02, 2007
But whatever the technical legalities, we as lawyers should worry if ordinary people find technical rules and litigation practices to be surprising and unfair. That can be the situation with regard to waiver of liability clauses in an array of situations. For example, where the signing party to a form document is not represented by counsel and does not realize the possibly draconian consequences of liability waiver language, or signs because it is necessary to complete the transaction with a party of greater bargaining power (an “adhesion” contract), or the signer simply skips reading the language on the naïve assumption that pitfalls are unlikely because the adverse party seems benign.
Washington Hebrew school says parents waived right to sue over sex abuse
By Lauren Lumpkin
Updated September 13, 2022 at 9:48 p.m. EDT|Published September 13, 2022 at 7:35 p.m. EDT
[Excerpts, slightly modified by DAR]
A group of parents in 2019 sued Washington Hebrew Congregation, claiming that leaders at Edlavitch-Tyser Early Childhood Center ignored warning signs as a teacher sexually abused toddlers. The suit also said the employee was allowed to be alone with students despite District regulations that require at least two adults to be present with toddlers in licensed child development centers.
The synagogue has argued that parents suing over alleged child sex abuse surrendered their right to bring a lawsuit when they signed activity waivers upon enrolling their children in school, court documents show.
In July, attorneys for Washington Hebrew Congregation filed a motion for summary judgment, a request for the court to make a ruling before a trial. The school’s attorneys argued that, in the paperwork parents signed, they gave up their right to sue.
Among those documents that parents completed was a consent and liability waiver that stated “neither parents nor their children will bring claims against WHC or any of its employees for personal injuries sustained ‘as a result of’ a child’s ‘participation in these activities [of the Washington Hebrew Congregation’s Edlavitch-Tyser Early Childhood Center].’”
But parents understood those “activities” to include “typical preschool activities,” parents’ attorneys responded in court records. “Not a single plaintiff parent who signed the release contemplated that it would cover injuries sustained as a result of their children being sexually abused by a trusted WHC employee.”
Karen Dunn, a lawyer for nine of the plaintiff families, urged the court to deny Washington Hebrew Congregation’s motion for summary judgment.
“Among other absurdities, WHC’s reading of the release’s text would require the court to find that damage caused by sexual abuse was damage caused by participation in a school activity,” Dunn stated in the filing.
The employee was also not properly vetted, the families — who are not identified in the lawsuit — claim.
+++
DAR comment:
The commonly stated rule for DC is that waivers of liability are generally enforceable, with some exceptions. One exception is where reckless behavior caused the injury: Liability waivers in Washington, D.C. are not enforceable if the injury suffered was due to the willful, wanton, and reckless negligence of the other party. See Richard J. MOORE, Appellant v. Terrell WALLER and Square 345 Limited Partnership t/a Grand Hyatt Hotel, Appellees.No. 05-CV-695, Decided: August 02, 2007
But whatever the technical legalities, we as lawyers should worry if ordinary people find technical rules and litigation practices to be surprising and unfair. That can be the situation with regard to waiver of liability clauses in an array of situations. For example, where the signing party to a form document is not represented by counsel and does not realize the possibly draconian consequences of liability waiver language, or signs because it is necessary to complete the transaction with a party of greater bargaining power (an “adhesion” contract), or the signer simply skips reading the language on the naïve assumption that pitfalls are unlikely because the adverse party seems benign.
From DMN -- Ticketmaster Formally Responds to Congressman Bill Pascrell Jr. (digitalmusicnews.com)https://www.digitalmusicnews.com/2022/09/07/ticketmaster-bill-pascrell-jr-response/? )
Ticketmaster Formally Responds to Congressman Bill Pascrell Jr.: ‘Dynamic Pricing Is About Capturing More Value For the Artist’
Dylan Smith
September 7, 2022
(Official White House Photo by Adam Schultz)
Last week, Ticketmaster faced renewed congressional scrutiny over its business practices – and specifically the role that “dynamic pricing” played in elevating the cost of tickets to Bruce Springsteen’s 2023 concerts. Now, the ticketing giant has addressed the situation with an “official statement.”
The NFT-equipped ticketing platform just recently published said official statement on Ticketmaster’s business website, and the public response arrives one week after New Jersey Representative Bill Pascrell Jr. took aim at the company in a letter addressed to Live Nation president and CEO Michael Rapino.
A longtime Ticketmaster critic (and the author of the BOSS Act), the lawmaker in the multifaceted message called on the Live Nation subsidiary to disclose, among an array of other things, how many of Springsteen’s 2023 shows will take place at venues owned by the business, whether there’s a “price ceiling” on the passes, and whether “there are restrictions on purchasing a single ticket.”
In addition to reportedly elevating the price of certain “platinum” Bruce Springsteen tickets to north of $5,000 apiece, dynamic pricing subsequently caused some Harry Styles “platinum” passes (which “are being sold for the first time through Ticketmaster,” the company’s website emphasizes) to cost more on Ticketmaster than on third-party resale platforms.
While Representative Pascrell Jr. requested that Live Nation and Ticketmaster respond to his inquiry by September 30th, the entities have already published a roughly 779-word official statement, as mentioned at the outset.
“We appreciate and share Congressman Pascrell’s passion for improving the ticketing industry and look forward to continuing our dialogue with him,” Ticketmaster’s response begins. “As the resale ticketing market has grown to more than a $10 billion dollar [sic] industry over the past few years, artists and teams have lost that revenue to resellers who have no investment in the event going well or any of the people working behind the scenes to bring the event to life. As such, Event Organizers have looked to market-based pricing to recapture that lost revenue.”
From there, the document indicates that these same event organizers, not Ticketmaster, establish “different onsale parameters” as well as “pricing strategy and price range parameters on all tickets, including dynamic and fixed price points.”
After dedicating a couple paragraphs to explaining that “supply and demand drives pricing decisions,” the text proceeds to paint dynamic pricing as a tool that secures “more value for the artist at the initial onsale” by preventing resellers from scooping up passes at face value and then reselling them for a profit.
“Ticketmaster builds the technology to empower the strategy that the artist team sets,” the document reiterates. “The secondary market sees over $10 billion in ticket sales and continues to grow rapidly. Through Ticketmaster, dynamic pricing has captured over $500 million for Event Organizers from resale markets in 2022 alone.”
Finally, before concluding by highlighting the ways in which Ticketmaster has purportedly advocated for reform in the ticketing space – including alleged support for New York’s total-cost law, which execs hope to see “extended across the nation” – the follow-up dives into some of the specifics behind Bruce Springsteen’s ticket sales.
According to Ticketmaster, at least four marketplaces (AXS, SeatGeek, and Paciolan, besides Ticketmaster) sold dynamically priced Springsteen tickets, 11.8 percent of which “were designated Platinum” on Ticketmaster. The remaining majority of passes “were sold at set prices,” higher-ups relayed.
Also on Ticketmaster, the average price of all sold Bruce Springsteen tickets was $262, with 1.3 percent of moved passes having fetched more than $1,000 apiece, per the breakdown. The same source shows that 18 percent of Springsteen tickets sold for under $99 each, against 27 percent for the $100 to $150 price range, 11 percent between $150 and $200, and a total of 56 percent for all <$200 tickets.
Ticketmaster Formally Responds to Congressman Bill Pascrell Jr.: ‘Dynamic Pricing Is About Capturing More Value For the Artist’
Dylan Smith
September 7, 2022
(Official White House Photo by Adam Schultz)
Last week, Ticketmaster faced renewed congressional scrutiny over its business practices – and specifically the role that “dynamic pricing” played in elevating the cost of tickets to Bruce Springsteen’s 2023 concerts. Now, the ticketing giant has addressed the situation with an “official statement.”
The NFT-equipped ticketing platform just recently published said official statement on Ticketmaster’s business website, and the public response arrives one week after New Jersey Representative Bill Pascrell Jr. took aim at the company in a letter addressed to Live Nation president and CEO Michael Rapino.
A longtime Ticketmaster critic (and the author of the BOSS Act), the lawmaker in the multifaceted message called on the Live Nation subsidiary to disclose, among an array of other things, how many of Springsteen’s 2023 shows will take place at venues owned by the business, whether there’s a “price ceiling” on the passes, and whether “there are restrictions on purchasing a single ticket.”
In addition to reportedly elevating the price of certain “platinum” Bruce Springsteen tickets to north of $5,000 apiece, dynamic pricing subsequently caused some Harry Styles “platinum” passes (which “are being sold for the first time through Ticketmaster,” the company’s website emphasizes) to cost more on Ticketmaster than on third-party resale platforms.
While Representative Pascrell Jr. requested that Live Nation and Ticketmaster respond to his inquiry by September 30th, the entities have already published a roughly 779-word official statement, as mentioned at the outset.
“We appreciate and share Congressman Pascrell’s passion for improving the ticketing industry and look forward to continuing our dialogue with him,” Ticketmaster’s response begins. “As the resale ticketing market has grown to more than a $10 billion dollar [sic] industry over the past few years, artists and teams have lost that revenue to resellers who have no investment in the event going well or any of the people working behind the scenes to bring the event to life. As such, Event Organizers have looked to market-based pricing to recapture that lost revenue.”
From there, the document indicates that these same event organizers, not Ticketmaster, establish “different onsale parameters” as well as “pricing strategy and price range parameters on all tickets, including dynamic and fixed price points.”
After dedicating a couple paragraphs to explaining that “supply and demand drives pricing decisions,” the text proceeds to paint dynamic pricing as a tool that secures “more value for the artist at the initial onsale” by preventing resellers from scooping up passes at face value and then reselling them for a profit.
“Ticketmaster builds the technology to empower the strategy that the artist team sets,” the document reiterates. “The secondary market sees over $10 billion in ticket sales and continues to grow rapidly. Through Ticketmaster, dynamic pricing has captured over $500 million for Event Organizers from resale markets in 2022 alone.”
Finally, before concluding by highlighting the ways in which Ticketmaster has purportedly advocated for reform in the ticketing space – including alleged support for New York’s total-cost law, which execs hope to see “extended across the nation” – the follow-up dives into some of the specifics behind Bruce Springsteen’s ticket sales.
According to Ticketmaster, at least four marketplaces (AXS, SeatGeek, and Paciolan, besides Ticketmaster) sold dynamically priced Springsteen tickets, 11.8 percent of which “were designated Platinum” on Ticketmaster. The remaining majority of passes “were sold at set prices,” higher-ups relayed.
Also on Ticketmaster, the average price of all sold Bruce Springsteen tickets was $262, with 1.3 percent of moved passes having fetched more than $1,000 apiece, per the breakdown. The same source shows that 18 percent of Springsteen tickets sold for under $99 each, against 27 percent for the $100 to $150 price range, 11 percent between $150 and $200, and a total of 56 percent for all <$200 tickets.
Supporting public colleges, including DC
by Don Allen Resnikoff
Current discussions about student loan forgiveness are related to a broader debate about the current high price of advanced education. I come to that debate like a visitor from another time -- 1958, to be exact. When I graduated from the public high school in Plainfield, New Jersey in 1958, it was not difficult for me to attend the New Jersey State university, Rutgers, for a few hundred dollars a year in tuition. State subsidized room and board were similarly inexpensive.
Because Rutgers was inexpensive, the fact that my family could provide no money for college was not a significant handicap. I was able to earn some money during college through music gigs (it was the era of “Animal House”), and summer jobs that often resembled Charlie Chaplin or “I Love Lucy” episodes where a hapless factory worker struggles with a comically rapid assembly line. And, I had a small scholarship from my hometown newspaper that rewarded me for years of delivering newspapers by bicycle, throwing folded papers onto the porches of homes near mine.
The result was that I was able to graduate from college debt free, and go on to law school with a partial scholarship. What followed was the sort of respectable career as a lawyer that my parents hoped for, much of it in government work pursuing affirmative antitrust litigation.
My gratitude to Rutgers is reflected in the Rutgers scholarship fund I have endowed in the name of my deceased brother Roy, who followed me to Rutgers in 1960 and subsequently pursued a career as a respected physician.
Turning to the current debate about the current high price of advanced education, a recent Forbes article provides “list price” (before scholarship and other subsidy) tuition costs for public colleges in the US. See https://www.forbes.com/sites/michaeltnietzel/2021/11/01/which-states-have--the-least-and-the-most-expensive-public-colleges/?
For two year colleges, in 2021-22, average published tuition and fees for full-time in-district students at public two-year colleges ranged from a low of $1,430 in California to a high of $8,600 in Vermont.
For four year colleges, the 2021-22 average tuition and fees price for full-time, in-state students at public four-year colleges ranged from a low of $6,100 in Wyoming to a high of $17,750 in Vermont. Following Wyoming, the least expensive states were Florida ($6,370), Montana ($7,265), Utah ($7,387), and North Carolina ($7,389).
After Vermont, the most expensive states for four-year were New Hampshire ($17,040), Pennsylvania ($15,312), my home base in New Jersey ($14,963), and Illinois ($14,667).
Forbes goes on to explain that for ‘flagship’ state universities, the lowest price for 2021-22 tuition and fees for full-time in-state students was $6,100 at the University of Wyoming, followed by the University of Florida ($6,380), University of Montana ($7,490), University of Idaho ($8,340) and the University of New Mexico ($8,510). The most expensive flagship was the University of Vermont with an in-state tuition and fee price of $19,000. It was followed by the University of New Hampshire ($18,960), Pennsylvania State University ($18,900), University of Connecticut ($18,560) and the University of Virginia ($17,460).
Most public four-year institutions charge nonresidents a significantly higher amount, but the District of Columbia has a subsidy program that provides some subsidies to DC residents to attend out of state colleges. The D.C. Tuition Assistance Grant Program (DCTAG) program assists D.C. residents by defraying the cost of out-of-state tuition to some extent. For public schools, the program will help cover the difference between in-state and out-of-state tuition for up to $10,000 a year for 6 years, with a lifetime maximum of $50,000. Undergraduate students who choose to attend private colleges and universities in the D.C. metropolitan area as well as those who choose to attend any private Historically Black Colleges and Universities (HBCUs) throughout the nation, are eligible to receive a grant for up to $2,500 a year for six years, with a lifetime maximum of $12,500.
But, college funding coach Zaina Bankwalla points out in her website that If you reside in D.C. you may or may not qualify for a tuition grant through the D.C. Tuition Assistance Grant Program (DCTAG), which, depending on what school you go to and what aid package you receive, might lower your tuition to in-state rates, but that is rare. There is likely to be a short-fall, because college prices have skyrocketed in the past two decades since the DCTAG program was adopted, while the grant values have remained roughly the same. The grants may still cover the whole difference at a few schools, but at most schools it will fall short of that. So, in most states D.C. residents will pay a price less than other out of state students, but somewhat more than in-state residents without any other forms of aid. See https://www.thecollegefundingcoach.org/the-myth-of-the-d-c-resident-paying-in-state-tuition/
The bottom line for me as a 1958-1962 Rutgers student is that I’d like to see increased government funding for state schools like Rutgers so that more students from poor but hopeful families have the same opportunities I had. There are a lot of people who say it can’t be done, but in my day it was done. Leading politician Mitch McConnell is reported to know about that, since McConnell graduated from an inexpensive public school, the University of Louisville in 1964. His tuition back then at the public (State/City) college was $330. Senator Bernie Sanders has advocated for federal funding support so that two- and four-year public and tribal colleges and universities would be tuition-free.
The issues raised by increasing government funding support for state supported schools are distinct from issues about government funding of education at private schools such as Princeton. Princeton, like Rutgers, is in New Jersey, but government support to a private school like Princeton raises issues of perverse incentives to raise tuition fees that do not apply to Rutgers.
As it happens, Founding Father James Madison had something to say on the importance of public funded education in Kentucky (albeit not for everyone at the time). In 1822, he wrote to a friend that “the liberal appropriations made by the Legislature of Kentucky for a general system of Education cannot be too much applauded. … Enlightened patriotism … is now providing for the State a Plan of Education embracing every class of Citizens.”
“Knowledge will forever govern ignorance,” Madison explained, “and a people who mean to be their own governors must arm themselves with the power which knowledge gives.”
Posting by Don Allen Resnikoff, who is fully responsble for the content
DCCRC agrees with National Consumers League, Public Justice, and other advocates of DC Councilmember Cheh's bill requiring public access to court filings with information important to consumers
By Don Allen Resnikoff
The DC Consumer Rights Coalition (DCCRC) is a non-profit organization with a 501(c)(3) IRS tax exemption that advances economic rights and financial inclusion of DC residents through research, education, advocacy, and community organization. DCCRC works with individual consumer advocates, poverty and consumer organizations, and grassroots members to press for policies that protect the District’s vulnerable residents. DCCRC also educates individuals on consumer issues and consumer rights, advocates for consumer interests, studies critical consumer issues, and works to build the consumer movement.
Consistent with that mission, DCCRC is an advocate for a fundamental principle of justice systems in democratic societies: court proceedings should be conducted in public view. Public access to judicial records is an important aspect of that principle. That is especially important in cases that have effects beyond the parties to the case—in particular, cases that involve defective products or dangerous environmental conditions that pose dangers to the general public. Unfortunately, that principle is ignored when a court agrees to the parties’ request to hide those dangers from the public, by allowing overbroad confidentiality clauses in settlement agreements, or by issuing overbroad protective orders.
DCCRC’s advocacy of public access to judicial records has included, among other things, joining with the DC Bar and Public Justuce in hosting a recent public forum on strategies lawyers can use to oppose overbroad confidentiality clauses in court-approved settlement agreements, and to oppose issuing overbroad court-ordered protective orders.
As an aspect of its broader advocacy of public access to judicial records, the DC Consumer Rights Coalition supports other public interest organizations who are advocating for the “Sunshine in Litigation Act of 2022” introduced to the Council of the District of Columbia by Councilmember Mary Cheh and co-sponsored by Councilmember Charles Allen. We thank advocates at the National Consumers League, Public Justice and others for their advocacy leadership on these issues.
Following is an excerpt of a statement prepared by DCCRC for submission to the DC Council at the appropriate time:
Court-permitted secrecy has caused harm in an array of cases, such as cases related to the opioid epidemic. As pointed out by Councilmember Cheh in her letter submitting the proposed D.C. Sunshine in Litigation Act of 2022, individuals and governments began filing cases many years ago charging that opioid manufacturers had intentionally misled doctors about the dangers of prescription opioids. However, because judges in these cases agreed to the parties’ request to require that the court records remain under seal, the clear evidence of the manufacturers’ wrongdoing and of the dangers of opioids uncovered by the plaintiff parties was kept from the public, causing great harm.
Court permitted secrecy in the opioid and other cases involving danger to consumers hampers effective government oversight and enforcement. And it makes it needlessly more difficult for other individuals who have been harmed in similar ways to get justice. For them, getting justice means repeating all the same efforts to build a new case from scratch. That leads to the inefficiency of duplicative court cases with varying results.
Councilmember Cheh explains in her note to the DC Council that the proposed Act would put a stop to that kind of harm-causing secrecy. It would prohibit parties and courts from keeping information related to public dangers secret. It would still allow courts to protect sensitive private information that is not needed for public safety, like people’s personal medical and financial information, and the company’s trade secrets. But it would make sure that evidence of ongoing dangers to the public cannot remain hidden.
Several other states, including Florida, Louisiana, Virginia, Arkansas, and Washington, have already adopted similar laws, and California has similar legislation pending.
Opponents of “sunshine” laws argue that settlements might be harder if companies cannot settle in a way that keeps the evidence of consumer harm secret. It is not at all clear that the Act would really impact a company’s willingness to settle case. But a company that is causing harm should not be permitted to force someone who has suffered that harm to agree to keep that harm secret from the public as a price for getting their own justice.
In summary, we agree that many lives could be saved and much suffering could be prevented if corporations are not allowed to insist on secrecy orders in court settlements that hide information about product issues harmful to consumers. For that reason we join other public interest organizations in supporting the “Sunshine in Litigation Act of 2022” introduced to the Council of the District of Columbia by Councilmember Mary Cheh and co-sponsored by Councilmember Charles Allen.
By Don Allen Resnikoff
The DC Consumer Rights Coalition (DCCRC) is a non-profit organization with a 501(c)(3) IRS tax exemption that advances economic rights and financial inclusion of DC residents through research, education, advocacy, and community organization. DCCRC works with individual consumer advocates, poverty and consumer organizations, and grassroots members to press for policies that protect the District’s vulnerable residents. DCCRC also educates individuals on consumer issues and consumer rights, advocates for consumer interests, studies critical consumer issues, and works to build the consumer movement.
Consistent with that mission, DCCRC is an advocate for a fundamental principle of justice systems in democratic societies: court proceedings should be conducted in public view. Public access to judicial records is an important aspect of that principle. That is especially important in cases that have effects beyond the parties to the case—in particular, cases that involve defective products or dangerous environmental conditions that pose dangers to the general public. Unfortunately, that principle is ignored when a court agrees to the parties’ request to hide those dangers from the public, by allowing overbroad confidentiality clauses in settlement agreements, or by issuing overbroad protective orders.
DCCRC’s advocacy of public access to judicial records has included, among other things, joining with the DC Bar and Public Justuce in hosting a recent public forum on strategies lawyers can use to oppose overbroad confidentiality clauses in court-approved settlement agreements, and to oppose issuing overbroad court-ordered protective orders.
As an aspect of its broader advocacy of public access to judicial records, the DC Consumer Rights Coalition supports other public interest organizations who are advocating for the “Sunshine in Litigation Act of 2022” introduced to the Council of the District of Columbia by Councilmember Mary Cheh and co-sponsored by Councilmember Charles Allen. We thank advocates at the National Consumers League, Public Justice and others for their advocacy leadership on these issues.
Following is an excerpt of a statement prepared by DCCRC for submission to the DC Council at the appropriate time:
Court-permitted secrecy has caused harm in an array of cases, such as cases related to the opioid epidemic. As pointed out by Councilmember Cheh in her letter submitting the proposed D.C. Sunshine in Litigation Act of 2022, individuals and governments began filing cases many years ago charging that opioid manufacturers had intentionally misled doctors about the dangers of prescription opioids. However, because judges in these cases agreed to the parties’ request to require that the court records remain under seal, the clear evidence of the manufacturers’ wrongdoing and of the dangers of opioids uncovered by the plaintiff parties was kept from the public, causing great harm.
Court permitted secrecy in the opioid and other cases involving danger to consumers hampers effective government oversight and enforcement. And it makes it needlessly more difficult for other individuals who have been harmed in similar ways to get justice. For them, getting justice means repeating all the same efforts to build a new case from scratch. That leads to the inefficiency of duplicative court cases with varying results.
Councilmember Cheh explains in her note to the DC Council that the proposed Act would put a stop to that kind of harm-causing secrecy. It would prohibit parties and courts from keeping information related to public dangers secret. It would still allow courts to protect sensitive private information that is not needed for public safety, like people’s personal medical and financial information, and the company’s trade secrets. But it would make sure that evidence of ongoing dangers to the public cannot remain hidden.
Several other states, including Florida, Louisiana, Virginia, Arkansas, and Washington, have already adopted similar laws, and California has similar legislation pending.
Opponents of “sunshine” laws argue that settlements might be harder if companies cannot settle in a way that keeps the evidence of consumer harm secret. It is not at all clear that the Act would really impact a company’s willingness to settle case. But a company that is causing harm should not be permitted to force someone who has suffered that harm to agree to keep that harm secret from the public as a price for getting their own justice.
In summary, we agree that many lives could be saved and much suffering could be prevented if corporations are not allowed to insist on secrecy orders in court settlements that hide information about product issues harmful to consumers. For that reason we join other public interest organizations in supporting the “Sunshine in Litigation Act of 2022” introduced to the Council of the District of Columbia by Councilmember Mary Cheh and co-sponsored by Councilmember Charles Allen.
DC Court Won't Revive AG's Antitrust Suit Against Amazon
A District of Columbia Superior Court judge has denied the Washington attorney general's bid to reverse his decision tossing a complaint accusing Amazon of stifling e-commerce competition, saying the complaint relies on repeated and conclusory statements that lack factual information to support claims of anti-competitive conduct and harm.
The opinion is here:
https://eaccess.dccourts.gov/eaccess/search.page.3?x=lt1k7bWCUoLShGjCBBHn4HcdrcO5N4ZsaoJRXZIAkPc-XjbfgMe9OBsqMXIikKfc06gdY3t2n0816A1Vd2fi4q9eQ9A7c3JWGLg9HNLFBHIWeaBoMpWYZAjNUFNYRpAka7440fQEH6s0UyF2auR9y2hqqq5nZNQ8WaUc10qVFFA
Excerpt:
ORDER
This order addresses the newest chapter of anti-trust litigation between the District of Columbia and Amazon.com, Inc. It began on April 14, 2022, when the District of Columbia filed Plaintiff's Opposed Motion for Reconsideration, or in the Alternative, For Leave to Amend the Complaint or for a Written Order of Decision ("Motion for Reconsideration"). It gathered momentum on April 27, 2022, when the non-party U.S. Department of Justice submitted a Statement of Interest of the United States of America in Support of Plaintiff's Motion for Reconsideration. It became ripe after the Defendant lodged its opposition to reconsideration on April 28, 2022, and the District countered with a reply on May 5, 2022. For reasons below, the Motion for Reconsideration is denied.
Background
On March 25, 2021, the Plaintiff District of Columbia filed its original Complaint against Defendant Amazon.com, Inc. See Compl. On July 20, 2021, the Defendant filed an Opposed Motion to Dismiss Plaintiff District of Columbia's Complaint ("First Motion to Dismiss"). On September 10, 2021, the District filed a First Amended Complaint in response to the Defendant's motions. As a result, Defendant's First Motion to Dismiss was denied as moot. See Sept. 16, 2021 Order.
The Plaintiff's First Amended Complaint raised four claims against the Defendant.
These claims were (1) Agreements in Restraint of Trade (MFNs) In Violation of the D.C. Code§ 28-4502, (2) Agreements in Restraint of Trade (MMA) In Violation of the D.C. Code§ 28-4502,
(3) Illegal Maintenance of Monopoly in Violation ofD.C. Code§ 28-4503, and (4) Attempted Monopolization in Violation ofD.C. Code§ 28-4503.
The First Amended Complaint triggered a series of filings from both sides. On October 25, 2021, the Defendant lodged an Opposed Motion to Dismiss Plaintiff District of Columbia's Amended Complaint ("Second Motion to Dismiss"). On December 15, 2021, the District countered with a written opposition. At that point, the parties respectively filed replies and sur replies on January 21, 2022, February 10, 2022, and February 8, 2022. Subsequently, at a hearing held on March 18, 2022, Defendant's Second Motion to Dismiss was granted and this matter dismissed.
Now, Plaintiff moves the Court to reconsider the dismissal entered on March 18, 2022, grant Plaintiff leave to file a Second Amended Complaint, or to issue a written order of decision to memorialize the Court's March 18, 2022 ruling.
A District of Columbia Superior Court judge has denied the Washington attorney general's bid to reverse his decision tossing a complaint accusing Amazon of stifling e-commerce competition, saying the complaint relies on repeated and conclusory statements that lack factual information to support claims of anti-competitive conduct and harm.
The opinion is here:
https://eaccess.dccourts.gov/eaccess/search.page.3?x=lt1k7bWCUoLShGjCBBHn4HcdrcO5N4ZsaoJRXZIAkPc-XjbfgMe9OBsqMXIikKfc06gdY3t2n0816A1Vd2fi4q9eQ9A7c3JWGLg9HNLFBHIWeaBoMpWYZAjNUFNYRpAka7440fQEH6s0UyF2auR9y2hqqq5nZNQ8WaUc10qVFFA
Excerpt:
ORDER
This order addresses the newest chapter of anti-trust litigation between the District of Columbia and Amazon.com, Inc. It began on April 14, 2022, when the District of Columbia filed Plaintiff's Opposed Motion for Reconsideration, or in the Alternative, For Leave to Amend the Complaint or for a Written Order of Decision ("Motion for Reconsideration"). It gathered momentum on April 27, 2022, when the non-party U.S. Department of Justice submitted a Statement of Interest of the United States of America in Support of Plaintiff's Motion for Reconsideration. It became ripe after the Defendant lodged its opposition to reconsideration on April 28, 2022, and the District countered with a reply on May 5, 2022. For reasons below, the Motion for Reconsideration is denied.
Background
On March 25, 2021, the Plaintiff District of Columbia filed its original Complaint against Defendant Amazon.com, Inc. See Compl. On July 20, 2021, the Defendant filed an Opposed Motion to Dismiss Plaintiff District of Columbia's Complaint ("First Motion to Dismiss"). On September 10, 2021, the District filed a First Amended Complaint in response to the Defendant's motions. As a result, Defendant's First Motion to Dismiss was denied as moot. See Sept. 16, 2021 Order.
The Plaintiff's First Amended Complaint raised four claims against the Defendant.
These claims were (1) Agreements in Restraint of Trade (MFNs) In Violation of the D.C. Code§ 28-4502, (2) Agreements in Restraint of Trade (MMA) In Violation of the D.C. Code§ 28-4502,
(3) Illegal Maintenance of Monopoly in Violation ofD.C. Code§ 28-4503, and (4) Attempted Monopolization in Violation ofD.C. Code§ 28-4503.
The First Amended Complaint triggered a series of filings from both sides. On October 25, 2021, the Defendant lodged an Opposed Motion to Dismiss Plaintiff District of Columbia's Amended Complaint ("Second Motion to Dismiss"). On December 15, 2021, the District countered with a written opposition. At that point, the parties respectively filed replies and sur replies on January 21, 2022, February 10, 2022, and February 8, 2022. Subsequently, at a hearing held on March 18, 2022, Defendant's Second Motion to Dismiss was granted and this matter dismissed.
Now, Plaintiff moves the Court to reconsider the dismissal entered on March 18, 2022, grant Plaintiff leave to file a Second Amended Complaint, or to issue a written order of decision to memorialize the Court's March 18, 2022 ruling.
DC Bar Brief Encounters! episode is now live. Information is below:
Gun Control and the Supreme Court
Public interest advocate Bert Foer on the background and implications of the Supreme Court’s decision in New York Rifle and Pistol Association v. Bruen, argued last November and announced on June 23, 2022.
Listen and subscribe to Brief Encounters at https://anchor.fm/DCBar or wherever you access your podcasts.
Gun Control and the Supreme Court
Public interest advocate Bert Foer on the background and implications of the Supreme Court’s decision in New York Rifle and Pistol Association v. Bruen, argued last November and announced on June 23, 2022.
Listen and subscribe to Brief Encounters at https://anchor.fm/DCBar or wherever you access your podcasts.
Bernie Sanders asks: To what extent Is the “Chips” Act really about preserving US competitiveness in semiconductors?
The Wall Street Journal reports that a $280 billion package of subsidies and research funding to boost U.S. competitiveness in semiconductors and advanced technology is on track to pass Congress. Senate Majority Leader Chuck Schumer is among those who support incentives to US semiconductor makers, ostensibly to increase US competitiveness.
Senator Bernie Sanders is not having it. In remarks issued on July 25, he said that the effect of the 1000+ page bill is for American taxpayers to provide the micro-chip industry, including Intel, with a blank check of over $76 billion at a time when semiconductor companies are making tens of billions of dollars in profits and paying their executives exorbitant compensation packages. In addition, the semiconductor companies have, with US government support, undermined US competitiveness by investing in Chinese manufacturing and sending US manufacturing jobs overseas. Here is an excerpt from the Sanders remarks:
+++
Over the last 20 years, the micro-chip industry has shut down over 780 manufacturing plants and other establishments in the United States and eliminated 150,000 American jobs while moving most of its production overseas after receiving over $9.5 billion in government subsidies and loans.
Let me give you just a few examples:
Between 2010 and 2014, Intel laid off approximately 1,400 workers from the Rio Rancho, New Mexico chip facility and offshored 1,000 jobs to Israel.
According to the Oregon Bureau of Labor and Industry, Intel laid off more than 1,000 workers in Oregon between 2015 and 2016. They specifically noted that the company was offshoring jobs to Israel and that workers were required to train their replacements in India and Costa Rica before being laid off when their jobs were shipped there.
Texas Instruments outsourced 400 jobs from their Houston, Texas manufacturing facility to the Philippines in 2013.
Micron Technology has repeatedly cut jobs in Boise, Idaho, including 1,100 in 2003, another 1,100 in 2007, and 1,500 in 2008. In 2009, the company stopped manufacturing some types of chips entirely and laid off 2,000 workers.
In other words, in order to make more profits, these companies took government money and used it to ship good-paying jobs abroad. Now, as a reward for causing this crisis, these same companies are in line to receive a massive taxpayer handout to undo the damage that they did. That is simply unacceptable.
In total, it has been estimated that 5 major semi-conductor companies will receive the lion’s share of this taxpayer handout: Intel, Texas Instruments, Micron Technology, Global Foundries, and Samsung. These 5 companies made $70 billion in profits last year.
The company that will likely benefit the most from this taxpayer assistance is Intel.
In 2021, Intel made nearly $20 billion in profits. During the pandemic, Intel had enough money to spend $16.6 billion, not on research and development, not in building new plants in America, but on buying back its own stock to reward its executives and wealthy shareholders. So here is the absurd moment that we are at. It is estimated that Intel will receive between $20 and $30 billion in federal funding with no strings attached in order to build new plants. And yet, within the last several years, this same company spent over $16 billion on stock buybacks. And there is no guarantee in this bill that they will not continue to do stock buybacks.
Over the past 20 years, Intel spent over $100 million on lobbying and campaign contributions. That’s a heck of an investment. For $100 million in lobbying and campaign contributions you receive at least $20 billion in corporate welfare. Not a bad deal.
A little over a week ago, the CEO of Intel, Pat Gelsinger, did an interview on CNBC’s Squawk Box. And I think it tells us everything we want to know about oligarchy, arrogance and the state of American politics.
And this is what Mr. Gelsinger said:
“My message to congressional leaders is ‘Hey, if I’m not done with the job, I don’t get to go home. Neither should you. Do not go home for August recess until you have passed the chips act. Because I and others in the industry will make investment decisions. And do you want those investments in the US or are we simply not competitive enough to do them here and we need to go to Europe or Asia for those? Get the job done. Do not go home for August recess without getting these bills passed.”
M. President, let’s be clear. The CEO of Intel received a $179 million compensation package last year. And now what he is saying is that if you don’t give my industry a $76 billion blank check and my company up to $30 billion, despite our profound love for our country and our love of American workers and the needs of the military we are prepared to go to Europe or Asia where we may be able to make even more money.
As I said last week, I am, thankfully, not a lawyer, but that sure sounds like extortion to me. But Mr. Gelsinger’s words sure sound like extortion to me. What he is saying is that if you don’t give his industry $76 billion in corporate welfare, despite the needs of the military for advanced microchips, despite the needs of the medical industry for advanced microchips, despite the needs of our entire economy for advanced microchips, he is threatening to abandon America and move abroad.
Well, I have a few questions for Mr. Gelsinger and the other micro-chip CEOs:
If Intel and the others receive a corporate welfare check from the taxpayers of America are they willing to commit today that their companies will not outsource American jobs overseas?
If this legislation passes, will Intel and the others commit today that they will not spend another penny on stock buybacks to enrich wealthy shareholders but will instead spend the lion’s share of their profits to create jobs in the United States of America?
If this legislation goes into effect, will Intel and the others commit today that they will stay neutral in any union organizing campaign like the one being waged at Intel’s micro-chip plant in Hillsboro, Oregon?
If this legislation goes into effect, will Intel and the others commit today that they are prepared to issue warrants to the federal government so that the taxpayers of America get a reasonable return on their investments?
M. President, if Intel and the others were prepared to say “yes” to any of these questions they would not be lobbying against my amendment to impose these conditions to the CHIPS Act. And that, to my mind, is absolutely unacceptable.
Further, I say to my colleagues who claim that this bill is supposed to make us “more competitive” with China, guess what?
Since 2008, Intel has invested at least $700 million in tech companies in China including two Chinese semi-conductor start-ups Pro-Plus and Spectrum Materials.
Cite: https://www.sanders.senate.gov/press-releases/prepared-remarks-sanders-questions-why-u-s-must-join-the-club-and-give-blank-checks-to-microchip-companies-while-ignoring-other-major-issues/
Posting by Don Allen Resnikoff
PS. I do not endorse Sanders’ thought that he is thankful not to be a lawyer. I believe that many lawyers are benign or even positive forces. DAR
The Wall Street Journal reports that a $280 billion package of subsidies and research funding to boost U.S. competitiveness in semiconductors and advanced technology is on track to pass Congress. Senate Majority Leader Chuck Schumer is among those who support incentives to US semiconductor makers, ostensibly to increase US competitiveness.
Senator Bernie Sanders is not having it. In remarks issued on July 25, he said that the effect of the 1000+ page bill is for American taxpayers to provide the micro-chip industry, including Intel, with a blank check of over $76 billion at a time when semiconductor companies are making tens of billions of dollars in profits and paying their executives exorbitant compensation packages. In addition, the semiconductor companies have, with US government support, undermined US competitiveness by investing in Chinese manufacturing and sending US manufacturing jobs overseas. Here is an excerpt from the Sanders remarks:
+++
Over the last 20 years, the micro-chip industry has shut down over 780 manufacturing plants and other establishments in the United States and eliminated 150,000 American jobs while moving most of its production overseas after receiving over $9.5 billion in government subsidies and loans.
Let me give you just a few examples:
Between 2010 and 2014, Intel laid off approximately 1,400 workers from the Rio Rancho, New Mexico chip facility and offshored 1,000 jobs to Israel.
According to the Oregon Bureau of Labor and Industry, Intel laid off more than 1,000 workers in Oregon between 2015 and 2016. They specifically noted that the company was offshoring jobs to Israel and that workers were required to train their replacements in India and Costa Rica before being laid off when their jobs were shipped there.
Texas Instruments outsourced 400 jobs from their Houston, Texas manufacturing facility to the Philippines in 2013.
Micron Technology has repeatedly cut jobs in Boise, Idaho, including 1,100 in 2003, another 1,100 in 2007, and 1,500 in 2008. In 2009, the company stopped manufacturing some types of chips entirely and laid off 2,000 workers.
In other words, in order to make more profits, these companies took government money and used it to ship good-paying jobs abroad. Now, as a reward for causing this crisis, these same companies are in line to receive a massive taxpayer handout to undo the damage that they did. That is simply unacceptable.
In total, it has been estimated that 5 major semi-conductor companies will receive the lion’s share of this taxpayer handout: Intel, Texas Instruments, Micron Technology, Global Foundries, and Samsung. These 5 companies made $70 billion in profits last year.
The company that will likely benefit the most from this taxpayer assistance is Intel.
In 2021, Intel made nearly $20 billion in profits. During the pandemic, Intel had enough money to spend $16.6 billion, not on research and development, not in building new plants in America, but on buying back its own stock to reward its executives and wealthy shareholders. So here is the absurd moment that we are at. It is estimated that Intel will receive between $20 and $30 billion in federal funding with no strings attached in order to build new plants. And yet, within the last several years, this same company spent over $16 billion on stock buybacks. And there is no guarantee in this bill that they will not continue to do stock buybacks.
Over the past 20 years, Intel spent over $100 million on lobbying and campaign contributions. That’s a heck of an investment. For $100 million in lobbying and campaign contributions you receive at least $20 billion in corporate welfare. Not a bad deal.
A little over a week ago, the CEO of Intel, Pat Gelsinger, did an interview on CNBC’s Squawk Box. And I think it tells us everything we want to know about oligarchy, arrogance and the state of American politics.
And this is what Mr. Gelsinger said:
“My message to congressional leaders is ‘Hey, if I’m not done with the job, I don’t get to go home. Neither should you. Do not go home for August recess until you have passed the chips act. Because I and others in the industry will make investment decisions. And do you want those investments in the US or are we simply not competitive enough to do them here and we need to go to Europe or Asia for those? Get the job done. Do not go home for August recess without getting these bills passed.”
M. President, let’s be clear. The CEO of Intel received a $179 million compensation package last year. And now what he is saying is that if you don’t give my industry a $76 billion blank check and my company up to $30 billion, despite our profound love for our country and our love of American workers and the needs of the military we are prepared to go to Europe or Asia where we may be able to make even more money.
As I said last week, I am, thankfully, not a lawyer, but that sure sounds like extortion to me. But Mr. Gelsinger’s words sure sound like extortion to me. What he is saying is that if you don’t give his industry $76 billion in corporate welfare, despite the needs of the military for advanced microchips, despite the needs of the medical industry for advanced microchips, despite the needs of our entire economy for advanced microchips, he is threatening to abandon America and move abroad.
Well, I have a few questions for Mr. Gelsinger and the other micro-chip CEOs:
If Intel and the others receive a corporate welfare check from the taxpayers of America are they willing to commit today that their companies will not outsource American jobs overseas?
If this legislation passes, will Intel and the others commit today that they will not spend another penny on stock buybacks to enrich wealthy shareholders but will instead spend the lion’s share of their profits to create jobs in the United States of America?
If this legislation goes into effect, will Intel and the others commit today that they will stay neutral in any union organizing campaign like the one being waged at Intel’s micro-chip plant in Hillsboro, Oregon?
If this legislation goes into effect, will Intel and the others commit today that they are prepared to issue warrants to the federal government so that the taxpayers of America get a reasonable return on their investments?
M. President, if Intel and the others were prepared to say “yes” to any of these questions they would not be lobbying against my amendment to impose these conditions to the CHIPS Act. And that, to my mind, is absolutely unacceptable.
Further, I say to my colleagues who claim that this bill is supposed to make us “more competitive” with China, guess what?
Since 2008, Intel has invested at least $700 million in tech companies in China including two Chinese semi-conductor start-ups Pro-Plus and Spectrum Materials.
Cite: https://www.sanders.senate.gov/press-releases/prepared-remarks-sanders-questions-why-u-s-must-join-the-club-and-give-blank-checks-to-microchip-companies-while-ignoring-other-major-issues/
Posting by Don Allen Resnikoff
PS. I do not endorse Sanders’ thought that he is thankful not to be a lawyer. I believe that many lawyers are benign or even positive forces. DAR
Bert Foer’s podcast for the DC Bar on 2nd Amendment gun rights
Recently Bert Foer recorded a podcast on 2nd Amendment gun rights for the DC Bar. It will be available in a few weeks. (We’ll circulate the link when its available.) He focused on the recent US Supreme Court decision in NY State Rifle & Pistol Assn v. Bruen .
His presentation provided some background, including earlier cases Heller and McDonald v. Chicago, which established an individual right to keep a handgun at home for self-defense.
Bert explained that the Bruen case involved state regulation of open and concealed carry of guns. The majority opinion, by Justice Thomas, held that New York’s requirements that the gun owner show a special need to carry a gun violates the 14th Amendment, by preventing law-abiding citizens with ordinary self-defense needs from exercising their Second Amendment right to keep and bear arms in public for self-defense.
The podcast discussion includes further information about the Thomas opinion, the additional opinions by Alito, Kavanaugh Roberts, and Barrett, as well as the dissent by Breyer, which was joined by Sotomayor and Kagan.
The dissenters said that it is wrong for the majority opinion to focus nearly exclusively on history, which means ignoring governmental interests. Balancing the lawful use of guns against the danger of firearms is primarily the responsibility of elected bodies, not judges. The dissenters said that the majority decision gives little guidance to lower courts, and that the majority reliance on history is an approach that will permit judges to reach outcomes they prefer, cloaking those outcomes in language of history.
The podcast discussion also concerned implications for federal law, state law, and private action.
One particularly interesting question Bert discussed is whether there remains a private right to be free from guns on one’s property. That is an issue that has not yet been broadly addressed. “No guns allowed” might be the policy of leading national businesses, as well as small businesses, hotels, shopping centers and malls, banks, restaurants and bars, apartment complexes, law firms, hospitals, doctors’ and dentist offices, to give a few examples. If such private initiatives are widespread and enforced, it will be highly inconvenient to carry a gun in public.
New York State’s current post-Bruen law makes it a crime to carry a firearm on private property, unless the property owner allows it. Other states may follow the New York example, which will likely be challenged, but a popular campaign to make the private sector gun-free may well be effective in the absence of legislation.
I think that Bert’s argument for a private campaign is a strong one. For businesses, it is an aspect of maintaining a non-hostile, safe work environment. For customers, the concerns for safety and stress when entering a place of business are similar. It is frightening to most of us to be in a space where there are possibly many guns, visible or concealed, so there would seem to be a natural and potentially powerful constituency awaiting mobilization for a campaign to keep guns out of most private areas.
There would be some gun-owners who claim their Second Amendment rights are violated by private initiatives banning guns, so court challenges to this ancient and widely accepted right against trespass could be expected. But, as Bert points out, there are many precedents for privately imposed limitations that may be imposed on entry onto private property.
I agree with Bert’s idea that we should be able to act on our own as private citizens to limit the carnage by gunfire that the Supreme Court has made ever more likely.
Posting by Don Allen Resnikoff
Recently Bert Foer recorded a podcast on 2nd Amendment gun rights for the DC Bar. It will be available in a few weeks. (We’ll circulate the link when its available.) He focused on the recent US Supreme Court decision in NY State Rifle & Pistol Assn v. Bruen .
His presentation provided some background, including earlier cases Heller and McDonald v. Chicago, which established an individual right to keep a handgun at home for self-defense.
Bert explained that the Bruen case involved state regulation of open and concealed carry of guns. The majority opinion, by Justice Thomas, held that New York’s requirements that the gun owner show a special need to carry a gun violates the 14th Amendment, by preventing law-abiding citizens with ordinary self-defense needs from exercising their Second Amendment right to keep and bear arms in public for self-defense.
The podcast discussion includes further information about the Thomas opinion, the additional opinions by Alito, Kavanaugh Roberts, and Barrett, as well as the dissent by Breyer, which was joined by Sotomayor and Kagan.
The dissenters said that it is wrong for the majority opinion to focus nearly exclusively on history, which means ignoring governmental interests. Balancing the lawful use of guns against the danger of firearms is primarily the responsibility of elected bodies, not judges. The dissenters said that the majority decision gives little guidance to lower courts, and that the majority reliance on history is an approach that will permit judges to reach outcomes they prefer, cloaking those outcomes in language of history.
The podcast discussion also concerned implications for federal law, state law, and private action.
One particularly interesting question Bert discussed is whether there remains a private right to be free from guns on one’s property. That is an issue that has not yet been broadly addressed. “No guns allowed” might be the policy of leading national businesses, as well as small businesses, hotels, shopping centers and malls, banks, restaurants and bars, apartment complexes, law firms, hospitals, doctors’ and dentist offices, to give a few examples. If such private initiatives are widespread and enforced, it will be highly inconvenient to carry a gun in public.
New York State’s current post-Bruen law makes it a crime to carry a firearm on private property, unless the property owner allows it. Other states may follow the New York example, which will likely be challenged, but a popular campaign to make the private sector gun-free may well be effective in the absence of legislation.
I think that Bert’s argument for a private campaign is a strong one. For businesses, it is an aspect of maintaining a non-hostile, safe work environment. For customers, the concerns for safety and stress when entering a place of business are similar. It is frightening to most of us to be in a space where there are possibly many guns, visible or concealed, so there would seem to be a natural and potentially powerful constituency awaiting mobilization for a campaign to keep guns out of most private areas.
There would be some gun-owners who claim their Second Amendment rights are violated by private initiatives banning guns, so court challenges to this ancient and widely accepted right against trespass could be expected. But, as Bert points out, there are many precedents for privately imposed limitations that may be imposed on entry onto private property.
I agree with Bert’s idea that we should be able to act on our own as private citizens to limit the carnage by gunfire that the Supreme Court has made ever more likely.
Posting by Don Allen Resnikoff
Washingtonpost: https://www.washingtonpost.com/dc-md-va/2022/06/30/lawsuit-guns-dc-metro-buses/
Gun owners sue D.C., demanding to carry firearms on Metro
The plaintiffs say a recent Supreme Court ruling opens the door for guns on buses and trains.
By Paul Duggan
EXCERPT
Updated June 30, 2022 at 9:26 p.m. EDT|Published June 30, 2022 at 7:05 p.m. EDT
Four men with permits to carry concealed handguns in the District sued the city on Thursday, arguing that the ban on carrying firearms in the Metro transit system is unconstitutional under a recent U.S. Supreme Court ruling.
The lawsuit, filed in U.S. District Court in Washington, cites the Supreme Court’s June 23 decision that makes it harder for governments to restrict the carrying of pistols outside the home. Writing for the court’s 6-to-3 conservative majority, Justice Clarence Thomas said that to ban concealed handguns in a particular place, “the government must demonstrate that the regulation is consistent with this Nation’s historical tradition of firearm regulation.”
The District prohibits people with concealed-carry permits to carry weapons in more than a dozen locations designated “sensitive areas,” including schools, government buildings, polling places, medical offices and businesses serving alcohol, in addition to the transit system. In the lawsuit filed Thursday, the plaintiffs argue that Metro should be removed from the list.
“Public transportation vehicles and stations, essentially the D.C. Metro, share few, if any, characteristics supporting the designation of other locations as sensitive areas,” the lawsuit says.
Unlike schools and government offices, for example, the Metro system is “not populated with individuals who would be high-value targets to a terrorist or active killer,” the plaintiffs contend. “They are not landmarks or symbols of our nation which would be inviting to terrorists or active killers. … There is not a tradition or history of prohibitions of carrying firearms on public transportation vehicles. In short, there is no basis to label the Metro as a sensitive area.”
The office of D.C. Attorney General Karl A. Racine (D) vowed to fight the lawsuit — one of many such cases that are likely to arise across the country in light of the Supreme Court’s ruling last week in New York State Rifle & Pistol Assoc. v. Bruen.
Gun owners sue D.C., demanding to carry firearms on Metro
The plaintiffs say a recent Supreme Court ruling opens the door for guns on buses and trains.
By Paul Duggan
EXCERPT
Updated June 30, 2022 at 9:26 p.m. EDT|Published June 30, 2022 at 7:05 p.m. EDT
Four men with permits to carry concealed handguns in the District sued the city on Thursday, arguing that the ban on carrying firearms in the Metro transit system is unconstitutional under a recent U.S. Supreme Court ruling.
The lawsuit, filed in U.S. District Court in Washington, cites the Supreme Court’s June 23 decision that makes it harder for governments to restrict the carrying of pistols outside the home. Writing for the court’s 6-to-3 conservative majority, Justice Clarence Thomas said that to ban concealed handguns in a particular place, “the government must demonstrate that the regulation is consistent with this Nation’s historical tradition of firearm regulation.”
The District prohibits people with concealed-carry permits to carry weapons in more than a dozen locations designated “sensitive areas,” including schools, government buildings, polling places, medical offices and businesses serving alcohol, in addition to the transit system. In the lawsuit filed Thursday, the plaintiffs argue that Metro should be removed from the list.
“Public transportation vehicles and stations, essentially the D.C. Metro, share few, if any, characteristics supporting the designation of other locations as sensitive areas,” the lawsuit says.
Unlike schools and government offices, for example, the Metro system is “not populated with individuals who would be high-value targets to a terrorist or active killer,” the plaintiffs contend. “They are not landmarks or symbols of our nation which would be inviting to terrorists or active killers. … There is not a tradition or history of prohibitions of carrying firearms on public transportation vehicles. In short, there is no basis to label the Metro as a sensitive area.”
The office of D.C. Attorney General Karl A. Racine (D) vowed to fight the lawsuit — one of many such cases that are likely to arise across the country in light of the Supreme Court’s ruling last week in New York State Rifle & Pistol Assoc. v. Bruen.
Matt Stoller on antitrust enforcement and the Biden choice for DC Circuit Court Judge
(From Stoller's 7-12-2022 free newsletter)
In other words, while enforcers have started to change their thinking around antitrust, judges on both sides of the aisle have not. If Biden had a coherent philosophy, to complement assertive enforcers like Khan and Kanter he would also be nominating candidates for judicial slots that oppose narrow views of antitrust law. That is, in reverse, how Reagan eroded the law, by both putting enforcers like James Miller and Bill Baxter at the agencies, and by nominating people like Bork to the judiciary.
But Biden is not doing that. This is not obvious if you just look at his one Supreme Court nominee, Ketanji Brown Jackson, who is not a corporate lawyer and will likely have a reasonable posture on market power questions. Below the surface, however, there are a lot of questionable picks.
For instance, Biden just nominated to D.C. Circuit a 35 year-old Google lawyer named Brad Garcia. Garcia is a former Elena Kagan clerk from the monopoly friendly big law firm O’Melveny, and aside from Google, he has also represented Ford, Fidelity, and China Agritech in cases that fortify corporate power. Like most corporate lawyers with political ambitions, Garcia has done a bunch of pro bono cases - in this instance for prisoners and immigration - but his paying work was on behalf of dominant firms. This choice is a big deal - the most important regulatory court outside of the Supreme Court is the D.C. circuit...
(From Stoller's 7-12-2022 free newsletter)
In other words, while enforcers have started to change their thinking around antitrust, judges on both sides of the aisle have not. If Biden had a coherent philosophy, to complement assertive enforcers like Khan and Kanter he would also be nominating candidates for judicial slots that oppose narrow views of antitrust law. That is, in reverse, how Reagan eroded the law, by both putting enforcers like James Miller and Bill Baxter at the agencies, and by nominating people like Bork to the judiciary.
But Biden is not doing that. This is not obvious if you just look at his one Supreme Court nominee, Ketanji Brown Jackson, who is not a corporate lawyer and will likely have a reasonable posture on market power questions. Below the surface, however, there are a lot of questionable picks.
For instance, Biden just nominated to D.C. Circuit a 35 year-old Google lawyer named Brad Garcia. Garcia is a former Elena Kagan clerk from the monopoly friendly big law firm O’Melveny, and aside from Google, he has also represented Ford, Fidelity, and China Agritech in cases that fortify corporate power. Like most corporate lawyers with political ambitions, Garcia has done a bunch of pro bono cases - in this instance for prisoners and immigration - but his paying work was on behalf of dominant firms. This choice is a big deal - the most important regulatory court outside of the Supreme Court is the D.C. circuit...
California promotes local production of low cost insulin
The state’s budget allocates $100 million to make insulin more cheaply. California Gov. Gavin Newsom, a Democrat, said $50 million will be put toward a California insulin-manufacturing facility and $50 million will go toward the development of low-cost insulin products.
“Nothing epitomizes market failures more than the cost of insulin,” Mr. Newsom said in a video on Thursday explaining the plan. See https://twitter.com/CAgovernor/status/1545121996123426816
The state’s budget allocates $100 million to make insulin more cheaply. California Gov. Gavin Newsom, a Democrat, said $50 million will be put toward a California insulin-manufacturing facility and $50 million will go toward the development of low-cost insulin products.
“Nothing epitomizes market failures more than the cost of insulin,” Mr. Newsom said in a video on Thursday explaining the plan. See https://twitter.com/CAgovernor/status/1545121996123426816
Law Reform
to Prohibit Overly Broad Secrecy Orders in Litigated Cases
A free remote Zoom program will be held July 20, 2022 1:15-2:45 PM --
Hosted by DC Consumer Rights Coalition and co-sponsored by the DC Bar’s
Antitrust and Consumer Community, and the DC Bar’s DC Affairs Community.
This is a free program – there is no charge for attendance.
To sign up for the program and get a Zoom link, send a request by email to DCConsumerProgram@zohomail.com with “7-20 right to know” in the subject line. More materials will be emailed to registered participants before the program.
Speakers:
Leah Nicholls and Phillip Robinson, Public Justice – Access to Justice Project
Program coordinator: Don Allen Resnikoff
Attorneys Nicholls and Robinson will speak in support of local “right to know” law reform.
The program will specifically discuss:
to Prohibit Overly Broad Secrecy Orders in Litigated Cases
A free remote Zoom program will be held July 20, 2022 1:15-2:45 PM --
Hosted by DC Consumer Rights Coalition and co-sponsored by the DC Bar’s
Antitrust and Consumer Community, and the DC Bar’s DC Affairs Community.
This is a free program – there is no charge for attendance.
To sign up for the program and get a Zoom link, send a request by email to DCConsumerProgram@zohomail.com with “7-20 right to know” in the subject line. More materials will be emailed to registered participants before the program.
Speakers:
Leah Nicholls and Phillip Robinson, Public Justice – Access to Justice Project
Program coordinator: Don Allen Resnikoff
Attorneys Nicholls and Robinson will speak in support of local “right to know” law reform.
The program will specifically discuss:
- The traditional role of the ‘public courthouse’ and right of the public to observe and review information disclosed in litigation.
- Why court secrecy is important and why advocates should care, including examples of the impact of overbroad confidentiality orders.
- Different means and methods to curb overbroad protective orders established in different jurisdictions.
- The current standard in DC courts.
- What local courts and attorneys can do to ensure a fair balance between protecting genuinely sensitive information, such as true trade secrets and the public’s right to know information disclosed in court proceedings.
Are local DC gas wholesalers and retailers gouging on price?
Rich Lowery of the NY Post apparently doesn’t think that could be. He called out “shameless demagoguery” and “economic illiteracy” when President Biden urged “companies running gas stations and setting prices at the pump” to “bring down the price you are charging at the pump to reflect the cost you’re paying for the product.” See https://nypost.com/2022/07/05/biden-blasting-gas-stations-economic-illiteracy-or-shameless-demagoguery/
But economic analysis turns on facts. For a local example, in the District of Columbia Gas Buddy reports for 7/6/2022 that several stations in DC are charging $5.05 per gallon, while other stations in DC are charging prices like $4.45, 4.54, and $4.69. See https://www.gasbuddy.com/gaspricemap?lat=38.94031259746692&lng=-77.00923321831054&z=13
For a further local example, a 2013 Washington Post article by Mike DeBonis explains that one corporate wholesaler group had exclusive supply agreements with roughly 60 percent of the 107 gasoline retailers operating in the city, according to a lawsuit brought by the DC Attorney General: “As a result of these agreements, the [Mamo companies] set the wholesale prices paid for Exxon-branded gasoline in D.C., depriving D.C. residents and others … of the benefits of competition.” https://www.washingtonpost.com/blogs/mike-debonis/wp/2013/08/27/d-c-attorney-general-takes-new-aim-at-gas-mogul-joe-mamo/
Is it certain on these facts that some DC gasoline station retailers and wholesalers are behaving badly, or illegally, or that government intervention is needed? Not necessarily. It can be argued that posted prices and Gas Buddy reporting mean that competition can work, and drivers can drive a few minutes to benefit from lower prices. Also, perhaps rents or other costs of doing business explain retail price discrepancies.
Direct or indirect power over retail prices by a dominant local wholesaler may or may not be a basis for a finding of bad or illegal behavior, depending on the fact details.
But, it is hardly “economic illiteracy” or worse for the DC AG to be concerned by price discrepancies, retail prices that do not reflect lower costs, and apparent dominance by a local wholesaler.
Even the simple set of facts from Gas Buddy suggests an idea worth exploring about the profits being made by those stations charging $5.05 per gallon rather than, say, $4.70 a gallon. Unless the $5.05 stations have decided to buy gas from local wholesale terminals at much higher prices than the $4.70 gas stations, the $5.05 gas stations might be making about 35 cents more per gallon than other stations. The Economics 101 principle in play here is that more may actually be more.
In 2020 DC AG Racine sued Capitol Petroleum, a major DC gasoline seller, alleging price gouging. Borrowing from the wording of the AG’s press release, Racine filed a lawsuit against Capitol Petroleum Group, LLC (CPG), a leading retailer and distributor of gasoline in the District of Columbia, as well as several affiliated companies, for illegal price gouging during the District’s COVID-19 emergency. The Office of the Attorney General’s (OAG) investigation revealed that even as wholesale gas prices dropped when the economy slowed in March and April 2020, CPG unlawfully doubled its profits on each gallon of gas sold to consumers at 54 gas stations in the District. OAG also alleged that CPG and its affiliates, Anacostia Realty, LLC, and DAG Petroleum Suppliers, LLC, unfairly increased profit margins they earned on gas distribution to other retailers. “With this lawsuit, OAG is seeking a court order to stop CPG from violating the District’s price gouging and consumer protection laws, relief for consumers who were charged unfairly high prices, and civil penalties.”
Whether illegal price gouging has occurred is a technical legal question beyond the scope of this brief note. The point here is simply that great price discrepancies raise concerns that are reasonable for an AG to explore. For those interested in the legal issues, a copy the DC AG’s price gouging complaint is available at: https://oag.dc.gov/sites/default/files/2020-11/Capitol-Petroleum-Group-Complaint.pdf
With regard to the 2013 DC AG lawsuit mentioned above, Washington Post reporter Mike DeBonis explained that the lawsuit targeted “exclusive-supply agreements” between the most powerful local gasoline wholesaler and the independent dealers who operated wholesaler-owned stations. ExxonMobil was also named as a defendant in the case, as it established the agreements in question before selling 29 stations to wholesaler-station operator Mamo in 2009, and could still enforce them through its supply contracts with distributors.
The 2013 AG lawsuit never resulted in an enforceable judgment in DC’s favor, but instead followed a tangled procedural history that is beyond the scope of this note, as are the precise merits or demerits of the case.
But the bottom-line point is clear. It is reasonable, and not an exercise in economics 101 illiteracy to worry that in the District of Columbia area it might be true that some gas sellers are selling gas at retail prices that are much more above cost than are other retailers. They may be doing it because of issues of market power. That is, they do it because they can.
The fact points drawn from the District of Columbia experience are hardly unique. Similar retail pricing variations are reported by Gas Buddy throughout the US, and a number of US metropolitan areas have powerful gasoline wholesalers.
It is neither demagoguery nor a failure to grasp Econ 101 principles to think that State Attorneys General should be concerned and conduct investigations when some local gas retailers charge much more than others, when retail prices do not decline to reflect lower supply costs, or when local wholesalers appear to directly or indirectly control retail prices of a high percentage of retailers.
More broadly, there may be good reason for AG investigation whenever retail gas prices are not responsive and proportionate to changes in the price of supply. Mr. Lowery’s suggestion that such investigation puts “shameless demagoguery” and “economic illiteracy” in play in fact reflects his tendency to demagoguery and ignoring relevant facts that are in plain sight.
by Don Allen Resnikoff 7-9
Rich Lowery of the NY Post apparently doesn’t think that could be. He called out “shameless demagoguery” and “economic illiteracy” when President Biden urged “companies running gas stations and setting prices at the pump” to “bring down the price you are charging at the pump to reflect the cost you’re paying for the product.” See https://nypost.com/2022/07/05/biden-blasting-gas-stations-economic-illiteracy-or-shameless-demagoguery/
But economic analysis turns on facts. For a local example, in the District of Columbia Gas Buddy reports for 7/6/2022 that several stations in DC are charging $5.05 per gallon, while other stations in DC are charging prices like $4.45, 4.54, and $4.69. See https://www.gasbuddy.com/gaspricemap?lat=38.94031259746692&lng=-77.00923321831054&z=13
For a further local example, a 2013 Washington Post article by Mike DeBonis explains that one corporate wholesaler group had exclusive supply agreements with roughly 60 percent of the 107 gasoline retailers operating in the city, according to a lawsuit brought by the DC Attorney General: “As a result of these agreements, the [Mamo companies] set the wholesale prices paid for Exxon-branded gasoline in D.C., depriving D.C. residents and others … of the benefits of competition.” https://www.washingtonpost.com/blogs/mike-debonis/wp/2013/08/27/d-c-attorney-general-takes-new-aim-at-gas-mogul-joe-mamo/
Is it certain on these facts that some DC gasoline station retailers and wholesalers are behaving badly, or illegally, or that government intervention is needed? Not necessarily. It can be argued that posted prices and Gas Buddy reporting mean that competition can work, and drivers can drive a few minutes to benefit from lower prices. Also, perhaps rents or other costs of doing business explain retail price discrepancies.
Direct or indirect power over retail prices by a dominant local wholesaler may or may not be a basis for a finding of bad or illegal behavior, depending on the fact details.
But, it is hardly “economic illiteracy” or worse for the DC AG to be concerned by price discrepancies, retail prices that do not reflect lower costs, and apparent dominance by a local wholesaler.
Even the simple set of facts from Gas Buddy suggests an idea worth exploring about the profits being made by those stations charging $5.05 per gallon rather than, say, $4.70 a gallon. Unless the $5.05 stations have decided to buy gas from local wholesale terminals at much higher prices than the $4.70 gas stations, the $5.05 gas stations might be making about 35 cents more per gallon than other stations. The Economics 101 principle in play here is that more may actually be more.
In 2020 DC AG Racine sued Capitol Petroleum, a major DC gasoline seller, alleging price gouging. Borrowing from the wording of the AG’s press release, Racine filed a lawsuit against Capitol Petroleum Group, LLC (CPG), a leading retailer and distributor of gasoline in the District of Columbia, as well as several affiliated companies, for illegal price gouging during the District’s COVID-19 emergency. The Office of the Attorney General’s (OAG) investigation revealed that even as wholesale gas prices dropped when the economy slowed in March and April 2020, CPG unlawfully doubled its profits on each gallon of gas sold to consumers at 54 gas stations in the District. OAG also alleged that CPG and its affiliates, Anacostia Realty, LLC, and DAG Petroleum Suppliers, LLC, unfairly increased profit margins they earned on gas distribution to other retailers. “With this lawsuit, OAG is seeking a court order to stop CPG from violating the District’s price gouging and consumer protection laws, relief for consumers who were charged unfairly high prices, and civil penalties.”
Whether illegal price gouging has occurred is a technical legal question beyond the scope of this brief note. The point here is simply that great price discrepancies raise concerns that are reasonable for an AG to explore. For those interested in the legal issues, a copy the DC AG’s price gouging complaint is available at: https://oag.dc.gov/sites/default/files/2020-11/Capitol-Petroleum-Group-Complaint.pdf
With regard to the 2013 DC AG lawsuit mentioned above, Washington Post reporter Mike DeBonis explained that the lawsuit targeted “exclusive-supply agreements” between the most powerful local gasoline wholesaler and the independent dealers who operated wholesaler-owned stations. ExxonMobil was also named as a defendant in the case, as it established the agreements in question before selling 29 stations to wholesaler-station operator Mamo in 2009, and could still enforce them through its supply contracts with distributors.
The 2013 AG lawsuit never resulted in an enforceable judgment in DC’s favor, but instead followed a tangled procedural history that is beyond the scope of this note, as are the precise merits or demerits of the case.
But the bottom-line point is clear. It is reasonable, and not an exercise in economics 101 illiteracy to worry that in the District of Columbia area it might be true that some gas sellers are selling gas at retail prices that are much more above cost than are other retailers. They may be doing it because of issues of market power. That is, they do it because they can.
The fact points drawn from the District of Columbia experience are hardly unique. Similar retail pricing variations are reported by Gas Buddy throughout the US, and a number of US metropolitan areas have powerful gasoline wholesalers.
It is neither demagoguery nor a failure to grasp Econ 101 principles to think that State Attorneys General should be concerned and conduct investigations when some local gas retailers charge much more than others, when retail prices do not decline to reflect lower supply costs, or when local wholesalers appear to directly or indirectly control retail prices of a high percentage of retailers.
More broadly, there may be good reason for AG investigation whenever retail gas prices are not responsive and proportionate to changes in the price of supply. Mr. Lowery’s suggestion that such investigation puts “shameless demagoguery” and “economic illiteracy” in play in fact reflects his tendency to demagoguery and ignoring relevant facts that are in plain sight.
by Don Allen Resnikoff 7-9
CFPB: Using Complex Algorithms Is Not A Legal Defense For Discrimination
10 June 2022
by Sarah Auchterlonie , Jason Downs and Jason R. Dunn
Brownstein Hyatt Farber Schreck, LLP
The Consumer Financial Protection Bureau recently warned companies that, under federal anti-discrimination laws, they still owe consumers an explanation of specific reasons for denying credit applications, even if they use complex algorithms to determine creditworthiness. The move is both a reminder of the agency's continued focus on anti-discrimination enforcement as well as the enduring responsibility of companies using new technology in consumer interactions.
On May 26, the agency published a circular confirming its position that creditors' adverse action notice requirements under the Equal Credit Opportunity Act apply when using artificial intelligence or other algorithm-based credit models-even if the company claims it does not fully understand how the technology it uses to make those decisions works. Beyond denied credit applications, adverse actions can include closing or changing the terms of an existing credit account or denying a request to increase credit limits.
"Companies are not absolved of their legal responsibilities when they let a black-box model make lending decisions," CFPB Director Rohit Chopra said in a press release.
"The law gives every applicant the right to a specific explanation if their application for credit was denied, and that right is not diminished simply because a company uses a complex algorithm that it doesn't understand."
The circular comes after the CFPB announced in mid-March that it would prioritize targeting unfair discrimination even if fair lending laws don't apply, citing prohibitions against unfair, deceptive and abusive practices under the Consumer Financial Protection Act (CFPA). In a move signaling closer collaboration with states, including state attorneys general, the CFPB is also empowering states to enforce provisions under the CFPA, recently publishing an interpretive rule clarifying that Section 1042 permits states to enforce any provision of the law. The interpretive rule notes a CFPB action would not preempt a parallel state action. Further evidence of federal-state partnerships is the fact that the CFPB has memoranda of understanding with nearly two dozen state attorneys general, all 50 states, the District of Columbia and Puerto Rico.
In the end, creditors and lenders are still liable under federal law if they do not provide specific reasons for adverse actions, and a lack of understanding of how credit modeling technology works is not a legal defense for noncompliance. More broadly, companies are operating in a regulatory environment at the state and federal level that is increasingly focused on protecting consumers from algorithmic discrimination. Companies would be wise to review their algorithms for disparate treatment and disparate impact.
The content of this article is intended to provide a general guide to the subject matter. Specialist advice should be sought about your specific circumstances.
Sarah Auchterlonie, Jason Downs,
Jason R. Dunn
Brownstein Hyatt Farber Schreck, LLP
10 June 2022
by Sarah Auchterlonie , Jason Downs and Jason R. Dunn
Brownstein Hyatt Farber Schreck, LLP
The Consumer Financial Protection Bureau recently warned companies that, under federal anti-discrimination laws, they still owe consumers an explanation of specific reasons for denying credit applications, even if they use complex algorithms to determine creditworthiness. The move is both a reminder of the agency's continued focus on anti-discrimination enforcement as well as the enduring responsibility of companies using new technology in consumer interactions.
On May 26, the agency published a circular confirming its position that creditors' adverse action notice requirements under the Equal Credit Opportunity Act apply when using artificial intelligence or other algorithm-based credit models-even if the company claims it does not fully understand how the technology it uses to make those decisions works. Beyond denied credit applications, adverse actions can include closing or changing the terms of an existing credit account or denying a request to increase credit limits.
"Companies are not absolved of their legal responsibilities when they let a black-box model make lending decisions," CFPB Director Rohit Chopra said in a press release.
"The law gives every applicant the right to a specific explanation if their application for credit was denied, and that right is not diminished simply because a company uses a complex algorithm that it doesn't understand."
The circular comes after the CFPB announced in mid-March that it would prioritize targeting unfair discrimination even if fair lending laws don't apply, citing prohibitions against unfair, deceptive and abusive practices under the Consumer Financial Protection Act (CFPA). In a move signaling closer collaboration with states, including state attorneys general, the CFPB is also empowering states to enforce provisions under the CFPA, recently publishing an interpretive rule clarifying that Section 1042 permits states to enforce any provision of the law. The interpretive rule notes a CFPB action would not preempt a parallel state action. Further evidence of federal-state partnerships is the fact that the CFPB has memoranda of understanding with nearly two dozen state attorneys general, all 50 states, the District of Columbia and Puerto Rico.
In the end, creditors and lenders are still liable under federal law if they do not provide specific reasons for adverse actions, and a lack of understanding of how credit modeling technology works is not a legal defense for noncompliance. More broadly, companies are operating in a regulatory environment at the state and federal level that is increasingly focused on protecting consumers from algorithmic discrimination. Companies would be wise to review their algorithms for disparate treatment and disparate impact.
The content of this article is intended to provide a general guide to the subject matter. Specialist advice should be sought about your specific circumstances.
Sarah Auchterlonie, Jason Downs,
Jason R. Dunn
Brownstein Hyatt Farber Schreck, LLP
law reform to prohibit overly broad secrecy orders in litigated cases
Public Justice (https://www.publicjustice.net) and other Washington, D.C. area public interest organizations are advocating for law reform to prohibit overly broad secrecy orders in litigated cases. One goal is legislation that will limit court entry of orders that permit parties to withhold and keep secret important consumer information without substantial justification. Several states have enacted “right to know” anti-secrecy laws that address the problem, including Florida, Louisiana, Montana, South Carolina, and Washington State. A California anti-secrecy law is being considered by legislators and may be adopted in the near future.
Neither the District of Columbia, Maryland, nor Virginia have such laws. The DC Consumer Rights Coalition, DC Bar Consumer and D.C. Affairs Communities/Sections, and others, plan to present a program this Summer in which attorneys representing Public Justice will advocate for local “right to know” law reform.
One model for such local advocacy is the California “Public Right to Know Act” which was recently passed by the California State Senate. As explained in a posting by Public Justice at https://www.publicjustice.net/california-senate-passes-public-right-to-know-act/,
California Senate Bill 1149 would protect the public’s right to know the facts about dangerous public hazards that are discovered during litigation.
The Public Justice posting explains that the California “Public Right to Know Act”— would do the following:
Sponsoring California Senator Connie M. Leyva explained that “Information about defects and hazards created by companies should never be hidden behind a veil of courthouse secrecy that can endanger the lives and safety of Californians . . . .The public must have access to this vital information so that they can decide—for themselves—how they can protect themselves and their families from these defective products or toxic hazards. It is unconscionable that any company would ever seek to keep critical information that can lead to injuries or even deaths from the public—and all because of their desire for keep making profits. I thank my Senate colleagues that voted for SB 1149 today, as they are standing on the side of the public by helping to prevent future injuries or deaths.”
The Public Justice posting explains that for decades, overly broad court protective orders have enabled companies to shield evidence of threats to public safety and other corporate wrongdoing.
Consumers Union has for many years supported “right to know” legislation in California. Elisa Odabashian, Senior Policy Analyst with Consumers Union’s West Coast Office, made the following statement in 2000 in support of legislative proposals resembling the current SB 1149 that would limit secret out-of-court settlements in product defect, environmental hazard, unfair insurance claims practice or financial fraud lawsuits.
“Many lives could be saved and much suffering could be averted if corporations were not allowed to use secrecy orders in court settlements to hide information about product defects, environmental hazards, or financial fraud.”
“The Firestone/Ford tire tragedies highlight how secrecy orders can have very serious consequences on public safety. Over the last decade–long before the recent recall of millions of Firestone tires sold largely on the popular Ford Explorer–there were 50-100 Firestone tire lawsuits. Most of these court cases were settled with secrecy orders in place that effectively kept information about the potential dangers associated with the tires from the public. According to the Detroit Free Press, to date, there have been 119 deaths and 500 serious injuries associated with Firestone tire tread separations. Many of these deaths and injuries could have been prevented if secret settlements had been barred.” https://advocacy.consumerreports.org/press_release/consumers-union-supports-bills-to-limit-secret-out-of-court-settlements/
Further information will be forthcoming about the upcoming DC Consumer Rights Coalition, DC Bar Consumer and D.C. Affairs Communities/Sections program in which attorneys representing Public Justice will advocate for local “right to know” law reform.
By Don Allen Resnikoff
__________
Public Justice (https://www.publicjustice.net) and other Washington, D.C. area public interest organizations are advocating for law reform to prohibit overly broad secrecy orders in litigated cases. One goal is legislation that will limit court entry of orders that permit parties to withhold and keep secret important consumer information without substantial justification. Several states have enacted “right to know” anti-secrecy laws that address the problem, including Florida, Louisiana, Montana, South Carolina, and Washington State. A California anti-secrecy law is being considered by legislators and may be adopted in the near future.
Neither the District of Columbia, Maryland, nor Virginia have such laws. The DC Consumer Rights Coalition, DC Bar Consumer and D.C. Affairs Communities/Sections, and others, plan to present a program this Summer in which attorneys representing Public Justice will advocate for local “right to know” law reform.
One model for such local advocacy is the California “Public Right to Know Act” which was recently passed by the California State Senate. As explained in a posting by Public Justice at https://www.publicjustice.net/california-senate-passes-public-right-to-know-act/,
California Senate Bill 1149 would protect the public’s right to know the facts about dangerous public hazards that are discovered during litigation.
The Public Justice posting explains that the California “Public Right to Know Act”— would do the following:
- Create a presumption that no court order may conceal information about a defective product or environmental hazard that poses a danger to public health or safety unless the court finds that the public interest in disclosure is clearly outweighed by a specific and substantial need for secrecy.
- Prohibit settlement agreements that restrict the disclosure of information about a defective product or environmental hazard that poses a danger to public health or safety, and make any provision in an agreement void as against public policy, and thus unenforceable.
- Narrowly tailor its application to only information about a “danger to public health or safety” that is likely to cause “significant or substantial bodily injury or illness, or death.”
Sponsoring California Senator Connie M. Leyva explained that “Information about defects and hazards created by companies should never be hidden behind a veil of courthouse secrecy that can endanger the lives and safety of Californians . . . .The public must have access to this vital information so that they can decide—for themselves—how they can protect themselves and their families from these defective products or toxic hazards. It is unconscionable that any company would ever seek to keep critical information that can lead to injuries or even deaths from the public—and all because of their desire for keep making profits. I thank my Senate colleagues that voted for SB 1149 today, as they are standing on the side of the public by helping to prevent future injuries or deaths.”
The Public Justice posting explains that for decades, overly broad court protective orders have enabled companies to shield evidence of threats to public safety and other corporate wrongdoing.
Consumers Union has for many years supported “right to know” legislation in California. Elisa Odabashian, Senior Policy Analyst with Consumers Union’s West Coast Office, made the following statement in 2000 in support of legislative proposals resembling the current SB 1149 that would limit secret out-of-court settlements in product defect, environmental hazard, unfair insurance claims practice or financial fraud lawsuits.
“Many lives could be saved and much suffering could be averted if corporations were not allowed to use secrecy orders in court settlements to hide information about product defects, environmental hazards, or financial fraud.”
“The Firestone/Ford tire tragedies highlight how secrecy orders can have very serious consequences on public safety. Over the last decade–long before the recent recall of millions of Firestone tires sold largely on the popular Ford Explorer–there were 50-100 Firestone tire lawsuits. Most of these court cases were settled with secrecy orders in place that effectively kept information about the potential dangers associated with the tires from the public. According to the Detroit Free Press, to date, there have been 119 deaths and 500 serious injuries associated with Firestone tire tread separations. Many of these deaths and injuries could have been prevented if secret settlements had been barred.” https://advocacy.consumerreports.org/press_release/consumers-union-supports-bills-to-limit-secret-out-of-court-settlements/
Further information will be forthcoming about the upcoming DC Consumer Rights Coalition, DC Bar Consumer and D.C. Affairs Communities/Sections program in which attorneys representing Public Justice will advocate for local “right to know” law reform.
By Don Allen Resnikoff
__________
dc-bar-ethics-charge-against-rudy-giuliani.pdf (documentcloud.org)
The DC Bar's ethics complaint against Rudy Giuliani is here:
https://s3.documentcloud.org/documents/22058087/dc-bar-ethics-charge-against-rudy-giuliani.pdf
Excerpt:
The conduct and standards that Respondent has violated, and the relevant facts, are as follows:
2. In the November 3, 2020, presidential election, in excess of 6.7 million votes were cast in the Commonwealth of Pennsylvania. President Biden carried the state by more than 80,000 votes.
3. Respondent represented Donald J. Trump for President, Inc. (the “Trump Campaign”), and Lawrence Roberts and David John Henry, registered voters who were citizens of the Commonwealth of Pennsylvania (collectively “Plaintiffs”).
4. Neither Respondent nor Plaintiffs challenged the November 3, 2020, election results pursuant to the Commonwealth of Pennsylvania’s statutory procedures for election contests.
5. Instead, with Respondent’s assistance, Plaintiffs filed a lawsuit that sought to overturn the results of the Pennsylvania presidential election through a federal district court order, based on alleged violations of the United States Constitution
* *
THE CHARGES
45. Respondent’s conduct violated the following Pennsylvania Rules of Professional Conduct: a. 3.1, in that he brought a proceeding and asserted issues therein without a non-frivolous basis in law and fact for doing so; and b. 8.4(d), in that he engaged in conduct prejudicial to the administration of justice.
The DC Bar's ethics complaint against Rudy Giuliani is here:
https://s3.documentcloud.org/documents/22058087/dc-bar-ethics-charge-against-rudy-giuliani.pdf
Excerpt:
The conduct and standards that Respondent has violated, and the relevant facts, are as follows:
2. In the November 3, 2020, presidential election, in excess of 6.7 million votes were cast in the Commonwealth of Pennsylvania. President Biden carried the state by more than 80,000 votes.
3. Respondent represented Donald J. Trump for President, Inc. (the “Trump Campaign”), and Lawrence Roberts and David John Henry, registered voters who were citizens of the Commonwealth of Pennsylvania (collectively “Plaintiffs”).
4. Neither Respondent nor Plaintiffs challenged the November 3, 2020, election results pursuant to the Commonwealth of Pennsylvania’s statutory procedures for election contests.
5. Instead, with Respondent’s assistance, Plaintiffs filed a lawsuit that sought to overturn the results of the Pennsylvania presidential election through a federal district court order, based on alleged violations of the United States Constitution
* *
THE CHARGES
45. Respondent’s conduct violated the following Pennsylvania Rules of Professional Conduct: a. 3.1, in that he brought a proceeding and asserted issues therein without a non-frivolous basis in law and fact for doing so; and b. 8.4(d), in that he engaged in conduct prejudicial to the administration of justice.
Uvalde victims sue gunmaker
"A school staffer and a deceased student’s family have filed lawsuits against the manufacturer of the gun used in the Uvalde, Texas mass shooting." See https://ardwatalab.net/news-headlines/uvalde-victims-suing-gun-manufacturer-face-long-road-to-justice The company is Daniel Defense. Commenters suggest that the gravamen of the lawsuits will be similar to the recently settled Connecticut action against Remington: that the gun maker intentionally marketed its weapons to young, unstable males. Copies of the Uvalde filings are not immediately available.
The Connecticut lawyers who successfully sued the maker of the rifle used in the 2012 Newtown, Connecticut, shooting filed a letter Friday seeking documents and records from Daniel Defense, maker of the rifle used in the Uvalde, Texas, shooting May 24.
This petition was filed on behalf of the father of Amerie Jo Garza, one of the 19 children killed in the rampage by the alleged gunman, 18-year-old Salvador Ramos. See https://abcnews.go.com/US/father-child-killed-uvalde-retains-lawyers-sued-makers/story?id=85165012
"A school staffer and a deceased student’s family have filed lawsuits against the manufacturer of the gun used in the Uvalde, Texas mass shooting." See https://ardwatalab.net/news-headlines/uvalde-victims-suing-gun-manufacturer-face-long-road-to-justice The company is Daniel Defense. Commenters suggest that the gravamen of the lawsuits will be similar to the recently settled Connecticut action against Remington: that the gun maker intentionally marketed its weapons to young, unstable males. Copies of the Uvalde filings are not immediately available.
The Connecticut lawyers who successfully sued the maker of the rifle used in the 2012 Newtown, Connecticut, shooting filed a letter Friday seeking documents and records from Daniel Defense, maker of the rifle used in the Uvalde, Texas, shooting May 24.
This petition was filed on behalf of the father of Amerie Jo Garza, one of the 19 children killed in the rampage by the alleged gunman, 18-year-old Salvador Ramos. See https://abcnews.go.com/US/father-child-killed-uvalde-retains-lawyers-sued-makers/story?id=85165012
Can the Uvalde police chief be prosecuted?
By Don Allen Resnikoff, who is individually responsible for the content
Is criminal prosecution possible for Pete Arredondo, the Uvalde district police chief who led a delayed and ineffective response to a school mass shooting in the Florida town? Conventional wisdom is that criminal prosecution is unlikely for such police failures as lack of prompt aggressive action against a shooter. But if the local prosecutors find that the facts of alleged bad behavior are strong enough to warrant it, there is possible precedent for prosecution.
A criminal action was brought by local prosecutors against Scot Peterson in connection with the shooting that killed 17 people in 2018 at a school in Parkland, Florida. The facts on which the Peterson prosecution was based have a unique aspect that may affect the utility of the Petersen prosecution as precedent. The allegation is that he took cover behind a wall while a gunman moved through several floors of Marjory Stoneman Douglas High School.
Peterson has been charged with seven felony counts of child neglect, three counts of culpable negligence and one count of perjury.
The status of the Peterson case is that it is scheduled for trial in September of 2022.
Following is a copy of a recent filing in the Peterson case in which Peterson requests permission to visit the shooting site for discovery purposes.
By Don Allen Resnikoff, who is individually responsible for the content
Is criminal prosecution possible for Pete Arredondo, the Uvalde district police chief who led a delayed and ineffective response to a school mass shooting in the Florida town? Conventional wisdom is that criminal prosecution is unlikely for such police failures as lack of prompt aggressive action against a shooter. But if the local prosecutors find that the facts of alleged bad behavior are strong enough to warrant it, there is possible precedent for prosecution.
A criminal action was brought by local prosecutors against Scot Peterson in connection with the shooting that killed 17 people in 2018 at a school in Parkland, Florida. The facts on which the Peterson prosecution was based have a unique aspect that may affect the utility of the Petersen prosecution as precedent. The allegation is that he took cover behind a wall while a gunman moved through several floors of Marjory Stoneman Douglas High School.
Peterson has been charged with seven felony counts of child neglect, three counts of culpable negligence and one count of perjury.
The status of the Peterson case is that it is scheduled for trial in September of 2022.
Following is a copy of a recent filing in the Peterson case in which Peterson requests permission to visit the shooting site for discovery purposes.
INVESTOR ALERT: Attorney General James Warns New Yorkers About Cryptocurrency Investment Risks
Investors Lost Hundreds of Billions in Cryptocurrency
Investments as the Market Reached Record Lows
See https://ag.ny.gov/press-release/2022/investor-alert-attorney-general-james-warns-new-yorkers-about-cryptocurrency
NEW YORK – New York Attorney General Letitia James today issued an alert to New Yorkers to remind them of the dangerous risks of investing in cryptocurrencies after the market reached record lows last month and investors lost hundreds of billions. Cryptocurrencies are subject to extreme and unpredictably high price swings that make them among the most high-risk investments on the market. Last month, some of those risks materialized as the price of multiple virtual currencies — from the newest coins to the most well-established coins — plunged deeply and wiped away hundreds of billions in investments. This is not the first time the market has plunged. To protect New Yorkers from this extreme volatility, Attorney General James offers New Yorkers guidance on the various risks associated with cryptocurrencies.
“Over and over again, investors are losing billions because of risky cryptocurrency investments,” said Attorney General James. “Even well-known virtual currencies from reputable trading platforms can still crash and investors can lose billions in the blink of an eye. Too often, cryptocurrency investments create more pain than gain for investors. I urge New Yorkers to be cautious before putting their hard-earned money in risky cryptocurrency investments that can yield more anxiety than fortune.”
The virtual currency market exposes investors to dangerous risks, such as wild price swings and potential losses due to hacking, fraud, or theft. Even “legitimate” investments in virtual assets are subject to speculative bubbles and security issues. Investors in virtual assets should beware of the many significant risks of investing in these products including:
Additionally, in 2018, the Office of the Attorney General (OAG) released its “Virtual Markets Integrity Initiative” report, a more detailed overview of the virtual currency markets in New York and around the world. The report gives basic, but important information about how virtual currencies trade, and the risks investors face when they buy and sell, even on “legitimate” trading platforms.
If you are worried that you or someone you love has been a victim of investment fraud, contact OAG’s Investor Protection Bureau immediately. If you have worked in the virtual assets industry and believe you may have knowledge of wrongdoing, contact OAG’s Investor Protection Bureau immediately or the online whistleblower portal.
Investors Lost Hundreds of Billions in Cryptocurrency
Investments as the Market Reached Record Lows
See https://ag.ny.gov/press-release/2022/investor-alert-attorney-general-james-warns-new-yorkers-about-cryptocurrency
NEW YORK – New York Attorney General Letitia James today issued an alert to New Yorkers to remind them of the dangerous risks of investing in cryptocurrencies after the market reached record lows last month and investors lost hundreds of billions. Cryptocurrencies are subject to extreme and unpredictably high price swings that make them among the most high-risk investments on the market. Last month, some of those risks materialized as the price of multiple virtual currencies — from the newest coins to the most well-established coins — plunged deeply and wiped away hundreds of billions in investments. This is not the first time the market has plunged. To protect New Yorkers from this extreme volatility, Attorney General James offers New Yorkers guidance on the various risks associated with cryptocurrencies.
“Over and over again, investors are losing billions because of risky cryptocurrency investments,” said Attorney General James. “Even well-known virtual currencies from reputable trading platforms can still crash and investors can lose billions in the blink of an eye. Too often, cryptocurrency investments create more pain than gain for investors. I urge New Yorkers to be cautious before putting their hard-earned money in risky cryptocurrency investments that can yield more anxiety than fortune.”
The virtual currency market exposes investors to dangerous risks, such as wild price swings and potential losses due to hacking, fraud, or theft. Even “legitimate” investments in virtual assets are subject to speculative bubbles and security issues. Investors in virtual assets should beware of the many significant risks of investing in these products including:
- Highly Speculative and Unpredictable Value: Virtual currencies are easy to create and spread in the market quickly. Their underlying value is highly subjective and unpredictable. As a result, prices can swing wildly and crash without warning and without regard to any changes in the real economy. At times, price fluctuations are driven by market hype on various social media platforms.
- Difficulty Cashing Out Investments: There is no guarantee that you will be able to liquidate your investments when you want — such as when the crypto markets begin to crash. During times of crisis, trading platforms may halt trading or purport to experience technical difficulties, preventing you from accessing your assets.
- Higher Transaction Costs: Some trading platforms charge fees on transactions such as transferring funds and withdrawing money. These fees can vary depending on the size of the transaction and overall trading volume. Therefore, it may also cost you more to access your assets when you need them the most.
- Unstable “Stablecoins”: Despite their misleading name, there is no guarantee that your stablecoin investment is protected from decreasing value. The nature and quality of the assets backing stablecoins — if there are any assets backing the stablecoin — can vary greatly and along with that so can the risks associated with holding such coins.
- Hidden Trading Costs: Value in cryptocurrencies and other virtual assets may be propped up by automated trading, or bots, that are, for example, programmed to spot when another trader is trying to make a purchase and then buy ahead of the trade. This practice can push up the price and cost you more to purchase the same virtual asset.
- Conflicts of Interest: Many operators of virtual currency trading platforms are themselves heavily invested in virtual currencies, and trade on their own platforms without oversight. The financial interests of these operators may conflict with your interests. There have also been recent reports of large investors receiving favorable treatment, such as private cash-outs away from the market.
- Limited Oversight: There are no federally regulated exchanges, like the New York Stock Exchange or Nasdaq, for virtual currencies. Virtual currency trading platforms operate from various places around the world, many of which are not easily accessible to American law enforcement. Many platforms are subject to little or no oversight. If you are the victim of fraud on one of these exchanges, you will likely have no recourse in the United States. Further, many issuers of virtual currencies are not regulated and therefore are not subject to net capital requirements or examinations. Thus, people who lose money trading a certain virtual currency may have no recourse with respect to the issue of the currency.
Additionally, in 2018, the Office of the Attorney General (OAG) released its “Virtual Markets Integrity Initiative” report, a more detailed overview of the virtual currency markets in New York and around the world. The report gives basic, but important information about how virtual currencies trade, and the risks investors face when they buy and sell, even on “legitimate” trading platforms.
If you are worried that you or someone you love has been a victim of investment fraud, contact OAG’s Investor Protection Bureau immediately. If you have worked in the virtual assets industry and believe you may have knowledge of wrongdoing, contact OAG’s Investor Protection Bureau immediately or the online whistleblower portal.
DAR comment:
Local litigation by local government and individuals has been brought against gun manufacturers. But for the most part such litigation is blocked by the e federal Protection of Lawful Commerce in Arms Act, which Congress passed in 2005 to shield gunmakers from legal claims stemming from crimes committed with their products. Following is brief discussion from the media of the recently settled Sandy Hook action by individuals against Remington, and a Reuters "Explainer" briefly cataloging other litigation actions brought against gun manufacturers. Also below is a media reference to two background check bills passed by the House and stalled in the Senate.
Also below is a media discussion of California and New York legislative efforts to increase legal responsibility of gun manufacturers.
From Barton article below: "no lawsuit has ever resulted in a jury finding a major gunmaker liable for a mass shooting. This is largely because of the federal Protection of Lawful Commerce in Arms Act, which Congress passed in 2005 to shield gunmakers from legal claims stemming from crimes committed with their products. The Sandy Hook case against Remington is one of only a few suits to have ever bypassed PLCAA’s protections, satisfying a narrow exception in the law that allows for claims when gun companies violate relevant state or federal laws."
In February the Sandy Hook case is settled in a way that reportedly allows Remington to withhold some documents of public interest.
**
Democratic state legislatures have shown a renewed interest in broadening the industry’s liability with new laws
Excerpt from https://americanblow.com/read/AAXULCJ
In California in the immediate wake of the Uvalde shooting, state legislators advanced a gun control package that included a bill that would open up gun manufacturers to civil legal liability for certain marketing and design practices.
Gov. Gavin Newsom (D) had vowed in recent months to push for a gun control law similar to the controversial Texas abortion restriction that allowed private individuals to sue healthcare providers who performed banned abortions.
“California will not stand by as kids across the country are gunned down,” Newsom said following the Texas school shooting. “Guns are now the leading cause of death for kids in America. While the U.S. Senate stands idly by and activist federal judges strike down commonsense gun laws across our nation, California will act with the urgency this crisis demands.”
The proposals are similar to a New York state law enacted last year that opens manufacturers up to civil public nuisance lawsuits if they fail to implement reasonable safeguards against unlawful distribution or use of their firearms.
On Wednesday, the New York law survived an initial legal hurdle when a federal judge dismissed a gun industry lawsuit challenging its constitutionality.
New York Attorney General Letitia James (D), who defended the law in federal court, responded to the judge’s ruling by inviting other states to follow suit.
“As we mourn the deaths of 19 innocent children lost to gun violence in Uvalde and the countless more in Buffalo and across America every day, this is a moment of light and hope,” James said in a statement. “New York is proud to defend the right to impose reasonable gun restrictions that protect all of us.”
“As public officials, we were elected to solve problems and address the needs of the people. Prayers alone will no longer do, and cowardliness is not part of the job description. New York will always lead, and I urge others with a backbone to follow.”
Still, it remains to be seen whether the state laws will ultimately withstand court scrutiny.
In 2005, Congress passed the Protection of Lawful Commerce in Arms Act (PLCAA), which protects firearms manufacturers and distributors from facing civil lawsuits over crimes committed with their products.
Gun control advocates have long argued that PLCAA has allowed manufacturers to act with impunity and smothered the sort of high-impact court cases that led to industry-wide reckonings for tobacco and opioid companies.
But the renewed state interest in liability laws and other recent legal developments may signal that such a reckoning could be on the horizon for gun makers.
While PLCAA granted the industry sweeping immunity from civil lawsuits, the protections are not absolute. The law has certain exceptions for things like misconduct or violating state and local laws.
Earlier this year, the gun manufacturer Remington reached a settlement with the families of nine victims of the 2012 Sandy Hook school shooting. Remington’s insurers agreed to pay the families $73 million to settle the claims that the company had marketed weapons to troubled young men like the one who committed the massacre.
As part of the settlement, Remington also agreed to release troves of internal company records, including ones detailing its marketing strategy.
Legal experts see the agreement as a huge blow to the gun industry, and not just because it includes the largest monetary award to victims of gun violence.
In 2019, the Supreme Court allowed the families’ case to proceed, declining to hear Remington’s appeal arguing that PLCAA shielded manufacturers from such lawsuits.
Heidi Li Feldman, a law professor at Georgetown University, said the renewed aggressiveness from state officials and private plaintiffs could usher in a new era in which the industry faces more liability.
“The most dramatic effect that PLCAA had was it led immediately to a round of dismissals of then pending suits that were premised on the idea that the gun industry’s conduct constituted a public nuisance,” Feldman said. “The second consequence of PLCAA is that … it drastically raised the cost of litigating against the gun industry, meaning that lots of suits that might have been brought didn’t get brought because no one can afford to bring them.”
She added that if plaintiffs continue to score major victories in big, expensive cases that pry internal records from manufacturers, it will provide an antidote “to the way in which PLCAA heightens the cost of pursuing civil accountability for the gun industry.”
The Sandy Hook Lawsuit Against Remington Settled in February
The gunmaker agreed to pay a $73 million settlement, which will allow it to shield some details about the industry’s internal workings.
From article by Champe Barton
EXCERPTS:
Families of victims killed in the Sandy Hook Elementary School massacre have agreed to a $73 million settlement with Remington Arms. The agreement heralds the final chapter of a nearly eight-year legal saga that has provided a template for successfully suing the gun industry.
Remington — which made the Bushmaster XM15-E2S semiautomatic rifle used in the shooting — will allow the families to make public thousands of internal marketing documents handed over by the company as part of discovery. But the gunmaker will no longer have to comply with a February 17 deadline for releasing additional documents that could have shed further light on its practices. [Emphasis by DAR]
* *
The families’ suit, filed in 2015, accused Remington of violating a Connecticut law against deceptive trade practices by intentionally marketing its weapons to young, unstable males. The company’s ads touted the use of Remington rifles in military combat and presented them as badges of masculinity. “Consider Your Man Card Reissued,” went the tagline in one ad. The families alleged that these tactics inspired the 20-year-old gunman to attack the elementary school in December 2012.
Remington contended that its advertising did not target at-risk youth in particular and that no evidence connected their marketing strategies to the Sandy Hook shooting.
* *
To date, no lawsuit has ever resulted in a jury finding a major gunmaker liable for a mass shooting. This is largely because of the Protection of Lawful Commerce in Arms Act, which Congress passed in 2005 to shield gunmakers from legal claims stemming from crimes committed with their products. The Sandy Hook case is one of only a few suits to have ever bypassed PLCAA’s protections, satisfying a narrow exception in the law that allows for claims when gun companies violate relevant state or federal laws. A Connecticut court rejected Remington’s argument that the case should be dismissed because of PLCAA, and in November 2019, the U.S. Supreme Court declined to hear the gunmaker’s appeal of that decision.
* *
The settlement leaves just a handful of surviving lawsuits against gunmakers. In 2020, a Pennsylvania Superior Court ruled PLCAA unconstitutional in a case brought against Springfield Armory after one of its pistols was involved in the accidental shooting death of a child. The state’s Supreme Court has yet to review that decision. In Indiana, the city of Gary has reached discovery in its suit that accuses Smith & Wesson and a number of other large gun manufacturers of creating and facilitating a public nuisance of gun violence in the city in the ’90s.
Most recently, the Mexican government filed suit against Smith & Wesson and a number of other major gunmakers in a bid to hold American gun companies accountable for firearm violence in Mexico. A judge has yet to rule on whether PLCAA will apply.
See full article at https://www.thetrace.org/2022/02/sandy-hook-families-lawsuit-remington-arms-marketing/
Reuters Explainer - Can U.S. gunmakers be liable for mass shooting?
Tom Hals
Wed, May 25, 2022 By Tom Hals
EXCERPTS:
U.S. GUN COMPANIES ARE GENERALLY PROTECTED FROM LAWSUITS
Since 2005, the Protection of Lawful Commerce in Arms Act (PLCAA) has provided near blanket immunity for gun makers and dealers from liability for crimes committed with their products. The law was passed after lawsuits by several cities tried to hold companies liable for gun violence.
ARE THERE EXCEPTIONS?
Yes. The PLCAA has several provisions that allow a company to be sued, including for claims a company has knowingly violated laws related to the marketing of the product related to the shooting.
The Connecticut Supreme Court said in 2019 that the federal law permitted a lawsuit by some of the families of the victims of a 2012 shooting at the Sandy Hook Elementary School. The families sued Remington for violating the state's marketing law by allegedly promoting its Bushmaster rifle for criminal use.
Remington, which twice filed for bankruptcy during the case, agreed in February to pay the families $73 million, the first settlement of its kind.
Also in 2019, the Indiana Court of Appeals said PLCAA did not prevent the city of Gary from pursuing a 1999 lawsuit against firearms manufacturers under the state's public nuisance laws. Nuisance laws can be used to hold a defendant liable for damage done to a public good, like community safety, and the city alleged the manufacturers knew of illegal handgun sales and failed to prevent them.
Two federal appeals courts, however, have ruled that public nuisance lawsuits are barred by PLCAA because they don't apply to the sale or marketing of firearms.
OTHER LEGAL CASES
Following the Connecticut Supreme Court ruling, other cases were launched that are working their way through the courts, seeking to seize on exemptions in PLCAA.
Victims of a 2019 mass shooting at a California synagogue sued Smith & Wesson, saying the company negligently marketed the AR-15 style rife used by the shooter. A state court judge rejected last year the company's argument the lawsuit was barred under PLCAA.
Meanwhile, the Texas Supreme Court ruled earlier this year that an online seller of ammunition, Luckygunner.com, was not protected by PLCAA from a lawsuit on behalf of victims of a 2018 shooting at a Santa Fe, Texas, high school. The company is accused of knowingly violating a law that makes it illegal to sell ammunition to minors.
* *
RECENT LEGISLATIVE ACTION
In July, New York's governor signed into law a measure that allows firearm sellers, manufacturers and distributors to be sued by the state, cities or individuals for creating a public nuisance.
A U.S. judge on Wednesday ruled against the firearms industry which sued to block the law and argued it was barred by PLCAA.
On Tuesday, California senators approved a bill hours after the Texas shooting that would allow private citizens to sue anyone who manufactures, distributes, transports, imports, or sells assault weapons and untraceable ghost guns.
The bill, which is supported by Governor Gavin Newsom, is styled on a Texas anti-abortion "vigilante" law that is meant to skirt conflicting federal law. It will now be considered by the state's assembly.
**
(Reporting by Tom Hals in Wilmington, Delaware; Editing by Noeleen Walder and Diane Craft)
Tom Hals
Wed, May 25, 2022 By Tom Hals
EXCERPTS:
U.S. GUN COMPANIES ARE GENERALLY PROTECTED FROM LAWSUITS
Since 2005, the Protection of Lawful Commerce in Arms Act (PLCAA) has provided near blanket immunity for gun makers and dealers from liability for crimes committed with their products. The law was passed after lawsuits by several cities tried to hold companies liable for gun violence.
ARE THERE EXCEPTIONS?
Yes. The PLCAA has several provisions that allow a company to be sued, including for claims a company has knowingly violated laws related to the marketing of the product related to the shooting.
The Connecticut Supreme Court said in 2019 that the federal law permitted a lawsuit by some of the families of the victims of a 2012 shooting at the Sandy Hook Elementary School. The families sued Remington for violating the state's marketing law by allegedly promoting its Bushmaster rifle for criminal use.
Remington, which twice filed for bankruptcy during the case, agreed in February to pay the families $73 million, the first settlement of its kind.
Also in 2019, the Indiana Court of Appeals said PLCAA did not prevent the city of Gary from pursuing a 1999 lawsuit against firearms manufacturers under the state's public nuisance laws. Nuisance laws can be used to hold a defendant liable for damage done to a public good, like community safety, and the city alleged the manufacturers knew of illegal handgun sales and failed to prevent them.
Two federal appeals courts, however, have ruled that public nuisance lawsuits are barred by PLCAA because they don't apply to the sale or marketing of firearms.
OTHER LEGAL CASES
Following the Connecticut Supreme Court ruling, other cases were launched that are working their way through the courts, seeking to seize on exemptions in PLCAA.
Victims of a 2019 mass shooting at a California synagogue sued Smith & Wesson, saying the company negligently marketed the AR-15 style rife used by the shooter. A state court judge rejected last year the company's argument the lawsuit was barred under PLCAA.
Meanwhile, the Texas Supreme Court ruled earlier this year that an online seller of ammunition, Luckygunner.com, was not protected by PLCAA from a lawsuit on behalf of victims of a 2018 shooting at a Santa Fe, Texas, high school. The company is accused of knowingly violating a law that makes it illegal to sell ammunition to minors.
* *
RECENT LEGISLATIVE ACTION
In July, New York's governor signed into law a measure that allows firearm sellers, manufacturers and distributors to be sued by the state, cities or individuals for creating a public nuisance.
A U.S. judge on Wednesday ruled against the firearms industry which sued to block the law and argued it was barred by PLCAA.
On Tuesday, California senators approved a bill hours after the Texas shooting that would allow private citizens to sue anyone who manufactures, distributes, transports, imports, or sells assault weapons and untraceable ghost guns.
The bill, which is supported by Governor Gavin Newsom, is styled on a Texas anti-abortion "vigilante" law that is meant to skirt conflicting federal law. It will now be considered by the state's assembly.
**
(Reporting by Tom Hals in Wilmington, Delaware; Editing by Noeleen Walder and Diane Craft)
The Hill: The background check gun bills now stalled in the Senate
Here are the gun bills stalled in the SenateBY EMILY BROOKS AND MIKE LILLIS - 05/25/22 1:01 PM ET
Two major control measures were passed by the House last year: The Enhanced Background Checks Act of 2021 and the Bipartisan Background Checks Act of 2021. Both measures stalled in the Senate.
Further detail on the bills is at Here are the gun bills stalled in Congress | The Hill https://thehill.com/news/house/3501301-here-are-the-gun-bills-stalled-in-congress/?email=23dab1a75b8396b58677d1fb9fc3d3e5f946969d&emaila=007a144815d178e37146c89d4c439342&emailb=f7bf73e2d7ca47c65c9df513d4f1a2ad486611b90e9f78b92689312edf5b4e16&utm_source=Sailthru&utm_medium=email&utm_campaign=05.26.22%20KB%20%E2%80%94%20The%20Hill%20-%20Morning%20Report&utm_term=Morning%20Report
Here are the gun bills stalled in the SenateBY EMILY BROOKS AND MIKE LILLIS - 05/25/22 1:01 PM ET
Two major control measures were passed by the House last year: The Enhanced Background Checks Act of 2021 and the Bipartisan Background Checks Act of 2021. Both measures stalled in the Senate.
Further detail on the bills is at Here are the gun bills stalled in Congress | The Hill https://thehill.com/news/house/3501301-here-are-the-gun-bills-stalled-in-congress/?email=23dab1a75b8396b58677d1fb9fc3d3e5f946969d&emaila=007a144815d178e37146c89d4c439342&emailb=f7bf73e2d7ca47c65c9df513d4f1a2ad486611b90e9f78b92689312edf5b4e16&utm_source=Sailthru&utm_medium=email&utm_campaign=05.26.22%20KB%20%E2%80%94%20The%20Hill%20-%20Morning%20Report&utm_term=Morning%20Report
The DC AG's revised 5-23 Complaint against Zuckerberg is HERE:
2022.05 (3).pdf (dc.gov) https://oag.dc.gov/sites/default/files/2022-05/2022.05%20%283%29.pdf
Excerpt:
Introduction
1. In under two decades, Facebook, Inc. (now known as Meta Platforms, Inc.) (“Facebook”) has grown from a small online social network to an implacable corporate giant. Facebook offers a variety of products and services, including the well-known Facebook product. Today, Facebook is larger than any single country—with more than 2.9 billion monthly active users, nearly half the global population. To put that in perspective, Facebook has more users than the populations of the United States, China and Brazil combined. And Facebook has become wealthier than over 150 countries worldwide, including Switzerland, Sweden, and the UAE. Not surprisingly, Facebook has seized enormous influence over global affairs. Facebook controls how people communicate with friends and family, conduct business online, what news they read, and even how they communicate with governments and elected officials. Atop it all is Mark Zuckerberg, the unelected leader of a massive digital empire with billions of inhabitants.
2. But Zuckerberg’s Facebook is far from a disinterested platform for people to communicate, stay in touch with friends, and reconnect with old acquaintances. Instead, Facebook has become a wildly successful and unique business, deriving enormous wealth from acquiring and monetizing the data of those billions of people leading their lives in Facebook’s digital ecosystem. But even that is not enough. Facebook is in a relentless pursuit to expand its reach on humanity and bring an ever-increasing number of people under its influence.
3. To that end, Mark Zuckerberg has been building his version of the Internet where the “default is social.” To him, that means building an Internet where people live their digital lives on Facebook. The goal is to convince people to reveal the most granular details of who they are to Facebook—their religions, their work histories, their likes—so that it can be monetized, and Zuckerberg and his company can continue to grow even wealthier. 3
4. Facebook—at Zuckerberg’s direction—shifted its business model in this way because it recognized that it could be even more profitable if it could harness and sell the ability to dependably influence its users’ behavior to third parties. Facebook therefore encouraged (and, at times, teamed up with) developers and researchers to collect and analyze Facebook user data so that it could better learn how to manipulate its own users’ moods and influence what they purchase and even whether and how they vote.
5. Facebook has become among the world’s leading innovators in experimenting on how to keep users engaged—meaning more data and more money for Facebook. But at Facebook’s scale, these experimental decisions reverberate globally.
6. That is in part because Facebook has realized an ugly truth: its social platform becomes “stickier” (meaning people will stay on it longer and share more data) when it is filled with toxicity. What this means is that the more Zuckerberg’s Facebook stokes divisiveness and polarization, destabilizes democracies, amplifies genocides, and impacts users’ mental health, the more money Facebook and its leaders make.
7. Given the trillions of dollars at issue, and having no regard for the people it purports to serve, Facebook—at Zuckerberg’s direction—has decided to hide these problems for as long as possible, including intentionally misleading Facebook users as well as the public, the press, and political leaders.
8. One prime example—and the one that forms the basis for the instant suit—was Facebook’s 2010 decision to open up the Facebook Platform to third parties. Again the brainchild of Zuckerberg, this move helped Facebook by persuading outside developers to build eye-catching applications for Facebook—directing even more users, and user data, into the platform. Developers, though, could access the massive trove of user data that Facebook had collected through the “side door” of applications.
9. Zuckerberg had always been aware that the success of Facebook hinged on convincing users that their data was private enough, while selling as much access to those users as possible without driving them away. And Zuckerberg was fully aware that users would be concerned by this newly vulnerable position. So Zuckerberg engaged in a decade-long campaign designed to convince users that Facebook cared about and tried to protect users and their data. Behind closed doors however, Zuckerberg insisted that Facebook’s policies be “as simple as we can get away with.
10. In March 2018, whistleblower Christopher Wylie publicly revealed that a company called Cambridge Analytica—a London-based electioneering firm—exfiltrated the personal data of more than 70 million Facebook users in the United States, including more than 340,000 District residents, in order to influence the results of the 2016 United States presidential election. This data trove included Facebook users’ ages, interests, pages they’ve liked, groups they belong to, physical locations, political affiliation, religious affiliation, relationships, and photos, as well as their full names, phone numbers, and email addresses.
11. In other words, Cambridge Analytica used the Facebook Platform—in a way that Facebook and Zuckerberg encouraged—to influence and manipulate the outcome of a United States presidential election. The personal data of the more than 70 million U.S. Facebook users that Cambridge Analytica used to manipulate the election accounted for more than half the total votes during the 2016 presidential elections, in an election that was effectively decided by just a few hundred thousand people.
12. Though the data Cambridge Analytica (and many other companies) used was supposedly private and protected from disclosure by Facebook’s privacy and data policies, Cambridge Analytica knew that it could access this trove of data using Facebook’s existing developer tools, an open secret that was well known to Facebook’s business partners using the platform. Cambridge Analytica also knew that it could leverage Facebook’s lax policy enforcement to continue manipulating the Facebook data it had amassed without fear Facebook would do anything about its operations. All the while, Facebook and Zuckerberg were trying to convince users in their user-facing statements that their data was safe.
13. The Cambridge Analytica revelations shocked the world, but it was no surprise to Facebook or Zuckerberg. Facebook had both a longstanding relationship with Cambridge Analytica and also actively encouraged companies like Cambridge Analytica to use the Facebook Platform to influence and manipulate consumer behavior.
14. What is most troubling is that Facebook looked into Cambridge Analytica and determined that it posed a risk to consumer data but chose to bury those concerns rather than stop them, as that could have hurt Facebook’s (and Zuckerberg’s) bottom line. Instead of coming clean, Facebook continued to help Cambridge Analytica win a United States presidential election.
15. While Facebook and Zuckerberg have, a full three years later, publicly condemned Cambridge Analytica’s data collection, its condemnation, in reality, only demonstrates that what Zuckerberg and Facebook say publicly is part of an intentional plan to mask the devastating consequences of their actions (or inactions).
16. Zuckerberg has said time and again that he and Facebook have a responsibility to protect users, and if they can’t, then they “don’t deserve to serve [them].”
17. Accordingly, the District brings this case to ensure that Mark Zuckerberg is held accountable for his role in Facebook violating the District’s consumer protection laws by misrepresenting the protection of user data and their blatant disregard and misuse of sensitive, personal data belonging to District residents.
2022.05 (3).pdf (dc.gov) https://oag.dc.gov/sites/default/files/2022-05/2022.05%20%283%29.pdf
Excerpt:
Introduction
1. In under two decades, Facebook, Inc. (now known as Meta Platforms, Inc.) (“Facebook”) has grown from a small online social network to an implacable corporate giant. Facebook offers a variety of products and services, including the well-known Facebook product. Today, Facebook is larger than any single country—with more than 2.9 billion monthly active users, nearly half the global population. To put that in perspective, Facebook has more users than the populations of the United States, China and Brazil combined. And Facebook has become wealthier than over 150 countries worldwide, including Switzerland, Sweden, and the UAE. Not surprisingly, Facebook has seized enormous influence over global affairs. Facebook controls how people communicate with friends and family, conduct business online, what news they read, and even how they communicate with governments and elected officials. Atop it all is Mark Zuckerberg, the unelected leader of a massive digital empire with billions of inhabitants.
2. But Zuckerberg’s Facebook is far from a disinterested platform for people to communicate, stay in touch with friends, and reconnect with old acquaintances. Instead, Facebook has become a wildly successful and unique business, deriving enormous wealth from acquiring and monetizing the data of those billions of people leading their lives in Facebook’s digital ecosystem. But even that is not enough. Facebook is in a relentless pursuit to expand its reach on humanity and bring an ever-increasing number of people under its influence.
3. To that end, Mark Zuckerberg has been building his version of the Internet where the “default is social.” To him, that means building an Internet where people live their digital lives on Facebook. The goal is to convince people to reveal the most granular details of who they are to Facebook—their religions, their work histories, their likes—so that it can be monetized, and Zuckerberg and his company can continue to grow even wealthier. 3
4. Facebook—at Zuckerberg’s direction—shifted its business model in this way because it recognized that it could be even more profitable if it could harness and sell the ability to dependably influence its users’ behavior to third parties. Facebook therefore encouraged (and, at times, teamed up with) developers and researchers to collect and analyze Facebook user data so that it could better learn how to manipulate its own users’ moods and influence what they purchase and even whether and how they vote.
5. Facebook has become among the world’s leading innovators in experimenting on how to keep users engaged—meaning more data and more money for Facebook. But at Facebook’s scale, these experimental decisions reverberate globally.
6. That is in part because Facebook has realized an ugly truth: its social platform becomes “stickier” (meaning people will stay on it longer and share more data) when it is filled with toxicity. What this means is that the more Zuckerberg’s Facebook stokes divisiveness and polarization, destabilizes democracies, amplifies genocides, and impacts users’ mental health, the more money Facebook and its leaders make.
7. Given the trillions of dollars at issue, and having no regard for the people it purports to serve, Facebook—at Zuckerberg’s direction—has decided to hide these problems for as long as possible, including intentionally misleading Facebook users as well as the public, the press, and political leaders.
8. One prime example—and the one that forms the basis for the instant suit—was Facebook’s 2010 decision to open up the Facebook Platform to third parties. Again the brainchild of Zuckerberg, this move helped Facebook by persuading outside developers to build eye-catching applications for Facebook—directing even more users, and user data, into the platform. Developers, though, could access the massive trove of user data that Facebook had collected through the “side door” of applications.
9. Zuckerberg had always been aware that the success of Facebook hinged on convincing users that their data was private enough, while selling as much access to those users as possible without driving them away. And Zuckerberg was fully aware that users would be concerned by this newly vulnerable position. So Zuckerberg engaged in a decade-long campaign designed to convince users that Facebook cared about and tried to protect users and their data. Behind closed doors however, Zuckerberg insisted that Facebook’s policies be “as simple as we can get away with.
10. In March 2018, whistleblower Christopher Wylie publicly revealed that a company called Cambridge Analytica—a London-based electioneering firm—exfiltrated the personal data of more than 70 million Facebook users in the United States, including more than 340,000 District residents, in order to influence the results of the 2016 United States presidential election. This data trove included Facebook users’ ages, interests, pages they’ve liked, groups they belong to, physical locations, political affiliation, religious affiliation, relationships, and photos, as well as their full names, phone numbers, and email addresses.
11. In other words, Cambridge Analytica used the Facebook Platform—in a way that Facebook and Zuckerberg encouraged—to influence and manipulate the outcome of a United States presidential election. The personal data of the more than 70 million U.S. Facebook users that Cambridge Analytica used to manipulate the election accounted for more than half the total votes during the 2016 presidential elections, in an election that was effectively decided by just a few hundred thousand people.
12. Though the data Cambridge Analytica (and many other companies) used was supposedly private and protected from disclosure by Facebook’s privacy and data policies, Cambridge Analytica knew that it could access this trove of data using Facebook’s existing developer tools, an open secret that was well known to Facebook’s business partners using the platform. Cambridge Analytica also knew that it could leverage Facebook’s lax policy enforcement to continue manipulating the Facebook data it had amassed without fear Facebook would do anything about its operations. All the while, Facebook and Zuckerberg were trying to convince users in their user-facing statements that their data was safe.
13. The Cambridge Analytica revelations shocked the world, but it was no surprise to Facebook or Zuckerberg. Facebook had both a longstanding relationship with Cambridge Analytica and also actively encouraged companies like Cambridge Analytica to use the Facebook Platform to influence and manipulate consumer behavior.
14. What is most troubling is that Facebook looked into Cambridge Analytica and determined that it posed a risk to consumer data but chose to bury those concerns rather than stop them, as that could have hurt Facebook’s (and Zuckerberg’s) bottom line. Instead of coming clean, Facebook continued to help Cambridge Analytica win a United States presidential election.
15. While Facebook and Zuckerberg have, a full three years later, publicly condemned Cambridge Analytica’s data collection, its condemnation, in reality, only demonstrates that what Zuckerberg and Facebook say publicly is part of an intentional plan to mask the devastating consequences of their actions (or inactions).
16. Zuckerberg has said time and again that he and Facebook have a responsibility to protect users, and if they can’t, then they “don’t deserve to serve [them].”
17. Accordingly, the District brings this case to ensure that Mark Zuckerberg is held accountable for his role in Facebook violating the District’s consumer protection laws by misrepresenting the protection of user data and their blatant disregard and misuse of sensitive, personal data belonging to District residents.
America’s addiction to monopolies caused the baby food shortage
By Samanth SubramanianPublished May 18, 2022
Excerpt:
The US’ vast shortage in infant formula has one immediate cause: the suspension of operations in an Abbott Laboratories plant in Michigan earlier this year, after samples of a lethal bacteria were found in it. But beyond that lies a bigger structural problem plaguing the American economy: a tendency for many sectors to be controlled by a few companies, or even just one.
The baby food sector, for instance, is an oligopoly, in which two companies—Abbott and the Reckitt-owned Mead Johnson—dominate three-quarters of the market by sales. Further, the federal Women, Infants and Children (WIC) program, which offers supplemental nutrition for low-income families, buys and distributes nearly half of all baby formula in the US. The WIC program contracts with a specific company in each state, setting up a de facto monopoly situation. Abbott is the WIC’s contracted supplier in 34 states.
Full article: America's addiction to monopolies caused the baby food shortage — Quartz (qz.com) https://qz.com/2167097/americas-addiction-to-monopolies-caused-the-baby-food-shortage/
By Samanth SubramanianPublished May 18, 2022
Excerpt:
The US’ vast shortage in infant formula has one immediate cause: the suspension of operations in an Abbott Laboratories plant in Michigan earlier this year, after samples of a lethal bacteria were found in it. But beyond that lies a bigger structural problem plaguing the American economy: a tendency for many sectors to be controlled by a few companies, or even just one.
The baby food sector, for instance, is an oligopoly, in which two companies—Abbott and the Reckitt-owned Mead Johnson—dominate three-quarters of the market by sales. Further, the federal Women, Infants and Children (WIC) program, which offers supplemental nutrition for low-income families, buys and distributes nearly half of all baby formula in the US. The WIC program contracts with a specific company in each state, setting up a de facto monopoly situation. Abbott is the WIC’s contracted supplier in 34 states.
Full article: America's addiction to monopolies caused the baby food shortage — Quartz (qz.com) https://qz.com/2167097/americas-addiction-to-monopolies-caused-the-baby-food-shortage/
The CA “Public Right to Know Act” That Passed Senate Judiciary Committee
Upholding the ability of Californians to find out the facts about dangerous public hazards that are discovered during litigation, the Senate Judiciary Committee approved Senate Bill 1149 authored by Senator Connie M. Leyva (D-Chino).
Also known as the “Public Right to Know Act”, SB 1149 will, if adopted:
- SB 1149 is Jointly Sponsored by Consumer Reports and Public Justice
Upholding the ability of Californians to find out the facts about dangerous public hazards that are discovered during litigation, the Senate Judiciary Committee approved Senate Bill 1149 authored by Senator Connie M. Leyva (D-Chino).
Also known as the “Public Right to Know Act”, SB 1149 will, if adopted:
- Create a presumption that no court order may conceal information about a defective product or environmental condition that poses a danger to public health or safety unless the court finds that the public interest in disclosure is clearly outweighed by a specific and substantial need for secrecy.
- Prohibit settlement agreements that restrict the disclosure of information about a defective product or environmental condition that poses a danger to public health or safety, and make any provision in an agreement void as against public policy, and thus unenforceable.
- Narrowly tailor its application to only information about a "danger to public health or safety" that is likely to cause "significant or substantial bodily injury or illness, or death."
One of the major developments on the "right to know" issue was the 2019 PRO PUBLICA revelation of dangerous information in sealed court documents. Following is the 2019 Pro Publica article, with a link to the court documents.
Sackler Embraced Plan to Conceal OxyContin’s Strength From Doctors, Sealed Testimony ShowsAs OxyContin addiction spurred a national nightmare, a member of the family that has reaped billions of dollars from the painkiller boasted that sales exceeded his “fondest dreams,” according to a secret court document obtained by ProPublica. https://www.propublica.org/series/opioid-billionaires
by David Armstrong
Feb. 21, 2019, 1:45 p.m. EST
EXCERPT:
In May 1997, the year after Purdue Pharma launched OxyContin, its head of sales and marketing sought input on a key decision from Dr. Richard Sackler, a member of the billionaire family that founded and controls the company. Michael Friedman told Sackler that he didn’t want to correct the false impression among doctors that OxyContin was weaker than morphine, because the myth was boosting prescriptions — and sales.
“It would be extremely dangerous at this early stage in the life of the product,” Friedman wrote to Sackler, “to make physicians think the drug is stronger or equal to morphine….We are well aware of the view held by many physicians that oxycodone [the active ingredient in OxyContin] is weaker than morphine. I do not plan to do anything about that.”
“I agree with you,” Sackler responded. “Is there a general agreement, or are there some holdouts?”
Ten years later, Purdue pleaded guilty in federal court to understating the risk of addiction to OxyContin, including failing to alert doctors that it was a stronger painkiller than morphine, and agreed to pay $600 million in fines and penalties. But Sackler’s support of the decision to conceal OxyContin’s strength from doctors — in email exchanges both with Friedman and another company executive — was not made public.
Read the DepositionThis sealed 2015 deposition, obtained by ProPublica, is believed to be the only time a Sackler family member has testified under oath about the aggressive marketing of OxyContin that helped foster the opioid crisis.
**
The email threads were divulged in a sealed court document that ProPublica has obtained: an Aug. 28, 2015, deposition of Richard Sackler.
https://www.documentcloud.org/documents/5745212-Deposition.html
Sackler Embraced Plan to Conceal OxyContin’s Strength From Doctors, Sealed Testimony ShowsAs OxyContin addiction spurred a national nightmare, a member of the family that has reaped billions of dollars from the painkiller boasted that sales exceeded his “fondest dreams,” according to a secret court document obtained by ProPublica. https://www.propublica.org/series/opioid-billionaires
by David Armstrong
Feb. 21, 2019, 1:45 p.m. EST
EXCERPT:
- SERIES:OPIOID BILLIONAIRESThe Deceptive Marketing of OxyContin
In May 1997, the year after Purdue Pharma launched OxyContin, its head of sales and marketing sought input on a key decision from Dr. Richard Sackler, a member of the billionaire family that founded and controls the company. Michael Friedman told Sackler that he didn’t want to correct the false impression among doctors that OxyContin was weaker than morphine, because the myth was boosting prescriptions — and sales.
“It would be extremely dangerous at this early stage in the life of the product,” Friedman wrote to Sackler, “to make physicians think the drug is stronger or equal to morphine….We are well aware of the view held by many physicians that oxycodone [the active ingredient in OxyContin] is weaker than morphine. I do not plan to do anything about that.”
“I agree with you,” Sackler responded. “Is there a general agreement, or are there some holdouts?”
Ten years later, Purdue pleaded guilty in federal court to understating the risk of addiction to OxyContin, including failing to alert doctors that it was a stronger painkiller than morphine, and agreed to pay $600 million in fines and penalties. But Sackler’s support of the decision to conceal OxyContin’s strength from doctors — in email exchanges both with Friedman and another company executive — was not made public.
Read the DepositionThis sealed 2015 deposition, obtained by ProPublica, is believed to be the only time a Sackler family member has testified under oath about the aggressive marketing of OxyContin that helped foster the opioid crisis.
**
The email threads were divulged in a sealed court document that ProPublica has obtained: an Aug. 28, 2015, deposition of Richard Sackler.
https://www.documentcloud.org/documents/5745212-Deposition.html
PRESS RELEASE -- 2000 statement from Consumers UnionConsumers Union supports bills to limit secret out-of-court settlementsDecember 4, 2000
December 4, 2000
CONSUMERS UNIONS SUPPORTS BILLS TO LIMIT SECRET OUT-OF-COURT SETTLEMENTS
Measures by Assemblymember Steinberg and Senator Escutia Would Limit Agreements in Product Defect, Environmental Hazard and Financial Fraud Cases
SACRAMENTO — Elisa Odabashian, Senior Policy Analyst with Consumers Union’s West Coast Office, made the following statement in support of AB 36 (Steinberg, D-Sacramento) and SB 11 (Escutia, D-Norwalk), which would limit secret out-of-court settlements in product defect, environmental hazard, unfair insurance claims practice or financial fraud lawsuits.
“Many lives could be saved and much suffering could be averted if corporations were not allowed to use secrecy orders in court settlements to hide information about product defects, environmental hazards, or financial fraud.”
“The Firestone/Ford tire tragedies highlight how secrecy orders can have very serious consequences on public safety. Over the last decade–long before the recent recall of millions of Firestone tires sold largely on the popular Ford Explorer–there were 50-100 Firestone tire lawsuits. Most of these court cases were settled with secrecy orders in place that effectively kept information about the potential dangers associated with the tires from the public. According to the Detroit Free Press, to date, there have been 119 deaths and 500 serious injuries associated with Firestone tire tread separations. Many of these deaths and injuries could have been prevented if secret settlements had been barred.”
“Consumers Union believes this legislation will be a strong deterrent to businesses tempted to engage in unethical acts that take lives, harm the environment, or commit financial fraud. We believe this law will motivate corporations to correct the errors that brought them into court in the first place, instead of hiding behind secrecy orders and continuing business as usual until hundreds of unsuspecting consumers are harmed or killed, and recalls are required. We applaud Assemblyman Steinberg and Senator Escutia for taking up this important matter and we urge the legislature to support it.”
Under the proposed measures, out-of-court secret settlements would be barred unless they met strict standards and procedures imposed by the courts. The bills also apply to discovery materials like crash test reports, company documents, and consumer complaints not used at trial.
By applying to settlement agreements and documents not filed with the court, the measures fill a large gap left open by a recently approved Judicial Council rule which applies only to material actually filed with the court. The new Judicial Council rule creates a presumption against secrecy and allows a court to seal records only if strict standards and procedures are met.
Steinberg and Escutia’s identical measures are sponsored by state Attorney General Bill Lockyer and the Consumer Attorneys of California and supported by a broad range of public interest organizations, including Center for Public Interest Law, Congress of California Seniors, Consumer Federation of California, Consumers for Auto Reliability and Safety, Foundation for Taxpayers and Consumer Rights, Sierra Club, and United Policyholders.
Contact:
Elisa Odabashian or Michael McCauley
415-431-6747
Consumers Union West Coast Office
###
December 4, 2000
CONSUMERS UNIONS SUPPORTS BILLS TO LIMIT SECRET OUT-OF-COURT SETTLEMENTS
Measures by Assemblymember Steinberg and Senator Escutia Would Limit Agreements in Product Defect, Environmental Hazard and Financial Fraud Cases
SACRAMENTO — Elisa Odabashian, Senior Policy Analyst with Consumers Union’s West Coast Office, made the following statement in support of AB 36 (Steinberg, D-Sacramento) and SB 11 (Escutia, D-Norwalk), which would limit secret out-of-court settlements in product defect, environmental hazard, unfair insurance claims practice or financial fraud lawsuits.
“Many lives could be saved and much suffering could be averted if corporations were not allowed to use secrecy orders in court settlements to hide information about product defects, environmental hazards, or financial fraud.”
“The Firestone/Ford tire tragedies highlight how secrecy orders can have very serious consequences on public safety. Over the last decade–long before the recent recall of millions of Firestone tires sold largely on the popular Ford Explorer–there were 50-100 Firestone tire lawsuits. Most of these court cases were settled with secrecy orders in place that effectively kept information about the potential dangers associated with the tires from the public. According to the Detroit Free Press, to date, there have been 119 deaths and 500 serious injuries associated with Firestone tire tread separations. Many of these deaths and injuries could have been prevented if secret settlements had been barred.”
“Consumers Union believes this legislation will be a strong deterrent to businesses tempted to engage in unethical acts that take lives, harm the environment, or commit financial fraud. We believe this law will motivate corporations to correct the errors that brought them into court in the first place, instead of hiding behind secrecy orders and continuing business as usual until hundreds of unsuspecting consumers are harmed or killed, and recalls are required. We applaud Assemblyman Steinberg and Senator Escutia for taking up this important matter and we urge the legislature to support it.”
Under the proposed measures, out-of-court secret settlements would be barred unless they met strict standards and procedures imposed by the courts. The bills also apply to discovery materials like crash test reports, company documents, and consumer complaints not used at trial.
By applying to settlement agreements and documents not filed with the court, the measures fill a large gap left open by a recently approved Judicial Council rule which applies only to material actually filed with the court. The new Judicial Council rule creates a presumption against secrecy and allows a court to seal records only if strict standards and procedures are met.
Steinberg and Escutia’s identical measures are sponsored by state Attorney General Bill Lockyer and the Consumer Attorneys of California and supported by a broad range of public interest organizations, including Center for Public Interest Law, Congress of California Seniors, Consumer Federation of California, Consumers for Auto Reliability and Safety, Foundation for Taxpayers and Consumer Rights, Sierra Club, and United Policyholders.
Contact:
Elisa Odabashian or Michael McCauley
415-431-6747
Consumers Union West Coast Office
###
The USDOJ statement of support for the DC AG's case against Amazon
The statement appears below
The statement appears below
In a letter to Fidelity’s CEO, Sens. Elizabeth Warren and Tina Smith asked for information on the extent to which potential conflicts of interest might have affected the decision to offer bitcoin.
The letter appears below
The letter appears below
The Case Against Montgomery County MD School Bus Camera Tickets
Are Montgomery County, Maryland car drivers and drivers elsewhere sometimes being unfairly punished for failing to stop for school bus flashing stop light warnings? The answer seems to be “yes” when the drivers are fined even though they are not given enough warning time to be able to stop safely.
Suppose an automobile driver is driving 30 miles per hour on a two-way residential street when a school bus approaches from the opposite direction and stops and puts on flashing stop sign lights. Data suggests that the auto driver will need at least three seconds to come to a safe stop 20 feet away from the bus. But if the auto driver is less than 3 seconds away when the flashing lights start, that driver cannot safely stop.
Despite that practical physical limitation, if an enforcement camera on the bus shows the car passing the school bus 1 or 2 seconds after the flashing lights start, in Montgomery County and elsewhere the photo and video showing that can be used as evidence of a violation. Unfairly so, some would say.
Montgomery County’s Automated School Bus Enforcement Program, called “Cross Safe,” punishes owners of vehicles that pass stopped school buses with the red stop lights flashing, without any exception where there is insufficient time to stop safely. The punishment is a ticket issued through Montgomery County’s automated traffic enforcement program. The ticket charges a civil violation.
As a matter of policy, no one supports drivers endangering students by passing stopped school buses with red stop lights flashing, any more than anyone supports running yellow or red lights at traffic intersections. But punishing drivers who are not afforded a reasonable warning period to safely stop seems obviously unfair.
How long is a reasonable time to allow automobile drivers to stop safely?
Maryland State law follows guidelines of the Federal Highway Administration for traffic signals at road intersections. Here is what Maryland State law says:
Timing of yellow light signals. -- The [government] agency primarily responsible for traffic control at an intersection monitored by a traffic control signal monitoring system shall ensure that the length of time that a traffic control signal displays a yellow light before changing to a red signal indication is set in accordance with regulations adopted by the State Highway Administration consistent with standards or guidelines established by the Federal Highway Administration.
Maryland Code TRANSPORTATION § 21-202 - 1. Traffic control signal monitoring systems
The Maryland State Highway Administration guidelines explain that the function of the yellow change interval is to warn motorists of an impending change in the assignment of right-of-way – i.e., notify motorists that a red signal indication will be displayed next. The yellow change interval should be long enough so motorists can see the indication change from green to yellow and then have adequate time to determine whether to stop or enter the intersection. Specifically, it should be long enough to allow motorists farther away from the intersection to comfortably stop in advance of the intersection or allow motorists closer to the signal to enter the intersection.
The Maryland Guidelines explain that “[T]he duration of a yellow change interval shall be predetermined and it should have a duration of approximately 3 to 6 seconds; however, SHA does not use yellow change intervals lower than 3.5 seconds.” See https://transops.s3.amazonaws.com/uploaded_files/MDSHA%20Signal%20Timing%20Manual.pdf
The Maryland State Guidelines track The Federal Highway Administration's Manual on Uniform Traffic Control Devices. Applying a formula used by the Institute of Technical Engineers Technical Committee, anything falling below the yellow times shown here should be considered as a potential unfairly short yellow light.
25 MPH -- 3.0 Seconds
30 MPH -- 3.5 Seconds
35 MPH -- 4.0 Seconds
40 MPH -- 4.5 Seconds
45 MPH -- 5.0 Seconds
Maryland State law is clear on the responsibility of local government agencies to require fair use of traffic stop light signals at roadway intersections. While school buses are not roadway intersections, the logic of the statute’s scheme of warning lights that applies to traffic intersections should carry over to school bus stop lights.
If anything, more warning time is appropriate for school bus stop lights, since buses move from place to place, so each new location for flashing bus stop signs is more of a surprise to motorists than for signs at an intersection.
The bottom line is that the logic of the Maryland State law on stop lights that applies to road intersections should apply to school buses with stop lights and enforcement cameras. Local government authorities should insure that motorists are not punished for failing to stop for a school bus stop light where the motorist lacked the seconds of time needed for a safe stop. If the application of that Maryland State stop light law to school buses is unclear, it should be made clear.
***
An additional bothersome point concerns the motivation for bus stop signs with unfairly short warning periods. The answer may be that most of the revenue from the fines collected from motorists goes to a private company; so the motivation might be greed. The private company has a perverse incentive to collect unjust fines.
The private company that takes most of the revenue derived from bus stop light violations in Montgomery County (typically a $250 fine) has a checkered history. Discussion of that checkered history will be the subject of a future writing.
Are Montgomery County, Maryland car drivers and drivers elsewhere sometimes being unfairly punished for failing to stop for school bus flashing stop light warnings? The answer seems to be “yes” when the drivers are fined even though they are not given enough warning time to be able to stop safely.
Suppose an automobile driver is driving 30 miles per hour on a two-way residential street when a school bus approaches from the opposite direction and stops and puts on flashing stop sign lights. Data suggests that the auto driver will need at least three seconds to come to a safe stop 20 feet away from the bus. But if the auto driver is less than 3 seconds away when the flashing lights start, that driver cannot safely stop.
Despite that practical physical limitation, if an enforcement camera on the bus shows the car passing the school bus 1 or 2 seconds after the flashing lights start, in Montgomery County and elsewhere the photo and video showing that can be used as evidence of a violation. Unfairly so, some would say.
Montgomery County’s Automated School Bus Enforcement Program, called “Cross Safe,” punishes owners of vehicles that pass stopped school buses with the red stop lights flashing, without any exception where there is insufficient time to stop safely. The punishment is a ticket issued through Montgomery County’s automated traffic enforcement program. The ticket charges a civil violation.
As a matter of policy, no one supports drivers endangering students by passing stopped school buses with red stop lights flashing, any more than anyone supports running yellow or red lights at traffic intersections. But punishing drivers who are not afforded a reasonable warning period to safely stop seems obviously unfair.
How long is a reasonable time to allow automobile drivers to stop safely?
Maryland State law follows guidelines of the Federal Highway Administration for traffic signals at road intersections. Here is what Maryland State law says:
Timing of yellow light signals. -- The [government] agency primarily responsible for traffic control at an intersection monitored by a traffic control signal monitoring system shall ensure that the length of time that a traffic control signal displays a yellow light before changing to a red signal indication is set in accordance with regulations adopted by the State Highway Administration consistent with standards or guidelines established by the Federal Highway Administration.
Maryland Code TRANSPORTATION § 21-202 - 1. Traffic control signal monitoring systems
The Maryland State Highway Administration guidelines explain that the function of the yellow change interval is to warn motorists of an impending change in the assignment of right-of-way – i.e., notify motorists that a red signal indication will be displayed next. The yellow change interval should be long enough so motorists can see the indication change from green to yellow and then have adequate time to determine whether to stop or enter the intersection. Specifically, it should be long enough to allow motorists farther away from the intersection to comfortably stop in advance of the intersection or allow motorists closer to the signal to enter the intersection.
The Maryland Guidelines explain that “[T]he duration of a yellow change interval shall be predetermined and it should have a duration of approximately 3 to 6 seconds; however, SHA does not use yellow change intervals lower than 3.5 seconds.” See https://transops.s3.amazonaws.com/uploaded_files/MDSHA%20Signal%20Timing%20Manual.pdf
The Maryland State Guidelines track The Federal Highway Administration's Manual on Uniform Traffic Control Devices. Applying a formula used by the Institute of Technical Engineers Technical Committee, anything falling below the yellow times shown here should be considered as a potential unfairly short yellow light.
25 MPH -- 3.0 Seconds
30 MPH -- 3.5 Seconds
35 MPH -- 4.0 Seconds
40 MPH -- 4.5 Seconds
45 MPH -- 5.0 Seconds
Maryland State law is clear on the responsibility of local government agencies to require fair use of traffic stop light signals at roadway intersections. While school buses are not roadway intersections, the logic of the statute’s scheme of warning lights that applies to traffic intersections should carry over to school bus stop lights.
If anything, more warning time is appropriate for school bus stop lights, since buses move from place to place, so each new location for flashing bus stop signs is more of a surprise to motorists than for signs at an intersection.
The bottom line is that the logic of the Maryland State law on stop lights that applies to road intersections should apply to school buses with stop lights and enforcement cameras. Local government authorities should insure that motorists are not punished for failing to stop for a school bus stop light where the motorist lacked the seconds of time needed for a safe stop. If the application of that Maryland State stop light law to school buses is unclear, it should be made clear.
***
An additional bothersome point concerns the motivation for bus stop signs with unfairly short warning periods. The answer may be that most of the revenue from the fines collected from motorists goes to a private company; so the motivation might be greed. The private company has a perverse incentive to collect unjust fines.
The private company that takes most of the revenue derived from bus stop light violations in Montgomery County (typically a $250 fine) has a checkered history. Discussion of that checkered history will be the subject of a future writing.
DC Bar program on China and antitrust: Angela Zhang; Nathan Bush- 4-14-2022
REMOTE PROGRAM: Author Angela Zhang discusses her book “Chinese Antitrust Exceptionalism"
Author Angela Chang will discuss her book: "Chinese Antitrust Exceptionalism: How the Rise of China Challenges Global Regulation", published by Oxford University Press in March 2021.
Available As:
Zoom Webinar --- See Bar anmnouncement:
Pasted in above is the link to the DC Bar's announcement of program that is free for anyone interested, because of co-sponsorship by the DC Consumer Rights Coalition. The date is 4-14-2022. The time is 9 AM Eastern (because Professor Zhang is in Hong Kong -- a 12 hour time difference.) Registration is required, using the on-line form that can be reached by clicking on the light blue printed link. I encourage you to sign up and invite other people to tune in to the program. As I understand it, the audience will not be able to speak during the program, but can submit questions.
Following is a further brief description of the program drawn from my book review that the DC Bar magazine will publish later this year.
I expect this to be an interesting and valuable antitrust program.
Don Resnikoff
******************************
More information: The DC Bar, Consumer and Antitrust Section, and the DC Consumer Rights Coalition, offer a video program via Zoom on April 14, 2002, 9 AM Eastern
Angela Huyue Zhang discusses her book: CHINESE ANTITRUST EXCEPTIONALISM : HOW THE RISE OF CHINA CHALLENGES GLOBAL REGULATION. Nathan Bush will ask questions and offer comment.
Angela Huyue Zhang is an associate professor at the Faculty of Law at the University of Hong Kong. In her book Professor Zhang describes the complex layers of competition regulation in China. Importantly, she also discusses international politics and economic rivalry: how antitrust and other business regulations are used as weapons of economic rivalry between China and the United States.
Professor Zhang explains that the Chinese government has increasingly weaponized its antitrust laws as part of its “tit-for-tat” trade war strategy against aggressive U.S. sanctions imposed on Chinese technology companies.
Professor Zhang agrees with experts such as lawyer Nathan Bush that it would be useful for the US and China to more directly tackle the difficult obstacles in the way of more positive and cooperative trade relations and coordination of competition policy between the two countries. Nathan Bush writes in a recent issue of the ABA’s Antitrust Law Journal that there is “value in preserving constructive engagement” and collaboration between the U.S. and China with regard to competition policy. [i]
Professor Zhang hopes that tit-for-tat weaponizing of business regulation will not continue to harm both the U.S. and China. She believes it will help if both China and the US encourage imports from each other, and support more economic interdependence that in turn will lead to better cooperation. She is concerned by the tendency of U.S. politicians to discourage imports of Chinese tech products, and suggests that “Economic interdependence raises the costs of conflict and increases the incentives for countries to cooperate.”
Professor Zhang’s insights into Chinese competition policy and China’s use of business regulation as a weapon in international economic rivalry make her a valuable participant in the international engagement among competition policymakers, scholars, and the Bar that Nathan Bush advocates. It may be a difficult engagement, but the US and China cannot escape being co-inhabitants in commerce on a small planet, and would do well to get along.
By Don Allen Resnikoff ©
[i] Nathan Bush, Chinese Antitrust in the Trade War, Antitrust Law Journal - Volume 84 Issue 1 (2021)
REMOTE PROGRAM: Author Angela Zhang discusses her book “Chinese Antitrust Exceptionalism"
Author Angela Chang will discuss her book: "Chinese Antitrust Exceptionalism: How the Rise of China Challenges Global Regulation", published by Oxford University Press in March 2021.
Available As:
Zoom Webinar --- See Bar anmnouncement:
- Thursday, April 14, 2022 (9:00 AM - 10:30 AM (GMT-05:00) Eastern Time (US & Canada)) https://dcbar.inreachce.com/Details/Information/CD9997DB-4059-45C0-B506-242C8CB0383A
Pasted in above is the link to the DC Bar's announcement of program that is free for anyone interested, because of co-sponsorship by the DC Consumer Rights Coalition. The date is 4-14-2022. The time is 9 AM Eastern (because Professor Zhang is in Hong Kong -- a 12 hour time difference.) Registration is required, using the on-line form that can be reached by clicking on the light blue printed link. I encourage you to sign up and invite other people to tune in to the program. As I understand it, the audience will not be able to speak during the program, but can submit questions.
Following is a further brief description of the program drawn from my book review that the DC Bar magazine will publish later this year.
I expect this to be an interesting and valuable antitrust program.
Don Resnikoff
******************************
More information: The DC Bar, Consumer and Antitrust Section, and the DC Consumer Rights Coalition, offer a video program via Zoom on April 14, 2002, 9 AM Eastern
Angela Huyue Zhang discusses her book: CHINESE ANTITRUST EXCEPTIONALISM : HOW THE RISE OF CHINA CHALLENGES GLOBAL REGULATION. Nathan Bush will ask questions and offer comment.
Angela Huyue Zhang is an associate professor at the Faculty of Law at the University of Hong Kong. In her book Professor Zhang describes the complex layers of competition regulation in China. Importantly, she also discusses international politics and economic rivalry: how antitrust and other business regulations are used as weapons of economic rivalry between China and the United States.
Professor Zhang explains that the Chinese government has increasingly weaponized its antitrust laws as part of its “tit-for-tat” trade war strategy against aggressive U.S. sanctions imposed on Chinese technology companies.
Professor Zhang agrees with experts such as lawyer Nathan Bush that it would be useful for the US and China to more directly tackle the difficult obstacles in the way of more positive and cooperative trade relations and coordination of competition policy between the two countries. Nathan Bush writes in a recent issue of the ABA’s Antitrust Law Journal that there is “value in preserving constructive engagement” and collaboration between the U.S. and China with regard to competition policy. [i]
Professor Zhang hopes that tit-for-tat weaponizing of business regulation will not continue to harm both the U.S. and China. She believes it will help if both China and the US encourage imports from each other, and support more economic interdependence that in turn will lead to better cooperation. She is concerned by the tendency of U.S. politicians to discourage imports of Chinese tech products, and suggests that “Economic interdependence raises the costs of conflict and increases the incentives for countries to cooperate.”
Professor Zhang’s insights into Chinese competition policy and China’s use of business regulation as a weapon in international economic rivalry make her a valuable participant in the international engagement among competition policymakers, scholars, and the Bar that Nathan Bush advocates. It may be a difficult engagement, but the US and China cannot escape being co-inhabitants in commerce on a small planet, and would do well to get along.
By Don Allen Resnikoff ©
[i] Nathan Bush, Chinese Antitrust in the Trade War, Antitrust Law Journal - Volume 84 Issue 1 (2021)
Members of Congress to FTC: Dan Snyder and Washington Commanders Football may have victimized fans who bought seat leases
Excerpt:
We are writing to share evidence of concerning business practices by the Washington
Commanders uncovered during the Committee’s ongoing investigation into workplace
misconduct at the team. Evidence obtained by the Committee, including emails, documents, and
statements from former employees, indicate senior executives and the team’s owner, Daniel
Snyder, may have engaged in a troubling, long-running, and potentially unlawful pattern of
financial conduct that victimized thousands of team fans and the National Football League
(NFL).
According to information and documents obtained by the Committee, for over a decade,
Commanders executives may have withheld millions of dollars in refundable security deposits
owed to customers upon the expiration of their multi-year seat leases and may have taken steps
to prevent customers from collecting these deposits. According to a former team executive, the
Commanders “failed to properly refund those security deposits intentionally and took various
steps to retain as much of that money as possible.”1 Documents indicate that as of 2016, the
team may have retained up to $5 million in deposits from approximately 2,000 customers.
a copy of the full letter follows:
Excerpt:
We are writing to share evidence of concerning business practices by the Washington
Commanders uncovered during the Committee’s ongoing investigation into workplace
misconduct at the team. Evidence obtained by the Committee, including emails, documents, and
statements from former employees, indicate senior executives and the team’s owner, Daniel
Snyder, may have engaged in a troubling, long-running, and potentially unlawful pattern of
financial conduct that victimized thousands of team fans and the National Football League
(NFL).
According to information and documents obtained by the Committee, for over a decade,
Commanders executives may have withheld millions of dollars in refundable security deposits
owed to customers upon the expiration of their multi-year seat leases and may have taken steps
to prevent customers from collecting these deposits. According to a former team executive, the
Commanders “failed to properly refund those security deposits intentionally and took various
steps to retain as much of that money as possible.”1 Documents indicate that as of 2016, the
team may have retained up to $5 million in deposits from approximately 2,000 customers.
a copy of the full letter follows:
SCOTUS nominee Ketanji Brown Jackson and SCOTUS restraints on regulatory agencies
As the Senate hearings for Supreme Court nominee Ketanji Brown Jackson become history, one element that will be remembered is the high level of partisanship, down to and including last minute pleading by leader McConnell that Republicans vote against her.
The Republican contribution to dialogue at the confirmation hearings focused mainly on issues apparently well suited to a large television and internet blogger audience: the content of children’s books used at Georgetown Day School, sentencing in criminal cases involving child pornography, and others.
There were drier but important ideological issues that Republican Senators could have focused on. Wall Street Journal editorial writers focused on an opinion by Supreme Court nominee Ketanji Brown Jackson that, in the view of the WSJ writers, gave far too much leeway for exercise of discretion by a government administrative agency. The regulatory discretion that bothers the WSJ is the US Department of Agriculture requirement that meat be labeled with the country where the animal was born, raised and slaughtered. It also bars processors from commingling meat from different countries.
The American Meat Institute in the case of AMI v. USDA contended that the USDA rule violated the First Amendment and Administrative Procedure Act. The Wall Street Journal editorial agrees with AMI,and takes exception to a decision by Judge Brown Jackson allowing the USDA rule. The WSJ editorial writers suggest that the Senators at Judge Brown Jackson’s recent confirmation hearing should have inquired further concerning Judge Jackson’s regulation friendly opinion in AMI v. USDA. See https://www.wsj.com/articles/judge-ketanji-brown-jacksons-regulatory-red-meat-usda-american-meat-institute-11648071674?msclkid=513b842cafa111ec8fe9a4ade312c04c
In fact, the Wall Street Journal editorial writers have an important point: a right-leaning US Supreme Court might be hostile to regulatory agencies and be instrumental in dismantling the regulatory government regime that has been important at least since the days of Franklin D. Roosevelt and the inception of the New Deal.
A recent excellent Brookings program addressed the issue of the future of regulatory issues in US Supreme Court jurisprudence. See https://www.brookings.edu/events/the-future-of-regulation-at-the-supreme-court/
The introduction to the Brookings program explains that two important cases at the Supreme Court this term–American Hospital Association v. Becerra, US Supreme Court Docket No. 20-1114 [Arg: 11.30.2021] and West Virginia v. Environmental Protection Agency, US Supreme Court Docket No. 20-1530 [Arg: 02.28.2022] –could shape regulatory policy in this country for years to come.
A main question in the AHA v. Becerra case is whether the Department of Health and Human Services is entitled to deference in its interpretation of a statute that enables it to reduce drug reimbursement rates for hospitals.
West Virginia v. Environmental Protection Agency asks the Supreme Court to consider the statutory limitations imposed on the Environmental Protection Agency by the Clean Air Act when it attempts to regulate emissions emanating from stationary sources.
Current law permits a degree of delegation of discretionary authority to regulatory agencies that some critics believe is excessive. That criticism is particularly strong where delegation involves major questions of policy. Changes in the law could reduce the discretion of regulatory agencies and arguably inhibit one of the greatest strengths of regulatory agencies: the ability to relatively quickly enact rules in response to changing social, political, or economic circumstances.
Briefly, some take-aways from the Brookings program are that a hostile U.S. Supreme Court could indeed take a wrecking ball to the regulatory regime that has been important to U.S. governance since the New Deal days of the 1930s. But the Justice most interested in the wrecking ball approach is Gorsuch, and he has not attracted a strong following even among the right-leaning Republican-appointed justices. It may be that leeway for exercise of regulatory discretion is not under immediate threat from the U.S. Supreme Court.
For more detail, go to the Brookings program, which featured impressive experts Robert Litan, Simon Lazarus, Susan Rose-Ackerman, and Ilan Wurman.
By Don Resnikoff
SCOTUS nominee Ketanji Brown Jackson and SCOTUS restraints on regulatory agencies
As the Senate hearings for Supreme Court nominee Ketanji Brown Jackson become history, one element that will be remembered is the high level of partisanship, down to and including last minute pleading by leader McConnell that Republicans vote against her.
The Republican contribution to dialogue at the confirmation hearings focused mainly on issues apparently well suited to a large television and internet blogger audience: the content of children’s books used at Georgetown Day School, sentencing in criminal cases involving child pornography, and others.
There were drier but important ideological issues that Republican Senators could have focused on. Wall Street Journal editorial writers focused on an opinion by Supreme Court nominee Ketanji Brown Jackson that, in the view of the WSJ writers, gave far too much leeway for exercise of discretion by a government administrative agency. The regulatory discretion that bothers the WSJ is the US Department of Agriculture requirement that meat be labeled with the country where the animal was born, raised and slaughtered. It also bars processors from commingling meat from different countries.
The American Meat Institute in the case of AMI v. USDA contended that the USDA rule violated the First Amendment and Administrative Procedure Act. The Wall Street Journal editorial agrees with AMI,and takes exception to a decision by Judge Brown Jackson allowing the USDA rule. The WSJ editorial writers suggest that the Senators at Judge Brown Jackson’s recent confirmation hearing should have inquired further concerning Judge Jackson’s regulation friendly opinion in AMI v. USDA. See https://www.wsj.com/articles/judge-ketanji-brown-jacksons-regulatory-red-meat-usda-american-meat-institute-11648071674?msclkid=513b842cafa111ec8fe9a4ade312c04c
In fact, the Wall Street Journal editorial writers have an important point: a right-leaning US Supreme Court might be hostile to regulatory agencies and be instrumental in dismantling the regulatory government regime that has been important at least since the days of Franklin D. Roosevelt and the inception of the New Deal.
A recent excellent Brookings program addressed the issue of the future of regulatory issues in US Supreme Court jurisprudence. See https://www.brookings.edu/events/the-future-of-regulation-at-the-supreme-court/
The introduction to the Brookings program explains that two important cases at the Supreme Court this term–American Hospital Association v. Becerra, US Supreme Court Docket No. 20-1114 [Arg: 11.30.2021] and West Virginia v. Environmental Protection Agency, US Supreme Court Docket No. 20-1530 [Arg: 02.28.2022] –could shape regulatory policy in this country for years to come.
A main question in the AHA v. Becerra case is whether the Department of Health and Human Services is entitled to deference in its interpretation of a statute that enables it to reduce drug reimbursement rates for hospitals.
West Virginia v. Environmental Protection Agency asks the Supreme Court to consider the statutory limitations imposed on the Environmental Protection Agency by the Clean Air Act when it attempts to regulate emissions emanating from stationary sources.
Current law permits a degree of delegation of discretionary authority to regulatory agencies that some critics believe is excessive. That criticism is particularly strong where delegation involves major questions of policy. Changes in the law could reduce the discretion of regulatory agencies and arguably inhibit one of the greatest strengths of regulatory agencies: the ability to relatively quickly enact rules in response to changing social, political, or economic circumstances.
Briefly, some take-aways from the Brookings program are that a hostile U.S. Supreme Court could indeed take a wrecking ball to the regulatory regime that has been important to U.S. governance since the New Deal days of the 1930s. But the Justice most interested in the wrecking ball approach is Gorsuch, and he has not attracted a strong following even among the right-leaning Republican-appointed justices. It may be that leeway for exercise of regulatory discretion is not under immediate threat from the U.S. Supreme Court.
For more detail, go to the Brookings program, which featured impressive experts Robert Litan, Simon Lazarus, Susan Rose-Ackerman, and Ilan Wurman.
By Don Resnikoff
🔊 ANTI-MONOPOLY RISING:
Anti-monopoly rising (as suggested by Barry Lynn)
- U.S. Senators Amy Klobuchar (D-Minn.) and Richard Blumenthal (D-Conn.) sent a letter to the Justice Department (DOJ) last week, urging officials to investigate anticompetitive conduct by ticketing and events company Live Nation. The letter alleges that Live Nation violated its agreement with the DOJ that convinced the agency to approve the company’s vertical merger with ticketing company Ticketmaster in 2010. Live Nation is accused of retaliating against concert venues that decide not to use Ticketmaster for their events. (Reuters)
- On March 11, the European Commission and the U.K.’s Competition and Markets Authority announced that they were investigating Google and Facebook over their “Jedi Blue” deal launched in September 2018. The regulators allege that the deal created obstacles for ad-tech competitors to Google’s Open Bidding Program. In 2017 Facebook decided to drop its support for a potential Google rival after receiving preferential access to Google’s bidding system. The deal is already being investigated in the U.S. as 15 attorneys general have filed lawsuits. (The Verge)
- Last week, the European Commission raided several automakers over suspected violation of the EU’s cartel rules, while the U.K.’s Competition and Markets Authority also launched a probe. The automakers are suspected of collusion in the collection, treatment, and recovery of end-of-life cars and vans. The companies raided are reported to be Renault and Stellantis, while Mercedes Benz and BMW received information requests. The European Commission has not publicly disclosed the names of companies being investigated. (Reuters, Bloomberg)
- Judge Richard A. Jones of the U.S. District Court for the Western District of Washington last week allowed a class-action lawsuit against Amazon to move forward. The lawsuit, brought by a group of consumers, accuses Amazon of putting in place “most favored nation” style rules in the form of “fair pricing agreements.” Such agreements force sellers who want to use different platforms to add an Amazon fee to the cost of their products, raising the price on platforms that offer lower prices and driving up prices across the entire internet. In 2011, Amazon signed an agreement with the Federal Trade Commission not to use such arrangements. (Competition Policy International, Bloomberg)
Anti-monopoly rising (as suggested by Barry Lynn)
- U.S. Senators Amy Klobuchar (D-Minn.) and Richard Blumenthal (D-Conn.) sent a letter to the Justice Department (DOJ) last week, urging officials to investigate anticompetitive conduct by ticketing and events company Live Nation. The letter alleges that Live Nation violated its agreement with the DOJ that convinced the agency to approve the company’s vertical merger with ticketing company Ticketmaster in 2010. Live Nation is accused of retaliating against concert venues that decide not to use Ticketmaster for their events. (Reuters)
- On March 11, the European Commission and the U.K.’s Competition and Markets Authority announced that they were investigating Google and Facebook over their “Jedi Blue” deal launched in September 2018. The regulators allege that the deal created obstacles for ad-tech competitors to Google’s Open Bidding Program. In 2017 Facebook decided to drop its support for a potential Google rival after receiving preferential access to Google’s bidding system. The deal is already being investigated in the U.S. as 15 attorneys general have filed lawsuits. (The Verge)
- Last week, the European Commission raided several automakers over suspected violation of the EU’s cartel rules, while the U.K.’s Competition and Markets Authority also launched a probe. The automakers are suspected of collusion in the collection, treatment, and recovery of end-of-life cars and vans. The companies raided are reported to be Renault and Stellantis, while Mercedes Benz and BMW received information requests. The European Commission has not publicly disclosed the names of companies being investigated. (Reuters, Bloomberg)
- Judge Richard A. Jones of the U.S. District Court for the Western District of Washington last week allowed a class-action lawsuit against Amazon to move forward. The lawsuit, brought by a group of consumers, accuses Amazon of putting in place “most favored nation” style rules in the form of “fair pricing agreements.” Such agreements force sellers who want to use different platforms to add an Amazon fee to the cost of their products, raising the price on platforms that offer lower prices and driving up prices across the entire internet. In 2011, Amazon signed an agreement with the Federal Trade Commission not to use such arrangements. (Competition Policy International, Bloomberg)
BROOKINGS: The future of regulation at the Supreme Court
Monday, March 28, 2022, 1:30 - 3:00 p.m. EDT
Online: https://www.brookings.edu/events/the-future-of-regulation-at-the-supreme-court
RSVP to watch Two important cases at the Supreme Court this term–American Hospital Association v. Becerra and West Virginia v. Environmental Protection Agency–could shape regulatory policy in this country for years to come. Rulings in each of these cases could invoke the "delegation doctrine" and/or the "major questions doctrine." Changes to either of these legal principles could inhibit one of the greatest strengths of regulatory agencies: the ability to relatively quickly enact rules in response to changing social, political, or economic circumstances.
On March 28, the Center on Regulation and Markets at Brookings will bring together leading experts on administrative and constitutional law to address the possible outcomes in these court decisions and what they mean for the future of regulatory policy in the U.S.
Viewers can submit questions for speakers by email to events@brookings.edu or on Twitter using #DelegationDoctrine.
Opening remarks
Stephanie Aaronson, Vice President and Director, Economic Studies, The Brookings Institution
Introduction
Sanjay Patnaik, Senior Fellow, Bernard L. Schwartz Chair in Economic Policy Development, and Director, Center on Regulation and Markets, The Brookings Institution
Keynote address
Anne Joseph O'Connell, Adelbert H. Sweet Professor of Law, Stanford University
Panel
Moderator: Robert E. Litan, Nonresident Senior Fellow, Economic Studies, Brookings
Simon Lazarus, Former Senior Counsel, Constitutional Accountability Center
Susan Rose-Ackerman, Professor of Law and Political Science, Emeritus, Yale Law School
Ilan Wurman, Associate Professor of Law, Sandra Day O'Connor College of Law, Arizona State University
Stay up to date on Brookings events. Sign up for event invitations by topic and our weekly events update.
IHOP has announced the International Bank of Pancakes.
Customers who open an account with the “bank” will be able to earn points, or Pancoins, with every order and trade them for free food.
The chain said the program will allow it to reward guests while also building relationships with them. It coincides with a revamped IHOP app and website that are intended to ease ordering and customization for guests.
Here’s how the program will work: Customers can open an IBOP account in the IHOP app. After that, they will earn one Pancoin for every $5 they spend at the restaurant. Once they earn three Pancoins, they can exchange them at the in-app “Stack Market” for a coupon that entitles them to free food, like a short-stack of pancakes, a burger or a burrito. Customers will need the IHOP app to use the program.
The chain will use data from the transactions to generate marketing offers for guests based on what they’ve ordered in the past.
“The purpose of us introducing the International Bank of Pancakes, our first loyalty program, is to reward and engage our guests and to create a relationship with them,” said IHOP CMO Kieran Donahue.
IHOP's first loyalty program is (as you might have noticed already) a riff on the cryptocurrency trend.
The mechanics of the program will be supported in part by new pay-at-the-table technology. Dine-in customers can scan a QR code with their phone to pay their bill, which will automatically add Pancoins to their account. If they choose to pay the old-fashioned way, they’ll get a receipt (aka a “deposit slip”) with a code and barcode to collect their reward points. Delivery and pickup orders will also earn Pancoins.
Donahue said the chain wanted to have some fun with the cryptocurrency trend when it was designing the program, which is how it landed on the bank motif.
Note: IHOP makes it clear that Pancoins are not actual cryptocurrency. They can only be used within the IHOP program. They may not otherwise be used as currency.
https://www.restaurantbusinessonline.com/marketing/ihop-unveils-first-loyalty-program-international-bank-pancakes?msclkid=398cfb5eb13211ec8958b50b7a6a2f8c
D.C. AG Antitrust Lawsuit Against Amazon is dismissed by Court
The D.C. AG's suit against Amazon concerned pricing restrictions in its contracts with sellers. D.C. alleged that the company harmed consumers by blocking sellers on its marketplace from offering better deals elsewhere.But on Friday of March 18 the DC lawsuit was dismissed by D.C. Superior Court Judge Hiram Puig-Lugo, who granted mazon’s motion to dismiss. The docket entry reads: "03/18/2022 Oral Ruling Granted on Defendant's Amazon.Com, Inc.'s Opposed Written Motion to Dismiss Plaintiff District of Columbia's Amended Complaint by Judge Puig-Lugo. Entered on the Docket 03/18/2022."
A spokesperson for the D.C. AG told the Wall Street Journal that “We believe that the Superior Court got this wrong, and its oral ruling did not seem to consider the detailed allegations in the complaint, the full scope of the anticompetitive agreements, the extensive briefing and a recent decision of a federal court to allow a nearly identical lawsuit to move forward . . .. We are considering our legal options and we’ll continue fighting to develop reasoned antitrust jurisprudence in our local courts and to hold Amazon accountable for using its concentrated power to unfairly tilt the playing field in its favor.
The Amazon motion to dismiss initial filing is at https://www.scribd.com/document/565534727/Amazon-Motion-to-Dismiss-DC-Case
Posting by Don Allen Resnikoff
The D.C. AG's suit against Amazon concerned pricing restrictions in its contracts with sellers. D.C. alleged that the company harmed consumers by blocking sellers on its marketplace from offering better deals elsewhere.But on Friday of March 18 the DC lawsuit was dismissed by D.C. Superior Court Judge Hiram Puig-Lugo, who granted mazon’s motion to dismiss. The docket entry reads: "03/18/2022 Oral Ruling Granted on Defendant's Amazon.Com, Inc.'s Opposed Written Motion to Dismiss Plaintiff District of Columbia's Amended Complaint by Judge Puig-Lugo. Entered on the Docket 03/18/2022."
A spokesperson for the D.C. AG told the Wall Street Journal that “We believe that the Superior Court got this wrong, and its oral ruling did not seem to consider the detailed allegations in the complaint, the full scope of the anticompetitive agreements, the extensive briefing and a recent decision of a federal court to allow a nearly identical lawsuit to move forward . . .. We are considering our legal options and we’ll continue fighting to develop reasoned antitrust jurisprudence in our local courts and to hold Amazon accountable for using its concentrated power to unfairly tilt the playing field in its favor.
The Amazon motion to dismiss initial filing is at https://www.scribd.com/document/565534727/Amazon-Motion-to-Dismiss-DC-Case
Posting by Don Allen Resnikoff
On unlicensed street vendors in DC -- from CityPaper
Street vending is illegal in D.C., punishable by fines of up to $500. Street vendors, many of whom sell pupusas, taquitos, or other food staples from their home countries, as well as clothes and water, are mainstays in neighborhoods such as Columbia Heights. They are excluded workers, which makes them ineligible to receive pandemic funds or unemployment benefits. Unlike gig economy jobs that don’t require a license, street vendors are criminalized when they fail to get past the hurdles to attain a costly vending license. For some vendors, particularly in Ward 1, English isn’t their first language, which makes it tough to jump through all the vending licensing hoops and may create confusion during interactions with police or officials from the Department of Consumer and Regulatory Affairs.
Some advocacy groups are stepping up to create an economic lifeline for the community. On Wednesday, Vendedores Unidos launched its partnership venture with Beloved Community Incubator to bring United Food Cooperative, a new catered meal service owned and operated by indigenous chefs, to the District.
Still, co-ops can only do so much. A systemic approach that would help all D.C. street vendors requires Council action, advocates say. In its 2021 report, the D.C. Police Reform Commission recommended that the Council decriminalize street vending, noting that most vendors are Black and Brown residents who disproportionately face jail time and live in constant fear of the police.
“The [police’s] attitude, … their hatred towards us—I don't know why they hate the street vendors so much,” Genesis tells City Paper.
To read more about Genesis' story and MPD's oversight hearing, click here.
--Ambar Castillo (acastillo@washingtoncitypaper.com)
See https://outlook.live.com/mail/inbox/id/AQMkADAwATM3ZmYAZS04MTcxLTJmMjgtMDACLTAwCgBGAAADRnoWw%2B1oGkecPn377%2FL9tQcA97M33DyMxEGb7MCV%2BuIrtgAAAgEMAAAA97M33DyMxEGb7MCV%2BuIrtgAFDif4HgAAAA%3D%3D
Street vending is illegal in D.C., punishable by fines of up to $500. Street vendors, many of whom sell pupusas, taquitos, or other food staples from their home countries, as well as clothes and water, are mainstays in neighborhoods such as Columbia Heights. They are excluded workers, which makes them ineligible to receive pandemic funds or unemployment benefits. Unlike gig economy jobs that don’t require a license, street vendors are criminalized when they fail to get past the hurdles to attain a costly vending license. For some vendors, particularly in Ward 1, English isn’t their first language, which makes it tough to jump through all the vending licensing hoops and may create confusion during interactions with police or officials from the Department of Consumer and Regulatory Affairs.
Some advocacy groups are stepping up to create an economic lifeline for the community. On Wednesday, Vendedores Unidos launched its partnership venture with Beloved Community Incubator to bring United Food Cooperative, a new catered meal service owned and operated by indigenous chefs, to the District.
Still, co-ops can only do so much. A systemic approach that would help all D.C. street vendors requires Council action, advocates say. In its 2021 report, the D.C. Police Reform Commission recommended that the Council decriminalize street vending, noting that most vendors are Black and Brown residents who disproportionately face jail time and live in constant fear of the police.
“The [police’s] attitude, … their hatred towards us—I don't know why they hate the street vendors so much,” Genesis tells City Paper.
To read more about Genesis' story and MPD's oversight hearing, click here.
--Ambar Castillo (acastillo@washingtoncitypaper.com)
See https://outlook.live.com/mail/inbox/id/AQMkADAwATM3ZmYAZS04MTcxLTJmMjgtMDACLTAwCgBGAAADRnoWw%2B1oGkecPn377%2FL9tQcA97M33DyMxEGb7MCV%2BuIrtgAAAgEMAAAA97M33DyMxEGb7MCV%2BuIrtgAFDif4HgAAAA%3D%3D
Subaru disabled the telematics system and associated features on new cars registered in Massachusetts last year
That is part of a spat over a right-to-repair ballot measure approved, overwhelmingly, by the state’s voters in 2020. The measure, which has been held up in the courts, required automakers to give car owners and independent mechanics more access to data about the car’s internal systems.
See https://www.wired.com/story/right-to-repair-massachusetts-question-1-election-2020/
Excerpt from https://www.wired.com/story/fight-right-repair-cars-turns-ugly/?utm_source=pocket-newtab
Coach Brian Flores v. the NFL and the Giants -- the WSJ perceives litigation difficulties
In a class action complaint against the NFL and others, former Head Coach of the Miami Dolphins, Brian Flores, charges that he and other members of the proposed class have been denied positions as head coaches and general managers as a result of racial discrimination. [See Complaint at https://int.nyt.com/data/documenttools/brian-flores-nfl-lawsuit/44f04359fa5bb496/full.pdf] The Wall Street Journal article points out that class action litigation requirements are daunting, even in the face of allegations of blatant race discrimination. That raises a question of whether the Courts are up to the task of dealing fairly with the litigation. Here is an excerpt from the WSJ piece:
While these types of cases potentially can take years to resolve, legal observers said early proceedings would determine whether the suit carries force.
The league and team defendants are likely to ask a judge to dismiss Mr. Flores’s claims at the outset, according to several employment lawyers not involved in the case.
Mr. Flores would need to prevail against those early motions to advance into a broad discovery phase that could potentially give his lawyers access to emails and text messages of owners and managers discussing their hiring processes, materials that could provide a rare window into the NFL’s employment practices.
“The discovery process in a case like this is dangerous for both sides because you don’t know what will come out,” said Joshua Burgener, a commercial and employment litigator at law firm Dickinson Wright.
Mr. Burgener and others said the central question for a judge at the motion-to-dismiss stage would likely be whether Mr. Flores’s allegations are merely speculative or instead add up to a plausible claim that hiring practices by the NFL and its teams disfavor candidates of color.
It is conceivable that Mr. Flores survives a dismissal motion in part because of statistical evidence showing few minorities hold top positions in the league, said Howie Waldman, a labor and employment lawyer in Florida who represents employers. But to prevail on the merits, the former coach at some point will need to draw a sharper connection between his alleged exclusion from coaching jobs and his race.
Cooley blog on Flores and the Dolphins: Is the Rooney Rule just window dressing?
Blog PubCo @ Cooley Cooley LLP
USA February 3 2022 At the beginning of Black history month, in a class action complaint against the NFL and others replete with heart-breaking allegations of racism, former Head Coach of the Miami Dolphins, Brian Flores, charged that, among many other things, he and other members of the proposed class have been denied positions as head coaches and general managers as a result of racial discrimination. Defendants that have responded publicly have reportedly denied the allegations and said that the claims are without merit. Particularly notable from a governance and DEI perspective are allegations regarding the disingenuous application of the vaunted “Rooney Rule”—which originated in the NFL back in 2002 in an effort to address the dearth of Black head coaches—but has since become almost de rigueur in governance circles as one effective approach to increasing diversity in a wide variety of contexts, including boards of directors. However well-intentioned originally, the complaint alleges, “the Rooney Rule is not working.” Flores claims that, to fulfill the admonitions of the Rooney Rule, NFL teams “discriminatorily subjected” him and other Black candidates “to sham and illegitimate interviews due in whole or part to their race and/or color.” While this claim is far from the most incendiary in the complaint, if shown to be accurate, it would certainly seriously damage the reputation of the defendants involved. Can an approach that has allegedly failed to work in its original setting still be made to work effectively in other contexts?
As you may have read, Flores was fired as head coach of the Miami Dolphins last month, after three years, including two winning seasons. After his termination, he was recruited as head coach for the NY Giants. But he was not hired for the position and, the complaint alleges, he “learned that the Giants’ continued courtship was nothing more than a discriminatory façade designed to show false compliance with the Rooney Rule.” The complaint alleges that around 40 other members of the proposed class have been subject to this and other types of discriminatory conduct. By filing the complaint, Flores says that he hopes “to shine a light on the racial injustices that take place inside the NFL and to effectuate real change for the future.” Among other relief, he is seeking injunctive relief designed to “Increase the influence of Black individuals in hiring and termination decisions,” ensure diversity of ownership and decision-making and increase objectivity in hiring and termination decisions.
According to the complaint, the Rooney Rule originated in 2002, in response to adverse public reaction to a detailed report on the NFL’s head-coaching hiring practices entitled “Black Coaches in the National Football League: Superior Performance, Inferior Opportunities.” The report showed evidence of discrimination, “including that Black Head Coach candidates were less likely to be hired and that Black Head Coaches were more likely to be fired.” In response, the NFL created a “Committee on Workplace Diversity,” headed by Pittsburgh Steelers’ President Dan Rooney, which recommended that the NFL institute the “Rooney Rule,” which required “that NFL teams make a commitment to interview minority candidates for every Head Coach job opening (with limited exceptions).” The Rule was approved by the owners in 2002 and has since been amended to apply to other coach and managerial positions and to require teams to interview at least two minority head coach candidates, including one in person. Violations have resulted in team fines, the complaint alleges.
According to the complaint, however, “the Rooney Rule has failed to yield any meaningful change to an institution so fully steeped in discriminatory practices….In the 20 years since the Rooney Rule was passed, only 15 Head Coaching positions have been filled by Black Candidates. During that time, there have been approximately 129 Head Coaching vacancies. Thus only 11% of Head Coach positions have been filled by Black candidates—in a league where 70% of players are Black.” The complaint alleges that, when “the Rooney Rule was instituted, almost twenty years ago, there were three Black Head Coaches. There is now only one,” among 32 teams. Although the complaint acknowledges that “the Rooney Rule was and remains well-intentioned, its effectiveness requires NFL teams to take it seriously, and not treat it as a formality that must be endured simply to formalize the pre-determined hiring of a white coach.” “[W]hat is clear,” the complaint alleges, “is that the Rooney Rule is not working.” Among other reasons, it is “not working because management is not doing the interviews in good-faith, and it therefore creates a stigma that interviews of Black candidates are only being done to comply with the Rooney Rule rather than in recognition of the talents that the Black candidates possess.”
The complaint alleges that, to appear to comply with the Rooney Rule, Flores was subjected to the indignity of sham interviews. In particular, Flores was scheduled to interview for the Head Coach position at the New York Giants. As it turns out, the complaint alleges, the Giants had already made the decision to hire someone else—and had disclosed that decision to third parties, one of whom inadvertently leaked that decision to Flores. But the Giants still went ahead with the Flores interview, “deceptively [leading him] to believe he actually had a chance at this job.” The complaint claims that Flores then had to sit through an interview dinner with the Giant’s new General Manager, knowing that the Giants had already selected someone else and “had to give an extensive interview for a job that he already knew he would not get—an interview that was held for no reason other than for the Giants to demonstrate falsely to the League Commissioner Roger Goodell and the public at large that it was in compliance with the Rooney Rule.” As alleged, Flores was devastated to learn “that not only would he not be getting the Giants Head Coach job—the job of his dreams—but, more importantly, that he was not even being given serious consideration for the position but being treated as a box to ‘check off’ due to his race.”
Other examples are provided in the complaint. For instance, a Black candidate that had coached for many years interviewed for, but was rejected at, around 10 open head coach positions. According to the complaint, he subsequently stated that “that only two of the four interviews he engaged in that year felt like ‘legitimate interviews’ where he had a ‘legitimate shot at the job.’ He was asked in a follow-up question whether his saying two of the job interviews were ‘legitimate,’ meant he believed the other two were ‘Rooney Rule interviews.’ [He] said: ‘Take it however you want.’” Ironically, the Rooney Rule had morphed into an epithet—and a highly pejorative one at that.
In recent years, the Rooney Rule has been widely touted in governance and DEI circles as a way to cast a wider net that includes diverse candidates when seeking to fill a position. Outside of the NFL, the Rooney Rule has meant a commitment to include women and minority candidates in every pool from which candidates for certain positions are chosen. For example, the NYC Comptroller’s Boardroom Accountability Project 3.0 called on companies to adopt the Rooney Rule as a structural reform—a policy committing to include women and minority candidates in every pool from which nominees for open board seats and CEOs are selected. The Rooney Rule has also been invoked by institutional investors, such as CalSTRS, and groups that advocate for board diversity, such as the Thirty Percent Coalition, as a tool to increase the number of women on boards. And certainly, the Rooney Rule may work well in those contexts. Whatever the context, however, to be effective, as this case suggests, the Rule requires that those applying it do more than just pay it lip service. This case makes clear that companies that rely on the Rooney Rule as a strategy for achieving diversity must ensure that they are implementing that strategy—along with other strategies to increase diversity—in good faith.
Cooley LLP - Cydney S. Posner
Blog PubCo @ Cooley Cooley LLP
USA February 3 2022 At the beginning of Black history month, in a class action complaint against the NFL and others replete with heart-breaking allegations of racism, former Head Coach of the Miami Dolphins, Brian Flores, charged that, among many other things, he and other members of the proposed class have been denied positions as head coaches and general managers as a result of racial discrimination. Defendants that have responded publicly have reportedly denied the allegations and said that the claims are without merit. Particularly notable from a governance and DEI perspective are allegations regarding the disingenuous application of the vaunted “Rooney Rule”—which originated in the NFL back in 2002 in an effort to address the dearth of Black head coaches—but has since become almost de rigueur in governance circles as one effective approach to increasing diversity in a wide variety of contexts, including boards of directors. However well-intentioned originally, the complaint alleges, “the Rooney Rule is not working.” Flores claims that, to fulfill the admonitions of the Rooney Rule, NFL teams “discriminatorily subjected” him and other Black candidates “to sham and illegitimate interviews due in whole or part to their race and/or color.” While this claim is far from the most incendiary in the complaint, if shown to be accurate, it would certainly seriously damage the reputation of the defendants involved. Can an approach that has allegedly failed to work in its original setting still be made to work effectively in other contexts?
As you may have read, Flores was fired as head coach of the Miami Dolphins last month, after three years, including two winning seasons. After his termination, he was recruited as head coach for the NY Giants. But he was not hired for the position and, the complaint alleges, he “learned that the Giants’ continued courtship was nothing more than a discriminatory façade designed to show false compliance with the Rooney Rule.” The complaint alleges that around 40 other members of the proposed class have been subject to this and other types of discriminatory conduct. By filing the complaint, Flores says that he hopes “to shine a light on the racial injustices that take place inside the NFL and to effectuate real change for the future.” Among other relief, he is seeking injunctive relief designed to “Increase the influence of Black individuals in hiring and termination decisions,” ensure diversity of ownership and decision-making and increase objectivity in hiring and termination decisions.
According to the complaint, the Rooney Rule originated in 2002, in response to adverse public reaction to a detailed report on the NFL’s head-coaching hiring practices entitled “Black Coaches in the National Football League: Superior Performance, Inferior Opportunities.” The report showed evidence of discrimination, “including that Black Head Coach candidates were less likely to be hired and that Black Head Coaches were more likely to be fired.” In response, the NFL created a “Committee on Workplace Diversity,” headed by Pittsburgh Steelers’ President Dan Rooney, which recommended that the NFL institute the “Rooney Rule,” which required “that NFL teams make a commitment to interview minority candidates for every Head Coach job opening (with limited exceptions).” The Rule was approved by the owners in 2002 and has since been amended to apply to other coach and managerial positions and to require teams to interview at least two minority head coach candidates, including one in person. Violations have resulted in team fines, the complaint alleges.
According to the complaint, however, “the Rooney Rule has failed to yield any meaningful change to an institution so fully steeped in discriminatory practices….In the 20 years since the Rooney Rule was passed, only 15 Head Coaching positions have been filled by Black Candidates. During that time, there have been approximately 129 Head Coaching vacancies. Thus only 11% of Head Coach positions have been filled by Black candidates—in a league where 70% of players are Black.” The complaint alleges that, when “the Rooney Rule was instituted, almost twenty years ago, there were three Black Head Coaches. There is now only one,” among 32 teams. Although the complaint acknowledges that “the Rooney Rule was and remains well-intentioned, its effectiveness requires NFL teams to take it seriously, and not treat it as a formality that must be endured simply to formalize the pre-determined hiring of a white coach.” “[W]hat is clear,” the complaint alleges, “is that the Rooney Rule is not working.” Among other reasons, it is “not working because management is not doing the interviews in good-faith, and it therefore creates a stigma that interviews of Black candidates are only being done to comply with the Rooney Rule rather than in recognition of the talents that the Black candidates possess.”
The complaint alleges that, to appear to comply with the Rooney Rule, Flores was subjected to the indignity of sham interviews. In particular, Flores was scheduled to interview for the Head Coach position at the New York Giants. As it turns out, the complaint alleges, the Giants had already made the decision to hire someone else—and had disclosed that decision to third parties, one of whom inadvertently leaked that decision to Flores. But the Giants still went ahead with the Flores interview, “deceptively [leading him] to believe he actually had a chance at this job.” The complaint claims that Flores then had to sit through an interview dinner with the Giant’s new General Manager, knowing that the Giants had already selected someone else and “had to give an extensive interview for a job that he already knew he would not get—an interview that was held for no reason other than for the Giants to demonstrate falsely to the League Commissioner Roger Goodell and the public at large that it was in compliance with the Rooney Rule.” As alleged, Flores was devastated to learn “that not only would he not be getting the Giants Head Coach job—the job of his dreams—but, more importantly, that he was not even being given serious consideration for the position but being treated as a box to ‘check off’ due to his race.”
Other examples are provided in the complaint. For instance, a Black candidate that had coached for many years interviewed for, but was rejected at, around 10 open head coach positions. According to the complaint, he subsequently stated that “that only two of the four interviews he engaged in that year felt like ‘legitimate interviews’ where he had a ‘legitimate shot at the job.’ He was asked in a follow-up question whether his saying two of the job interviews were ‘legitimate,’ meant he believed the other two were ‘Rooney Rule interviews.’ [He] said: ‘Take it however you want.’” Ironically, the Rooney Rule had morphed into an epithet—and a highly pejorative one at that.
In recent years, the Rooney Rule has been widely touted in governance and DEI circles as a way to cast a wider net that includes diverse candidates when seeking to fill a position. Outside of the NFL, the Rooney Rule has meant a commitment to include women and minority candidates in every pool from which candidates for certain positions are chosen. For example, the NYC Comptroller’s Boardroom Accountability Project 3.0 called on companies to adopt the Rooney Rule as a structural reform—a policy committing to include women and minority candidates in every pool from which nominees for open board seats and CEOs are selected. The Rooney Rule has also been invoked by institutional investors, such as CalSTRS, and groups that advocate for board diversity, such as the Thirty Percent Coalition, as a tool to increase the number of women on boards. And certainly, the Rooney Rule may work well in those contexts. Whatever the context, however, to be effective, as this case suggests, the Rule requires that those applying it do more than just pay it lip service. This case makes clear that companies that rely on the Rooney Rule as a strategy for achieving diversity must ensure that they are implementing that strategy—along with other strategies to increase diversity—in good faith.
Cooley LLP - Cydney S. Posner
A bill that would upend how Apple and Google run their mobile app stores easily made it out of the Senate Judiciary Committee on Thursday.
Senators on the committee voted to pass the Open App Markets Act 20-2, with Sen. John Cornyn (R-Texas) and Sen. Thom Tillis (R-NC) voting no.
Senators on the committee voted to pass the Open App Markets Act 20-2, with Sen. John Cornyn (R-Texas) and Sen. Thom Tillis (R-NC) voting no.
- If the bill passes the full Senate and is signed by President Biden, Google and Apple would essentially have to give up full control of their app stores.
- New rules could require them both to allow app side-loading — installing apps from non-sanctioned marketplaces — and alternative payment processing systems. Apple and Google have argued vehemently against the bill.
- Source: Axios
Two hard-to-love companies, BARBRI and West Academic, plan to merge
By Don Allen Resnikoff
On January 4, 2022, legal exam prep company BARBRI Global, a “portfolio” company of investor Francisco Partners, announced that it has acquired West Academic from Levine Leichtman Capital Partners. West Academic is a publisher of casebooks, treatises, study aids and other legal education materials for law students. It publishes materials under three brands: West Academic Publishing, Foundation Press, and Gilbert. The January 4 announcement says that "West Academic provides industry-leading materials for tomorrow's lawyers and the schools that train them.”
From a consumer perspective, neither BARBRI or West are particularly lovable. Both are thought of as expensive by many consumers.
In 2013 BARBRI reached a $9.5 million class action lawsuit settlement over allegations it attempted to monopolize the market for bar examination courses. See
http://www.barbrisettlement.com/media/1871446/v1_stets2_notice_050613_final.pdf
The settlement resolved a class action lawsuit (Stetson, et al. v. West Publishing Corporation, et al.) that alleged that BARBRI violated antitrust laws by agreeing with rival Kaplan to limit competition in the market for bar review courses. Plaintiffs alleged that BARBRI agreed not to compete in the LSAT business and that Kaplan agreed not to compete in the bar review business, thereby allocating to BARBRI the market for full-service bar review courses in the United States and preventing a competitive bar review course from being marketed and sold.
West is a conglomeration of previously independent publishers. Publisher Thomson purchased West in 1996. Thomson also consolidated into West a number of other law book companies purchased by either Thomson or West, including Bancroft-Whitney, Banks-Baldwin, Barclay, Callaghan & Company, Clark Boardman, Foundation Press, Gilbert's, Harrison, Lawyers Cooperative Publishing, and Warren, Gorham & Lamont.
An indication of West’s book pricing policies is found in four texts sold by West Academics that are relevant to the merger and acquisition questions of law law applicable to the BARBI-West merger:
(1) Gevurtz and Sautter's Mergers and Acquisitions Law (Hornbook Series), By Franklin A. Gevurtz, Christina M. Sautter, Hardbound $146.00, eBook$109.50;
(2) Oesterle and Haas's The Law of Mergers and Acquisitions, 5th
By Dale A. Oesterle, Jeffrey J. Haas, Hardbound $245.00, eBook$183.75;
(3) Hill, Quinn, and Davidoff Solomon's Mergers and Acquisitions: Law, Theory, and Practice, 2d By Claire A. Hill, Brian JM Quinn, Steven Davidoff Solomon, Hardbound $225.00
eBook $168.75; and
(4) Bainbridge's Mergers and Acquisitions, 3d (Concepts and Insights Series)
By Stephen M. Bainbridge, , Softbound$50.00, eBook$37.50 (perhaps a relative bargain).
As an economist might say, West’s relevant costs are probably much lower than the selling prices, so that West Academics has extracted lots of rents.
It might surprise a consumer without legal or economics training, but for the USDOJ to find a theory of harm to support an antitrust prosecution of the BARBRI-West merger would likely be difficult. The companies are not direct competitors, so the price effects of the merger are not obvious. The products of the companies are complements –they have a “vertical” relationship.
A reason for consumer surprise might be the tendency for BARBRI to be an antitrust bad actor, West to be a very powerful company in its market area, and for both parties to charge what seem like very high prices.
However, just because no strong obvious theory of harm comes to the mind of experts doesn’t mean that there is no problem in the Government’s allowing the merger. Perhaps, as one respected antitrust scholar suggests, exclusion of rivals by way of control over complementary or vertical products is underestimated as a competitive risk, and it to be feared that companies in severely concentrated markets with histories of gross and aggressive consumer abuse may well have something unfortunate up their sleeves when they merge.
By Don Allen Resnikoff
On January 4, 2022, legal exam prep company BARBRI Global, a “portfolio” company of investor Francisco Partners, announced that it has acquired West Academic from Levine Leichtman Capital Partners. West Academic is a publisher of casebooks, treatises, study aids and other legal education materials for law students. It publishes materials under three brands: West Academic Publishing, Foundation Press, and Gilbert. The January 4 announcement says that "West Academic provides industry-leading materials for tomorrow's lawyers and the schools that train them.”
From a consumer perspective, neither BARBRI or West are particularly lovable. Both are thought of as expensive by many consumers.
In 2013 BARBRI reached a $9.5 million class action lawsuit settlement over allegations it attempted to monopolize the market for bar examination courses. See
http://www.barbrisettlement.com/media/1871446/v1_stets2_notice_050613_final.pdf
The settlement resolved a class action lawsuit (Stetson, et al. v. West Publishing Corporation, et al.) that alleged that BARBRI violated antitrust laws by agreeing with rival Kaplan to limit competition in the market for bar review courses. Plaintiffs alleged that BARBRI agreed not to compete in the LSAT business and that Kaplan agreed not to compete in the bar review business, thereby allocating to BARBRI the market for full-service bar review courses in the United States and preventing a competitive bar review course from being marketed and sold.
West is a conglomeration of previously independent publishers. Publisher Thomson purchased West in 1996. Thomson also consolidated into West a number of other law book companies purchased by either Thomson or West, including Bancroft-Whitney, Banks-Baldwin, Barclay, Callaghan & Company, Clark Boardman, Foundation Press, Gilbert's, Harrison, Lawyers Cooperative Publishing, and Warren, Gorham & Lamont.
An indication of West’s book pricing policies is found in four texts sold by West Academics that are relevant to the merger and acquisition questions of law law applicable to the BARBI-West merger:
(1) Gevurtz and Sautter's Mergers and Acquisitions Law (Hornbook Series), By Franklin A. Gevurtz, Christina M. Sautter, Hardbound $146.00, eBook$109.50;
(2) Oesterle and Haas's The Law of Mergers and Acquisitions, 5th
By Dale A. Oesterle, Jeffrey J. Haas, Hardbound $245.00, eBook$183.75;
(3) Hill, Quinn, and Davidoff Solomon's Mergers and Acquisitions: Law, Theory, and Practice, 2d By Claire A. Hill, Brian JM Quinn, Steven Davidoff Solomon, Hardbound $225.00
eBook $168.75; and
(4) Bainbridge's Mergers and Acquisitions, 3d (Concepts and Insights Series)
By Stephen M. Bainbridge, , Softbound$50.00, eBook$37.50 (perhaps a relative bargain).
As an economist might say, West’s relevant costs are probably much lower than the selling prices, so that West Academics has extracted lots of rents.
It might surprise a consumer without legal or economics training, but for the USDOJ to find a theory of harm to support an antitrust prosecution of the BARBRI-West merger would likely be difficult. The companies are not direct competitors, so the price effects of the merger are not obvious. The products of the companies are complements –they have a “vertical” relationship.
A reason for consumer surprise might be the tendency for BARBRI to be an antitrust bad actor, West to be a very powerful company in its market area, and for both parties to charge what seem like very high prices.
However, just because no strong obvious theory of harm comes to the mind of experts doesn’t mean that there is no problem in the Government’s allowing the merger. Perhaps, as one respected antitrust scholar suggests, exclusion of rivals by way of control over complementary or vertical products is underestimated as a competitive risk, and it to be feared that companies in severely concentrated markets with histories of gross and aggressive consumer abuse may well have something unfortunate up their sleeves when they merge.
Antitrust reform in 2022? Analysis by Jeffrey May for Walters-Kluwer
[http://antitrustconnect.com/2021/12/31/will-2022-be-the-year-in-which-antitrust-reforms-become-law/]
Comment by Don Allen Resnikoff
Jeffrey May’s topic is antitrust reform, which is the focus of a great deal of current discussion. The Biden Administration has encouraged reform discussion with talk about the importance of antitrust enforcement, and by appointing well known antitrust reformers to key positions at the FTC and the USDOJ. Legislators like Senator Klobuchar have introduced antitrust reform bills in Congress.
The path for antitrust reform is uncertain. Legislative appetite for sweeping structural reform of the economy seems limited – there are, for example, no active legislative proposals for no-fault monopoly legislation that would cap large firm size. (Senator Klobuchar does propose particularly strict antitrust rules for certain large companies.) Many of the array of current legislative proposals are unlikely to survive and pass the U.S. Senate.
Author May’s approach to making sense of the unpredictability of reform is to compile a list of currently relevant legislative proposals and to comment on them. That is a reasonable approach that improves on simply saying that antitrust reform will be difficult to achieve. May’s approach makes it possible to categorize the proposals that are on legislators’ minds. Following is a selective overview:
To my mind the legislative proposals fall roughly into five main categories: (1) proposals that leave current antitrust enforcement laws mainly unchanged, but strengthened by legislative tweaks; (2) proposals that modify the substance of antitrust laws in ways that remedy perceived shortfalls in enforcement; (3) proposals for laws with specific provisions targeted at specific industry segments, like “platform” industries. (4) Special proposals affecting baseball and OPEC. (5) Proposals to defund the FTC.
- Tweaks
Other pending legislation would assist the FTC’s antitrust enforcement efforts. One proposal (H R 2668) would make clear the power of the FTC to obtain restitution of money, and to seek disgorgement of ill-gotten gains. That would reverse the results of a US Supreme Court decision unfavorable to the FTC.
Legislation has been introduced (H R 6093) that would aid FTC enforcement by providing incentives to “whistleblowers” who reveal wrongdoing. The incentives include rewards, and protection from retaliation.
The State Antitrust Enforcement Venue Act (H R 3460; S 1787) would strengthen the ability of State AGs to control the cases they bring. The goal is to prevent transfer of cases away from the State where they were brought.
2. Modifying the substance of antitrust laws
Senator Klobuchar introduced legislation (S. 225) that would toughen the standards for merger enforcement. Section 7 of the Clayton Act would be revised to forbid mergers that “create an appreciable risk of materially increasing competition.” That would preclude more mergers than the current language, which forbids mergers that “substantially lessen competition.”
Another Klobuchar proposal contained in S. 225 would greatly expand the Clayton Act to reach “exclusionary conduct.” The statutory language explains that “The term ‘exclusionary conduct’ means conduct that— “(i) materially disadvantages 1 or more actual or potential competitors; or“ (ii) tends to foreclose or limit the ability or incentive of 1 or more actual or potential competitors to compete.”
There is a legislative proposal by Senator Mike Lee (S 2039) that would change the doctrine that antitrust remedies are foreclosed to “downstream” purchasers by case law, Illinois Brick and related cases. The proposed legislation would reverse the Illinois Brick rule and create an entitlement to recover by remote purchasers. Another proposal in the same bill would allow the USDOJ to recover treble damages on behalf of consumers.
The same Lee bill will attempt to codify a view of the much debated “consumer welfare” standard for antitrust enforcement. The bill’s language would, in the view of some critics, narrow the scope of antitrust enforcement. It provides that “In examining the competitive effects of conduct or a transaction challenged under any of the antitrust laws, a court shall consider exclusively the effects of the challenged conduct or transaction on consumer welfare, including price, output, quality, innovation, and consumer choice.”
3. Targeted proposals affecting platform companies.2 The House bills targeting tech sector platform companies are identified at page 7 of the May article. One (H R 3849) has the goal of requiring data to be easily transportable from one platform to another. Another (H R 3816; S 2992) would preclude what is perceived as the Amazon practice of self-preferencing – disadvantaging products on the Amazon platform that compete with Amazon products.
A Klobuchar/Cotton bill (the Senate version is S 3197) would put particularly burdensome merger requirements on designated platform companies perceived to have unusual market power. Another proposal (H R 3825) would block designated platform companies from integrating with downstream businesses where there is a “conflict of interest.” (An example is Google if it acts as owner of the platform and a competitor on the platform.) Another proposal (S 2710; H R 5017) would provide app developers with expanded rights against Google and Apple.
4. Proposals affecting OPEC and baseball
Briefly, proposals have been made to eliminate the judicially created exemption of baseball from antitrust enforcement, and to authorize the USDOJ to sue the OPEC oil cartel, notwithstanding that sovereign governments are involved in the cartel.
5. Proposals to divest the FTC of antitrust jurisdiction.
Senator Mike Lee’s proposed S 2039 includes a “one agency” provision that would divest the FTC of antitrust enforcement authority, leaving the USDOJ as the exclusive federal antitrust enforcer.
CONCLUSION
Jeffrey May’s article is an excellent aid in parsing recent legislative proposals affecting antitrust enforcement. There is doubt about enactment of any of the proposals, but knowing about them is helpful in assessing possible future paths for antirust reform, whether through changes in antitrust by regulatory agencies and the courts, or through the legislative political process.
DAR
A new lawsuit charges major U.S. universities and college with violating antitrust laws by coordinating concerning students' financial aid packages.
The schools allegedly "participated in a price-fixing cartel that is designed to reduce or eliminate financial aid...and that in fact has artificially inflated the net price of attendance for students receiving financial aid."
See the Complaint at https://www.courtlistener.com/docket/62017107/henry-v-brown-university/
Here is an excerpt from the Complaint Introduction:
- Defendants are private, national universities that have long been in the top 25 of the U.S. News & World Report rankings for such schools. These elite institutions occupy a place of privilege and importance in American society. And yet these same Defendants, by their own admission, have participated in a price-fixing cartel that is designed to reduce or eliminate financial aid as a locus of competition, and that in fact has artificially inflated the net price of attendance for students receiving financial aid. Defendants participate in the cartel claiming the protection of Section 568 of the Improving America's Schools Act of 1994 (the "568 Exemption"). This exemption from the antitrust laws, which otherwise prohibit conspiracies among competitors, applies to two or more institutions of higher education at which "all students admitted are admitted on a need-blind basis." Section 568 defines "on a need-blind basis" to mean "without regard to the financial circumstances of the student involved or the student's family." 15 U.S.C. § 1 Note.
- Defendants have not been entitled to the 568 Exemption. Under a true need-blind admissions system, all students would be admitted without regard to the financial circumstances of the student or student's family. Far from following this practice, at least nine Defendants for many years have favored wealthy applicants in the admissions process. These nine Defendants have thus made admissions decisions with regard to the financial circumstances of students and their families, thereby disfavoring students who need financial aid. All Defendants, in turn, have conspired to reduce the amount of financial aid they provide to admitted students. This conspiracy, which has existed (with slightly varying membership) for many years, thus falls outside the exemption from the antitrust laws.
- Defendants are members of the so-called "568 Presidents Group," in which the members have agreed on "a set of common standards for determining the family's ability to pay for college," which the members describe as the "Consensus Approach." Based on the Consensus Approach, in approximately 2003 the 568 Presidents Group (the "568 Cartel") devised the Consensus Methodology, which is a common formula for determining an applicant's ability to pay. Under the Consensus Methodology, an applicant's ability to pay is a substantial determinant of the net price, which is the institution's gross tuition plus fees for room and board, less institutional grant aid, charged to the applicant for attendance.
- In collectively adopting this methodology, and regularly meeting to implement it jointly, the 568 Cartel has explicitly aimed to reduce or eliminate price competition among its members. As a result of this conspiracy, the net price of attendance for financial-aid recipients at Defendants' schools has been artificially inflated. In short, due to the conduct challenged herein, over almost two decades, Defendants have overcharged over 170,000 financial-aid recipients by at least hundreds of millions of dollars, in violation of Section 1 of the Sherman Act.
- Defendants' longstanding conspiracy would be immune from the antitrust laws only if they have all been complying with the 568 Exemption. In fact, however, at least nine Defendants (Columbia, Dartmouth, Duke, Georgetown, MIT, Northwestern, Notre Dame, Penn, and Vanderbilt) have been members of the 568 Cartel and have not qualified for the 568 Exemption throughout the Class Periods (defined below).
- Instead, these nine Defendants have considered the financial circumstances of students and their families in admissions- for example, by maintaining admissions systems that favor the children of wealthy past or potential future donors. At least some of these nine Defendants also take into account applicants' financial circumstances through a largely secretive practice known as "enrollment management." And at least some of these nine Defendants have also considered applicants' need for financial aid by preferencing students who will not need financial aid in deciding on waitlist admissions.
- The other seven Defendants (Brown, CalTech, Chicago, Cornell, Emory, Rice, and Yale) have been members of the 568 Cartel during at least parts of the last two decades. These seven Defendants may or may not have adhered to need-blind admissions policies, but they nonetheless conspired with the other Defendants. The 568 Exemption thus does not apply to them either. In addition, although such knowledge is unnecessary to show their liability, these seven Defendants knew or should have known that the other nine Defendants were not following need blind admissions policies.
- In critical respects, elite, private universities like Defendants are gatekeepers to the American Dream. Defendants' misconduct is therefore particularly egregious because it has narrowed a critical pathway to upward mobility that admission to their institutions represents. The burden of the 568 Cartel's overcharges falls in particular on low- and middle-income families struggling to afford the cost of a university education and to achieve success for their children. In addition, unlike prior admissions scandals, such as Varsity Blues,1 the 568 Cartel's systematic suppression of financial aid is the official policy of its participants.
Biden antitrust litigation --
by Don Allen Resnikoff
We are at what is widely perceived as a watershed moment for antitrust enforcement. Thanks to President Joe Biden, Lina Khan and Tim Wu now have important roles at the FTC. They are well known as dynamic thinkers about competition policy. Jonathan Kanter, known as an adversary of Facebook and Google, will lead the antitrust division of the Justice Department. Facebook and Google are among tech companies widely thought of as potential targets of aggressive enforcement.
Some have suggested that since the inauguration of President Biden the antitrust litigation efforts of the FTC and USDOJ are already more aggressive, and that regulators other than the FTC and USDOJ have stepped up and acted as aggressive antitrust enforcers.
But some journalists and commenters seem to be overstating or simply misstating what is happening in antitrust. Some talk about antitrust as now addressing immediate and difficult political and economic issues such as inflation and income disparity. Antitrust enforcement is certainly linked to political issues. But a misunderstanding of the linkage between antitrust enforcement and politics can lead to the error of thinking that political predispositions should determine the outcome of antitrust enforcement actions. For that reason, I think some words of caution are in order about the importance of traditional due process principles in antitrust enforcement.
I am not suggesting that the Biden antitrust appointees fail to see the importance of due process principles. The words of caution are for others. I think that the Biden appointees understand very well that what should determine antitrust outcomes is, of course, due process litigation principles that have been followed in the US at least since the time of Thurman Arnold and the FDR New Deal. As US citizens we expect due process in antitrust enforcement: we expect that antitrust litigation targets will be apprised of well defined and fair and consistent requirements of the law, and that they will be given a right to defend before a fair and impartial judicial decision maker. The rights of antitrust litigants in the US are not different from other litigants, as defined in such cases as Goldberg v. Kelly, 397 U.S. 254, 267 (1970). The rights of US litigants are different from those of litigants in China, where antitrust enforcement can be bureaucratic, quixotic, and short on due process rights. See Chinese Antitrust Exceptionalism: How The Rise of China Challenges Global Regulation by Angela Huyue Zhang (University of Hong Kong) :: Oxford University Press (2021)
It is comforting to see that in the Biden Administration there has been significant continuity with traditional antitrust enforcement styles. The USDOJ and FTC continue to follow some traditional litigation enforcement practices, including application of usual due process procedures. That traditional enforcement practices persist is not too surprising, since antitrust litigation is generally pursued under the watchful eye of judges who expect due process in their courts.
Following are a few examples that illustrate that under the Biden Administration much of government antitrust litigation has stayed on well recognized tracks.
One example is what some say is one of USDOJ’s biggest recent successes -- blocking the merger of two large insurance companies, Aon and Willis Towers Watson.
A June 2021 press release of the USDOJ describes its filed Complaint in the Aon/Willis matter in a way that should please advocates of vigorous enforcement, but it is also an example of following traditional antitrust enforcement practices. The following press release excerpts describe market power allegations in the Complaint that are similar to the sort of carefully honed and provable allegations the USDOJ has made in merger cases for decades:
The U.S. Department of Justice filed a civil antitrust lawsuit today to block Aon’s $30 billion proposed acquisition of Willis Towers Watson, a transaction that would bring together two of the “Big Three” global insurance brokers. As alleged in the complaint filed in the U.S. District Court for the District of Columbia, the merger threatens to eliminate competition, raise prices, and reduce innovation for American businesses, employers, and unions that rely on these important services.
“Today’s action demonstrates the Justice Department’s commitment to stopping harmful consolidation and preserving competition that directly and indirectly benefits Americans across the country,” said Attorney General Merrick B. Garland. “American companies and consumers rely on competition between Aon and Willis Towers Watson to lower prices for crucial services, such as health and retirement benefits consulting. Allowing Aon and Willis Towers Watson to merge would reduce that vital competition and leave American customers with fewer choices, higher prices, and lower quality services.”
Another recent example of antitrust enforcement following a traditional track are bid rigging charges brought against Contech Engineered Solutions LLC (Contech). Contech pleaded guilty to one count of violating the Sherman Act and one count of conspiracy to commit fraud, as charged in a six-count indictment filed in the Eastern District of North Carolina on Oct. 21, 2020. An excerpt from the June, 2021 USDOJ press release follows:
Engineering Firm Pleads Guilty to Decade-Long Bid Rigging and Fraud Scheme
Company Sentenced to Pay $7 Million in Criminal Fine and Over $1.5 Million in Restitution to North Carolina Department of Transportation
A North Carolina engineering firm was sentenced today after pleading guilty to long lasting conspiracies to rig bids and defraud the North Carolina Department of Transportation (NCDOT).
According to court documents, Contech Engineered Solutions LLC (Contech) pleaded guilty to one count of violating the Sherman Act and one count of conspiracy to commit fraud, as charged in a six-count indictment filed in the Eastern District of North Carolina on Oct. 21, 2020. Contech admitted to conspiring to rig bids to the NCDOT and conspiring to defraud the NCDOT in order to fraudulently obtain contracts for infrastructure projects. The conspiracies started at least as early as 2009 and continued at least until March 2018. Former Contech executive Brent Brewbaker was charged as a co-defendant in the same six-count indictment, and he remains under indictment.
“Today’s resolution demonstrates the Antitrust Division’s unwavering commitment to holding accountable those who cheat the competitive process at the expense of the American taxpayer,” said Acting Assistant Attorney General Richard A. Powers of the Justice Department’s Antitrust Division. “A critical part of that mission is seeking restitution to compensate government victims of public procurement crimes.”
Other examples of Biden Administration antitrust enforcement are more novel, and as such may be praiseworthy examples of aggressive and innovative antitrust enforcement. For one example, The U.S. Surface Transportation Board recently flexed its antitrust muscles and exercised its antitrust authority with regard to Canadian National Railway Co.'s takeover bid for Kansas City Southern Railway. The Board denied use of a device called “voting trust” which would have facilitated the merger. The trust would have allowed KCS to remain independent while a full and lengthy review of the proposed takeover goes forward, while also allowing shareholders to be paid without having to wait for a final decision on the deal.
The Surface Transportation Board said that while the trust would mean CN wasn't in direct control of KCS operations, it would still be a beneficial owner and share in profits:
"Antitrust regulators have long recognized that the sort of financial interest that CN would have in KCS is sufficient to alter a firm's incentive to compete vigorously."
An “all-of-government” engagement of an array of regulatory agencies may be a useful tool for effective antitrust enforcement. The Surface Transportation Board is just one of several federal agencies that combine public interest and antitrust enforcement powers.
But to return to our cautionary points, some public commenters and political advocates need to be more aware that political pressures can be brought to bear on antitrust enforcement in ways that can undermine traditional due process practices and do harm. The unfortunate consequences include loss of confidence in the fairness of enforcement procedures. The examples of political misuse of antitrust that come to mind are from the Trump Administration, not the Biden Administration, but the Trump examples illustrate the hazards to be avoided.
Law professor Chris Sagers opined that President Trump’s U.S. Antitrust chief enforcer Delrahim “proved to be yet another of the president’s political hacks." See https://slate.com/business/2020/08/antitrust-doj-delrahim-trump.html Among other things, Sagers talks about the Trump USDOJ’s challenge to the AT&T/Time Warner merger. Sagers discusses the allegations that the USDOJ action was pursued to punish President Trump’s political enemy, Time Warner’s CNN. Sagers finds the allegations “hard to doubt.”
Whether Sagers is right or not about what happened, he is certainly right that antitrust litigation should not be pursued for political reasons not tied to the merits of the matter.
Spencer Waller’s article The Political Misuse of Antitrust https://www.competitionpolicyinternational.com/the-political-misuse-of-antitrust-doing-the-right-thing-for-the-wrong-reason/ , helpfully reviews the legal standards and precedents for dealing with allegations of political misuse of the antitrust laws. Among them is the USDOJ’s past guidance on the impropriety of government prosecutorial decisions motivated by political considerations: “The legal judgments of the Department of Justice must be impartial and insulated from political influence. It is imperative that the Department’s investigatory and prosecutorial powers be exercised free from partisan consideration.”
To be clear, I’ll repeat that I don’t think there is a need to fear that Biden appointees will go off of the traditional track of due process in antitrust enforcement. I don’t think they want to emulate the perceived behavior of Donald Trump or Chinese antitrust bureaucrats in misusing antitrust enforcement as a cudgel to secure political goals, ignoring usual due process protections. That is, well defined charges, and a full opportunity to defend before an impartial judge, among other due process elements. But I worry that some commenters and politicians don’t see it that way. So, some words of caution seem in order.
DAR
by Don Allen Resnikoff
We are at what is widely perceived as a watershed moment for antitrust enforcement. Thanks to President Joe Biden, Lina Khan and Tim Wu now have important roles at the FTC. They are well known as dynamic thinkers about competition policy. Jonathan Kanter, known as an adversary of Facebook and Google, will lead the antitrust division of the Justice Department. Facebook and Google are among tech companies widely thought of as potential targets of aggressive enforcement.
Some have suggested that since the inauguration of President Biden the antitrust litigation efforts of the FTC and USDOJ are already more aggressive, and that regulators other than the FTC and USDOJ have stepped up and acted as aggressive antitrust enforcers.
But some journalists and commenters seem to be overstating or simply misstating what is happening in antitrust. Some talk about antitrust as now addressing immediate and difficult political and economic issues such as inflation and income disparity. Antitrust enforcement is certainly linked to political issues. But a misunderstanding of the linkage between antitrust enforcement and politics can lead to the error of thinking that political predispositions should determine the outcome of antitrust enforcement actions. For that reason, I think some words of caution are in order about the importance of traditional due process principles in antitrust enforcement.
I am not suggesting that the Biden antitrust appointees fail to see the importance of due process principles. The words of caution are for others. I think that the Biden appointees understand very well that what should determine antitrust outcomes is, of course, due process litigation principles that have been followed in the US at least since the time of Thurman Arnold and the FDR New Deal. As US citizens we expect due process in antitrust enforcement: we expect that antitrust litigation targets will be apprised of well defined and fair and consistent requirements of the law, and that they will be given a right to defend before a fair and impartial judicial decision maker. The rights of antitrust litigants in the US are not different from other litigants, as defined in such cases as Goldberg v. Kelly, 397 U.S. 254, 267 (1970). The rights of US litigants are different from those of litigants in China, where antitrust enforcement can be bureaucratic, quixotic, and short on due process rights. See Chinese Antitrust Exceptionalism: How The Rise of China Challenges Global Regulation by Angela Huyue Zhang (University of Hong Kong) :: Oxford University Press (2021)
It is comforting to see that in the Biden Administration there has been significant continuity with traditional antitrust enforcement styles. The USDOJ and FTC continue to follow some traditional litigation enforcement practices, including application of usual due process procedures. That traditional enforcement practices persist is not too surprising, since antitrust litigation is generally pursued under the watchful eye of judges who expect due process in their courts.
Following are a few examples that illustrate that under the Biden Administration much of government antitrust litigation has stayed on well recognized tracks.
One example is what some say is one of USDOJ’s biggest recent successes -- blocking the merger of two large insurance companies, Aon and Willis Towers Watson.
A June 2021 press release of the USDOJ describes its filed Complaint in the Aon/Willis matter in a way that should please advocates of vigorous enforcement, but it is also an example of following traditional antitrust enforcement practices. The following press release excerpts describe market power allegations in the Complaint that are similar to the sort of carefully honed and provable allegations the USDOJ has made in merger cases for decades:
The U.S. Department of Justice filed a civil antitrust lawsuit today to block Aon’s $30 billion proposed acquisition of Willis Towers Watson, a transaction that would bring together two of the “Big Three” global insurance brokers. As alleged in the complaint filed in the U.S. District Court for the District of Columbia, the merger threatens to eliminate competition, raise prices, and reduce innovation for American businesses, employers, and unions that rely on these important services.
“Today’s action demonstrates the Justice Department’s commitment to stopping harmful consolidation and preserving competition that directly and indirectly benefits Americans across the country,” said Attorney General Merrick B. Garland. “American companies and consumers rely on competition between Aon and Willis Towers Watson to lower prices for crucial services, such as health and retirement benefits consulting. Allowing Aon and Willis Towers Watson to merge would reduce that vital competition and leave American customers with fewer choices, higher prices, and lower quality services.”
Another recent example of antitrust enforcement following a traditional track are bid rigging charges brought against Contech Engineered Solutions LLC (Contech). Contech pleaded guilty to one count of violating the Sherman Act and one count of conspiracy to commit fraud, as charged in a six-count indictment filed in the Eastern District of North Carolina on Oct. 21, 2020. An excerpt from the June, 2021 USDOJ press release follows:
Engineering Firm Pleads Guilty to Decade-Long Bid Rigging and Fraud Scheme
Company Sentenced to Pay $7 Million in Criminal Fine and Over $1.5 Million in Restitution to North Carolina Department of Transportation
A North Carolina engineering firm was sentenced today after pleading guilty to long lasting conspiracies to rig bids and defraud the North Carolina Department of Transportation (NCDOT).
According to court documents, Contech Engineered Solutions LLC (Contech) pleaded guilty to one count of violating the Sherman Act and one count of conspiracy to commit fraud, as charged in a six-count indictment filed in the Eastern District of North Carolina on Oct. 21, 2020. Contech admitted to conspiring to rig bids to the NCDOT and conspiring to defraud the NCDOT in order to fraudulently obtain contracts for infrastructure projects. The conspiracies started at least as early as 2009 and continued at least until March 2018. Former Contech executive Brent Brewbaker was charged as a co-defendant in the same six-count indictment, and he remains under indictment.
“Today’s resolution demonstrates the Antitrust Division’s unwavering commitment to holding accountable those who cheat the competitive process at the expense of the American taxpayer,” said Acting Assistant Attorney General Richard A. Powers of the Justice Department’s Antitrust Division. “A critical part of that mission is seeking restitution to compensate government victims of public procurement crimes.”
Other examples of Biden Administration antitrust enforcement are more novel, and as such may be praiseworthy examples of aggressive and innovative antitrust enforcement. For one example, The U.S. Surface Transportation Board recently flexed its antitrust muscles and exercised its antitrust authority with regard to Canadian National Railway Co.'s takeover bid for Kansas City Southern Railway. The Board denied use of a device called “voting trust” which would have facilitated the merger. The trust would have allowed KCS to remain independent while a full and lengthy review of the proposed takeover goes forward, while also allowing shareholders to be paid without having to wait for a final decision on the deal.
The Surface Transportation Board said that while the trust would mean CN wasn't in direct control of KCS operations, it would still be a beneficial owner and share in profits:
"Antitrust regulators have long recognized that the sort of financial interest that CN would have in KCS is sufficient to alter a firm's incentive to compete vigorously."
An “all-of-government” engagement of an array of regulatory agencies may be a useful tool for effective antitrust enforcement. The Surface Transportation Board is just one of several federal agencies that combine public interest and antitrust enforcement powers.
But to return to our cautionary points, some public commenters and political advocates need to be more aware that political pressures can be brought to bear on antitrust enforcement in ways that can undermine traditional due process practices and do harm. The unfortunate consequences include loss of confidence in the fairness of enforcement procedures. The examples of political misuse of antitrust that come to mind are from the Trump Administration, not the Biden Administration, but the Trump examples illustrate the hazards to be avoided.
Law professor Chris Sagers opined that President Trump’s U.S. Antitrust chief enforcer Delrahim “proved to be yet another of the president’s political hacks." See https://slate.com/business/2020/08/antitrust-doj-delrahim-trump.html Among other things, Sagers talks about the Trump USDOJ’s challenge to the AT&T/Time Warner merger. Sagers discusses the allegations that the USDOJ action was pursued to punish President Trump’s political enemy, Time Warner’s CNN. Sagers finds the allegations “hard to doubt.”
Whether Sagers is right or not about what happened, he is certainly right that antitrust litigation should not be pursued for political reasons not tied to the merits of the matter.
Spencer Waller’s article The Political Misuse of Antitrust https://www.competitionpolicyinternational.com/the-political-misuse-of-antitrust-doing-the-right-thing-for-the-wrong-reason/ , helpfully reviews the legal standards and precedents for dealing with allegations of political misuse of the antitrust laws. Among them is the USDOJ’s past guidance on the impropriety of government prosecutorial decisions motivated by political considerations: “The legal judgments of the Department of Justice must be impartial and insulated from political influence. It is imperative that the Department’s investigatory and prosecutorial powers be exercised free from partisan consideration.”
To be clear, I’ll repeat that I don’t think there is a need to fear that Biden appointees will go off of the traditional track of due process in antitrust enforcement. I don’t think they want to emulate the perceived behavior of Donald Trump or Chinese antitrust bureaucrats in misusing antitrust enforcement as a cudgel to secure political goals, ignoring usual due process protections. That is, well defined charges, and a full opportunity to defend before an impartial judge, among other due process elements. But I worry that some commenters and politicians don’t see it that way. So, some words of caution seem in order.
DAR
Why a Chinese company dominates the international market for electric car batteries
A recent New York Times story explains that the Chinese CATL company has become a dominant international player in electric car batteries. The company already supplies batteries to almost all of the world’s automakers, including G.M., Volkswagen, BMW and Tesla.
One reason for CATL’s success is obvious: CATL is the beneficiary of Chinese government policies with the goal of making CATL a national industrial champion. Influential Chinese people are part of the CATL operation. The Chinese government has been generous in supplying money.
The New York Times article provides some detail. For example:
In 2011 the Chinese government required that foreign automakers that want to sell electric cars in China transfer crucial technology to a local company. Only then would the government subsidize the sale of their autos.
In 2015 the Chinese government unveiled the Made in China 2025 plan, a guide to achieving independence in major industries of the future, including electric cars, in a decade.
Chinese policy banks, which lend to government-endorsed projects that may be too risky for local banks, stepped in to provide more than $100 million to CATL projects in Qinghai, where important raw materials are located. The provincial government of Qinghai offered roughly $33 million from 2015 through 2017.
CATL benefited greatly from the government’s drive to get automakers in China to use only locally made batteries.
Do these anecdotes carry a point about Chinese government policies and US government policies? Of course. It is obvious that in the absence of a US government strategy responsive to Chinese government policy, Chinese companies may have dominant international roles in car batteries and other industries.
Underneath the obvious point are complexities. Chinese industrial policies are not as monolithic as may appear on the surface. Various national and local government agencies vie for authority, and some ostensibly are interested in promoting competitive industries.
US policies have their complexities as well. The US has traditions of legal due process that are weak in China, where judicial review of agency actions is much less important. The US has significant anti-monopoly traditions. Yet the US imposes tariffs and other import restraints that appear to have protectionist goals.
How the interplay of Chinese and US business regulation will work out is something that remains to be seen.
The full New York Times article is at https://www.nytimes.com/2021/12/22/business/china-catl-electric-car-batteries.html?smid=em-share
A recent New York Times story explains that the Chinese CATL company has become a dominant international player in electric car batteries. The company already supplies batteries to almost all of the world’s automakers, including G.M., Volkswagen, BMW and Tesla.
One reason for CATL’s success is obvious: CATL is the beneficiary of Chinese government policies with the goal of making CATL a national industrial champion. Influential Chinese people are part of the CATL operation. The Chinese government has been generous in supplying money.
The New York Times article provides some detail. For example:
In 2011 the Chinese government required that foreign automakers that want to sell electric cars in China transfer crucial technology to a local company. Only then would the government subsidize the sale of their autos.
In 2015 the Chinese government unveiled the Made in China 2025 plan, a guide to achieving independence in major industries of the future, including electric cars, in a decade.
Chinese policy banks, which lend to government-endorsed projects that may be too risky for local banks, stepped in to provide more than $100 million to CATL projects in Qinghai, where important raw materials are located. The provincial government of Qinghai offered roughly $33 million from 2015 through 2017.
CATL benefited greatly from the government’s drive to get automakers in China to use only locally made batteries.
Do these anecdotes carry a point about Chinese government policies and US government policies? Of course. It is obvious that in the absence of a US government strategy responsive to Chinese government policy, Chinese companies may have dominant international roles in car batteries and other industries.
Underneath the obvious point are complexities. Chinese industrial policies are not as monolithic as may appear on the surface. Various national and local government agencies vie for authority, and some ostensibly are interested in promoting competitive industries.
US policies have their complexities as well. The US has traditions of legal due process that are weak in China, where judicial review of agency actions is much less important. The US has significant anti-monopoly traditions. Yet the US imposes tariffs and other import restraints that appear to have protectionist goals.
How the interplay of Chinese and US business regulation will work out is something that remains to be seen.
The full New York Times article is at https://www.nytimes.com/2021/12/22/business/china-catl-electric-car-batteries.html?smid=em-share
U.S. FAA Issues Safety Alert on 5G Interference to Aircraft
U.S. regulators at the Federal Aviation Administration are warning airlines that a new band of 5G mobile phone service approved by the Federal Communications Commission might interfere with key safety devices on aircraft.
The FAA issued a Special Airworthiness Information Bulletin warning that “action might be required to address potential interference with sensitive aircraft electronics.”
The 5G spectrum abuts radio signals used by so-called radar altimeters, which measure how close an aircraft is to the ground.
While FAA took pains to say it is working with the Federal Communications Commission and other agencies to allow the new technology to safely coexist with aviation, the safety alert creates an unusual situation in which one agency raises concerns while another has granted its approval. It also illustrates growing frustration within the aviation industry.
Canada recently imposed restrictions on locating new 5G cell towers near the runways of large airports. Australia, France and other nations have taken steps to limit the chances of aircraft interference.
Radar altimeters are used on planes and helicopters for multiple critical safety functions, including landing when visibility is low, anti-collision warnings and systems that warn pilots when they inadvertently get too low. Some commercial helicopter flights can’t operate without a working radar altimeter.
“The FCC is committed to continuing to work with its federal partners to simultaneously preserve air safety and advance the deployment of new technologies that promote American consumer and business needs,” the agency said in a statement.
On December 20 the Wall Street Journal reported that the problem has not been solved.
See article at https://www.bloomberg.com/news/articles/2021-11-02/u-s-faa-issues-safety-alert-on-5g-interference-to-aircraft
U.S. regulators at the Federal Aviation Administration are warning airlines that a new band of 5G mobile phone service approved by the Federal Communications Commission might interfere with key safety devices on aircraft.
The FAA issued a Special Airworthiness Information Bulletin warning that “action might be required to address potential interference with sensitive aircraft electronics.”
The 5G spectrum abuts radio signals used by so-called radar altimeters, which measure how close an aircraft is to the ground.
While FAA took pains to say it is working with the Federal Communications Commission and other agencies to allow the new technology to safely coexist with aviation, the safety alert creates an unusual situation in which one agency raises concerns while another has granted its approval. It also illustrates growing frustration within the aviation industry.
Canada recently imposed restrictions on locating new 5G cell towers near the runways of large airports. Australia, France and other nations have taken steps to limit the chances of aircraft interference.
Radar altimeters are used on planes and helicopters for multiple critical safety functions, including landing when visibility is low, anti-collision warnings and systems that warn pilots when they inadvertently get too low. Some commercial helicopter flights can’t operate without a working radar altimeter.
“The FCC is committed to continuing to work with its federal partners to simultaneously preserve air safety and advance the deployment of new technologies that promote American consumer and business needs,” the agency said in a statement.
On December 20 the Wall Street Journal reported that the problem has not been solved.
See article at https://www.bloomberg.com/news/articles/2021-11-02/u-s-faa-issues-safety-alert-on-5g-interference-to-aircraft
antitrust-division-seeks-additional-public-comments-bank-merger-competitive-analysis
I was recently asked by a reporter to comment on the DOJ's announcement that it is seeking additional public comments on how and whether it should update the 1995 Bank Merger Competitive Review Guidelines:
https://www.justice.gov/opa/pr/antitrust-division-seeks-additional-public-comments-bank-merger-competitive-analysis
Following is what I sent to the reporter.
Don Allen Resnikoff
**
I'm guessing that you'd like a reply from me that is quick and, hopefully, pithy, despite the complexities of the subject matter.
Democrat v. Republican partisan quarrels are likely to be a focus of commenters, and there do seem to be some differences of opinion that split on party lines. The traditional USDOJ way of dealing with bank mergers has been criticized by progressives as too lax. Congresswoman Maxine Waters (D. Ca) wrote in a recent letter that "Scholars and regulators have written about the need for a stronger framework, including through lowering the concentration thresholds for enhanced scrutiny of mergers, more rigorous evaluation of financial stability risks, and consideration of potential conflicts of interest, which is especially important as a range of markets are becoming more concentrated." https://financialservices.house.gov/news/email/show.aspx?ID=CWRRGI26ELG3KXMYL73UMHJNPQ -- https://financialservices.house.gov/news/email/show.aspx?ID=CWRRGI26ELG3KXMYL73UMHJNPQ
Congresswoman Water's comments are consistent with more general complaints about merger enforcement, as reflected in comments of AAI's Diana L. Moss in “Merger Policy and Rising Concentration: An Active Agenda for Antitrust Enforcement, Antitrust,” Vol 33 (2018), https://www.antitrustinstitute.org/wp-content/uploads/2018/12/Antitrust-Mag-2018_Moss.pdf Moss points out that “evidence of rising concentration bolsters progressives’ longstanding concerns about lax merger enforcement”.
And, some partisan battles about regulation of banking have erupted in regulatory agencies. Politico comments that "The FDIC is currently in the throes of an internal power struggle. The immediate issue at the FDIC is about whether the agency is controlled by a majority of its board of directors or by its chair, Jelena McWilliams. All of the directors other than McWilliams are Joe Biden appointees; McWilliams is a Donald Trump holdover." https://www.politico.com/news/magazine/2021/12/16/biden-fire-fdic-chief-525140
On the other hand, some of the complex issues of how to regulate banking may transcend partisan bickering. The recent USDOJ call for comments concerning merger guidelines at https://www.justice.gov/opa/pr/antitrust-division-seeks-additional-public-comments-bank-merger-competitive-analysis is notable for an ecumenical tone. While the call for comments compliments the insights of CFPB Director Rohit Chopra, who was involved in the recent McWilliams kerfuffle at the FDIC, the call also highlights efforts of former head of DOJ's Antitrust Division, Makan Delrahim.
Many issues of bank regulation are complex, whether approached from a "left" or "right" perspective. For example, under the heading “Relevant Product and Geographic Markets,” the call for comments explains that, depending on the transaction, the Division generally reviews three separate product markets in banking matters: (1) retail banking products and services, (2) small business banking products and services, and (3) middle market banking products and services. The question that follows is: "Are there additional product markets that the Division should include in its analysis?" That is a complicated question to answer, in part because in recent years the banks have taken on non-traditional roles, such as investment banking and dealing in derivatives. Some of those activities involve partnerships with fintech firms. The recently withdrawn Office of Comptroller of Currency candidate Saule Omarova was vocal in expressing concerns about OCC interpretations that expanded national bank derivatives activities to include derivatives on commodities and equities, and the Federal Reserve’s granting of Section 23A exemptions on dealings with affiliates immediately before and during the 2008 Financial Crisis; and the exemptions from the definition of a “bank” under the Bank Holding Company Act. The U.S. Comptroller of the Currency Nominee and Her Writings: What They Mean for Banks and Fintechs
Complexity is also heightened because the Department of Justice shares merger review jurisdiction with the Federal Reserve, the FDIC, the Office of Thrift Supervision, or the Office of the Comptroller of the Currency, depending on which agency has jurisdiction over the relevant category of banking institution. The Federal Reserve has been the most important of these because of its jurisdiction over mergers involving bank holding companies.
In the aftermath of the financial crisis of 2008, there were many large bank mergers, most of which involved bank holding companies, such as Bank of America, JPMorgan Chase, and Wells Fargo. Those mergers were subject to review by both the Federal Reserve and the Department of Justice. The procedure relevant to interagency collaboration is that the acquiring bank first files an application with the Federal Reserve (or one of the other regulatory agencies, as applicable), which will then pass the application on to the Antitrust Division for review. The Federal Reserve or other regulatory agency then reviews the application concurrently with the Antitrust Division. The analytical approaches of the Antitrust Division are somewhat different from the approaches of the Federal Reserve Board and the other regulatory agencies, but in past years the differences have certainly not obstructed the recent U.S. government tendency to facilitate nationwide consolidation in banking.
Improving coordination between USDOJ and regulatory agencies concerning bank mergers and considering needed updates to relevant procedures is a complex and important challenge that politicians with differing views will need to deal with.
I hope I have helped.
Don Allen Resnikoff
I was recently asked by a reporter to comment on the DOJ's announcement that it is seeking additional public comments on how and whether it should update the 1995 Bank Merger Competitive Review Guidelines:
https://www.justice.gov/opa/pr/antitrust-division-seeks-additional-public-comments-bank-merger-competitive-analysis
Following is what I sent to the reporter.
Don Allen Resnikoff
**
I'm guessing that you'd like a reply from me that is quick and, hopefully, pithy, despite the complexities of the subject matter.
Democrat v. Republican partisan quarrels are likely to be a focus of commenters, and there do seem to be some differences of opinion that split on party lines. The traditional USDOJ way of dealing with bank mergers has been criticized by progressives as too lax. Congresswoman Maxine Waters (D. Ca) wrote in a recent letter that "Scholars and regulators have written about the need for a stronger framework, including through lowering the concentration thresholds for enhanced scrutiny of mergers, more rigorous evaluation of financial stability risks, and consideration of potential conflicts of interest, which is especially important as a range of markets are becoming more concentrated." https://financialservices.house.gov/news/email/show.aspx?ID=CWRRGI26ELG3KXMYL73UMHJNPQ -- https://financialservices.house.gov/news/email/show.aspx?ID=CWRRGI26ELG3KXMYL73UMHJNPQ
Congresswoman Water's comments are consistent with more general complaints about merger enforcement, as reflected in comments of AAI's Diana L. Moss in “Merger Policy and Rising Concentration: An Active Agenda for Antitrust Enforcement, Antitrust,” Vol 33 (2018), https://www.antitrustinstitute.org/wp-content/uploads/2018/12/Antitrust-Mag-2018_Moss.pdf Moss points out that “evidence of rising concentration bolsters progressives’ longstanding concerns about lax merger enforcement”.
And, some partisan battles about regulation of banking have erupted in regulatory agencies. Politico comments that "The FDIC is currently in the throes of an internal power struggle. The immediate issue at the FDIC is about whether the agency is controlled by a majority of its board of directors or by its chair, Jelena McWilliams. All of the directors other than McWilliams are Joe Biden appointees; McWilliams is a Donald Trump holdover." https://www.politico.com/news/magazine/2021/12/16/biden-fire-fdic-chief-525140
On the other hand, some of the complex issues of how to regulate banking may transcend partisan bickering. The recent USDOJ call for comments concerning merger guidelines at https://www.justice.gov/opa/pr/antitrust-division-seeks-additional-public-comments-bank-merger-competitive-analysis is notable for an ecumenical tone. While the call for comments compliments the insights of CFPB Director Rohit Chopra, who was involved in the recent McWilliams kerfuffle at the FDIC, the call also highlights efforts of former head of DOJ's Antitrust Division, Makan Delrahim.
Many issues of bank regulation are complex, whether approached from a "left" or "right" perspective. For example, under the heading “Relevant Product and Geographic Markets,” the call for comments explains that, depending on the transaction, the Division generally reviews three separate product markets in banking matters: (1) retail banking products and services, (2) small business banking products and services, and (3) middle market banking products and services. The question that follows is: "Are there additional product markets that the Division should include in its analysis?" That is a complicated question to answer, in part because in recent years the banks have taken on non-traditional roles, such as investment banking and dealing in derivatives. Some of those activities involve partnerships with fintech firms. The recently withdrawn Office of Comptroller of Currency candidate Saule Omarova was vocal in expressing concerns about OCC interpretations that expanded national bank derivatives activities to include derivatives on commodities and equities, and the Federal Reserve’s granting of Section 23A exemptions on dealings with affiliates immediately before and during the 2008 Financial Crisis; and the exemptions from the definition of a “bank” under the Bank Holding Company Act. The U.S. Comptroller of the Currency Nominee and Her Writings: What They Mean for Banks and Fintechs
Complexity is also heightened because the Department of Justice shares merger review jurisdiction with the Federal Reserve, the FDIC, the Office of Thrift Supervision, or the Office of the Comptroller of the Currency, depending on which agency has jurisdiction over the relevant category of banking institution. The Federal Reserve has been the most important of these because of its jurisdiction over mergers involving bank holding companies.
In the aftermath of the financial crisis of 2008, there were many large bank mergers, most of which involved bank holding companies, such as Bank of America, JPMorgan Chase, and Wells Fargo. Those mergers were subject to review by both the Federal Reserve and the Department of Justice. The procedure relevant to interagency collaboration is that the acquiring bank first files an application with the Federal Reserve (or one of the other regulatory agencies, as applicable), which will then pass the application on to the Antitrust Division for review. The Federal Reserve or other regulatory agency then reviews the application concurrently with the Antitrust Division. The analytical approaches of the Antitrust Division are somewhat different from the approaches of the Federal Reserve Board and the other regulatory agencies, but in past years the differences have certainly not obstructed the recent U.S. government tendency to facilitate nationwide consolidation in banking.
Improving coordination between USDOJ and regulatory agencies concerning bank mergers and considering needed updates to relevant procedures is a complex and important challenge that politicians with differing views will need to deal with.
I hope I have helped.
Don Allen Resnikoff
DC AG Press release:
AG Racine Files Lawsuit to Hold January 6 Insurrectionists Accountable & Stand Up for Harmed District Law Enforcement Officers
December 14, 2021WASHINGTON, D.C. –
Attorney General Karl A. Racine today filed a federal lawsuit to hold two violent groups accountable for the role they played in planning and carrying out the deadly January 6, 2021 attack on the U.S. Capitol. The lawsuit specifically claims the groups, and their leaders and members, caused extensive damage to the District of Columbia, and particularly to the law enforcement officers who risked their lives to defend the Capitol, those in it, the District, and our democracy.
Full press release: https://oag.dc.gov/release/ag-racine-files-lawsuit-hold-january-6
Karl Racine interview by CNBC:
https://www.msnbc.com/morning-joe/watch/dc-attorney-general-sues-proud-boys-oath-keepers-for-damages-from-jan-6-attack-128771141884
AG Racine Files Lawsuit to Hold January 6 Insurrectionists Accountable & Stand Up for Harmed District Law Enforcement Officers
December 14, 2021WASHINGTON, D.C. –
Attorney General Karl A. Racine today filed a federal lawsuit to hold two violent groups accountable for the role they played in planning and carrying out the deadly January 6, 2021 attack on the U.S. Capitol. The lawsuit specifically claims the groups, and their leaders and members, caused extensive damage to the District of Columbia, and particularly to the law enforcement officers who risked their lives to defend the Capitol, those in it, the District, and our democracy.
Full press release: https://oag.dc.gov/release/ag-racine-files-lawsuit-hold-january-6
Karl Racine interview by CNBC:
https://www.msnbc.com/morning-joe/watch/dc-attorney-general-sues-proud-boys-oath-keepers-for-damages-from-jan-6-attack-128771141884
From LA Times: Rand Paul demands federal disaster aid for Kentucky, after voting against it for everyone else
BY MICHAEL HILTZIKBUSINESS COLUMNIST
DEC. 13, 2021 11:44 AM PT
Consider the two faces of Sen. Rand Paul (R-Ky.).
First, the Rand Paul of Dec. 11, writing to President Biden after a string of tornadoes devastated his home state, killing at least 64 and leveling whole communities:
“The Governor of the Commonwealth has requested federal assistance this morning, and certainly further requests will be coming as the situation is assessed. I fully support those requests and ask that you move expeditiously to approve the appropriate resources for our state.”
Second, the Rand Paul of Oct. 24, 2017, on the Senate floor opposing a $36.5-billion disaster aid bill to help residents of Texas, Louisiana, Florida and Puerto Rico after hurricanes Harvey, Irma and Maria as well as victims of wildfires in California:
“People here will say they have great compassion and they want to help the people of Puerto Rico, the people of Texas, the people of Florida, but notice they have great compassion with someone else’s money. Ask them what they’re doing to help their fellow man.”
Excerpt from https://www.latimes.com/business/story/2021-12-13/hiltzik-rand-paul-kentucky-tornado-aid-after-voting-against-it-for-everyone-else
BY MICHAEL HILTZIKBUSINESS COLUMNIST
DEC. 13, 2021 11:44 AM PT
Consider the two faces of Sen. Rand Paul (R-Ky.).
First, the Rand Paul of Dec. 11, writing to President Biden after a string of tornadoes devastated his home state, killing at least 64 and leveling whole communities:
“The Governor of the Commonwealth has requested federal assistance this morning, and certainly further requests will be coming as the situation is assessed. I fully support those requests and ask that you move expeditiously to approve the appropriate resources for our state.”
Second, the Rand Paul of Oct. 24, 2017, on the Senate floor opposing a $36.5-billion disaster aid bill to help residents of Texas, Louisiana, Florida and Puerto Rico after hurricanes Harvey, Irma and Maria as well as victims of wildfires in California:
“People here will say they have great compassion and they want to help the people of Puerto Rico, the people of Texas, the people of Florida, but notice they have great compassion with someone else’s money. Ask them what they’re doing to help their fellow man.”
Excerpt from https://www.latimes.com/business/story/2021-12-13/hiltzik-rand-paul-kentucky-tornado-aid-after-voting-against-it-for-everyone-else
The DC AG as antitrust enforcer and litigator against big tech “platform” companies
Karl Racine is the first elected Attorney General of Washington D. C. He assumed office in 2015. His current term ends on January 2, 2023. He has said that he won’t seek re-election. One question for candidates who will seek the AG office is whether they will continue his policies, particularly with regard to actions against large tech “platform” companies, including antitrust actions.
Following are several D.C. AG press releases from the last few months that are relevant, including D.C. actions against large tech “platform” companies that would impose limits on the companies but that are not strictly about antitrust. Brief excerpts are provided.
AG Racine Opening Statement About His Antitrust Lawsuit Against Amazon for Senate Finance Subcommittee Hearing
December 7, 2021
Attorney General Karl A. Racine today will testify at a hearing in the U.S. Senate Finance Subcommittee on Fiscal Responsibility and Economic Growth. Below is an excerpt from his opening statement.
Excerpt:
[W]e were the first attorney general office to bring an antitrust lawsuit against Amazon alleging that it is illegally controlling prices through restrictive agreements with third-party sellers that sell on Amazon’s marketplace and wholesalers that feed Amazon’s retail business.
Amazon claims that everything it does in business is about the consumer. Well, even just a cursory look – and certainly our investigation – reveals otherwise. Amazon is focused on one thing only: its bottom line, even at the expense of consumers – like the ones it claims to care so much about. In fact, Amazon is costing all of us more money by controlling prices across the entire market.
As you have said before, Senator Warren – I too, am a capitalist. A fair profit is more than fair. A great profit is more than fair. And people should get paid for entrepreneurship and hard work. But when companies use their market power to reduce competition and take advantage of consumers under the guise of creating efficiencies, regulators must step in.
Right now, many families are hurting. They’re trying to keep a roof over their heads, food on the table, and clothes on their back. And if they’re lucky, maybe afford a few Christmas presents. But Amazon’s pricing policies contribute to making that unattainable.
Back in 2019, Amazon was facing pressure from Congress and regulators over anti-competitive behavior. To put regulators at ease, Amazon claimed it removed a clause in its agreements with third-party sellers that prohibited them from offering their goods for lower prices or on better terms on competing online marketplaces, including the third-party sellers’ own websites.
Spoiler alert: Amazon did a bait-and-switch by replacing the initial agreement with something nearly identical.
Let me give an example of how this works. If I’m a third-party seller selling headphones and I want to list my product on Amazon, I must do the following: Sell the headphones at a price on the Amazon marketplace that allows me to still earn a reasonable profit after incorporating Amazon’s high fees and commissions. Then, I’m barred from selling my headphones on any other platform, including my own website at a lower price, even though I could earn the same profit by doing so. And if I do, I – the third-party seller – could get kicked off of Amazon or have other significant sanctions imposed on me.
This leaves third-party sellers with two choices. They can sell their product on Amazon under these restrictive terms. Or they can only offer their product on other marketplaces. But because Amazon controls between 50-70% of all online sales, third-party sellers have little choice but to accept Amazon’s terms.
These agreements impose an artificially high price floor across the online retail marketplace. By charging such high fees – as much as 40% of the product price – Amazon is inflating the prices for consumers on its platform and competing platforms. For example, if I’m selling a pair of headphones for $100 on Amazon. Up to $40 dollars of that price is to cover Amazon’s fees. Plain and simple, this is inflation.
And consumers lose in this scheme. As a result of Amazon’s agreements, consumers think they’re getting the lowest prices on Amazon’s marketplace because they don’t see any lower prices on other online marketplaces. But, absent these agreements, third-party sellers could offer their products for lower prices on other online marketplaces.
And Amazon isn’t just doing this with third-party sellers, they’re doing it with wholesalers as well—so we added that to our lawsuit too.
First-party sellers sell products to Amazon for Amazon to resell at retail to consumers. If Amazon lowers its retail prices to match or beat a lower price on a competing online marketplace, the wholesalers are forced to pay Amazon the difference between the agreed-upon profit and what Amazon realizes with the lowered retail price. This can lead to wholesalers owing Amazon millions of dollars. To avoid triggering this agreement, wholesalers have increased the prices to and on competing online marketplaces.
AG Racine Files Brief Supporting Effort to Hold Facebook Accountable For Falsely Claiming to Remove Hate Speech From Its Platform
December 6, 2021
Attorney General Karl A. Racine filed a brief urging the Superior Court of the District of Columbia not to grant technology platforms sweeping immunity from local consumer protection law, and to allow a private lawsuit challenging Facebook’s deceptive claims about its content moderation…
Excerpt from press release:
“As we know from countless documents and sworn testimony of former Facebook employees, Facebook and its senior executives know exactly what they’re doing and why they’re doing it. They are bombarding users with hateful and violent content every day—because Facebook cares more about profit than it cares about protecting its consumers and being responsible about hate speech,” said AG Racine. “Now Facebook is trying to claim that it—and other massive tech companies—are above the law and cannot be held accountable for their false statements to consumers. But no company is entitled to mislead consumers, and there is nothing in local or federal law that shields companies like Facebook from the consequences of their own deception.”
Muslim Advocates, a national civil rights organization based in the District, filed suit against Facebook and its executives in April 2020 to hold the company accountable for misleading consumers about the safety of its product. In its lawsuit, Muslim Advocates alleged that Facebook and its senior leadership violated DC’s consumer protection laws when they repeatedly and falsely claimed to remove hate speech and harmful content from its platform. The group highlights the hateful anti-Muslim attacks that remain pervasive on Facebook, and the alleged failure of the tech giant to uphold its policies requiring the removal of harmful content, including hate speech, bullying, harassment, and violence.
In its amicus brief supporting Muslim Advocates, OAG urges the Court to allow the case to move forward because:
- District law prohibits all companies from misleading consumers: The District’s Consumer Protection Procedures Act (CPPA) prohibits a wide variety of deceptive and unlawful businesses practices that harm consumers. The law applies to all consumer goods and services, whether they are sold, leased, or transferred. In its motion seeking dismissal of Muslim Advocates’ lawsuit, Facebook argues that it cannot be held accountable under the CPPA because it does not charge consumers a monetary fee. OAG’s brief explains that the law clearly protects consumers from all improper trade practices, regardless of whether a consumer pays a fee to use the service.
- Granting tech platforms immunity from the District’s consumer protection laws would harm District residents: Exempting tech companies that do not charge monetary fees from consumer protection laws would harm District consumers and diminish their access to truthful information about many of the services they use every day. Today, many companies operate like Facebook: they provide purportedly free online services in exchange for access to consumers’ personal data, which they sell to third parties or use to sell advertising. While users may not pay money for these services, they are “paying” with something of value: sensitive personal information, including information about their demographic characteristics, physical locations, search histories, and even health-related information. These large and powerful tech companies should not be exempt from accountability when they harm and mislead consumers.
- Federal law does not protect tech platforms from being held accountable for false statements and misrepresentations: In Facebook’s motion to dismiss, the tech platform argues that a federal law—Section 230 of the Communications Decency Act—exempts it from any legal responsibility for its own statements to consumers. OAG’s brief explains why this is wrong. Section 230 shields tech platforms from lawsuits related to the content posted on their platforms by third parties. However, it does not provide businesses with immunity for their own unlawful representations about their goods and services. The District explains that the statute simply does not apply in this case, where consumers are seeking to hold Facebook and its executives accountable for their own alleged misrepresentations about the services the company provides.
Suing Mark Zuckerberg and Holding CEOs Accountable
November 1, 2021
In October, I added Facebook CEO Mark Zuckerberg to a lawsuit I filed in 2018 suing Facebook. Our lawsuit goes after Facebook for deceiving its consumers about the steps Facebook would take to protect user data.
Testimony https://oag.dc.gov/newsroom?category%5B10%5D=10
From the press release:
Our lawsuit goes after Facebook for deceiving its consumers about the steps Facebook would take to protect user data. These failures to put in place safeguards promised to consumers impacted tens of millions of users nationally and nearly half of all District residents – including by allowing Cambridge Analytica, a private company, to acquire and use that data to influence voters and manipulate the 2016 election. The Cambridge Analytica scandal is still the largest consumer privacy scandal in the nation’s history.
We did our due diligence over the past two years before taking this step of adding Mark Zuckerberg to our lawsuit. Since we originally filed the lawsuit in December 2018, my office has reviewed hundreds of thousands of pages of documents that have been produced in the litigation.
We have conducted a wide range of depositions, from Facebook’s directors to former employees and whistleblowers. We have also reviewed documents produced in other cases, as well as many hours of public statements by Mr. Zuckerberg, including his sworn testimony before the U.S. Senate and other law enforcement agencies.
The evidence we gathered is clear: Mark Zuckerberg knowingly and actively participated in the decisions that led to Cambridge Analytica’s mass collection of Facebook user data. On top of this, he also made misrepresentations to users, the public, and government officials about how secure the data on Facebook was and about Facebook’s role.
Under these circumstances, adding Mark Zuckerberg to our lawsuit is warranted, and sends a strong message that corporate leaders, including CEOs, will be held accountable for their actions.
To learn more about the case, read this New York Times article.https://www.nytimes.com/2021/10/20/technology/mark-zuckerberg-facebook-lawsuit.html
To learn more about the significance of the case, watch my interview on CNN’s OutFront and listen to my interview with NPR’s Morning Edition.
Karl A. Racine
Attorney General
Amazon’s search results are full of ads ‘unlawfully deceiving’ consumers, new complaint to FTC claims
A FTC new complaint alleges Amazon uses “deliberately" confusing practices in search results, misleading users about advertisements on the platform. Ad sales are one of Amazon’s fastest growing businesses, and the complaint alleges its practices run afoul of consumer protection laws.
See https://www.washingtonpost.com/technology/2021/12/08/amazon-search-results-ftc-complaint/
A FTC new complaint alleges Amazon uses “deliberately" confusing practices in search results, misleading users about advertisements on the platform. Ad sales are one of Amazon’s fastest growing businesses, and the complaint alleges its practices run afoul of consumer protection laws.
See https://www.washingtonpost.com/technology/2021/12/08/amazon-search-results-ftc-complaint/
Consumer Reports on high auto loan rates
A Consumer Reports article explains that llaws governing auto loan financing caps vary dramatically from state to state—there is no federal interest rate limit—and individual state usury laws, which make it illegal to charge excessive interest, are complicated and can appear to contradict other statutes on the books, Consumer Reports found. As a result, in some places consumers can be charged interest rates on car loans more commonly associated with predatory payday lending. The problem may be especially acute for people with poor credit.
“We need comprehensive laws that address all the ways dealers and lenders can take advantage of people and provide meaningful protections for buyers,” says R.J. Cross, tax and budget advocate for the U.S. Public Interest Research Group, a consumer advocacy and political organization that has researched auto lending.
The article is at America’s Loophole-Ridden Auto Lending Laws Harm Consumers - Consumer Reports https://www.consumerreports.org/car-financing/how-loophole-ridden-auto-lending-laws-harm-consumers-a3113489289/
A Consumer Reports article explains that llaws governing auto loan financing caps vary dramatically from state to state—there is no federal interest rate limit—and individual state usury laws, which make it illegal to charge excessive interest, are complicated and can appear to contradict other statutes on the books, Consumer Reports found. As a result, in some places consumers can be charged interest rates on car loans more commonly associated with predatory payday lending. The problem may be especially acute for people with poor credit.
“We need comprehensive laws that address all the ways dealers and lenders can take advantage of people and provide meaningful protections for buyers,” says R.J. Cross, tax and budget advocate for the U.S. Public Interest Research Group, a consumer advocacy and political organization that has researched auto lending.
The article is at America’s Loophole-Ridden Auto Lending Laws Harm Consumers - Consumer Reports https://www.consumerreports.org/car-financing/how-loophole-ridden-auto-lending-laws-harm-consumers-a3113489289/
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.
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 responsibility for the views expressed.
END
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.
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 responsibility for the views expressed.
END
Christina Jackson: Pandemic exposes DC government’s failure to distribute unemployment benefits to people in need
Excerpt from https://thedcline.org/2021/11/16/christina-jackson-pandemic-exposes-dc-governments-failure-to-distribute-unemployment-benefits-to-people-in-need/
The COVID-19 pandemic caused many DC residents to lose their jobs and erased years of employment progress. In February 2020, just before the pandemic began, the District’s unemployment rate had fallen to a five-year low of 4.9%. Two months later, unemployment more than doubled to 11.1%. Some people who lost their jobs have since found new employment, but not nearly enough have been able to do so. As of September 2021, the unemployment rate was still 6.5%.
Even worse, the District government has failed to ensure that people who lose their jobs receive the unemployment benefits to which they are entitled. These long-standing failures became especially conspicuous when the federal government expanded unemployment benefits during the pandemic.
The pandemic presented a stress test to the District’s unemployment system, and the DC Department of Employment Services (DOES) flunked.
Excerpt from https://thedcline.org/2021/11/16/christina-jackson-pandemic-exposes-dc-governments-failure-to-distribute-unemployment-benefits-to-people-in-need/
The COVID-19 pandemic caused many DC residents to lose their jobs and erased years of employment progress. In February 2020, just before the pandemic began, the District’s unemployment rate had fallen to a five-year low of 4.9%. Two months later, unemployment more than doubled to 11.1%. Some people who lost their jobs have since found new employment, but not nearly enough have been able to do so. As of September 2021, the unemployment rate was still 6.5%.
Even worse, the District government has failed to ensure that people who lose their jobs receive the unemployment benefits to which they are entitled. These long-standing failures became especially conspicuous when the federal government expanded unemployment benefits during the pandemic.
The pandemic presented a stress test to the District’s unemployment system, and the DC Department of Employment Services (DOES) flunked.
A National Labor Relations Board regional director has decided that Amazon warehouse workers in Bessemer, Ala., will get a second vote on whether to unionize.
Complaints about the first vote concerned issues such as the placement of a mailbox at the warehouse and signage posted nearby, and the NLRB regional director said the company disregarded the rules for the election and interfered with employees' "rights to an election free of coercion and interference."
Full Story: CNN (11/29), National Public Radio (11/29)
SCOTUS hears arguments over HHS hospital-payments rule
Justices of the US Supreme Court expressed concern about the complexity of a case concerning a rule that opponents say has curtailed additional Medicare payments that go to hospitals with a large proportion of poor patients. The case centers on a rule from the Department of Health and Human Services that altered the formula for calculating disproportionate share hospital adjustments, as the payments are known.
Full Story: Bloomberg Law (11/29)
Rittenhouse and Wisconsin self-defense law
Kyle Rittenhouse'strial for shooting three men during street protests in Wisconsin last summer resulted in acquittal. The case outcome may be seen as an artifact of Wisconsin's self-defense law. Prosecutors' argued that he acted recklessly and dangerously, but the defense argument included self defense within the meaning of Wisconsin law.
From the WSJ [ Kyle Rittenhouse Shooting Trial to Focus on Reasonableness, Self-Defense - WSJ https://www.wsj.com/articles/kyle-rittenhouse-shooting-trial-to-focus-on-reasonableness-self-defense-11635428739?mod=article_inline]
“What is really terribly difficult for the state is that under Wisconsin law the prosecutor will have the burden of negating self-defense, beyond a reasonable doubt. And to negate anything is difficult, to negate it beyond a reasonable doubt is extraordinary,” said Daniel Blinka, a former prosecutor and professor at Marquette University Law School in Milwaukee.
In Wisconsin, a defendant needs only to present some evidence of self-defense in order to impose the burden of proof on the prosecution to negate that claim beyond a reasonable doubt, Mr. Blinka said. About 17 other states have similar laws, according to research by the National Conference of State Legislatures. In most states, the defendant has to prove their actions were reasonable.
“The self-defense provisions in Wisconsin clearly favor the defense,” said Joshua Dressler, a professor emeritus at Ohio State University’s law school and author of a widely used textbook on criminal law.
Here, from a Wisconsin lawyers' blog, is a summary of the Wisconsin law.
See What Are Wisconsin's Self-Defense Laws? - Gamino Law Offices, LLC https://gamino.law/what-are-wisconsins-self-defense-laws/
Under Wisconsin law, you’re allowed to use self-defense to protect yourself by threatening to use force or by actually using force against someone, but only if:
In a case like that, the prosecutor would most likely try to show the jury that you could’ve deescalated the situation without killing the other person. He or she might suggest that you could’ve simply retreated from the situation. In other cases, the prosecutor might argue that you provoked the original attack.
Sometimes you have a duty to retreat from a situation. If you provoke an attack, you can’t claim self-defense unless you’ve exhausted every other reasonable means to escape from the situation. If you didn’t provoke the attack, the jury in your case will look at whether you had a chance to retreat from the situation in most cases.
***
The Wisconsin statute language:
2020 Wisconsin Statutes & Annotations
Chapter 939. Crimes — general provisions.
939.48 Self-defense and defense of others.
Universal Citation: WI Stat § 939.48 (2020)939.48 Self-defense and defense of others.
(1) A person is privileged to threaten or intentionally use force against another for the purpose of preventing or terminating what the person reasonably believes to be an unlawful interference with his or her person by such other person. The actor may intentionally use only such force or threat thereof as the actor reasonably believes is necessary to prevent or terminate the interference. The actor may not intentionally use force which is intended or likely to cause death or great bodily harm unless the actor reasonably believes that such force is necessary to prevent imminent death or great bodily harm to himself or herself.
(1m)
(a) In this subsection:
1. “Dwelling" has the meaning given in s. 895.07 (1) (h).
2. “Place of business" means a business that the actor owns or operates.
(ar) If an actor intentionally used force that was intended or likely to cause death or great bodily harm, the court may not consider whether the actor had an opportunity to flee or retreat before he or she used force and shall presume that the actor reasonably believed that the force was necessary to prevent imminent death or great bodily harm to himself or herself if the actor makes such a claim under sub. (1) and either of the following applies:
1. The person against whom the force was used was in the process of unlawfully and forcibly entering the actor's dwelling, motor vehicle, or place of business, the actor was present in the dwelling, motor vehicle, or place of business, and the actor knew or reasonably believed that an unlawful and forcible entry was occurring.
2. The person against whom the force was used was in the actor's dwelling, motor vehicle, or place of business after unlawfully and forcibly entering it, the actor was present in the dwelling, motor vehicle, or place of business, and the actor knew or reasonably believed that the person had unlawfully and forcibly entered the dwelling, motor vehicle, or place of business.
(b) The presumption described in par. (ar) does not apply if any of the following applies:
1. The actor was engaged in a criminal activity or was using his or her dwelling, motor vehicle, or place of business to further a criminal activity at the time.
2. The person against whom the force was used was a public safety worker, as defined in s. 941.375 (1) (b), who entered or attempted to enter the actor's dwelling, motor vehicle, or place of business in the performance of his or her official duties. This subdivision applies only if at least one of the following applies:
a. The public safety worker identified himself or herself to the actor before the force described in par. (ar) was used by the actor.
b. The actor knew or reasonably should have known that the person entering or attempting to enter his or her dwelling, motor vehicle, or place of business was a public safety worker.
(2) Provocation affects the privilege of self-defense as follows:
(a) A person who engages in unlawful conduct of a type likely to provoke others to attack him or her and thereby does provoke an attack is not entitled to claim the privilege of self-defense against such attack, except when the attack which ensues is of a type causing the person engaging in the unlawful conduct to reasonably believe that he or she is in imminent danger of death or great bodily harm. In such a case, the person engaging in the unlawful conduct is privileged to act in self-defense, but the person is not privileged to resort to the use of force intended or likely to cause death to the person's assailant unless the person reasonably believes he or she has exhausted every other reasonable means to escape from or otherwise avoid death or great bodily harm at the hands of his or her assailant.
(b) The privilege lost by provocation may be regained if the actor in good faith withdraws from the fight and gives adequate notice thereof to his or her assailant.
(c) A person who provokes an attack, whether by lawful or unlawful conduct, with intent to use such an attack as an excuse to cause death or great bodily harm to his or her assailant is not entitled to claim the privilege of self-defense.
(3) The privilege of self-defense extends not only to the intentional infliction of harm upon a real or apparent wrongdoer, but also to the unintended infliction of harm upon a 3rd person, except that if the unintended infliction of harm amounts to the crime of first-degree or 2nd-degree reckless homicide, homicide by negligent handling of dangerous weapon, explosives or fire, first-degree or 2nd-degree reckless injury or injury by negligent handling of dangerous weapon, explosives or fire, the actor is liable for whichever one of those crimes is committed.
(4) A person is privileged to defend a 3rd person from real or apparent unlawful interference by another under the same conditions and by the same means as those under and by which the person is privileged to defend himself or herself from real or apparent unlawful interference, provided that the person reasonably believes that the facts are such that the 3rd person would be privileged to act in self-defense and that the person's intervention is necessary for the protection of the 3rd person.
(5) A person is privileged to use force against another if the person reasonably believes that to use such force is necessary to prevent such person from committing suicide, but this privilege does not extend to the intentional use of force intended or likely to cause death.
(6) In this section “unlawful" means either tortious or expressly prohibited by criminal law or both.
History: 1987 a. 399; 1993 a. 486; 2005 a. 253; 2011 a. 94.
Kyle Rittenhouse'strial for shooting three men during street protests in Wisconsin last summer resulted in acquittal. The case outcome may be seen as an artifact of Wisconsin's self-defense law. Prosecutors' argued that he acted recklessly and dangerously, but the defense argument included self defense within the meaning of Wisconsin law.
From the WSJ [ Kyle Rittenhouse Shooting Trial to Focus on Reasonableness, Self-Defense - WSJ https://www.wsj.com/articles/kyle-rittenhouse-shooting-trial-to-focus-on-reasonableness-self-defense-11635428739?mod=article_inline]
“What is really terribly difficult for the state is that under Wisconsin law the prosecutor will have the burden of negating self-defense, beyond a reasonable doubt. And to negate anything is difficult, to negate it beyond a reasonable doubt is extraordinary,” said Daniel Blinka, a former prosecutor and professor at Marquette University Law School in Milwaukee.
In Wisconsin, a defendant needs only to present some evidence of self-defense in order to impose the burden of proof on the prosecution to negate that claim beyond a reasonable doubt, Mr. Blinka said. About 17 other states have similar laws, according to research by the National Conference of State Legislatures. In most states, the defendant has to prove their actions were reasonable.
“The self-defense provisions in Wisconsin clearly favor the defense,” said Joshua Dressler, a professor emeritus at Ohio State University’s law school and author of a widely used textbook on criminal law.
Here, from a Wisconsin lawyers' blog, is a summary of the Wisconsin law.
See What Are Wisconsin's Self-Defense Laws? - Gamino Law Offices, LLC https://gamino.law/what-are-wisconsins-self-defense-laws/
Under Wisconsin law, you’re allowed to use self-defense to protect yourself by threatening to use force or by actually using force against someone, but only if:
- You use only the force necessary to prevent or terminate interference with your person or someone else’s person.
- You must reasonably believe that such force is necessary to prevent imminent death or great bodily harm to yourself.
In a case like that, the prosecutor would most likely try to show the jury that you could’ve deescalated the situation without killing the other person. He or she might suggest that you could’ve simply retreated from the situation. In other cases, the prosecutor might argue that you provoked the original attack.
Sometimes you have a duty to retreat from a situation. If you provoke an attack, you can’t claim self-defense unless you’ve exhausted every other reasonable means to escape from the situation. If you didn’t provoke the attack, the jury in your case will look at whether you had a chance to retreat from the situation in most cases.
***
The Wisconsin statute language:
2020 Wisconsin Statutes & Annotations
Chapter 939. Crimes — general provisions.
939.48 Self-defense and defense of others.
Universal Citation: WI Stat § 939.48 (2020)939.48 Self-defense and defense of others.
(1) A person is privileged to threaten or intentionally use force against another for the purpose of preventing or terminating what the person reasonably believes to be an unlawful interference with his or her person by such other person. The actor may intentionally use only such force or threat thereof as the actor reasonably believes is necessary to prevent or terminate the interference. The actor may not intentionally use force which is intended or likely to cause death or great bodily harm unless the actor reasonably believes that such force is necessary to prevent imminent death or great bodily harm to himself or herself.
(1m)
(a) In this subsection:
1. “Dwelling" has the meaning given in s. 895.07 (1) (h).
2. “Place of business" means a business that the actor owns or operates.
(ar) If an actor intentionally used force that was intended or likely to cause death or great bodily harm, the court may not consider whether the actor had an opportunity to flee or retreat before he or she used force and shall presume that the actor reasonably believed that the force was necessary to prevent imminent death or great bodily harm to himself or herself if the actor makes such a claim under sub. (1) and either of the following applies:
1. The person against whom the force was used was in the process of unlawfully and forcibly entering the actor's dwelling, motor vehicle, or place of business, the actor was present in the dwelling, motor vehicle, or place of business, and the actor knew or reasonably believed that an unlawful and forcible entry was occurring.
2. The person against whom the force was used was in the actor's dwelling, motor vehicle, or place of business after unlawfully and forcibly entering it, the actor was present in the dwelling, motor vehicle, or place of business, and the actor knew or reasonably believed that the person had unlawfully and forcibly entered the dwelling, motor vehicle, or place of business.
(b) The presumption described in par. (ar) does not apply if any of the following applies:
1. The actor was engaged in a criminal activity or was using his or her dwelling, motor vehicle, or place of business to further a criminal activity at the time.
2. The person against whom the force was used was a public safety worker, as defined in s. 941.375 (1) (b), who entered or attempted to enter the actor's dwelling, motor vehicle, or place of business in the performance of his or her official duties. This subdivision applies only if at least one of the following applies:
a. The public safety worker identified himself or herself to the actor before the force described in par. (ar) was used by the actor.
b. The actor knew or reasonably should have known that the person entering or attempting to enter his or her dwelling, motor vehicle, or place of business was a public safety worker.
(2) Provocation affects the privilege of self-defense as follows:
(a) A person who engages in unlawful conduct of a type likely to provoke others to attack him or her and thereby does provoke an attack is not entitled to claim the privilege of self-defense against such attack, except when the attack which ensues is of a type causing the person engaging in the unlawful conduct to reasonably believe that he or she is in imminent danger of death or great bodily harm. In such a case, the person engaging in the unlawful conduct is privileged to act in self-defense, but the person is not privileged to resort to the use of force intended or likely to cause death to the person's assailant unless the person reasonably believes he or she has exhausted every other reasonable means to escape from or otherwise avoid death or great bodily harm at the hands of his or her assailant.
(b) The privilege lost by provocation may be regained if the actor in good faith withdraws from the fight and gives adequate notice thereof to his or her assailant.
(c) A person who provokes an attack, whether by lawful or unlawful conduct, with intent to use such an attack as an excuse to cause death or great bodily harm to his or her assailant is not entitled to claim the privilege of self-defense.
(3) The privilege of self-defense extends not only to the intentional infliction of harm upon a real or apparent wrongdoer, but also to the unintended infliction of harm upon a 3rd person, except that if the unintended infliction of harm amounts to the crime of first-degree or 2nd-degree reckless homicide, homicide by negligent handling of dangerous weapon, explosives or fire, first-degree or 2nd-degree reckless injury or injury by negligent handling of dangerous weapon, explosives or fire, the actor is liable for whichever one of those crimes is committed.
(4) A person is privileged to defend a 3rd person from real or apparent unlawful interference by another under the same conditions and by the same means as those under and by which the person is privileged to defend himself or herself from real or apparent unlawful interference, provided that the person reasonably believes that the facts are such that the 3rd person would be privileged to act in self-defense and that the person's intervention is necessary for the protection of the 3rd person.
(5) A person is privileged to use force against another if the person reasonably believes that to use such force is necessary to prevent such person from committing suicide, but this privilege does not extend to the intentional use of force intended or likely to cause death.
(6) In this section “unlawful" means either tortious or expressly prohibited by criminal law or both.
History: 1987 a. 399; 1993 a. 486; 2005 a. 253; 2011 a. 94.
Antitrust hawks offer states a toolbox for regulating Big Tech
‘If we’re going to wait for Washington to solve this problem, we could be waiting a very long time,’ New York state senator says
The so-called techlash that has gripped Washington in recent years has yet to result in Congress sending new antitrust legislation to the president’s desk."
By Dean DeChiaro
Posted November 16, 2021 at 6:30am
Article excerpt -- opening sentences:
Antitrust hawks who favor tougher regulations on big technology companies are looking beyond the Beltway to aid state lawmakers who have similar aims — but fewer resources.
The D.C.-based American Economic Liberties Project — a nonpartisan organization that advocates for new antitrust laws to take on the power of companies like Apple, Amazon, Facebook and Google — last week released a toolkit that state officials could use to push policies similar to those that have been proposed, but not yet passed, at the federal level.
See https://www.rollcall.com/2021/11/16/antitrust-hawks-offer-states-a-toolbox-for-regulating-big-tech/
‘If we’re going to wait for Washington to solve this problem, we could be waiting a very long time,’ New York state senator says
The so-called techlash that has gripped Washington in recent years has yet to result in Congress sending new antitrust legislation to the president’s desk."
By Dean DeChiaro
Posted November 16, 2021 at 6:30am
Article excerpt -- opening sentences:
Antitrust hawks who favor tougher regulations on big technology companies are looking beyond the Beltway to aid state lawmakers who have similar aims — but fewer resources.
The D.C.-based American Economic Liberties Project — a nonpartisan organization that advocates for new antitrust laws to take on the power of companies like Apple, Amazon, Facebook and Google — last week released a toolkit that state officials could use to push policies similar to those that have been proposed, but not yet passed, at the federal level.
See https://www.rollcall.com/2021/11/16/antitrust-hawks-offer-states-a-toolbox-for-regulating-big-tech/
Prosecutors’ Focus On Labor Market Collusion Sharpens the Need for Compliance Training
By Robert E. Connolly (Law Office of Robert Connolly) on Nov 15, 2021 06:05 pm
See https://kluwerlaw.us6.list-manage.com/track/click?u=752026a04d2007135a2ab4662&id=42eb7820b5&e=84837a780d
Excerpt -- opening sentences:
In an October 16, 2016 FTC/DOJ press release: FTC and DOJ Release Guidance for Human Resource Professionals on How Antitrust Law Applies to Employee Hiring and Compensation the Antitrust Division first announced: “Going forward, the Justice Department intends to criminally investigate naked no-poaching or wage-fixing agreements that are unrelated or unnecessary to a larger legitimate collaboration between the employers.” The Antitrust Division has since made good on that promise with several criminal cases, some involving individuals as defendants, currently in the courts. See, United States v. Jindal, No. 4:20-cr-00358 (E.D. Tex. Dec. 9, 2020); United States v. Surgical Care Affiliates, LLC, No: 3-21-CR0011-L (N.D. Tex. Jan. 5, 2021); United States v. Hee et al., No. 2:21-cr-00098-RFB-BNW (D. Nev. Mar. 30, 2021); United States v. DaVita, Inc., No. 21-cr-00229-RBJ (D. Colo. July 14, 2021).
The focus on labor market collusion is not a passing interest of the Antitrust Division.
On guardianship reform
The highly publicized Britney Spears tangle with guardianship raised issues of reform concerning unduly restrictive guardianship practices.
During the week of May 10, 2021, the National Guardianship Network, and other affiliated groups, brought together advocates who discussed the current state of the nation’s adult guardianship system and developed recommendations for reform and improvement around the theme of maximizing autonomy and ensuring accountability. Following is an excerpt:
States and courts must ensure that all judicial proceedings which may impact any of an adult’s rights to legal capacity provide meaningful due process, which includes:
• Right to a qualified and compensated lawyer, paid a reasonable fee through the use of public funds if the adult is unable to pay, and appointed by the court should the adult not have a lawyer of their own choosing.
• Reasonable notice provided in the adult's preferred language in an understandable and accessible format, served in a manner that ensures timely receipt.
• An impartial, valid, and reliable assessment by a compensated and qualified person conducting a capacity assessment who has knowledge and training about decision-making in the area(s) related to the proceedings, inclusive of the adult’s preferred reasonable accommodations and method of communication. Recommendations of the Fourth National Guardianship Summit 3
• Protection of the adult’s right to participate in the proceeding consistent with their preferences, including preferred communication accommodations, after the right to appear and the purpose of the proceeding have been explained to the adult through the means the adult understands. Recommendation 1.3: States and courts must ensure full access to a full or partial restoration of rights as soon as possible after a right is legally restricted. The process to restore rights includes:
• A clearly defined statute, regulation, court rule or policy which sets forth the procedures and the evidentiary burden and timelines.
• Representation of the adult whose rights were legally restricted by a qualified and compensated lawyer, paid a reasonable fee through the use of public funds if the adult is unable to pay, and appointed by the court should the adult not have a lawyer of their own choosing. • A process triggered by informal or formal means.
• Notice to the adult whose rights have been legally restricted of the opportunity to restore their rights, annually and upon a change in the applicable law, regulation, rule or policy.
• A meaningful periodic review by a court or other appropriate entity, inclusive of the perspective of the adult whose rights were restricted, of whether it is necessary to continue to restrict the adult’s rights.
• A guardian trained on the rights restoration process and the guardian’s obligations in regards to the restoration of rights, the training to occur initially upon appointment and upon a change in the applicable law, regulation, rule or policy.
• Courts and lawyers trained on the rights restoration process.
• A prohibition on guardian interference with the restoration of rights, and as appropriate guardian facilitation of the restoration of rights. Any party seeking to restore any right or rights of an adult whose rights have been legally restricted need only demonstrate the right to restoration by a preponderance of the evidence.
Fourth_National_Guardianship_Summit_-_Adopted_Recommendations_(May_2021).pdf (syr.edu) http://law.syr.edu/uploads/docs/academics/Fourth_National_Guardianship_Summit_-_Adopted_Recommendations_%28May_2021%29.pdf
Note: We will include additional discussion of guardianship issues in future postings. DAR
The highly publicized Britney Spears tangle with guardianship raised issues of reform concerning unduly restrictive guardianship practices.
During the week of May 10, 2021, the National Guardianship Network, and other affiliated groups, brought together advocates who discussed the current state of the nation’s adult guardianship system and developed recommendations for reform and improvement around the theme of maximizing autonomy and ensuring accountability. Following is an excerpt:
States and courts must ensure that all judicial proceedings which may impact any of an adult’s rights to legal capacity provide meaningful due process, which includes:
• Right to a qualified and compensated lawyer, paid a reasonable fee through the use of public funds if the adult is unable to pay, and appointed by the court should the adult not have a lawyer of their own choosing.
• Reasonable notice provided in the adult's preferred language in an understandable and accessible format, served in a manner that ensures timely receipt.
• An impartial, valid, and reliable assessment by a compensated and qualified person conducting a capacity assessment who has knowledge and training about decision-making in the area(s) related to the proceedings, inclusive of the adult’s preferred reasonable accommodations and method of communication. Recommendations of the Fourth National Guardianship Summit 3
• Protection of the adult’s right to participate in the proceeding consistent with their preferences, including preferred communication accommodations, after the right to appear and the purpose of the proceeding have been explained to the adult through the means the adult understands. Recommendation 1.3: States and courts must ensure full access to a full or partial restoration of rights as soon as possible after a right is legally restricted. The process to restore rights includes:
• A clearly defined statute, regulation, court rule or policy which sets forth the procedures and the evidentiary burden and timelines.
• Representation of the adult whose rights were legally restricted by a qualified and compensated lawyer, paid a reasonable fee through the use of public funds if the adult is unable to pay, and appointed by the court should the adult not have a lawyer of their own choosing. • A process triggered by informal or formal means.
• Notice to the adult whose rights have been legally restricted of the opportunity to restore their rights, annually and upon a change in the applicable law, regulation, rule or policy.
• A meaningful periodic review by a court or other appropriate entity, inclusive of the perspective of the adult whose rights were restricted, of whether it is necessary to continue to restrict the adult’s rights.
• A guardian trained on the rights restoration process and the guardian’s obligations in regards to the restoration of rights, the training to occur initially upon appointment and upon a change in the applicable law, regulation, rule or policy.
• Courts and lawyers trained on the rights restoration process.
• A prohibition on guardian interference with the restoration of rights, and as appropriate guardian facilitation of the restoration of rights. Any party seeking to restore any right or rights of an adult whose rights have been legally restricted need only demonstrate the right to restoration by a preponderance of the evidence.
Fourth_National_Guardianship_Summit_-_Adopted_Recommendations_(May_2021).pdf (syr.edu) http://law.syr.edu/uploads/docs/academics/Fourth_National_Guardianship_Summit_-_Adopted_Recommendations_%28May_2021%29.pdf
Note: We will include additional discussion of guardianship issues in future postings. DAR
To what extent will the US Supreme Court rely on 1300s British law to decide 2022 NY gun carry rights?
The U.S. Supreme Court is examining a question left unanswered since the its 2008 Heller decision: To what extent do Americans have a constitutional right to carry loaded, concealed firearms outside the home and in public places? That question is part of the New York State Rifle & Pistol Association Inc. v. Bruen case, currently before the Court. The case was argued before the Court on November 3.
An article in the Washington Post explains how it is that 14th Century English law may have a role in the U.S. Supreme Court’s decision.
“At times, the dueling sides examine in their briefs the same founding-era statutes, court rulings and even 14th-century English law. Both quote the Statute of Northampton — the ancient law that prohibited people from traveling armed “by night nor by day” and in places where people were likely to gather such as “fairs” and “markets.”https://www.washingtonpost.com/politics/courts_law/supreme-court-ny-gun-law/2021/10/28/f21a5fc2-31cf-11ec-a1e5-07223c50280a_story.html
An acquaintance who is not a lawyer told me he is puzzled that 14th through 18th century firearms laws are relevant to a U.S. Supreme Court decision, when current gun carrying issues involve use of modern weapons in modern urban areas, and civilian misuse of modern military style assault rifles. The fact is that the handgun was invented in about 1500. In the 1300s firearms in England did not go beyond something referred to as a hand held cannon. It was a metal tube in which gunpowder and a small cannon ball was inserted. Guns and rifles used in the 1700s were quite different from those used today. See https://about-history.com/history-of-the-firearm-and-how-it-changed-warfare/#:~:text=The%20firearm%20was%20introduced%20to%20the%20Arabs%20in,almost%20perfect%2C%20this%20made%20it%20far%20more%20deadly.
Along the same line, the conditions in England’s cities in the 1300s were likely much different than in urban centers in New York and elsewhere in the modern word. Not to mention that militias of the time were different than now.
People who have the benefit of law school training understand that for Supreme Court Justices it can be important to analyse the mindset of the drafters of the Second Amendment of the Constitution, and that what had gone in England in the 1300s through the 1700s was likely part of that mindset.
Here’s how one scholar put it, who reads history as on the side of limiting the right to bear arms:
“As the Supreme Court considers the issue of the public carrying of arms in the New York State Rifle & Pistol Association Inc. v. Bruen, the court should look no further than the [1328] Statute of Northampton, its interpretation by Coke and de Bracton, and the Statute’s enforcement.[footnote omitted] In so doing, the court should find that the 1689 English Bill of Rights did not guarantee the absolute right to bear arms, and governmental authorities and bodies were within their right by means of the Statute of Northampton and later legislation to restrict and prosecute the carrying of arms in public by private citizens.
https://firearmslaw.duke.edu/2021/09/observations-regarding-the-interpretation-and-legacy-of-the-statute-of-northampton-in-anglo-american-legal-history/
For people who have not had the benefit of law school training, and some that have, it may be comforting to know that there has been lively discussion about how judges should decide Constitutional cases, and how questions of current social and political policy may be brought to bear. One focus of such discussion is the well-know Brown v. Board of Education desegregation case of the 1950’s. It may seem obvious to some that the Equal Protection clause of the US Constitution applies to Blacks as well as whites. But on the issue of desegregation it seems clear that for the framers of the Constitution the very separate and unequal treatment of Black people was OK.
Relatively few people would argue today that the Brown v. Board of Education desegregation case was wrongly decided. The question that continues to be argued is the explanation of how the Court brought to bear current social and political points of fundamental fairness to Black people, despite the procedural limitations of legal precedent suggesting that separation of Blacks was OK. . One scholar concludes that a purely procedural theory of justice and institutional legitimacy for courts is insufficient. See Untitled Document (harva https://cyber.harvard.edu/bridge/LegalProcess/essay3.txt.htm rd.edu)
Another scholarly observer suggests that when famous “originalist” jurist Antonin Scalia said that “I am an originalist, not a nut,” the inference may be drawn that Scalia “would surely accept Brown v. Board of Education for that reason.” See http://carneades.pomona.edu/2020-Law/11.Scalia.html The thought is that no level of deference to the mindset of the drafters of the Constitution and to legal precedent supporting racial separation can justify judicial decisions that are “nuts” in terms of current political and social realities. One can hope.
The U.S. Supreme Court is examining a question left unanswered since the its 2008 Heller decision: To what extent do Americans have a constitutional right to carry loaded, concealed firearms outside the home and in public places? That question is part of the New York State Rifle & Pistol Association Inc. v. Bruen case, currently before the Court. The case was argued before the Court on November 3.
An article in the Washington Post explains how it is that 14th Century English law may have a role in the U.S. Supreme Court’s decision.
“At times, the dueling sides examine in their briefs the same founding-era statutes, court rulings and even 14th-century English law. Both quote the Statute of Northampton — the ancient law that prohibited people from traveling armed “by night nor by day” and in places where people were likely to gather such as “fairs” and “markets.”https://www.washingtonpost.com/politics/courts_law/supreme-court-ny-gun-law/2021/10/28/f21a5fc2-31cf-11ec-a1e5-07223c50280a_story.html
An acquaintance who is not a lawyer told me he is puzzled that 14th through 18th century firearms laws are relevant to a U.S. Supreme Court decision, when current gun carrying issues involve use of modern weapons in modern urban areas, and civilian misuse of modern military style assault rifles. The fact is that the handgun was invented in about 1500. In the 1300s firearms in England did not go beyond something referred to as a hand held cannon. It was a metal tube in which gunpowder and a small cannon ball was inserted. Guns and rifles used in the 1700s were quite different from those used today. See https://about-history.com/history-of-the-firearm-and-how-it-changed-warfare/#:~:text=The%20firearm%20was%20introduced%20to%20the%20Arabs%20in,almost%20perfect%2C%20this%20made%20it%20far%20more%20deadly.
Along the same line, the conditions in England’s cities in the 1300s were likely much different than in urban centers in New York and elsewhere in the modern word. Not to mention that militias of the time were different than now.
People who have the benefit of law school training understand that for Supreme Court Justices it can be important to analyse the mindset of the drafters of the Second Amendment of the Constitution, and that what had gone in England in the 1300s through the 1700s was likely part of that mindset.
Here’s how one scholar put it, who reads history as on the side of limiting the right to bear arms:
“As the Supreme Court considers the issue of the public carrying of arms in the New York State Rifle & Pistol Association Inc. v. Bruen, the court should look no further than the [1328] Statute of Northampton, its interpretation by Coke and de Bracton, and the Statute’s enforcement.[footnote omitted] In so doing, the court should find that the 1689 English Bill of Rights did not guarantee the absolute right to bear arms, and governmental authorities and bodies were within their right by means of the Statute of Northampton and later legislation to restrict and prosecute the carrying of arms in public by private citizens.
https://firearmslaw.duke.edu/2021/09/observations-regarding-the-interpretation-and-legacy-of-the-statute-of-northampton-in-anglo-american-legal-history/
For people who have not had the benefit of law school training, and some that have, it may be comforting to know that there has been lively discussion about how judges should decide Constitutional cases, and how questions of current social and political policy may be brought to bear. One focus of such discussion is the well-know Brown v. Board of Education desegregation case of the 1950’s. It may seem obvious to some that the Equal Protection clause of the US Constitution applies to Blacks as well as whites. But on the issue of desegregation it seems clear that for the framers of the Constitution the very separate and unequal treatment of Black people was OK.
Relatively few people would argue today that the Brown v. Board of Education desegregation case was wrongly decided. The question that continues to be argued is the explanation of how the Court brought to bear current social and political points of fundamental fairness to Black people, despite the procedural limitations of legal precedent suggesting that separation of Blacks was OK. . One scholar concludes that a purely procedural theory of justice and institutional legitimacy for courts is insufficient. See Untitled Document (harva https://cyber.harvard.edu/bridge/LegalProcess/essay3.txt.htm rd.edu)
Another scholarly observer suggests that when famous “originalist” jurist Antonin Scalia said that “I am an originalist, not a nut,” the inference may be drawn that Scalia “would surely accept Brown v. Board of Education for that reason.” See http://carneades.pomona.edu/2020-Law/11.Scalia.html The thought is that no level of deference to the mindset of the drafters of the Constitution and to legal precedent supporting racial separation can justify judicial decisions that are “nuts” in terms of current political and social realities. One can hope.
Nocera on Steve Donziger v. Chevron:
An Environmental Hero or Outlaw? Can It Be Both?
An Environmental Hero or Outlaw? Can It Be Both? - The New York Times (nytimes.com) https://www.nytimes.com/2021/11/06/business/dealbook/steven-donziger.html
Nocera offers an interesting opinion piece about Steve Donziger, the lawyer who spent decades suing first Texaco and then Chevron (after Chevron bought Texaco in 2001) for damaging the environment and despoiling the Amazon rainforest in Ecuador, harming the tribespeople who lived there.
Here is a quick summary of the Nocera opinion piece – which I recommend reading in full – ending with a full presentation of Nocera’s concluding observations:
In 2011, an Ecuadorean court ruled in favor of Mr. Donziger’s clients, and awarded them $18 billion (later reduced to $9.5 billion).
But Chevron brought a RICO case against Donziger in the United States, claiming wrongdoing in the prosecution of the Equador case. And in 2014, Judge Lewis A. Kaplan, of the United States District Court in Manhattan, ruled in Chevron’s favor. He wrote that Mr. Donziger had foisted “fraudulent evidence on an Ecuadorean court,” and accused Mr. Donziger and “his co-conspirators” of attempting to use the court to extort money from Chevron. Therefore, he said, Chevron did not have to pay the $9.5 billion. Courts in other countries where Chevron does business came to the same conclusion. Mr. Donziger has always denied the bribery allegation, or that he did anything wrong in handling the case.
In 2018, after Judge Kaplan’s judgment had finally been affirmed, the company brought another case against Mr. Donziger. Among other things, it wanted him to turn over his computer and other electronic devices. Judge Kaplan agreed. But Mr. Donziger refused to comply, saying it would give the oil company “backdoor access to confidential attorney-client communications.”
In 2019, the judge took the extraordinary measure of bringing in a private law firm to prosecute Mr. Donziger for criminal contempt of court. This case was presided over by another district court judge, Loretta A. Preska, who quickly ordered that Donziger be placed under house arrest and wear an electronic ankle monitor. After a short trial earlier this year, she found Mr. Donziger guilty, and sentenced him to the six months he is now serving. He was also disbarred.
[Here is the concluding part of the Nocera article in full:]
Along the way, something surprising has happened: Outside the courtroom, it was as if the ghostwritten report and the alleged bribe of the Ecuadorean judge had never happened. Mr. Donziger’s victory in Ecuador was praised as legitimate, and he was widely viewed by progressives as an environmental hero. Sting, the musician, helped raise money for his defense. Greta Thunberg offered her support. Representative Alexandria Ocasio-Cortez and several of her Democratic colleagues sent a letter to Attorney General Merrick Garland, asking him to review the case. The Harvard Law professor Charles Nesson rallied to his cause. Campaigns have been started to #FREEDONZIGER. A group of experts from the United Nations said in a report that his pretrial detention was “arbitrary” and therefore illegal. And on, and on. To them, this was a classic example of a fossil fuel company using its might to punish someone brave enough to stand up to it.
This phenomenon of seeing controversial figures as black or white — saint or sinner, hero or villain — is one of the plagues of our polarized age. It has become nearly impossible for people to acknowledge that sometimes their heroes can do something wrong, and their foes can get something right. Donald Trump is the most obvious example of this, but you see it all the time in politics, and in business as well. Are C.E.O.s rapacious greed-heads, or are they stewards of capitalism? Are oil companies supplying the fuel that the world needs to function, or are they “outlaws,” as the environmental activist Bill McKibben calls them? Too many people are unwilling to hold both ideas in their heads at once.
This failing is especially glaring in the Donziger case. If he had played by the rules in litigating the case in Ecuador, he might have come away with a judgment that a U.S. court would have upheld. Chevron would have had to pay billions to his impoverished clients. To put it another way, by using the tactics he did, Mr. Donziger did his clients an enormous disservice. That his allies refuse to see this suggests their hatred of Big Oil has blinded them to some of Mr. Donziger’s inconvenient actions.
But then there is Chevron. Companies are supposed to make rational risk and reward calculations. The company’s push to prevent the Ecuadorean judgment from going into effect was rational, and showing that Mr. Donziger had violated the rules was an appropriate way to do that. But punishing Mr. Donziger beyond that may ultimately have been a mistake. He has been turned into an environmental martyr, which is the last thing Chevron should want. He’s no longer the lawyer who broke the rules to win a case. Instead, he’s the lawyer who stood up to Big Oil.
As machination piled upon machination, and as the case became solely about Mr. Donziger, one party has been largely forgotten: the Ecuadorean tribespeople he once represented. Thirty years later, for all the money that has been spent on litigation, their circumstance is unchanged.
Consumer Report on Maserati Levante, Senator Joe Manchin's vehicle of choice
Derived from the Ghibli and Quattroporte sedans, most versions of the Levante come with a 345-hp or 424-hp turbo V6. Each is mated to an quick-and-smooth eight-speed automatic. The Maserati Levante has a combined gas mileage ranging from 16.0 miles per gallon to 19.0 miles per gallon depending on the trim and model year. A model with better mileage or an electric version that does not use fossil fuels seems improbable.
The Trofeo version uses a turbocharged V8. The Levante delivers a powerful sound from the Ferrari-developed engine, with nimble, athletic handling and, courtesy of the standard air suspension, a steady ride. Interior features include a version of Chrysler's Uconnect system with an 8.4-inch touch screen and a stunning cabin that's wrapped in leather, suede, and wood, with comfortable seats and detailed stitching. But the gear selector and other controls are not intuitive to use. BSW is standard, and FCW and AEB are optional.
The Maserati is the vehicle referred to by singer Joe Walsh in "Life's Been Good -- Records on the Wall." Joe Walsh - Life Been Good at VetsAid 2018 (Tacoma) - Bing video https://www.bing.com/videos/search?q=joe+walsh+records+on+the+wall&docid=608027675465578300&mid=D16A312DB2A6158ACE4ED16A312DB2A6158ACE4E&view=detail&FORM=VIRE Walsh says that his Maserati goes 185 mph.
Recent news reports involving climate change protesters and Senator Joe Manshin of West Virginia show Manshin proudly driving a Maserati Levante. There does not appear to be a Maserati dealer in West Virginia, perhaps because of lack of local demand in West Virginia for Maseratis. For the
2021 Maserati Levante BASE MSRP RANGE is $74,490 - $149,990, Destination Charge: $1495. There is a Maserati dealer near Pittsburgh, and Senator Manshin could have purchased his Maserati at that location.
Owning a Maserati suggests that for rock star Joe Walsh and Senator Joe Manshin life has been, as Joe Walsh put it, good so far.
For further consumer information on the Maserati, see https://www.consumerreports.org/cars/maserati/levante/2021/overview
Posting by Don Resnikoff
Derived from the Ghibli and Quattroporte sedans, most versions of the Levante come with a 345-hp or 424-hp turbo V6. Each is mated to an quick-and-smooth eight-speed automatic. The Maserati Levante has a combined gas mileage ranging from 16.0 miles per gallon to 19.0 miles per gallon depending on the trim and model year. A model with better mileage or an electric version that does not use fossil fuels seems improbable.
The Trofeo version uses a turbocharged V8. The Levante delivers a powerful sound from the Ferrari-developed engine, with nimble, athletic handling and, courtesy of the standard air suspension, a steady ride. Interior features include a version of Chrysler's Uconnect system with an 8.4-inch touch screen and a stunning cabin that's wrapped in leather, suede, and wood, with comfortable seats and detailed stitching. But the gear selector and other controls are not intuitive to use. BSW is standard, and FCW and AEB are optional.
The Maserati is the vehicle referred to by singer Joe Walsh in "Life's Been Good -- Records on the Wall." Joe Walsh - Life Been Good at VetsAid 2018 (Tacoma) - Bing video https://www.bing.com/videos/search?q=joe+walsh+records+on+the+wall&docid=608027675465578300&mid=D16A312DB2A6158ACE4ED16A312DB2A6158ACE4E&view=detail&FORM=VIRE Walsh says that his Maserati goes 185 mph.
Recent news reports involving climate change protesters and Senator Joe Manshin of West Virginia show Manshin proudly driving a Maserati Levante. There does not appear to be a Maserati dealer in West Virginia, perhaps because of lack of local demand in West Virginia for Maseratis. For the
2021 Maserati Levante BASE MSRP RANGE is $74,490 - $149,990, Destination Charge: $1495. There is a Maserati dealer near Pittsburgh, and Senator Manshin could have purchased his Maserati at that location.
Owning a Maserati suggests that for rock star Joe Walsh and Senator Joe Manshin life has been, as Joe Walsh put it, good so far.
For further consumer information on the Maserati, see https://www.consumerreports.org/cars/maserati/levante/2021/overview
Posting by Don Resnikoff
In Scalia's shadow: U.S. Supreme Court -- Second Amendment Case heard 11-3-2021
The transcript of the 11-3 hearing is here:
https://www.supremecourt.gov/oral_arguments/argument_transcripts/2021/20-843_i4dk.pdf
DC Bar Podcast on race and the Second Amendment:
DC Bar's "Brief Encounters" has a new episode. You can listen to the episode HERE<https://anchor.fm/dcbar/episodes/Race-and-the-Second-Amendment-e19gh5k>.
Race and the Second Amendment
Don Resnikoff, Esq. and Anthony Picadio, Esq. take a look at the Second Amendment and its roots. Why did the drafters connect the right to bear arms to service in a militia; and how has the U.S. Supreme Court interpreted the drafters' language.
The transcript of the 11-3 hearing is here:
https://www.supremecourt.gov/oral_arguments/argument_transcripts/2021/20-843_i4dk.pdf
DC Bar Podcast on race and the Second Amendment:
DC Bar's "Brief Encounters" has a new episode. You can listen to the episode HERE<https://anchor.fm/dcbar/episodes/Race-and-the-Second-Amendment-e19gh5k>.
Race and the Second Amendment
Don Resnikoff, Esq. and Anthony Picadio, Esq. take a look at the Second Amendment and its roots. Why did the drafters connect the right to bear arms to service in a militia; and how has the U.S. Supreme Court interpreted the drafters' language.
The USDOJ press release on its suit to block Peguin Random House's acquisition of Simon and Shuster
by DAR: The press release, which is excerpted below, can be found at https://www.justice.gov/opa/pr/justice-department-sues-block-penguin-random-house-s-acquisition-rival-publisher-simon
The press release, like the Complaint it describes, is interesting for focusing on the power of the large companies over authors. It is a case that includes allegations of "monopsony," power over those who supply product.
We previously included a Don Resnikoff review of Chris Sagers' book on the Apple litigation. The Sagers book contains
a detailed and interesting description of the publishing industry and relevant antitrust law.
The USDOJ excerpt:
Justice Department Sues to Block Penguin Random House’s Acquisition of Rival Publisher Simon & Schuster
Merger Would Create Publishing Behemoth, Harming Authors and Consumers
The U.S. Department of Justice filed a civil antitrust lawsuit today to block Penguin Random House’s proposed acquisition of its close competitor, Simon & Schuster. As alleged in the complaint filed in the U.S. District Court for the District of Columbia, this acquisition would enable Penguin Random House, which is already the largest book publisher in the world, to exert outsized influence over which books are published in the United States and how much authors are paid for their work.
“The complaint filed today to ensure fair competition in the U.S. publishing industry is the latest demonstration of the Justice Department’s commitment to pursuing economic opportunity and fairness through antitrust enforcement,” said Attorney General Merrick B. Garland.
“Books have shaped American public life throughout our nation’s history, and authors are the lifeblood of book publishing in America. But just five publishers control the U.S. publishing industry,” the Attorney General continued. “If the world’s largest book publisher is permitted to acquire one of its biggest rivals, it will have unprecedented control over this important industry. American authors and consumers will pay the price of this anticompetitive merger – lower advances for authors and ultimately fewer books and less variety for consumers.”
“In stopping Penguin Random House from extending its control of the U.S. publishing market, this lawsuit will prevent further consolidation in an industry that has a history of collusion,” said Acting Assistant Attorney General Richard A. Powers of the Justice Department’s Antitrust Division. “I want to thank the Attorney General and senior leadership of the department for their support of antitrust enforcement.”
As described in the complaint, publishers compete to acquire manuscripts, which they edit, package, market, distribute and sell as books. Publishers pay authors advances for the rights to publish their books. In most cases, the advance represents an author’s total compensation for their work.
The publishing industry is already highly concentrated, as the complaint details. Just five publishers, known as the “Big Five,” are regularly able to offer high advances and extensive marketing and editorial support, making them the best option for authors who want to publish a top-selling book. Most authors aspire to write the next bestseller and selling their rights to the Big Five offers the best chance to do so.
While smaller publishers occasionally win the publishing rights to anticipated top-selling books, they lack the financial resources to regularly pay the high advances required and absorb the financial losses if a book does not meet sales expectations. Today, Penguin Random House, the world’s largest publisher, and Simon & Schuster, the fourth largest in the United States, compete head-to-head to acquire manuscripts by offering higher advances, better services and more favorable contract terms to authors. However, as the complaint alleges, the proposed merger would eliminate this important competition, resulting in lower advances for authors and ultimately fewer books and less variety for consumers.
The complaint alleges that the acquisition of Simon & Schuster for $2.175 billion would put Penguin Random House in control of close to half the market for acquiring publishing rights to anticipated top-selling books, leaving hundreds of individual authors with fewer options and less leverage. According to its own documents as described in the complaint, Penguin Random House views the U.S. publishing market as an “oligopoly” and its acquisition of Simon & Schuster is intended to “cement” its position as the dominant publisher in the United States.
Courts have long recognized that the antitrust laws are designed to protect both buyers and sellers of products and services, including, as relevant here, authors who rely on competition between the major publishers to ensure they are fairly compensated for their work. As the complaint makes clear, this merger will cause harm to American workers, in this case authors, through consolidation among buyers – a fact pattern referred to as “monopsony.”
The Antitrust Division’s Horizontal Merger Guidelines lay out a straightforward framework to analyze monopsony cases, and under those guidelines this transaction is presumptively anticompetitive. Simply put, if Penguin Random House acquires Simon & Schuster, the two publishers will stop competing against each other. As a result, authors will be paid less for their work. Authors who are paid less write less, which, in turn, means that the quantity and variety of books diminishes too.
by DAR: The press release, which is excerpted below, can be found at https://www.justice.gov/opa/pr/justice-department-sues-block-penguin-random-house-s-acquisition-rival-publisher-simon
The press release, like the Complaint it describes, is interesting for focusing on the power of the large companies over authors. It is a case that includes allegations of "monopsony," power over those who supply product.
We previously included a Don Resnikoff review of Chris Sagers' book on the Apple litigation. The Sagers book contains
a detailed and interesting description of the publishing industry and relevant antitrust law.
The USDOJ excerpt:
Justice Department Sues to Block Penguin Random House’s Acquisition of Rival Publisher Simon & Schuster
Merger Would Create Publishing Behemoth, Harming Authors and Consumers
The U.S. Department of Justice filed a civil antitrust lawsuit today to block Penguin Random House’s proposed acquisition of its close competitor, Simon & Schuster. As alleged in the complaint filed in the U.S. District Court for the District of Columbia, this acquisition would enable Penguin Random House, which is already the largest book publisher in the world, to exert outsized influence over which books are published in the United States and how much authors are paid for their work.
“The complaint filed today to ensure fair competition in the U.S. publishing industry is the latest demonstration of the Justice Department’s commitment to pursuing economic opportunity and fairness through antitrust enforcement,” said Attorney General Merrick B. Garland.
“Books have shaped American public life throughout our nation’s history, and authors are the lifeblood of book publishing in America. But just five publishers control the U.S. publishing industry,” the Attorney General continued. “If the world’s largest book publisher is permitted to acquire one of its biggest rivals, it will have unprecedented control over this important industry. American authors and consumers will pay the price of this anticompetitive merger – lower advances for authors and ultimately fewer books and less variety for consumers.”
“In stopping Penguin Random House from extending its control of the U.S. publishing market, this lawsuit will prevent further consolidation in an industry that has a history of collusion,” said Acting Assistant Attorney General Richard A. Powers of the Justice Department’s Antitrust Division. “I want to thank the Attorney General and senior leadership of the department for their support of antitrust enforcement.”
As described in the complaint, publishers compete to acquire manuscripts, which they edit, package, market, distribute and sell as books. Publishers pay authors advances for the rights to publish their books. In most cases, the advance represents an author’s total compensation for their work.
The publishing industry is already highly concentrated, as the complaint details. Just five publishers, known as the “Big Five,” are regularly able to offer high advances and extensive marketing and editorial support, making them the best option for authors who want to publish a top-selling book. Most authors aspire to write the next bestseller and selling their rights to the Big Five offers the best chance to do so.
While smaller publishers occasionally win the publishing rights to anticipated top-selling books, they lack the financial resources to regularly pay the high advances required and absorb the financial losses if a book does not meet sales expectations. Today, Penguin Random House, the world’s largest publisher, and Simon & Schuster, the fourth largest in the United States, compete head-to-head to acquire manuscripts by offering higher advances, better services and more favorable contract terms to authors. However, as the complaint alleges, the proposed merger would eliminate this important competition, resulting in lower advances for authors and ultimately fewer books and less variety for consumers.
The complaint alleges that the acquisition of Simon & Schuster for $2.175 billion would put Penguin Random House in control of close to half the market for acquiring publishing rights to anticipated top-selling books, leaving hundreds of individual authors with fewer options and less leverage. According to its own documents as described in the complaint, Penguin Random House views the U.S. publishing market as an “oligopoly” and its acquisition of Simon & Schuster is intended to “cement” its position as the dominant publisher in the United States.
Courts have long recognized that the antitrust laws are designed to protect both buyers and sellers of products and services, including, as relevant here, authors who rely on competition between the major publishers to ensure they are fairly compensated for their work. As the complaint makes clear, this merger will cause harm to American workers, in this case authors, through consolidation among buyers – a fact pattern referred to as “monopsony.”
The Antitrust Division’s Horizontal Merger Guidelines lay out a straightforward framework to analyze monopsony cases, and under those guidelines this transaction is presumptively anticompetitive. Simply put, if Penguin Random House acquires Simon & Schuster, the two publishers will stop competing against each other. As a result, authors will be paid less for their work. Authors who are paid less write less, which, in turn, means that the quantity and variety of books diminishes too.
Book review of The Second: Race and Guns in a Fatally Unequal America, by Carol Anderson
The Don Allen Resnikoff discussion of the Carol Anderson book on the Second Amendment is here:
Washington Lawyer - November/December 2021 https://washingtonlawyer.dcbar.org/novemberdecember2021/index.php#/p/42
Anderson believes the root of many incidents of misconduct toward Black people with guns lies in the design of the Second Amendment to the U.S. Constitution. She writes: “[W]hat we get in the Second Amendment is . . . about a militia that is designed to curtail Black people’s rights to life, liberty and the pursuit of happiness. So sitting in the Bill of Rights is the right to curtail Black people’s rights. . . .”
As determined by the U.S. Supreme Court, the law on gun rights has to a significant extent turned against Anderson’s point about racial motivation. The leading opinion, District of Columbia v. Heller (2008), rejects the idea that the Second Amendment was adopted to protect a white militia and to curtail Black rights.
The Resnikoff book review in the DC Bar's Washington Lawyer refers to scholarly articles by Anthony Picadio. Mr. Picadio is featured in a DC Bar podcast on the Second Amendment that will be available shortly.
For the full discussion of the Anderson book, follow the link above.
The Don Allen Resnikoff discussion of the Carol Anderson book on the Second Amendment is here:
Washington Lawyer - November/December 2021 https://washingtonlawyer.dcbar.org/novemberdecember2021/index.php#/p/42
Anderson believes the root of many incidents of misconduct toward Black people with guns lies in the design of the Second Amendment to the U.S. Constitution. She writes: “[W]hat we get in the Second Amendment is . . . about a militia that is designed to curtail Black people’s rights to life, liberty and the pursuit of happiness. So sitting in the Bill of Rights is the right to curtail Black people’s rights. . . .”
As determined by the U.S. Supreme Court, the law on gun rights has to a significant extent turned against Anderson’s point about racial motivation. The leading opinion, District of Columbia v. Heller (2008), rejects the idea that the Second Amendment was adopted to protect a white militia and to curtail Black rights.
The Resnikoff book review in the DC Bar's Washington Lawyer refers to scholarly articles by Anthony Picadio. Mr. Picadio is featured in a DC Bar podcast on the Second Amendment that will be available shortly.
For the full discussion of the Anderson book, follow the link above.
DC AG Racine's newsletter on the DC suit against Mark Zuckerberg
Suing Mark Zuckerberg and Holding CEOs Accountable
In October, I added Facebook CEO Mark Zuckerberg to a lawsuit I filed in 2018 suing Facebook. [https://lnks.gd/l/eyJhbGciOiJIUzI1NiJ9.eyJidWxsZXRpbl9saW5rX2lkIjoxMDAsInVyaSI6ImJwMjpjbGljayIsImJ1bGxldGluX2lkIjoiMjAyMTExMDEuNDgyMDI1MTEiLCJ1cmwiOiJodHRwczovL29hZy5kYy5nb3YvcmVsZWFzZS9hZy1yYWNpbmUtc3Vlcy1mYWNlYm9vay1mYWlsaW5nLXByb3RlY3QtbWlsbGlvbnMifQ.n95Qq3GwemLwClIWBisjVbBuhiBx8eEu0ntW5N8koxU/s/1016768181/br/115936435047-l]
Our lawsuit goes after Facebook for deceiving its consumers about the steps Facebook would take to protect user data. These failures to put in place safeguards promised to consumers impacted tens of millions of users nationally and nearly half of all District residents – including by allowing Cambridge Analytica, a private company, to acquire and use that data to influence voters and manipulate the 2016 election. The Cambridge Analytica scandal is still the largest consumer privacy scandal in the nation’s history.
We did our due diligence over the past two years before taking this step of adding Mark Zuckerberg to our lawsuit. Since we originally filed the lawsuit in December 2018, my office has reviewed hundreds of thousands of pages of documents that have been produced in the litigation.
We have conducted a wide range of depositions, from Facebook’s directors to former employees and whistleblowers. We have also reviewed documents produced in other cases, as well as many hours of public statements by Mr. Zuckerberg, including his sworn testimony before the U.S. Senate and other law enforcement agencies.
The evidence we gathered is clear: Mark Zuckerberg knowingly and actively participated in the decisions that led to Cambridge Analytica’s mass collection of Facebook user data. On top of this, he also made misrepresentations to users, the public, and government officials about how secure the data on Facebook was and about Facebook’s role.
Under these circumstances, adding Mark Zuckerberg to our lawsuit is warranted, and sends a strong message that corporate leaders, including CEOs, will be held accountable for their actions.
To learn more about the case, read this New York Times article. [https://lnks.gd/l/eyJhbGciOiJIUzI1NiJ9.eyJidWxsZXRpbl9saW5rX2lkIjoxMDEsInVyaSI6ImJwMjpjbGljayIsImJ1bGxldGluX2lkIjoiMjAyMTExMDEuNDgyMDI1MTEiLCJ1cmwiOiJodHRwczovL3d3dy5ueXRpbWVzLmNvbS8yMDIxLzEwLzIwL3RlY2hub2xvZ3kvbWFyay16dWNrZXJiZXJnLWZhY2Vib29rLWxhd3N1aXQuaHRtbCJ9.K6B_6--nmCK0KmBNK_I2IC9BPvBTtxRU44KxoEh2hiA/s/1016768181/br/115936435047-l]
To learn more about the significance of the case, watch my interview on CNN’s OutFront and listen to my interview with NPR’s Morning Edition.
/s/ Karl A. Racine
Attorney General
Suing Mark Zuckerberg and Holding CEOs Accountable
In October, I added Facebook CEO Mark Zuckerberg to a lawsuit I filed in 2018 suing Facebook. [https://lnks.gd/l/eyJhbGciOiJIUzI1NiJ9.eyJidWxsZXRpbl9saW5rX2lkIjoxMDAsInVyaSI6ImJwMjpjbGljayIsImJ1bGxldGluX2lkIjoiMjAyMTExMDEuNDgyMDI1MTEiLCJ1cmwiOiJodHRwczovL29hZy5kYy5nb3YvcmVsZWFzZS9hZy1yYWNpbmUtc3Vlcy1mYWNlYm9vay1mYWlsaW5nLXByb3RlY3QtbWlsbGlvbnMifQ.n95Qq3GwemLwClIWBisjVbBuhiBx8eEu0ntW5N8koxU/s/1016768181/br/115936435047-l]
Our lawsuit goes after Facebook for deceiving its consumers about the steps Facebook would take to protect user data. These failures to put in place safeguards promised to consumers impacted tens of millions of users nationally and nearly half of all District residents – including by allowing Cambridge Analytica, a private company, to acquire and use that data to influence voters and manipulate the 2016 election. The Cambridge Analytica scandal is still the largest consumer privacy scandal in the nation’s history.
We did our due diligence over the past two years before taking this step of adding Mark Zuckerberg to our lawsuit. Since we originally filed the lawsuit in December 2018, my office has reviewed hundreds of thousands of pages of documents that have been produced in the litigation.
We have conducted a wide range of depositions, from Facebook’s directors to former employees and whistleblowers. We have also reviewed documents produced in other cases, as well as many hours of public statements by Mr. Zuckerberg, including his sworn testimony before the U.S. Senate and other law enforcement agencies.
The evidence we gathered is clear: Mark Zuckerberg knowingly and actively participated in the decisions that led to Cambridge Analytica’s mass collection of Facebook user data. On top of this, he also made misrepresentations to users, the public, and government officials about how secure the data on Facebook was and about Facebook’s role.
Under these circumstances, adding Mark Zuckerberg to our lawsuit is warranted, and sends a strong message that corporate leaders, including CEOs, will be held accountable for their actions.
To learn more about the case, read this New York Times article. [https://lnks.gd/l/eyJhbGciOiJIUzI1NiJ9.eyJidWxsZXRpbl9saW5rX2lkIjoxMDEsInVyaSI6ImJwMjpjbGljayIsImJ1bGxldGluX2lkIjoiMjAyMTExMDEuNDgyMDI1MTEiLCJ1cmwiOiJodHRwczovL3d3dy5ueXRpbWVzLmNvbS8yMDIxLzEwLzIwL3RlY2hub2xvZ3kvbWFyay16dWNrZXJiZXJnLWZhY2Vib29rLWxhd3N1aXQuaHRtbCJ9.K6B_6--nmCK0KmBNK_I2IC9BPvBTtxRU44KxoEh2hiA/s/1016768181/br/115936435047-l]
To learn more about the significance of the case, watch my interview on CNN’s OutFront and listen to my interview with NPR’s Morning Edition.
/s/ Karl A. Racine
Attorney General
YouTube power over media
An article by journalist Adam Satariano buried in the middle of the Saturday New York Times Business section tells the tale of how a British media outlet, Novaro Media, was arbitrarily deleted by YouTube. Novaro is a left-leaning media outlet, but right leaning news outlets have often complained of the same deletion fate. Satariano explains that Youtube's “rules are opaque and sometimes arbitrarily enforced — or mistakenly enforced, in Novara’s case.” YouTube has great market power that make it a particularly important platform for media outlets.
The article is titled How a Mistake by YouTube Shows Its Power Over Media It can be found at https://www.nytimes.com/2021/10/29/business/youtube-novara.html?smid=em-share
Key points include that YouTube can exercise its power and terminate publications arbitrarily. YouTube's accountability is sharply limited. Terminated media outlets have little recourse.
Satariano explains that after an outcry online, YouTube restored Novara’s channel in a few hours, saying that it had been removed in error. It helped Novara that there was a great on-line outcry, and that members of the British Parliament expressed concern.
But other independent journalists, activists and creators on YouTube often don’t have similar success, particularly in countries like Belarus, Russia and Turkey where YouTube is under pressure from authorities to remove opposition content and where the company does not have as much language or cultural expertise.
Satariano’s article mentions possible legislative remedies being considered in Great Britain, but commenters suggest that the proposed remedies are unlikely to protect media outlets like Novaro.
See How a Mistake by YouTube Shows Its Power Over Media - The New York Times (nytimes.com)
An article by journalist Adam Satariano buried in the middle of the Saturday New York Times Business section tells the tale of how a British media outlet, Novaro Media, was arbitrarily deleted by YouTube. Novaro is a left-leaning media outlet, but right leaning news outlets have often complained of the same deletion fate. Satariano explains that Youtube's “rules are opaque and sometimes arbitrarily enforced — or mistakenly enforced, in Novara’s case.” YouTube has great market power that make it a particularly important platform for media outlets.
The article is titled How a Mistake by YouTube Shows Its Power Over Media It can be found at https://www.nytimes.com/2021/10/29/business/youtube-novara.html?smid=em-share
Key points include that YouTube can exercise its power and terminate publications arbitrarily. YouTube's accountability is sharply limited. Terminated media outlets have little recourse.
Satariano explains that after an outcry online, YouTube restored Novara’s channel in a few hours, saying that it had been removed in error. It helped Novara that there was a great on-line outcry, and that members of the British Parliament expressed concern.
But other independent journalists, activists and creators on YouTube often don’t have similar success, particularly in countries like Belarus, Russia and Turkey where YouTube is under pressure from authorities to remove opposition content and where the company does not have as much language or cultural expertise.
Satariano’s article mentions possible legislative remedies being considered in Great Britain, but commenters suggest that the proposed remedies are unlikely to protect media outlets like Novaro.
See How a Mistake by YouTube Shows Its Power Over Media - The New York Times (nytimes.com)
Can Trust Busters Help Deter Union Busters?
From https://www.foodandpower.net/latest/dollar-general-union-busting-unfair-competition-10-21
As workers flex their power in strikes and walkouts across the country, more retail employees are trying to organize corners of the large, low-wage, anti-union sector.
This includes a union drive in Barkhamsted, Connecticut, at a Dollar General store, a rapidly expanding discount chain known for low wages and harsh working conditions. Dollar General has more than 157,000 employees, and in 2020 a store employee’s median annual income was $14,571. Meanwhile corporate profits increased 54% between 2019 and 2020 to $2.6 billion.
Shortly after Dollar General workers in Barkhamsted filed for a union election in late September, the corporation hired anti-union consultants for $2,700 per consultant per day and sent corporate managers to patrol the store. After weeks of one-on-one meetings with workers, anti-union presentations, alleged threats to close the store, and a specious termination of a union-sympathetic employee, the union election looks likely to fail. Last Friday, two workers voted for unionizing, three voted against, and two ballots were contested. The National Labor Relations Board (NLRB) will make the final call.
In a statement sent via email, Dollar General said that “we disagree with the claim raised by our former Barkhamsted employee, as well as any allegation of retaliation or harassment” and that the company “believe[s] a union is not in our employees’ best interests.”
“It’s been the most aggressive anti-union campaign that I’ve seen,” says Jessica Petronella, director of organizing with UFCW Local 371. “They are worried about the bigger picture. They don’t want these workers at Barkhamsted to organize because … they don’t want workers in other stores to feel empowered.”
Petronella alleges that Dollar General violated several labor laws and plans to file unfair labor practice charges with the NLRB. But the agency’s weak fines generally do not deter illegal union busting by firms determined to block worker organizing. “It’s a cost of doing business,” says Nelson Lichtenstein, labor historian and professor emeritus at University of California, Santa Barbara.
Harsher penalties and stronger labor protections could change this business calculus, as could a new approach to competition policy. Labor advocates have long sought to prevent firms from competing in a race to the bottom on labor costs. Antitrust enforcement could embody this principle by establishing that labor law violations are an unfair way for corporations to corner markets.
Antitrust laws bar businesses from dominating industries through “unfair” or “anticompetitive” means. But there are few clear legal definitions of unfair or anticompetitive conduct. Congress gave the Federal Trade Commission (FTC) broad authority to define and prohibit so-called “unfair methods of competition,” but the agency has read this power narrowly and used it sparingly in recent decades. This could change – the FTC formed a new working group to explore fair competition rulemaking, and new chairwoman Lina Khan is committed to tapping unused authority.
Courts have held that businesses cannot acquire or maintain monopolies using fraud, deception, and other generally prohibited practices, according to research by Open Markets legal director Sandeep Vaheesan.
In the late 1970s, FTC Chairman Michael Pertschuk extended this interpretation and floated the idea of prosecuting companies that violated employment, environmental, labor, and other laws. By breaking these generally applicable laws, Pertschuk argued that firms used “unfair methods of competition” to obtain advantages over honest rivals that complied with the law. What Pertschuk suggested was not farfetched but rooted in Supreme Court interpretations of the FTC’s authority. In a 1972 decision, the Supreme Court stated the FTC can act as “a court of equity” and “consider[] public values beyond simply those enshrined in the letter or encompassed in the spirit of the antitrust laws.”
In the case of Dollar General, maintaining low labor costs is a central part of its competitive edge. But if Dollar General holds down wages and working conditions by breaking labor law and illegally busting unions in order to drive out retail competitors, especially in small towns, that could be deemed an unfair method of competition. Antitrust scholars including Vaheesan and University of Chicago law professor Eric Posner have made arguments along these lines.
David Seligman, executive director of the nonprofit law firm Towards Justice, says some lawyers have recently tried using labor law violations as evidence of unfair competition. Most notably, private plaintiffs and the state attorney general in California argued corporations that illegally misclassify employees as independent contractors gain an unfair competitive advantage by evading minimum wage, overtime, workers compensation, and other labor standards (thus lowering their labor costs). Courts agreed this conduct violated California competition and labor laws, but in a private suit the court did not find any violation of federal antitrust law.
Seligman says other antitrust practitioners could do more to expand this legal theory. “One key thing that public enforcers and academics ought to be doing is reinforcing the ways in which conduct fits together to amount to unfair competition,” says Seligman. “Unfair labor practice[s] can be part of a pattern of conduct that results in unfair competitive advantages.”
Lichtenstein also pointed to mechanisms beyond antitrust and traditional collective bargaining that can take squeezing labor out of competition, such as sectoral bargaining. Governments can establish standard-setting boards or councils where worker and business representatives come together to set wage, benefits, safety, and other standards across entire industries. New York state raised fast food workers’ minimum wage through this type of board, and Seattle created a multi-stakeholder board that sets labor standards for domestic workers. Participatory standard-setting boards can be especially useful in sectors, such as retail, where corporations manage many outlets or independently owned franchises that are hard to unionize.
“I don’t see traditional collective bargaining as it was envisioned in the [National Labor Relations] Act able to organize Dollar General,” Lichtenstein says. “They have ten thousand stores, it’s so easy for them to shut down the stores that get unionized.”
Even though it is illegal to shut down a store for unionizing, it happens. Only one Dollar General store has ever successfully unionized and three months after the union was finally certified, Dollar General closed the location citing “future profitability” concerns.
From https://www.foodandpower.net/latest/dollar-general-union-busting-unfair-competition-10-21
As workers flex their power in strikes and walkouts across the country, more retail employees are trying to organize corners of the large, low-wage, anti-union sector.
This includes a union drive in Barkhamsted, Connecticut, at a Dollar General store, a rapidly expanding discount chain known for low wages and harsh working conditions. Dollar General has more than 157,000 employees, and in 2020 a store employee’s median annual income was $14,571. Meanwhile corporate profits increased 54% between 2019 and 2020 to $2.6 billion.
Shortly after Dollar General workers in Barkhamsted filed for a union election in late September, the corporation hired anti-union consultants for $2,700 per consultant per day and sent corporate managers to patrol the store. After weeks of one-on-one meetings with workers, anti-union presentations, alleged threats to close the store, and a specious termination of a union-sympathetic employee, the union election looks likely to fail. Last Friday, two workers voted for unionizing, three voted against, and two ballots were contested. The National Labor Relations Board (NLRB) will make the final call.
In a statement sent via email, Dollar General said that “we disagree with the claim raised by our former Barkhamsted employee, as well as any allegation of retaliation or harassment” and that the company “believe[s] a union is not in our employees’ best interests.”
“It’s been the most aggressive anti-union campaign that I’ve seen,” says Jessica Petronella, director of organizing with UFCW Local 371. “They are worried about the bigger picture. They don’t want these workers at Barkhamsted to organize because … they don’t want workers in other stores to feel empowered.”
Petronella alleges that Dollar General violated several labor laws and plans to file unfair labor practice charges with the NLRB. But the agency’s weak fines generally do not deter illegal union busting by firms determined to block worker organizing. “It’s a cost of doing business,” says Nelson Lichtenstein, labor historian and professor emeritus at University of California, Santa Barbara.
Harsher penalties and stronger labor protections could change this business calculus, as could a new approach to competition policy. Labor advocates have long sought to prevent firms from competing in a race to the bottom on labor costs. Antitrust enforcement could embody this principle by establishing that labor law violations are an unfair way for corporations to corner markets.
Antitrust laws bar businesses from dominating industries through “unfair” or “anticompetitive” means. But there are few clear legal definitions of unfair or anticompetitive conduct. Congress gave the Federal Trade Commission (FTC) broad authority to define and prohibit so-called “unfair methods of competition,” but the agency has read this power narrowly and used it sparingly in recent decades. This could change – the FTC formed a new working group to explore fair competition rulemaking, and new chairwoman Lina Khan is committed to tapping unused authority.
Courts have held that businesses cannot acquire or maintain monopolies using fraud, deception, and other generally prohibited practices, according to research by Open Markets legal director Sandeep Vaheesan.
In the late 1970s, FTC Chairman Michael Pertschuk extended this interpretation and floated the idea of prosecuting companies that violated employment, environmental, labor, and other laws. By breaking these generally applicable laws, Pertschuk argued that firms used “unfair methods of competition” to obtain advantages over honest rivals that complied with the law. What Pertschuk suggested was not farfetched but rooted in Supreme Court interpretations of the FTC’s authority. In a 1972 decision, the Supreme Court stated the FTC can act as “a court of equity” and “consider[] public values beyond simply those enshrined in the letter or encompassed in the spirit of the antitrust laws.”
In the case of Dollar General, maintaining low labor costs is a central part of its competitive edge. But if Dollar General holds down wages and working conditions by breaking labor law and illegally busting unions in order to drive out retail competitors, especially in small towns, that could be deemed an unfair method of competition. Antitrust scholars including Vaheesan and University of Chicago law professor Eric Posner have made arguments along these lines.
David Seligman, executive director of the nonprofit law firm Towards Justice, says some lawyers have recently tried using labor law violations as evidence of unfair competition. Most notably, private plaintiffs and the state attorney general in California argued corporations that illegally misclassify employees as independent contractors gain an unfair competitive advantage by evading minimum wage, overtime, workers compensation, and other labor standards (thus lowering their labor costs). Courts agreed this conduct violated California competition and labor laws, but in a private suit the court did not find any violation of federal antitrust law.
Seligman says other antitrust practitioners could do more to expand this legal theory. “One key thing that public enforcers and academics ought to be doing is reinforcing the ways in which conduct fits together to amount to unfair competition,” says Seligman. “Unfair labor practice[s] can be part of a pattern of conduct that results in unfair competitive advantages.”
Lichtenstein also pointed to mechanisms beyond antitrust and traditional collective bargaining that can take squeezing labor out of competition, such as sectoral bargaining. Governments can establish standard-setting boards or councils where worker and business representatives come together to set wage, benefits, safety, and other standards across entire industries. New York state raised fast food workers’ minimum wage through this type of board, and Seattle created a multi-stakeholder board that sets labor standards for domestic workers. Participatory standard-setting boards can be especially useful in sectors, such as retail, where corporations manage many outlets or independently owned franchises that are hard to unionize.
“I don’t see traditional collective bargaining as it was envisioned in the [National Labor Relations] Act able to organize Dollar General,” Lichtenstein says. “They have ten thousand stores, it’s so easy for them to shut down the stores that get unionized.”
Even though it is illegal to shut down a store for unionizing, it happens. Only one Dollar General store has ever successfully unionized and three months after the union was finally certified, Dollar General closed the location citing “future profitability” concerns.
Discussion of On Corruption in America (Knopf, 2020), by Sarah Chayes
By Don Allen Resnikoff
Is US prosecution of official corruption too lax?
Writing in the New York Times, Ryan C. Crocker, ambassador to Afghanistan under President Barack Obama, explains that a major problem in Afghanistan has been the corruption of their political leaders. Crocker points out that U.S. sufferance of corruption in Afghanistan has precedent in the U.S.: “Corruption was endemic in New York, Boston and Chicago through much of the 19th and into the 20th centuries.”[i]
Journalist and former military advisor Sarah Chayes’ makes essentially the same points as Crocker in her book , On Corruption in America (Alfred a Knopf, 2020). When Chayes was in Afghanistan, she saw that theft of government money was rife. There have been networks of privileged people in and out of the Afghan government who have had access to government decision makers, and misused that access.
Chayes offers many examples of the same thing happening in America. One example among many concerns the well-connected Steven Mnuchin. His Capmark Financial Group was a leading originator of shaky real estate loans and collateralized debt arrangements in the lead up to the financial crash of 2008. When Mnuchin bought IndyMac Bank in 2009, the FDIC assumed nearly 80% of loan losses. It “enriched him on homeowners’ distress,” according to Chayes.
Mnuchin was subsequently appointed to head the U.S. Treasury during the Trump Administration.
Another example involves Senate leader Mitch McConnell, his wife Elaine Chao, and Russian and Chinese business people. Chayes alleges that a network of McConnell’s relatives, and Russian and Chinese cronies, conspired to divert public money that should have benefitted Kentucky mineworkers. The diversion was to an aluminum plant in Kentucky that benefitted well connected individuals. Chayes says that what happened was “a distorted sequence of events typical of today’s era of transnational kleptocratic networks.”
Chayes believes that U.S. laws on official corruption need to be strengthened in a number of ways, including legislative reversal of decisions of the U.S. Supreme Court on what constitutes official corruption. Chayes defies conventional wisdom when she argues against the unanimous decision of the Court overturning the corruption conviction of Virginia’s former Governor Bob McDonnell.
The Governor accepted valuable benefits from a wealthy corporate leader and then put pressure on the University of Virginia to run studies of a questionable pharmaceutical product being promoted by the wealthy benefactor.
The federal bribery statute, 18 U.S.C. § 201, makes it a crime for a public official to “receive or accept anything of value” in exchange for being “influenced in the performance of any official act.” An "official act" is a decision or action on a "question, matter, cause, suit, proceeding or controversy." The Court said that the “question” or “matter” must involve a formal exercise of government authority, and must also be something specific and focused that is "pending" or "may by law be brought" before a public official. To qualify as an "official act," the public official must make a decision to take an action on that question or matter, or agree to do so. Setting up a meeting, talking to another official, or organizing an event -- without more -- does not fit that definition of "official act." Because jury instructions in the McDonnell trial did not follow those requirements, the U.S. Supreme Court found that there was trial error requiring reversal of the McDonnell conviction.[ii]
Chayes disparages the U.S. Supreme Court’s decision as making routine corrupt politics legal and acceptable. Chayes argues that the U.S. Supreme Court managed to “transform a broad, commonsense definition of bribery into something narrow and technical.” Lawyers understand the fairness rationale of the Court’s reasoning, but such understanding does not address Chayes’ point that ordinary citizens may expect that behavior like McDonnell’s should be considered corrupt and prosecutable.
Chayes’ point about political corruption is straightforward: When well-connected networks of business and government people act corruptly to enrich themselves at the expense of ordinary people, those ordinary people will lose confidence in their government.
[i] Ryan Croccker, America Lost Patience in Afghanista, https://www.nytimes.com/2021/08/21/opinion/us-afghanistan
[ii] McDonnell v. United States, 579 U.S. ___,2915
Slate: Is Joe Manchin about ideology or self-serving?
A recent article in Slate magazine points out:
• A summer sting operation by Greenpeace had an Exxon Mobil lobbyist reveal that he met with Manchin weekly to try to persuade him to weaken Biden’s climate agenda (and he’s not the only rich guy who gets Manchin regularly on the line).
• An August piece in Harper’s noted that the West Virginia Democratic Party, which the senator played no small role in gutting, remains entirely under Manchin’s influence and control. It also mentions how Manchin leveraged his influence within the Senate to get plush government appointments for people close to him, including his wife.
• A September report from Type Investigations and the Intercept revealed that Manchin is currently invested in multiple coal companies that are run by his son, and that, even though the elder Manchin’s investments are in a blind trust, he has personally made $4.5 million from them during the time he has spent in the Senate (11 years to date).
Also: "In this remaining time, he seems to be simply looking out for his sources of wealth, including the ones that come from his son’s coal incinerators. It wouldn’t be the first time a Manchin family member used conflicts of interest to their advantage. Joe’s wife, Gayle, previously served as head of the West Virginia Board of Education and used her position to try to require the state’s schools to purchase EpiPens. EpiPens are manufactured by the Big Pharma juggernaut Mylan, whose former CEO was Heather Bresch—Manchin’s daughter, who stepped down after it was revealed she helped fix the prices of EpiPens in collusion with Pfizer. Family helping family: It’s a highly lucrative graft."
See https://slate.com/news-and-politics/2021/10/joe-manchin-coal-climate-change.html?sid=5ff8d8b261bfa546dd075a83&email=f7bf73e2d7ca47c65c9df513d4f1a2ad486611b90e9f78b92689312edf5b4e16&utm_medium=email&utm_source=newsletter&utm_content=TheSlatest&utm_campaign=traffic
Another among other articles with a similar point: Joe Manchin’s Dirty Empire (theintercept.com) https://theintercept.com/2021/09/03/joe-manchin-coal-fossil-fuels-pollution/
Posting by Don Allen Resnikoff
Judge Sotomayor finds her colleagues approach to procedural issues to be "Stunning:"
Cite as: 594 U. S. ____ (2021) 1 SOTOMAYOR, J., dissenting SUPREME COURT OF THE UNITED STATES No. 21A24 WHOLE WOMAN’S HEALTH ET AL. v. AUSTIN REEVE JACKSON, JUDGE, ET AL. ON APPLICATION FOR INJUNCTIVE RELIEF [September 1, 2021] JUSTICE SOTOMAYOR, with whom JUSTICE BREYER and JUSTICE KAGAN join, dissenting.
The Court’s order is stunning. Presented with an application to enjoin a flagrantly unconstitutional law engineered to prohibit women from exercising their constitutional rights and evade judicial scrutiny, a majority of Justices have opted to bury their heads in the sand. Last night, the Court silently acquiesced in a State’s enactment of a law that flouts nearly 50 years of federal precedents. Today, the Court belatedly explains that it declined to grant relief because of procedural complexities of the State’s own invention. Ante, at 1. Because the Court’s failure to act rewards tactics designed to avoid judicial review and inflicts significant harm on the applicants and on women seeking abortions in Texas, I dissent
The whole of the opinion is here: 21A24 Whole Woman's Health v. Jackson (09/01/2021) (supremecourt.gov) https://www.supremecourt.gov/opinions/20pdf/21a24_8759.pdf
Posting by Don Allen Resnikoff
Cite as: 594 U. S. ____ (2021) 1 SOTOMAYOR, J., dissenting SUPREME COURT OF THE UNITED STATES No. 21A24 WHOLE WOMAN’S HEALTH ET AL. v. AUSTIN REEVE JACKSON, JUDGE, ET AL. ON APPLICATION FOR INJUNCTIVE RELIEF [September 1, 2021] JUSTICE SOTOMAYOR, with whom JUSTICE BREYER and JUSTICE KAGAN join, dissenting.
The Court’s order is stunning. Presented with an application to enjoin a flagrantly unconstitutional law engineered to prohibit women from exercising their constitutional rights and evade judicial scrutiny, a majority of Justices have opted to bury their heads in the sand. Last night, the Court silently acquiesced in a State’s enactment of a law that flouts nearly 50 years of federal precedents. Today, the Court belatedly explains that it declined to grant relief because of procedural complexities of the State’s own invention. Ante, at 1. Because the Court’s failure to act rewards tactics designed to avoid judicial review and inflicts significant harm on the applicants and on women seeking abortions in Texas, I dissent
The whole of the opinion is here: 21A24 Whole Woman's Health v. Jackson (09/01/2021) (supremecourt.gov) https://www.supremecourt.gov/opinions/20pdf/21a24_8759.pdf
Posting by Don Allen Resnikoff
Does current labor unrest offer an opportunity for a resurgence of labor unions?
By DAR: The context for current labor-management disputes is that union power has declined over recent decades. In 2019, only 10.8 percent of U.S. workers were union members, according to the Bureau of Labor Statistics.
27 states have “right to work” laws that require unions to represent all workers, not just those that join or pay union dues. That holds down the number of union workers and weakens unions financially.
Most employees can be fired for any reason, and do not have the advantage of union representation on issues such a wage levels, working conditions, and health and other benefits.
Current pandemic related labor unrest may be an opportunity for union organizing, but perhaps not. Amazon famously beat back attempts to unionize its workers. The Biden administration has promoted legislation to aid unions and expand employee bargaining rights, but the fate of that legislation is uncertain. For a description of the legislation see 2021-02-04 PRO Act of 2021 Fact Sheet.pdf (house.gov)
By DAR: The context for current labor-management disputes is that union power has declined over recent decades. In 2019, only 10.8 percent of U.S. workers were union members, according to the Bureau of Labor Statistics.
27 states have “right to work” laws that require unions to represent all workers, not just those that join or pay union dues. That holds down the number of union workers and weakens unions financially.
Most employees can be fired for any reason, and do not have the advantage of union representation on issues such a wage levels, working conditions, and health and other benefits.
Current pandemic related labor unrest may be an opportunity for union organizing, but perhaps not. Amazon famously beat back attempts to unionize its workers. The Biden administration has promoted legislation to aid unions and expand employee bargaining rights, but the fate of that legislation is uncertain. For a description of the legislation see 2021-02-04 PRO Act of 2021 Fact Sheet.pdf (house.gov)
Some believe there may be a resurgence of labor unions
A New Republic magazine article is optimistic. The article argues that “workers across the country are standing up for basic dignity and respect on the job in a historic way.” America Is in the Midst of a Dramatic Labor Resurgence | The New Republic https://newrepublic.com/article/163936/america-midst-dramatic-labor-resurgencehttps://newrepublic.com/article/163936/america-midst-dramatic-labor-resurgence
The article offers some statistics: The Bureau of Labor Statistics tracks “large strikes,” meaning strikes of over 1,000 workers. In 2020, there were a total of nine such strikes, involving 28,800 workers. In 2021 so far, the total number is already at 12 strikes, involving 22,300 workers. There are three large pending strike authorizations that could add to that tally: IATSE-affiliated Hollywood production workers (60–65,000 workers), Kaiser Permanente workers (37,000), and UAW-affiliated John Deere workers (roughly 10,000).
The article also offers statistics about strikes that are not “large strikes.” either. In 2020, the Federal Mediation & Conciliation Service, a government agency that handles labor disputes, recorded under 50 official strikes resulting from union labor disputes. So far in 2021, the Cornell ILR Labor Action Tracker has recorded over 100 such strikes—and it’s only October.
A New Republic magazine article is optimistic. The article argues that “workers across the country are standing up for basic dignity and respect on the job in a historic way.” America Is in the Midst of a Dramatic Labor Resurgence | The New Republic https://newrepublic.com/article/163936/america-midst-dramatic-labor-resurgencehttps://newrepublic.com/article/163936/america-midst-dramatic-labor-resurgence
The article offers some statistics: The Bureau of Labor Statistics tracks “large strikes,” meaning strikes of over 1,000 workers. In 2020, there were a total of nine such strikes, involving 28,800 workers. In 2021 so far, the total number is already at 12 strikes, involving 22,300 workers. There are three large pending strike authorizations that could add to that tally: IATSE-affiliated Hollywood production workers (60–65,000 workers), Kaiser Permanente workers (37,000), and UAW-affiliated John Deere workers (roughly 10,000).
The article also offers statistics about strikes that are not “large strikes.” either. In 2020, the Federal Mediation & Conciliation Service, a government agency that handles labor disputes, recorded under 50 official strikes resulting from union labor disputes. So far in 2021, the Cornell ILR Labor Action Tracker has recorded over 100 such strikes—and it’s only October.
The number of workers on strike hits the highest since the 1980s
Excerpt from https://www.cnbc.com/2019/10/21/the-number-of-workers-on-strike-hits-the-highest-since-the-1980s.html
PUBLISHED MON, OCT 21 20191:20 PM EDTUPDATED MON, OCT 21 20191:57 PM EDT
Olivia Raimonde
The number of striking workers balloons to nearly 500,000 in 2018, up from about 25,000 in 2017, according to the Bureau of Labor Statistics.
This is the largest number of people who have walked out on work since the mid-1980s.
As the labor market tightens, workers are becoming more confident about striking for better salaries and benefits.
In September, workers for General Motors walked out in what has now become the company’s longest strike in decades. The strike began after the auto manufacturer could not reach a contract agreement with labor union United Auto Workers. The walkout is estimated to have cost General Motors upwards of $2 billion, according to Bank of America.
Not only are people striking, but the number of people who have voluntarily quit their job, which can be viewed as a measure of job market confidence, hit an all-time high in July. The percentage of striking workers in the total workforce is currently at about 0.3%, compared with 0.4% in the mid-1980s.
As the gap between executive salaries and worker pay expands, more people are becoming discontent. In the recovery, corporate profits stabilized long before household income, acting as a spark for the surge in strikes.
General Motors workers aren’t the only ones walking out on the job. About 3,500 Mack Truck employees, who are also UAW members, are currently striking across three states for the first time in 35 years over their contracts. The union is seeking better contract terms on issues ranging from wage increases and holiday schedules to health care coverage and retirement benefits.
Among other notable actions, Chicago public school teachers are in their third day of a strike, demanding higher salaries, better benefits and more resources for the classroom. The strike has effectively canceled classes for approximately 361,000 students.
DAR Note: John Deere workers are also striking.
Record numbers of people are quitting their jobs-
About 4.3 million Americans, or 2.9% of the workforce, left their jobs in August, with many citing a career change and better hours as reasons why.
See Video Record number of people are quitting their jobs - ABC News (go.com) https://abcnews.go.com/GMA/News/video/record-number-people-quitting-jobs-80554144#:~:text=Record%20number%20of%20people%20are%20quitting%20their%20jobs,career%20change%20and%20better%20hours%20as%20reasons%20why.
Excerpt from https://www.cnbc.com/2019/10/21/the-number-of-workers-on-strike-hits-the-highest-since-the-1980s.html
PUBLISHED MON, OCT 21 20191:20 PM EDTUPDATED MON, OCT 21 20191:57 PM EDT
Olivia Raimonde
The number of striking workers balloons to nearly 500,000 in 2018, up from about 25,000 in 2017, according to the Bureau of Labor Statistics.
This is the largest number of people who have walked out on work since the mid-1980s.
As the labor market tightens, workers are becoming more confident about striking for better salaries and benefits.
In September, workers for General Motors walked out in what has now become the company’s longest strike in decades. The strike began after the auto manufacturer could not reach a contract agreement with labor union United Auto Workers. The walkout is estimated to have cost General Motors upwards of $2 billion, according to Bank of America.
Not only are people striking, but the number of people who have voluntarily quit their job, which can be viewed as a measure of job market confidence, hit an all-time high in July. The percentage of striking workers in the total workforce is currently at about 0.3%, compared with 0.4% in the mid-1980s.
As the gap between executive salaries and worker pay expands, more people are becoming discontent. In the recovery, corporate profits stabilized long before household income, acting as a spark for the surge in strikes.
General Motors workers aren’t the only ones walking out on the job. About 3,500 Mack Truck employees, who are also UAW members, are currently striking across three states for the first time in 35 years over their contracts. The union is seeking better contract terms on issues ranging from wage increases and holiday schedules to health care coverage and retirement benefits.
Among other notable actions, Chicago public school teachers are in their third day of a strike, demanding higher salaries, better benefits and more resources for the classroom. The strike has effectively canceled classes for approximately 361,000 students.
DAR Note: John Deere workers are also striking.
Record numbers of people are quitting their jobs-
About 4.3 million Americans, or 2.9% of the workforce, left their jobs in August, with many citing a career change and better hours as reasons why.
See Video Record number of people are quitting their jobs - ABC News (go.com) https://abcnews.go.com/GMA/News/video/record-number-people-quitting-jobs-80554144#:~:text=Record%20number%20of%20people%20are%20quitting%20their%20jobs,career%20change%20and%20better%20hours%20as%20reasons%20why.
A judge on Friday issued a temporary restraining order against the Chicago police union president, prohibiting him from making public statements that encourage members not to report their COVID-19 vaccine status to the city.
Cook County Circuit Judge Cecilia Horan ruled there was potential irreparable harm if local Fraternal Order of Police President John Catanzara persisted in making such statements. City attorneys argued they were tantamount to him advocating “sedition” and “anarchy” because he was directing members to disobey an order from their superiors.https://www.chicagotribune.com/news/breaking/ct-fop-john-catanzara-vaccine-mandate-20211015-egsrqzbzvzefrk4thcbxfqwpxi-story.html
The City of Chicago's litigation Complaint requesting injunction against discouraging COVID vaccine mandate requirements is here:
https://news.wttw.com/sites/default/files/article/file-attachments/1%202021-10-14%20Verified%20Complaint%20(FOP).pdf
Excerpt:
If Catanzara and the FOP are allowed to continue with these extortionate demands ... the City will be faced with an unlawful and untenable Hobson’s Choice: either exempt the FOP membership from complying with reasonable and necessary directives needed to combat the COVID-19 pandemic and thereby jeopardize the health and safety of both CPD employees and citizens with whom they interact, or be left without a police force sufficient to keep the peace and combat the pandemic of violent crime plaguing the City. . . .
Cook County Circuit Judge Cecilia Horan ruled there was potential irreparable harm if local Fraternal Order of Police President John Catanzara persisted in making such statements. City attorneys argued they were tantamount to him advocating “sedition” and “anarchy” because he was directing members to disobey an order from their superiors.https://www.chicagotribune.com/news/breaking/ct-fop-john-catanzara-vaccine-mandate-20211015-egsrqzbzvzefrk4thcbxfqwpxi-story.html
The City of Chicago's litigation Complaint requesting injunction against discouraging COVID vaccine mandate requirements is here:
https://news.wttw.com/sites/default/files/article/file-attachments/1%202021-10-14%20Verified%20Complaint%20(FOP).pdf
Excerpt:
If Catanzara and the FOP are allowed to continue with these extortionate demands ... the City will be faced with an unlawful and untenable Hobson’s Choice: either exempt the FOP membership from complying with reasonable and necessary directives needed to combat the COVID-19 pandemic and thereby jeopardize the health and safety of both CPD employees and citizens with whom they interact, or be left without a police force sufficient to keep the peace and combat the pandemic of violent crime plaguing the City. . . .
Legislation to bar internet companies from favoring their own products on their platforms is gaining more support, in what could be a potential threat to the business models of tech giants like Amazon.com Inc. and Apple Inc.
Bipartisan Senate legislation set to be unveiled on Thursday would prohibit dominant platforms from favoring their own products or services, a practice known as self-preferencing. It would also bar these dominant platforms from discriminating among business users in a way that materially harms competition.
In particular, the bill would prohibit a range of practices that are harmful to businesses and consumers, such as requiring a business to buy a dominant platform’s goods or services in exchange for preferred placement; misusing a business’s data in order to compete against it; biasing search results in favor of the dominant firm; and unfairly preventing another business’s product from inter-operating with the dominant platform.
The House Judiciary Committee passed a similar bill earlier this year, although in some respects the Senate bill would be somewhat tougher.
The Senate bill is being sponsored by Sens. Amy Klobuchar (D., Minn.), the chairwoman of the Senate antitrust subcommittee, and Chuck
Grassley of Iowa, the Judiciary Committee’s top Republican.
Excerpt from WSJ [paywall] Effort to Bar Tech Companies From ‘Self-Preferencing’ Gains Traction - WSJhttps://www.wsj.com/articles/effort-to-bar-tech-companies-from-self-preferencing-gains-traction-11634202000?cx_testId=3&cx_testVariant=cx_2&cx_artPos=3&mod=WTRN#cxrecs_s
An excerpt from the House version of the bill follows [https://www.congress.gov/bill/117th-congress/house-bill/3816/text?r=43&s=1]:
SECTION 1. SHORT TITLE.
This Act may be cited as the “American Choice and Innovation Online Act”.
SEC. 2. UNLAWFUL DISCRIMINATORY CONDUCT.
(a) Violation.—It shall be unlawful for a person operating a covered platform, in or affecting commerce, to engage in any conduct in connection with the operation of the covered platform that--
(1) advantages the covered platform operator’s own products, services, or lines of business over those of another business user;
(2) excludes or disadvantages the products, services, or lines of business of another business user relative to the covered platform operator’s own products, services, or lines of business; or
(3) discriminates among similarly situated business users.
(b) Other Discriminatory Conduct.—It shall be unlawful for a person operating a covered platform, in or affecting commerce, to--
(1) restrict or impede the capacity of a business user to access or interoperate with the same platform, operating system, hardware and software features that are available to the covered platform operator’s own products, services, or lines of business;
(2) condition access to the covered platform or preferred status or placement on the covered platform on the purchase or use of other products or services offered by the covered platform operator;
(3) use non-public data obtained from or generated on the platform by the activities of a business user or its customers that is generated through an interaction with the business user’s products or services to offer or support the offering of the covered platform operator’s own products or services;
(4) restrict or impede a business user from accessing data generated on the platform by the activities of the business user or its customers through an interaction with the business user’s products or services, such as contractual or technical restrictions that prevent the portability of such data by the business user to other systems or applications;
(5) restrict or impede covered platform users from un-installing software applications that have been preinstalled on the covered platform or changing default settings that direct or steer covered platform users to products or services offered by the covered platform operator;
(6) restrict or impede businesses users from communicating information or providing hyperlinks on the covered platform to covered platform users to facilitate business transactions;
(7) in connection with any user interfaces, including search or ranking functionality offered by the covered platform, treat the covered platform operator’s own products, services, or lines of business more favorably than those of another business user;
(8) interfere or restrict a business user’s pricing of its goods or services;
(9) restrict or impede a business user, or a business user’s customers or users, from interoperating or connecting to any product or service; and
(10) retaliate against any business user or covered platform user that raises concerns with any law enforcement authority about actual or potential violations of State or Federal law.
(c) Affirmative Defense.--
(1) IN GENERAL.—Subsection (a) and (b) shall not apply if the defendant establishes by clear and convincing evidence that the conduct described in subsections (a) or (b)--
(A) would not result in harm to the competitive process by restricting or impeding legitimate activity by business users; or
(B) was narrowly tailored, could not be achieved through a less discriminatory means, was nonpretextual, and was necessary to--
(i) prevent a violation of, or comply with, Federal or State law; or
(ii) protect user privacy or other non-public data.
Bipartisan Senate legislation set to be unveiled on Thursday would prohibit dominant platforms from favoring their own products or services, a practice known as self-preferencing. It would also bar these dominant platforms from discriminating among business users in a way that materially harms competition.
In particular, the bill would prohibit a range of practices that are harmful to businesses and consumers, such as requiring a business to buy a dominant platform’s goods or services in exchange for preferred placement; misusing a business’s data in order to compete against it; biasing search results in favor of the dominant firm; and unfairly preventing another business’s product from inter-operating with the dominant platform.
The House Judiciary Committee passed a similar bill earlier this year, although in some respects the Senate bill would be somewhat tougher.
The Senate bill is being sponsored by Sens. Amy Klobuchar (D., Minn.), the chairwoman of the Senate antitrust subcommittee, and Chuck
Grassley of Iowa, the Judiciary Committee’s top Republican.
Excerpt from WSJ [paywall] Effort to Bar Tech Companies From ‘Self-Preferencing’ Gains Traction - WSJhttps://www.wsj.com/articles/effort-to-bar-tech-companies-from-self-preferencing-gains-traction-11634202000?cx_testId=3&cx_testVariant=cx_2&cx_artPos=3&mod=WTRN#cxrecs_s
An excerpt from the House version of the bill follows [https://www.congress.gov/bill/117th-congress/house-bill/3816/text?r=43&s=1]:
SECTION 1. SHORT TITLE.
This Act may be cited as the “American Choice and Innovation Online Act”.
SEC. 2. UNLAWFUL DISCRIMINATORY CONDUCT.
(a) Violation.—It shall be unlawful for a person operating a covered platform, in or affecting commerce, to engage in any conduct in connection with the operation of the covered platform that--
(1) advantages the covered platform operator’s own products, services, or lines of business over those of another business user;
(2) excludes or disadvantages the products, services, or lines of business of another business user relative to the covered platform operator’s own products, services, or lines of business; or
(3) discriminates among similarly situated business users.
(b) Other Discriminatory Conduct.—It shall be unlawful for a person operating a covered platform, in or affecting commerce, to--
(1) restrict or impede the capacity of a business user to access or interoperate with the same platform, operating system, hardware and software features that are available to the covered platform operator’s own products, services, or lines of business;
(2) condition access to the covered platform or preferred status or placement on the covered platform on the purchase or use of other products or services offered by the covered platform operator;
(3) use non-public data obtained from or generated on the platform by the activities of a business user or its customers that is generated through an interaction with the business user’s products or services to offer or support the offering of the covered platform operator’s own products or services;
(4) restrict or impede a business user from accessing data generated on the platform by the activities of the business user or its customers through an interaction with the business user’s products or services, such as contractual or technical restrictions that prevent the portability of such data by the business user to other systems or applications;
(5) restrict or impede covered platform users from un-installing software applications that have been preinstalled on the covered platform or changing default settings that direct or steer covered platform users to products or services offered by the covered platform operator;
(6) restrict or impede businesses users from communicating information or providing hyperlinks on the covered platform to covered platform users to facilitate business transactions;
(7) in connection with any user interfaces, including search or ranking functionality offered by the covered platform, treat the covered platform operator’s own products, services, or lines of business more favorably than those of another business user;
(8) interfere or restrict a business user’s pricing of its goods or services;
(9) restrict or impede a business user, or a business user’s customers or users, from interoperating or connecting to any product or service; and
(10) retaliate against any business user or covered platform user that raises concerns with any law enforcement authority about actual or potential violations of State or Federal law.
(c) Affirmative Defense.--
(1) IN GENERAL.—Subsection (a) and (b) shall not apply if the defendant establishes by clear and convincing evidence that the conduct described in subsections (a) or (b)--
(A) would not result in harm to the competitive process by restricting or impeding legitimate activity by business users; or
(B) was narrowly tailored, could not be achieved through a less discriminatory means, was nonpretextual, and was necessary to--
(i) prevent a violation of, or comply with, Federal or State law; or
(ii) protect user privacy or other non-public data.
_______________
Last July, the Senate Commerce Commottee issued a press release which anticipated the scheduling disaster that hit Southwest Air this past weekend. The press release complained that the airlines had not applied the taxpayer funds given to them to maintain an effective workforce. The press release follows:
As Workforce Shortages Force Flight Cancellations, Delays, and Passenger Frustra... (senate.gov)As Workforce Shortages Force Flight Cancellations, Delays, and Passenger Frustrations, Chair Cantwell Calls on Airlines for AnswersAs Workforce Shortages Force Flight Cancellations, Delays, and Passenger Frustra... (senate.gov) https://www.commerce.senate.gov/2021/7/as-workforce-shortages-force-flight-cancellations-delays-and-passenger-frustrations-chair-cantwell-calls-on-airlines-for-answers
A headline in the Senate Commerce Committee press release says:
An excerpt from the letters sent to several airlines, including Southwest Air, which cancelled many flights last weekend:
I am deeply concerned by recent reports highlighting [Airline] workforce shortages that have caused flight cancellations and generated delays for passengers. These shortages come in the wake of unprecedented federal funding that Congress appropriated, at the airlines’ request, to support the airline industry during the COVID-19 pandemic. Congress issued this funding with the express purpose of keeping the workforce on payroll to ensure an easier ramp up when air travel returned. I am concerned that, at best, [Airline] poorly managed its marketing of flights and workforce as more people are traveling, and, at worst, it failed to meet the intent of tax payer funding and prepare for the surge in travel that we are now witnessing. In light of reported airline cancellations and delays, and recognizing that [Airline] was one of the largest recipients of payroll support funding, I write to request information regarding [Airline] efforts to comply with the terms of its payroll support agreements with the federal government as well as the origin of recent workforce shortages and the subsequent effect on passengers.
Congress recognized the need to ensure that airline workers, including pilots, flight attendants, baggage crews, customer service professionals, contractors, and others could retain their jobs and, in turn, keep the airline industry operating safely for the American public. To accomplish this, Congress created the Payroll Support Program (“PSP”) to protect the jobs of thousands of airline workers, ensure that essential travel would continue uninterrupted, and guarantee that the airline industry would remain viable not just for passenger flight, but for cargo flight as well. At the urging of industry, the PSP was initially created by the CARES Act to help the industry as air traffic sharply dropped and was subsequently extended by the 2021 Consolidated Appropriations Act and the American Rescue Plan Act, and provided $63 billion to passenger carriers, cargo carriers, and contractors, including $54 billion in relief to passenger airlines. Under the CARES Act, to further assist the airline industry, Congress also provided up to $46 billion in loans, including up to $25 billion for passenger air carriers.
In exchange for funding, aviation companies were required to refrain from conducting involuntary layoffs, furloughs, or instituting pay or benefit reductions. These companies were also required to file periodic reports with Treasury, documenting, among other things, the amount of PSP funds expended and any changes in employee headcount each quarter.[1]
Over the past year, there have been reports of U.S. airlines seeking to reduce the size of their workforce by encouraging employees to accept early retirements, voluntary furloughs, buyouts, and leaves of absence. This is in addition to reports projecting an impending, massive pilot shortage. As passenger travel has boomed in recent weeks, new reports also suggest that some airlines are now unprepared to meet the increased demand that they scheduled for, and have resorted to delaying or canceling flights. This reported workforce shortage runs counter to the objective and spirit of the PSP, which was to enable airlines to endure the pandemic and keep employees on payroll so that the industry was positioned to capture a rebound in demand. Additionally, these disruptions in air travel have harmed U.S. consumers just as the American economy is rebounding, and the existing airline workforce is being placed under immense pressure to meet demand.
To assist the Committee in examining these issues, please provide written responses to the following questions by July 30, 2021:
Last July, the Senate Commerce Commottee issued a press release which anticipated the scheduling disaster that hit Southwest Air this past weekend. The press release complained that the airlines had not applied the taxpayer funds given to them to maintain an effective workforce. The press release follows:
As Workforce Shortages Force Flight Cancellations, Delays, and Passenger Frustra... (senate.gov)As Workforce Shortages Force Flight Cancellations, Delays, and Passenger Frustrations, Chair Cantwell Calls on Airlines for AnswersAs Workforce Shortages Force Flight Cancellations, Delays, and Passenger Frustra... (senate.gov) https://www.commerce.senate.gov/2021/7/as-workforce-shortages-force-flight-cancellations-delays-and-passenger-frustrations-chair-cantwell-calls-on-airlines-for-answers
A headline in the Senate Commerce Committee press release says:
An excerpt from the letters sent to several airlines, including Southwest Air, which cancelled many flights last weekend:
I am deeply concerned by recent reports highlighting [Airline] workforce shortages that have caused flight cancellations and generated delays for passengers. These shortages come in the wake of unprecedented federal funding that Congress appropriated, at the airlines’ request, to support the airline industry during the COVID-19 pandemic. Congress issued this funding with the express purpose of keeping the workforce on payroll to ensure an easier ramp up when air travel returned. I am concerned that, at best, [Airline] poorly managed its marketing of flights and workforce as more people are traveling, and, at worst, it failed to meet the intent of tax payer funding and prepare for the surge in travel that we are now witnessing. In light of reported airline cancellations and delays, and recognizing that [Airline] was one of the largest recipients of payroll support funding, I write to request information regarding [Airline] efforts to comply with the terms of its payroll support agreements with the federal government as well as the origin of recent workforce shortages and the subsequent effect on passengers.
Congress recognized the need to ensure that airline workers, including pilots, flight attendants, baggage crews, customer service professionals, contractors, and others could retain their jobs and, in turn, keep the airline industry operating safely for the American public. To accomplish this, Congress created the Payroll Support Program (“PSP”) to protect the jobs of thousands of airline workers, ensure that essential travel would continue uninterrupted, and guarantee that the airline industry would remain viable not just for passenger flight, but for cargo flight as well. At the urging of industry, the PSP was initially created by the CARES Act to help the industry as air traffic sharply dropped and was subsequently extended by the 2021 Consolidated Appropriations Act and the American Rescue Plan Act, and provided $63 billion to passenger carriers, cargo carriers, and contractors, including $54 billion in relief to passenger airlines. Under the CARES Act, to further assist the airline industry, Congress also provided up to $46 billion in loans, including up to $25 billion for passenger air carriers.
In exchange for funding, aviation companies were required to refrain from conducting involuntary layoffs, furloughs, or instituting pay or benefit reductions. These companies were also required to file periodic reports with Treasury, documenting, among other things, the amount of PSP funds expended and any changes in employee headcount each quarter.[1]
Over the past year, there have been reports of U.S. airlines seeking to reduce the size of their workforce by encouraging employees to accept early retirements, voluntary furloughs, buyouts, and leaves of absence. This is in addition to reports projecting an impending, massive pilot shortage. As passenger travel has boomed in recent weeks, new reports also suggest that some airlines are now unprepared to meet the increased demand that they scheduled for, and have resorted to delaying or canceling flights. This reported workforce shortage runs counter to the objective and spirit of the PSP, which was to enable airlines to endure the pandemic and keep employees on payroll so that the industry was positioned to capture a rebound in demand. Additionally, these disruptions in air travel have harmed U.S. consumers just as the American economy is rebounding, and the existing airline workforce is being placed under immense pressure to meet demand.
To assist the Committee in examining these issues, please provide written responses to the following questions by July 30, 2021:
Austin Real Estate Firm Files Antitrust Suit Against Zillow
There is a new antitrust lawsuit against Zillow, reported Axios.
Austin-based REX, a tech-based real estate broker, alleges Zillow unfairly marginalized its listings. REX’s listings, along with others that don’t list with a realtor — such as sale by owner — are now found on an obscure “other listings” tab on the Zillow website, rather than the default tab.
Zillow officials say they are complying with National Association of Realtors rules that call for the separation of agent-listed homes from those not represented by agents. The NAR is also a defendant in the REX lawsuit.
The dispute stems from Zillow’s recent move to go beyond listing homes for sale and create a brokerage to hire agents itself. The company announced last fall it would employ agents for its house-flipping service Zillow Offers in several states and would join the National Association of Realtors.
As part of that move, Zillow changed the way it collects listings of houses for sale. Zillow now gathers listings directly from multiple listing services, the databases of listings provided by real-estate brokers. (The Northwest Multiple Listing Service, for example, catalogues listings across more than two dozen counties in Washington.)
Along with that came the change that hit Rex: Zillow now categorizes listings under two tabs when people search for homes for sale: “agent listings” (where homes listed on multiple listing services show up) and “other listings.” To enforce National Association of Realtors rules, certain multiple listing services require that separation, according to the complaint. See https://www.axios.com/local/austin/2021/10/11/austin-real-estate-tech-zillow-rex-lawsuit
Source:Axios
There is a new antitrust lawsuit against Zillow, reported Axios.
Austin-based REX, a tech-based real estate broker, alleges Zillow unfairly marginalized its listings. REX’s listings, along with others that don’t list with a realtor — such as sale by owner — are now found on an obscure “other listings” tab on the Zillow website, rather than the default tab.
Zillow officials say they are complying with National Association of Realtors rules that call for the separation of agent-listed homes from those not represented by agents. The NAR is also a defendant in the REX lawsuit.
The dispute stems from Zillow’s recent move to go beyond listing homes for sale and create a brokerage to hire agents itself. The company announced last fall it would employ agents for its house-flipping service Zillow Offers in several states and would join the National Association of Realtors.
As part of that move, Zillow changed the way it collects listings of houses for sale. Zillow now gathers listings directly from multiple listing services, the databases of listings provided by real-estate brokers. (The Northwest Multiple Listing Service, for example, catalogues listings across more than two dozen counties in Washington.)
Along with that came the change that hit Rex: Zillow now categorizes listings under two tabs when people search for homes for sale: “agent listings” (where homes listed on multiple listing services show up) and “other listings.” To enforce National Association of Realtors rules, certain multiple listing services require that separation, according to the complaint. See https://www.axios.com/local/austin/2021/10/11/austin-real-estate-tech-zillow-rex-lawsuit
Source:Axios
Bonus: SNL news summary 10-16-2021
https://youtu.be/QQP_IMxtfBM
https://youtu.be/QQP_IMxtfBM
Is China Shooting Its Private Entrepreneurs in the Foot (Or Worse)?
by Don Allen Resnikoff
Even advocates of aggressive business regulation in the U.S. often recognize that excessive government restraints hobble entrepreneurial innovation. Former USDOJ Antitrust chief Delharim observed that while certain kinds of regulation are necessary, regulation was never intended to be without appropriate limits. Delharim pointed out that Thomas Jefferson said that "a wise and frugal government, which shall restrain men from injuring one another, shall leave them otherwise free to regulate their own pursuits of industry and improvement, and shall not take from the mouth of labor the bread it has earned." [Public Roundtable on Anticompetitive Regulations Transcript Part One (justice.gov) https://www.justice.gov/atr/page/file/1073936/download]
It is hardly surprising that the Chinese government, which has Communist ideological roots, would depart from the advice of Thomas Jefferson and seek to control private Chinese companies in a way that risks seriously undermining those companies.
It is surprising that some U.S. commenters, including a prestigious New York Times columnist, suggest that the Chinese government’s recent crackdown on its private entrepreneurs will make them more threatening competitors, so much so that antitrust enforcement against companies like Facebook should be relaxed: “Mark Zuckerberg was right. . . .[he pointed to] the growing dangers from China across the digital landscape. He argued that [U.S.] tech companies like his needed to be large, if only to fend off challenges from the Asian giant and its ever-more-powerful government-controlled companies.” [https://www.nytimes.com/2021/07/20/opinion/china-xi-didi-biden-facebook.html]
Japan’s experience with keiretsu and government control of business in the 1970s and 1980s suggests that excessive government control undermines private entrepreneurs. One Japanese observer says that during those years “the Japanese economy caught up with other industrial economies in the world. . . . Japanese business and household sectors should have changed their behavior from the one based on collective actions to the more autonomous one of coping with their own risks under a more competitive environment. . . . .Collective business practices and government interventions largely remained.” The effects on the Japanese economy were dire. See https://www.gsid.nagoya-u.ac.jp/sotsubo/Postwar_Development_of_the_Japanese%20Economy(Otsubo_NagoyaU).pdf
There are important parallels between Japan’s earlier strategies and China’s current strategies for economic growth, despite obvious differences such as different population size and political ideology. In both situations governments’ political influence over business activities is very important. Growth is important as a government goal. In Japan’s earlier strategy and China’s recent strategy there is deliberate targeting of specific industry sectors for growth.
The experience in Japan suggests that the time came when the Japanese government needed to step out of the way and let successful private companies mature and succeed and let weaker companies fail. Instead, Japanese government bureaucrats continued to protect weaker companies.
The question for China is the extent to which it will allow government bureaucrats to meddle in the business of private companies in a way that suits perceived political purposes, but interferes with the operation of an open commercial market that rewards strong companies. If there is too much meddling by government bureaucrats,, China may face a decline for its companies in a manner similar to Japan.
It is possible to argue that because China has a non-democratic government its leaders may be in a position to avoid Japan’s error of failing to release the entrepreneurial energy of its successful companies. But that argument ignores the strong bent of Chinese bureaucrats to exercise political control over business, to the possible great detriment to those businesses. (See Benjamin Bracher’s perceptive student honors thesis written years ago and comparing Japan and China economies, at https://www.southwestern.edu/live/news/9466-benjamin-bracher-13-the-economic-rise-of-japan
What will happen after the Chinese government’s current crackdown on its private entrepreneurs is a matter of speculation, of course. I see merit in the observation that while the Chinese government’s goal is to fix structural problems, like excess debt and inequality, and generate more balanced growth, “economists warn that authoritarian governments have a shaky record with this type of transformation.” See The End of a ‘Gilded Age’: China Is Bringing Business to Heel - The New York Times (nytimes.com) https://www.nytimes.com/2021/10/05/business/china-businesses.html
The recent comments of Raghuram G. Rajan, professor of economics, are in the same vein. He observes that “[B]ecause China’s past cavalier treatment of intellectual property rights has made advanced economies increasingly wary of sharing research and know-how, China now must create more of its own IP. And while it has universities and sophisticated private corporations that can do this, the key question is whether these entities will have incentive to innovate freely despite the recent crackdown. From https://www.project-syndicate.org/commentary/china-risky-business-crackdown-common-prosperity-campaign-by-raghuram-rajan-2021-_2021&utm_medium=email&utm_term=0_73bad5b7d8-38b81a0552-107280365&mc_cid=38b81a0552&mc_eid=1ddc269de8}
So, it may be that the Chinese government policy of cracking down on its private entrepreneurs will shoot the Chinese economy in the foot, or worse. The implications for U.S. economic policy are complex, but appear to include cautions about the U.S. countering the Chinese by emulating a misguided policy of authoritarian government controls over business.
by Don Allen Resnikoff
Even advocates of aggressive business regulation in the U.S. often recognize that excessive government restraints hobble entrepreneurial innovation. Former USDOJ Antitrust chief Delharim observed that while certain kinds of regulation are necessary, regulation was never intended to be without appropriate limits. Delharim pointed out that Thomas Jefferson said that "a wise and frugal government, which shall restrain men from injuring one another, shall leave them otherwise free to regulate their own pursuits of industry and improvement, and shall not take from the mouth of labor the bread it has earned." [Public Roundtable on Anticompetitive Regulations Transcript Part One (justice.gov) https://www.justice.gov/atr/page/file/1073936/download]
It is hardly surprising that the Chinese government, which has Communist ideological roots, would depart from the advice of Thomas Jefferson and seek to control private Chinese companies in a way that risks seriously undermining those companies.
It is surprising that some U.S. commenters, including a prestigious New York Times columnist, suggest that the Chinese government’s recent crackdown on its private entrepreneurs will make them more threatening competitors, so much so that antitrust enforcement against companies like Facebook should be relaxed: “Mark Zuckerberg was right. . . .[he pointed to] the growing dangers from China across the digital landscape. He argued that [U.S.] tech companies like his needed to be large, if only to fend off challenges from the Asian giant and its ever-more-powerful government-controlled companies.” [https://www.nytimes.com/2021/07/20/opinion/china-xi-didi-biden-facebook.html]
Japan’s experience with keiretsu and government control of business in the 1970s and 1980s suggests that excessive government control undermines private entrepreneurs. One Japanese observer says that during those years “the Japanese economy caught up with other industrial economies in the world. . . . Japanese business and household sectors should have changed their behavior from the one based on collective actions to the more autonomous one of coping with their own risks under a more competitive environment. . . . .Collective business practices and government interventions largely remained.” The effects on the Japanese economy were dire. See https://www.gsid.nagoya-u.ac.jp/sotsubo/Postwar_Development_of_the_Japanese%20Economy(Otsubo_NagoyaU).pdf
There are important parallels between Japan’s earlier strategies and China’s current strategies for economic growth, despite obvious differences such as different population size and political ideology. In both situations governments’ political influence over business activities is very important. Growth is important as a government goal. In Japan’s earlier strategy and China’s recent strategy there is deliberate targeting of specific industry sectors for growth.
The experience in Japan suggests that the time came when the Japanese government needed to step out of the way and let successful private companies mature and succeed and let weaker companies fail. Instead, Japanese government bureaucrats continued to protect weaker companies.
The question for China is the extent to which it will allow government bureaucrats to meddle in the business of private companies in a way that suits perceived political purposes, but interferes with the operation of an open commercial market that rewards strong companies. If there is too much meddling by government bureaucrats,, China may face a decline for its companies in a manner similar to Japan.
It is possible to argue that because China has a non-democratic government its leaders may be in a position to avoid Japan’s error of failing to release the entrepreneurial energy of its successful companies. But that argument ignores the strong bent of Chinese bureaucrats to exercise political control over business, to the possible great detriment to those businesses. (See Benjamin Bracher’s perceptive student honors thesis written years ago and comparing Japan and China economies, at https://www.southwestern.edu/live/news/9466-benjamin-bracher-13-the-economic-rise-of-japan
What will happen after the Chinese government’s current crackdown on its private entrepreneurs is a matter of speculation, of course. I see merit in the observation that while the Chinese government’s goal is to fix structural problems, like excess debt and inequality, and generate more balanced growth, “economists warn that authoritarian governments have a shaky record with this type of transformation.” See The End of a ‘Gilded Age’: China Is Bringing Business to Heel - The New York Times (nytimes.com) https://www.nytimes.com/2021/10/05/business/china-businesses.html
The recent comments of Raghuram G. Rajan, professor of economics, are in the same vein. He observes that “[B]ecause China’s past cavalier treatment of intellectual property rights has made advanced economies increasingly wary of sharing research and know-how, China now must create more of its own IP. And while it has universities and sophisticated private corporations that can do this, the key question is whether these entities will have incentive to innovate freely despite the recent crackdown. From https://www.project-syndicate.org/commentary/china-risky-business-crackdown-common-prosperity-campaign-by-raghuram-rajan-2021-_2021&utm_medium=email&utm_term=0_73bad5b7d8-38b81a0552-107280365&mc_cid=38b81a0552&mc_eid=1ddc269de8}
So, it may be that the Chinese government policy of cracking down on its private entrepreneurs will shoot the Chinese economy in the foot, or worse. The implications for U.S. economic policy are complex, but appear to include cautions about the U.S. countering the Chinese by emulating a misguided policy of authoritarian government controls over business.
States Allowed To Seek Disgorgement (Money Payment) Order In Martin Shkreli Antitrust Case-
New York and other states will be allowed to seek a nationwide disgorgement (money payment) order if they win at trial on their claim that Vyera Pharmaceuticals and its former chief executive Martin Shkreli participated in an anticompetitive scheme to maintain a price boost for the life-saving drug Daraprim.
US District Judge Denise Cote in Manhattan federal court said in her ruling on Friday, September 24, that New York law permitted the state to move to recoup alleged ill-gotten corporate gains nationally. The Cote decision is at https://fingfx.thomsonreuters.com/gfx/legaldocs/zdvxodjgopx/FTC%20et%20al%20v%20Vyera%20Pharmaceuticals%20et%20al%20decision%20(1).pdf
New York and other states will be allowed to seek a nationwide disgorgement (money payment) order if they win at trial on their claim that Vyera Pharmaceuticals and its former chief executive Martin Shkreli participated in an anticompetitive scheme to maintain a price boost for the life-saving drug Daraprim.
US District Judge Denise Cote in Manhattan federal court said in her ruling on Friday, September 24, that New York law permitted the state to move to recoup alleged ill-gotten corporate gains nationally. The Cote decision is at https://fingfx.thomsonreuters.com/gfx/legaldocs/zdvxodjgopx/FTC%20et%20al%20v%20Vyera%20Pharmaceuticals%20et%20al%20decision%20(1).pdf
Federal Trade Commission chief Lina Khan is resurrecting a review of Zillow Group's (Z, ZG) $500 million acquisition of ShowingTime -
Zillow had come to the deal in February for the online scheduling platform for real estate showings.
In the Spring, FTC lawyers told the companies they had no concerns about it. But now the FTC is asking for more information.
https://seekingalpha.com/news/3660803-zillow-acquiring-home-showing-platfor-showingtime-for-500m
Zillow had come to the deal in February for the online scheduling platform for real estate showings.
In the Spring, FTC lawyers told the companies they had no concerns about it. But now the FTC is asking for more information.
https://seekingalpha.com/news/3660803-zillow-acquiring-home-showing-platfor-showingtime-for-500m
Are the Authors of Consumer Reviews Protected by Anti-SLAPP Laws?
EXCERPT FROM Public Citizen Consumer Law & Policy Blog
Posted: 01 Oct 2021 09:02 AM PDT
by Paul Alan Levy
Today we entered an important case that will determine whether New York’s new and improved anti-SLAPP law protects the authors of consumer reviews against being sued for defamation when they reveal publicly that they were less than thrilled with a business’s services or products.
The case arose from the horrible experience of the Sproule family in early March 2020, when they traveled from their home in the Chicago suburbs to Sarah Sproule’s hometown, Wantagh, New York, to attend her father’s funeral. They brought along their daughter’s brand-new puppy (her Christmas present!) and took him in for grooming at a local business, VIP Pet Grooming Studio. The precise course of events is disputed, but the bottom line is that the grooming was interrupted because the puppy reacted badly; water accumulated in the dog’s lungs; and after two days on a ventilator at a local animal hospital, at a cost of more than $10,000, the dog had to be put down.
Compounding the family’s misery, the grooming outfit refused to take any responsibility for what had happened. So Robert Sproule posted reviews on both Yelp and Google, and both he and his wife sued the grooming company for negligence once the courts reopened as the pandemic eased. On the same day that it responded to the negligence complaint, VIP Pet Grooming sued for defamation. In a particularly sleazy move, the company sued both Robert and Sarah Sproule, even though only Robert Sproule had posted the reviews. Was this punishment for Sarah Sproule’s having sued for negligence? Was it just extra pressure on the family as a whole? VIP's lawyer has ignored that question so far.
Last year, New York updated its antiSLAPP law by expanding coverage from speech about “public permittees and licensees” to “speech on an issue of public interest,” as well as by toughening both the standards for justifying SLAPP suits and the remedies afforded to the victims of SLAPPs. Curiously enough, the defamation suit was filed a mere eight days before the effective date of the new law; it was served four days before the effective date, potentially raising the question whether the new law would be held to be applicable to cases still pending when the law came into effect. (all the courts that have addressed that issue so far have found that anti-SLAPP amendments do apply). But the trial judge denied the motion to dismiss on the ground that, because the consumer reviews addressed only a single problem encountered with a single local business, it was a review about a “private beef” rather than an issue of public interest.
This holding threatens all consumers and, indeed, most people who write publicly about the actions of companies that affect them. After all, most people post reviews only about incidents that affect them, and usually they write about their own particular experiences. Does that make these postings “private beefs”? And the holding raises a problem far beyond New York because anti-SLAPP laws in many states have similar language defining the scope of the speech protected. We took the case, therefore, to establish the principle that, when a consumer speaks up about his or her experiences with a single company, the common interest of all consumers in learning about corporate wrongdoing is sufficient to make the review a matter of public interest within the meaning of anti-SLAPP laws. And the legal issues are squarely presented on this appeal because the plaintiff pet grooming business chose to stand on its complaint, along with its argument that the anti-SLAPP law did not apply, rather than submitting any affidavits purporting to show that the review contained false statements of fact.
Our brief draws both on the language of the New York anti-SLAPP law, which is particularly useful because it defines “public interest” as including everything but “a purely private matter,” but also on cases applying anti-SLAPP laws in other states as well as interpretations of “matter of public concern,”which is a common concept in First Amendment law that affects defamation law particularly but other kinds of controversies as well.
The appeal will likely be argued next year.
https://pubcit.typepad.com/clpblog/2021/10/are-the-authors-of-consumer-reviews-protected-by-anti-slapp-laws.html?utm_source=feedburner&utm_medium=email&utm_campaign=Feed%3A+ConsumerLawPolicyBlog+%28Consumer+Law+%26+Policy+Blog%29
EXCERPT FROM Public Citizen Consumer Law & Policy Blog
Posted: 01 Oct 2021 09:02 AM PDT
by Paul Alan Levy
Today we entered an important case that will determine whether New York’s new and improved anti-SLAPP law protects the authors of consumer reviews against being sued for defamation when they reveal publicly that they were less than thrilled with a business’s services or products.
The case arose from the horrible experience of the Sproule family in early March 2020, when they traveled from their home in the Chicago suburbs to Sarah Sproule’s hometown, Wantagh, New York, to attend her father’s funeral. They brought along their daughter’s brand-new puppy (her Christmas present!) and took him in for grooming at a local business, VIP Pet Grooming Studio. The precise course of events is disputed, but the bottom line is that the grooming was interrupted because the puppy reacted badly; water accumulated in the dog’s lungs; and after two days on a ventilator at a local animal hospital, at a cost of more than $10,000, the dog had to be put down.
Compounding the family’s misery, the grooming outfit refused to take any responsibility for what had happened. So Robert Sproule posted reviews on both Yelp and Google, and both he and his wife sued the grooming company for negligence once the courts reopened as the pandemic eased. On the same day that it responded to the negligence complaint, VIP Pet Grooming sued for defamation. In a particularly sleazy move, the company sued both Robert and Sarah Sproule, even though only Robert Sproule had posted the reviews. Was this punishment for Sarah Sproule’s having sued for negligence? Was it just extra pressure on the family as a whole? VIP's lawyer has ignored that question so far.
Last year, New York updated its antiSLAPP law by expanding coverage from speech about “public permittees and licensees” to “speech on an issue of public interest,” as well as by toughening both the standards for justifying SLAPP suits and the remedies afforded to the victims of SLAPPs. Curiously enough, the defamation suit was filed a mere eight days before the effective date of the new law; it was served four days before the effective date, potentially raising the question whether the new law would be held to be applicable to cases still pending when the law came into effect. (all the courts that have addressed that issue so far have found that anti-SLAPP amendments do apply). But the trial judge denied the motion to dismiss on the ground that, because the consumer reviews addressed only a single problem encountered with a single local business, it was a review about a “private beef” rather than an issue of public interest.
This holding threatens all consumers and, indeed, most people who write publicly about the actions of companies that affect them. After all, most people post reviews only about incidents that affect them, and usually they write about their own particular experiences. Does that make these postings “private beefs”? And the holding raises a problem far beyond New York because anti-SLAPP laws in many states have similar language defining the scope of the speech protected. We took the case, therefore, to establish the principle that, when a consumer speaks up about his or her experiences with a single company, the common interest of all consumers in learning about corporate wrongdoing is sufficient to make the review a matter of public interest within the meaning of anti-SLAPP laws. And the legal issues are squarely presented on this appeal because the plaintiff pet grooming business chose to stand on its complaint, along with its argument that the anti-SLAPP law did not apply, rather than submitting any affidavits purporting to show that the review contained false statements of fact.
Our brief draws both on the language of the New York anti-SLAPP law, which is particularly useful because it defines “public interest” as including everything but “a purely private matter,” but also on cases applying anti-SLAPP laws in other states as well as interpretations of “matter of public concern,”which is a common concept in First Amendment law that affects defamation law particularly but other kinds of controversies as well.
The appeal will likely be argued next year.
https://pubcit.typepad.com/clpblog/2021/10/are-the-authors-of-consumer-reviews-protected-by-anti-slapp-laws.html?utm_source=feedburner&utm_medium=email&utm_campaign=Feed%3A+ConsumerLawPolicyBlog+%28Consumer+Law+%26+Policy+Blog%29
SIRM: EEOC Guidance on when Employers can require COVID vaccination
An SIRM article explains:
As mandatory COVID-19 vaccines become more widespread, many employers are asking what they can do if workers refuse. Some employers are firing workers who won't take the vaccine and others are requiring unvaccinated employees to submit to weekly testing and take other safety precautions.
The Equal Employment Opportunity Commission (EEOC) has weighed in with guidance that answers some workplace vaccination questions. For example, the agency said that federal anti-discrimination laws don't prohibit employers from requiring all employees who physically enter the workplace to be vaccinated for COVID-19. Employers that encourage or require vaccinations, however, must comply with the Americans with Disabilities Act (ADA), Title VII of the Civil Rights Act of 1964 and other workplace laws, according to the EEOC.
Explanation is at the full SIRM article: https://www.shrm.org/resourcesandtools/legal-and-compliance/employment-law/pages/if-workers-refuse-a-covid-19-vaccination.aspx
An SIRM article explains:
As mandatory COVID-19 vaccines become more widespread, many employers are asking what they can do if workers refuse. Some employers are firing workers who won't take the vaccine and others are requiring unvaccinated employees to submit to weekly testing and take other safety precautions.
The Equal Employment Opportunity Commission (EEOC) has weighed in with guidance that answers some workplace vaccination questions. For example, the agency said that federal anti-discrimination laws don't prohibit employers from requiring all employees who physically enter the workplace to be vaccinated for COVID-19. Employers that encourage or require vaccinations, however, must comply with the Americans with Disabilities Act (ADA), Title VII of the Civil Rights Act of 1964 and other workplace laws, according to the EEOC.
Explanation is at the full SIRM article: https://www.shrm.org/resourcesandtools/legal-and-compliance/employment-law/pages/if-workers-refuse-a-covid-19-vaccination.aspx
Fed Corruption Maybe: Second Fed president leaves amid fallout from trading controversy
from article by Zachary Halaschak https://news.yahoo.com/second-fed-president-leaves-amid-204500090.html
Mon, September 27, 2021
Federal Reserve Bank of Dallas President Robert Kaplan announced his retirement from the central bank just hours after another top official at the central bank announced he was stepping down amid controversy over personal trades they made while on the job.
Kaplan, a former Goldman Sachs executive, announced his resignation on Monday, citing fallout from a series of trades he made last year while the Fed embarked upon an expansive asset-buying program. The resignation comes the same day that Federal Reserve Bank of Boston President Eric Rosengren, who was also facing public scrutiny, announced his retirement for health reasons.
“The Federal Reserve is approaching a critical point in our economic recovery as it deliberates the future path of monetary policy,” Kaplan said in a statement. “Unfortunately, the recent focus on my financial disclosure risks becoming a distraction to the Federal Reserve’s execution of that vital work.”
Kaplan reiterated that his personal trades did not violate Fed policies or the central bank’s ethical standards. His retirement from the central bank is effective on Oct. 8, and Rosengren will be departing the Fed on Friday.
***
Earlier this month, disclosures revealed that Kaplan executed high-value trades in large corporations such as Apple and Amazon.
The individual security holdings prompted Fed Chairman Jerome Powell to call for changes to the Fed’s rules during a press briefing last week. Powell said that the Fed has begun a “comprehensive review of the ethics rules around permissible financial holdings and activity by Fed officials.”
“We need to make changes, and we’re going to do that as a consequence of this,” the chairman said on Wednesday.
***
from article by Zachary Halaschak https://news.yahoo.com/second-fed-president-leaves-amid-204500090.html
Mon, September 27, 2021
Federal Reserve Bank of Dallas President Robert Kaplan announced his retirement from the central bank just hours after another top official at the central bank announced he was stepping down amid controversy over personal trades they made while on the job.
Kaplan, a former Goldman Sachs executive, announced his resignation on Monday, citing fallout from a series of trades he made last year while the Fed embarked upon an expansive asset-buying program. The resignation comes the same day that Federal Reserve Bank of Boston President Eric Rosengren, who was also facing public scrutiny, announced his retirement for health reasons.
“The Federal Reserve is approaching a critical point in our economic recovery as it deliberates the future path of monetary policy,” Kaplan said in a statement. “Unfortunately, the recent focus on my financial disclosure risks becoming a distraction to the Federal Reserve’s execution of that vital work.”
Kaplan reiterated that his personal trades did not violate Fed policies or the central bank’s ethical standards. His retirement from the central bank is effective on Oct. 8, and Rosengren will be departing the Fed on Friday.
***
Earlier this month, disclosures revealed that Kaplan executed high-value trades in large corporations such as Apple and Amazon.
The individual security holdings prompted Fed Chairman Jerome Powell to call for changes to the Fed’s rules during a press briefing last week. Powell said that the Fed has begun a “comprehensive review of the ethics rules around permissible financial holdings and activity by Fed officials.”
“We need to make changes, and we’re going to do that as a consequence of this,” the chairman said on Wednesday.
***
Auto seat safety bill now before Congress may be in peril
Recent news suggests that a bill to improve auto seat safety may currently be in jeopardy because of Congressional wrangling. The article below is from some weeks ago and discusses the merits of the propsed legislation.
From article By Megan Towey, Kris Van Cleave
Updated on: April 26, 2021 / 7:09 PM / CBS News
Following a series of CBS News reports that revealed potential safety dangers in vehicle seats, Senators Ed Markey and Richard Blumenthal will reintroduce legislation that would require a new strength standard.
"Seatback strength standards have not been substantially updated since 1967, allowing thousands to be injured and killed when their car's front seats collapse after a crash," Markey, a Democrat from Massachusetts, told CBS News. "That's why I'm reintroducing legislation to require the modernization of our seatback safety standards moving forward. We must end these entirely unacceptable and preventable tragedies."
The Modernizing Seatback Safety Act would require automakers and the National Highway Traffic Safety Administration to strengthen seat standards within two years.
In a series of stories that began airing in 2015, CBS News revealed that when hit from behind, car front seats may break and their occupants can be propelled – forcefully – into the rear seats where children usually sit.
CBS News identified more than 100 people, mostly children, who were severely injured or killed in alleged seatback failures over the past 30 years. The number is likely higher: In 2016, then-NHTSA administrator Mark Rosekind acknowledged that such crashes were not closely tracked.
Crash tests have shown the risks associated with seatback failures for decades, with problems existing in many different car makes and models. Auto safety experts blame a seatback safety standard that dates back to the 1960s.
The cost to fix the problem could be small - as little as on a dollar or so per seat, according to a deposition with an auto company engineer reviewed by CBS News.
"It is the moral obligation of a society to use available, affordable, science-based solutions to limit risks that can kill or severely injure unsuspecting individuals," said Jason Levine, executive director of the Center for Auto Safety. "The Modernizing Seatback Safety Act can finally bring closure to an embarrassing half-century of an unwillingness to upgrade a safety standard that can be passed with the average dining room chair."
***
The measure on seat strength is one of four auto-safety bills Markey and Blumenthal are introducing Monday.
One would offer grants to states to use for notifying registered vehicle owners of safety recalls and establish annual report cards on how effectively automakers are completing open recalls. Another would require automakers to provide more information about incidents involving death or serious injuries and then have NHTSA make that data available to the public in a user-friendly format.
The third would require the Department of Transportation to study how driver-monitoring systems can prevent distraction and misuse of advanced driver assistance systems – including Tesla's Autopilot – and calls for regulations requiring the installation of driver-monitoring systems based on the agency's findings.
The Senators hope to include the package in President Biden's infrastructure bill.
See https://www.cbsnews.com/news/seatback-strength-legislation-reintroduced-after-cbs-news-investigation/
Recent news suggests that a bill to improve auto seat safety may currently be in jeopardy because of Congressional wrangling. The article below is from some weeks ago and discusses the merits of the propsed legislation.
From article By Megan Towey, Kris Van Cleave
Updated on: April 26, 2021 / 7:09 PM / CBS News
Following a series of CBS News reports that revealed potential safety dangers in vehicle seats, Senators Ed Markey and Richard Blumenthal will reintroduce legislation that would require a new strength standard.
"Seatback strength standards have not been substantially updated since 1967, allowing thousands to be injured and killed when their car's front seats collapse after a crash," Markey, a Democrat from Massachusetts, told CBS News. "That's why I'm reintroducing legislation to require the modernization of our seatback safety standards moving forward. We must end these entirely unacceptable and preventable tragedies."
The Modernizing Seatback Safety Act would require automakers and the National Highway Traffic Safety Administration to strengthen seat standards within two years.
In a series of stories that began airing in 2015, CBS News revealed that when hit from behind, car front seats may break and their occupants can be propelled – forcefully – into the rear seats where children usually sit.
CBS News identified more than 100 people, mostly children, who were severely injured or killed in alleged seatback failures over the past 30 years. The number is likely higher: In 2016, then-NHTSA administrator Mark Rosekind acknowledged that such crashes were not closely tracked.
Crash tests have shown the risks associated with seatback failures for decades, with problems existing in many different car makes and models. Auto safety experts blame a seatback safety standard that dates back to the 1960s.
The cost to fix the problem could be small - as little as on a dollar or so per seat, according to a deposition with an auto company engineer reviewed by CBS News.
"It is the moral obligation of a society to use available, affordable, science-based solutions to limit risks that can kill or severely injure unsuspecting individuals," said Jason Levine, executive director of the Center for Auto Safety. "The Modernizing Seatback Safety Act can finally bring closure to an embarrassing half-century of an unwillingness to upgrade a safety standard that can be passed with the average dining room chair."
***
The measure on seat strength is one of four auto-safety bills Markey and Blumenthal are introducing Monday.
One would offer grants to states to use for notifying registered vehicle owners of safety recalls and establish annual report cards on how effectively automakers are completing open recalls. Another would require automakers to provide more information about incidents involving death or serious injuries and then have NHTSA make that data available to the public in a user-friendly format.
The third would require the Department of Transportation to study how driver-monitoring systems can prevent distraction and misuse of advanced driver assistance systems – including Tesla's Autopilot – and calls for regulations requiring the installation of driver-monitoring systems based on the agency's findings.
The Senators hope to include the package in President Biden's infrastructure bill.
See https://www.cbsnews.com/news/seatback-strength-legislation-reintroduced-after-cbs-news-investigation/
New York and other states will be allowed to seek a nationwide disgorgement order based on the claim that Vyera Pharmaceuticals and its former chief executive Martin Shkreli participated in an anticompetitive scheme to maintain a price boost for the life-saving drug Daraprim
From the ruling by DENISE COTE, District Judge:
Defendants Vyera Pharmaceuticals, LLC and its parent company Phoenixus, AG (together, “Vyera”), Martin Shkreli, and
Kevin Mulleady have moved for partial summary judgment on the scope of the plaintiffs’ claim for disgorgement. They contend
that the seven State plaintiffs may only pursue such relief where the defendants’ net profits are tied to sales that have
victimized citizens of their States. The State plaintiffs have cross-moved for summary judgment and a preclusion order. For
the following reasons, the defendants’ motion is denied. The States’ cross-motion is granted.
The opinion can be read at https://fingfx.thomsonreuters.com/gfx/legaldocs/zdvxodjgopx/FTC%20et%20al%20v%20Vyera%20Pharmaceuticals%20et%20al%20decision%20(1).pdf
From the ruling by DENISE COTE, District Judge:
Defendants Vyera Pharmaceuticals, LLC and its parent company Phoenixus, AG (together, “Vyera”), Martin Shkreli, and
Kevin Mulleady have moved for partial summary judgment on the scope of the plaintiffs’ claim for disgorgement. They contend
that the seven State plaintiffs may only pursue such relief where the defendants’ net profits are tied to sales that have
victimized citizens of their States. The State plaintiffs have cross-moved for summary judgment and a preclusion order. For
the following reasons, the defendants’ motion is denied. The States’ cross-motion is granted.
The opinion can be read at https://fingfx.thomsonreuters.com/gfx/legaldocs/zdvxodjgopx/FTC%20et%20al%20v%20Vyera%20Pharmaceuticals%20et%20al%20decision%20(1).pdf
FTC Chair Kahn's recent memo to Staff and Commissioners
Viatris, Joe Manchin, and the problem with overseas production of generic pharmaceuticals
In an earlier posting we noted that although the Viatris plant in West Virginia has been making generic pharmaceuticals since 1965 it’s closed down and laid workers off -- moving manufacture to India and Australia. We pointed out the disturbing involvement of Senator Joe Manchin. Viatris was formed through a merger between two pharmaceutical companies, Mylan and Upjohn. Mylan’s chief executive, Manchin’s daughter Heather Bresch, got a $31 million payout as a result of the corporate consolidation before the new company set about cutting costs, including the closure of the Morgantown plant. Joseph Gouzd, president of United Steelworkers of America Local 8-957 and a worker at the plant, said that Viatris gave little reason for the closure except to say the company is looking to “maximize the best interests of the shareholders.” Investigative journalist Katherine Eban says moving pharmaceutical production overseas contradicts the recommendations of numerous reports that have found major safety lapses in drug manufacturing abroad, as well as concern from lawmakers about keeping a key industry within the United States. “This is pure insanity,” Eban says. “It seems like it is both pharmaceutical and national security suicide to close this plant.”
Now a new NYT article points out that when production of generics shifts overseas, it’s harder for the Food and Drug Administration to inspect factories: "Major companies have been caught faking and manipulating the data that is supposed to prove that drugs are effective and safe. Probable carcinogens have been discovered in the drug supply. During the pandemic, which caused several countries to ban the export of medical supplies, a new fear has arisen: that faraway factories might one day cut Americans off from their drugs. Dozens of lifesaving medications are made with ingredients no longer manufactured in the United States."
The new article reiterates the past promises by Presidents Donald Trump and Joe Biden to encourage more drug production on U.S. soil. But the Viatris experience suggests that these promises are not being fulfilled.
See https://www.nytimes.com/2021/09/18/opinion/drug-market-prescription-generic.html
In an earlier posting we noted that although the Viatris plant in West Virginia has been making generic pharmaceuticals since 1965 it’s closed down and laid workers off -- moving manufacture to India and Australia. We pointed out the disturbing involvement of Senator Joe Manchin. Viatris was formed through a merger between two pharmaceutical companies, Mylan and Upjohn. Mylan’s chief executive, Manchin’s daughter Heather Bresch, got a $31 million payout as a result of the corporate consolidation before the new company set about cutting costs, including the closure of the Morgantown plant. Joseph Gouzd, president of United Steelworkers of America Local 8-957 and a worker at the plant, said that Viatris gave little reason for the closure except to say the company is looking to “maximize the best interests of the shareholders.” Investigative journalist Katherine Eban says moving pharmaceutical production overseas contradicts the recommendations of numerous reports that have found major safety lapses in drug manufacturing abroad, as well as concern from lawmakers about keeping a key industry within the United States. “This is pure insanity,” Eban says. “It seems like it is both pharmaceutical and national security suicide to close this plant.”
Now a new NYT article points out that when production of generics shifts overseas, it’s harder for the Food and Drug Administration to inspect factories: "Major companies have been caught faking and manipulating the data that is supposed to prove that drugs are effective and safe. Probable carcinogens have been discovered in the drug supply. During the pandemic, which caused several countries to ban the export of medical supplies, a new fear has arisen: that faraway factories might one day cut Americans off from their drugs. Dozens of lifesaving medications are made with ingredients no longer manufactured in the United States."
The new article reiterates the past promises by Presidents Donald Trump and Joe Biden to encourage more drug production on U.S. soil. But the Viatris experience suggests that these promises are not being fulfilled.
See https://www.nytimes.com/2021/09/18/opinion/drug-market-prescription-generic.html
California lawmakers recently approved the Garment Worker Protection Act, which would eliminate the piece rate system and ensure workers are paid an hourly minimum wage.
The bill would also expand who is liable for stolen wages – meaning a brand like Charlotte Russe, for example, would share responsibility for paying out wage theft claims filed by workers who make their clothing in factories such as the ones in downtown LA. Right now, those claims are filed against the factories themselves but can languish for years before being paid out, if they ever are.
from Garment workers in America’s fashion capital may make just $6 an hour. A new law could change that (msn.com) https://www.msn.com/en-us/news/us/garment-workers-in-america-s-fashion-capital-may-make-just-6-an-hour-a-new-law-could-change-that/ar-AAOzWgP?ocid=msedgdhp&pc=U531
The bill would also expand who is liable for stolen wages – meaning a brand like Charlotte Russe, for example, would share responsibility for paying out wage theft claims filed by workers who make their clothing in factories such as the ones in downtown LA. Right now, those claims are filed against the factories themselves but can languish for years before being paid out, if they ever are.
from Garment workers in America’s fashion capital may make just $6 an hour. A new law could change that (msn.com) https://www.msn.com/en-us/news/us/garment-workers-in-america-s-fashion-capital-may-make-just-6-an-hour-a-new-law-could-change-that/ar-AAOzWgP?ocid=msedgdhp&pc=U531
SCOTUS BLOG's Amy Howe discusses the upcoming US Supreme Court term, including abortion and gun related issues
Amy Howe's interview on the weekend PBS Newshour discusses the upcoming US Supreme Court term, which is likely to include abortion and gun rights cases. Among other things, Amy Howe offers her expertise on questions such as the Court's use of the "shadow docket" in denying an emergency stay against the Texas law limiting abortions. She also discusses the impact of recent changes in the Court's membership.
See:
https://www.pbs.org/newshour/show/gun-laws-abortion-rights-upcoming-scotus-hearings-to-be-impacted-by-rbgs-death
Amy Howe's interview on the weekend PBS Newshour discusses the upcoming US Supreme Court term, which is likely to include abortion and gun rights cases. Among other things, Amy Howe offers her expertise on questions such as the Court's use of the "shadow docket" in denying an emergency stay against the Texas law limiting abortions. She also discusses the impact of recent changes in the Court's membership.
See:
https://www.pbs.org/newshour/show/gun-laws-abortion-rights-upcoming-scotus-hearings-to-be-impacted-by-rbgs-death
Abortion, the death penalty, and the shadow docket By Lee Kovarsky
on Sep 6, 2021 at 12:03 pm
FacebookLinkedInTwitterEmail
PrintFriendlyShareLee Kovarsky is the Bryant Smith chair in law and co-director of Capital Punishment Center at the University of Texas at Austin.
Most people following the litigation over S.B. 8 — the new Texas ban on nearly all abortions after the sixth week of pregnancy — have heard some version of the argument. The Supreme Court could neither enjoin the flagrantly unconstitutional abortion restrictions nor lift the circuit court’s unexplained order pausing lower-court litigation, the “rule-of-law story” goes, because the Supreme Court’s hands were tied. In this telling, the Supreme Court’s procedural doctrines required that it refuse emergency relief unless the party seeking it is reasonably certain to prevail in the litigation. And procedural uncertainties admittedly lurked. Sovereign immunity precluded suit against Texas itself, S.B. 8 privatized enforcement and circuit precedent foreclosed suits against state executive-branch officers, and there were lingering questions about whether the plaintiffs could sue the judicial personnel named in the complaint. But this ode to rule-of-law values sounds some pretty false notes.
The Supreme Court issued its S.B. 8 order on the so-called “shadow docket,” where it hands down orders and summary decisions that did not receive full briefing and oral argument. In the past several years — and especially in the past 18 months — the court has increasingly used its shadow docket to award emergency relief in politically charged cases. I have niche expertise in one category of shadow-docket activity: the death penalty. There were 13 federal executions during the last six months of the Trump administration, and the pertinent shadow-docket interventions disclose anything but a court abstaining in close cases.
I have written about the “Trump executions” at length elsewhere, and a little background is in order here. Before the summer of 2020, the federal government hadn’t executed anyone since 2003. President Donald Trump’s Justice Department decided to get the federal government back in the execution business, and it began announcing execution dates during the summer of 2019. The federal lethal-injection protocol called for the use of a single drug, pentobarbital, that was developed to euthanize animals. The first volley of planned executions took place in July 2020, with the possibility of a Trump-to-Biden transition looming six months later. There is usually 11th-hour litigation in the shadow of executions, and the relevant federal law ensures that the Supreme Court will almost always receive applications for execution stays (from prisoners) or applications to vacate them (from the government).
The Supreme Court granted emergency relief to the government, on the shadow docket and pursuant to the same norms about restricting relief to reasonably certain litigation winners, in seven of the 13 Trump execution cases. In each of these cases, the Supreme Court’s intervention overturned a lower-court disposition on a contested legal question. As a practical matter, the relief allowed the executions to go forward while the cases were pending, and courts dismissed the litigation as moot after the prisoners were dead. Let me tell you a bit more about how “certain” the government’s success was in those cases.
Start with Eighth Amendment litigation over the use of pentobarbital, which culminated in a shadow-docket order vacating a lower-court injunction affecting four of the 13 prisoners (Daniel Lee, Wesley Purkey, Dustin Honken, and Keith Nelson). In Barr v. Lee, the Supreme Court grounded its decision to vacate that injunction on an earlier case involving a materially different issue that the Supreme Court nonetheless seemed to read as a categorical rule that the Eighth Amendment permitted pentobarbital-only executions. Several months later, however, the U.S. Court of Appeals for the District of Columbia Circuit squarely held that a claimant could state an Eighth Amendment claim against such executions. The legal rule forming the basis for the Supreme Court’s intervention was anything but settled.
Next consider the Orlando Hall execution. Hall asserted that the use of un-prescribed pentobarbital violated the Food, Drug, and Cosmetic Act. The district court stayed his execution after a D.C. Circuit decision that such use of pentobarbital was in fact an FDCA violation. The Supreme Court vacated the stay. What bears emphasis is that the Supreme Court granted emergency relief on its shadow docket not just when the party seeking it had uncertain prospects for success, but when that party would almost certainly lose on the underlying legal question — and even though likelihood of success on the merits is supposed to be a necessary condition for such relief.
Perhaps the most shocking of all the shadow-docket orders was the last one, in the Dustin Higgs case. The federal death-penalty statute has a provision requiring that federal sentence implementation mimic that of the state in which the federal court sits. In situations where the federal court sits in a state that has abolished the death penalty, the statute directs the sentencer, at the time of sentence, to designate some other state for implementation-parity purposes. Higgs had been sentenced by the U.S. District Court for the District of Maryland in 2001, at a time when Maryland retained the death penalty, and so there was no other-state designation in the sentencing judgment. But Maryland abolished the death penalty in 2013; the implementation parity rule would thus have mooted the capital sentence.
At the very least, Higgs raised a novel question about how the statute should apply in such a case. As Higgs’ execution date approached — which also coincided with the very end of Trump’s term — the federal government rather sloppily (and tardily) asked that the non-designating judgment be amended or “supplemented” (whatever that means) so that a practicing state could be designated retroactively. The (exasperated) district judge held that he had no power to alter the judgment in that way, and the government appealed to the U.S. Court of Appeals for the 4th Circuit, which aggressively expedited the appellate calendar so that oral argument could take place on Jan. 22 (two days after President Joe Biden’s inauguration). Without offering any substantive reasoning, the Supreme Court used its shadow docket to vacate the lower-court stay, grant certiorari before judgment, summarily reverse on the merits, and order the lower courts to retroactively designate Indiana. I have been able to locate no comparable maneuver (a summary merits decision on a petition for certiorari before judgment) before or since, and neither has my colleague Professor Steve Vladeck, who meticulously tracks the court’s shadow-docket activity. (Vladeck also has argued persuasively that the Supreme Court’s handling of the Texas abortion law is inconsistent with its recent shadow-docket practice in another area: emergency requests related to religious liberty.)
I should mention that the Supreme Court’s criteria for adjudicating stays and those for adjudicating injunctions have some meaningful differences. There is express statutory authority for stays, whereas the authority for court injunctions traces to a more general authority specified in the All Writs Act. Those differences notwithstanding, both require the party seeking emergency relief to establish some elevated likelihood of prevailing on the merits alongside the injury justifying immediate intervention. Uncertainty, whether procedural or substantive, is supposed to be a powerful weight against shadow-docket relief.
The comparison between the Supreme Court’s federal-execution interventions and its S.B. 8 abstention exposes the problems with the rule-of-law story. The court’s treatment of the death-penalty litigation was less about the clear merits of the government’s claims than it was about the justices’ frustration with execution delays and their desire to prevent the Biden administration from influencing sentence implementation. (The Biden administration later declared an execution moratorium.) There is a reasonable debate to be had about whether considerations like those justify more aggressive shadow-docket intervention, and two wrongs don’t make a right. But nobody can reasonably argue that the court’s federal-execution interventions sided with a party that would clearly prevail on the underlying claims, at least based on existing law. The rule-of-law storytelling flooding cable news and social media is therefore farcical. The court refused to enjoin S.B. 8 because five justices chose not to; not because the modern law and norms of shadow-docket practice foreclosed it from doing so.
Posted in Featured, Emergency appeals and applications
on Sep 6, 2021 at 12:03 pm
FacebookLinkedInTwitterEmail
PrintFriendlyShareLee Kovarsky is the Bryant Smith chair in law and co-director of Capital Punishment Center at the University of Texas at Austin.
Most people following the litigation over S.B. 8 — the new Texas ban on nearly all abortions after the sixth week of pregnancy — have heard some version of the argument. The Supreme Court could neither enjoin the flagrantly unconstitutional abortion restrictions nor lift the circuit court’s unexplained order pausing lower-court litigation, the “rule-of-law story” goes, because the Supreme Court’s hands were tied. In this telling, the Supreme Court’s procedural doctrines required that it refuse emergency relief unless the party seeking it is reasonably certain to prevail in the litigation. And procedural uncertainties admittedly lurked. Sovereign immunity precluded suit against Texas itself, S.B. 8 privatized enforcement and circuit precedent foreclosed suits against state executive-branch officers, and there were lingering questions about whether the plaintiffs could sue the judicial personnel named in the complaint. But this ode to rule-of-law values sounds some pretty false notes.
The Supreme Court issued its S.B. 8 order on the so-called “shadow docket,” where it hands down orders and summary decisions that did not receive full briefing and oral argument. In the past several years — and especially in the past 18 months — the court has increasingly used its shadow docket to award emergency relief in politically charged cases. I have niche expertise in one category of shadow-docket activity: the death penalty. There were 13 federal executions during the last six months of the Trump administration, and the pertinent shadow-docket interventions disclose anything but a court abstaining in close cases.
I have written about the “Trump executions” at length elsewhere, and a little background is in order here. Before the summer of 2020, the federal government hadn’t executed anyone since 2003. President Donald Trump’s Justice Department decided to get the federal government back in the execution business, and it began announcing execution dates during the summer of 2019. The federal lethal-injection protocol called for the use of a single drug, pentobarbital, that was developed to euthanize animals. The first volley of planned executions took place in July 2020, with the possibility of a Trump-to-Biden transition looming six months later. There is usually 11th-hour litigation in the shadow of executions, and the relevant federal law ensures that the Supreme Court will almost always receive applications for execution stays (from prisoners) or applications to vacate them (from the government).
The Supreme Court granted emergency relief to the government, on the shadow docket and pursuant to the same norms about restricting relief to reasonably certain litigation winners, in seven of the 13 Trump execution cases. In each of these cases, the Supreme Court’s intervention overturned a lower-court disposition on a contested legal question. As a practical matter, the relief allowed the executions to go forward while the cases were pending, and courts dismissed the litigation as moot after the prisoners were dead. Let me tell you a bit more about how “certain” the government’s success was in those cases.
Start with Eighth Amendment litigation over the use of pentobarbital, which culminated in a shadow-docket order vacating a lower-court injunction affecting four of the 13 prisoners (Daniel Lee, Wesley Purkey, Dustin Honken, and Keith Nelson). In Barr v. Lee, the Supreme Court grounded its decision to vacate that injunction on an earlier case involving a materially different issue that the Supreme Court nonetheless seemed to read as a categorical rule that the Eighth Amendment permitted pentobarbital-only executions. Several months later, however, the U.S. Court of Appeals for the District of Columbia Circuit squarely held that a claimant could state an Eighth Amendment claim against such executions. The legal rule forming the basis for the Supreme Court’s intervention was anything but settled.
Next consider the Orlando Hall execution. Hall asserted that the use of un-prescribed pentobarbital violated the Food, Drug, and Cosmetic Act. The district court stayed his execution after a D.C. Circuit decision that such use of pentobarbital was in fact an FDCA violation. The Supreme Court vacated the stay. What bears emphasis is that the Supreme Court granted emergency relief on its shadow docket not just when the party seeking it had uncertain prospects for success, but when that party would almost certainly lose on the underlying legal question — and even though likelihood of success on the merits is supposed to be a necessary condition for such relief.
Perhaps the most shocking of all the shadow-docket orders was the last one, in the Dustin Higgs case. The federal death-penalty statute has a provision requiring that federal sentence implementation mimic that of the state in which the federal court sits. In situations where the federal court sits in a state that has abolished the death penalty, the statute directs the sentencer, at the time of sentence, to designate some other state for implementation-parity purposes. Higgs had been sentenced by the U.S. District Court for the District of Maryland in 2001, at a time when Maryland retained the death penalty, and so there was no other-state designation in the sentencing judgment. But Maryland abolished the death penalty in 2013; the implementation parity rule would thus have mooted the capital sentence.
At the very least, Higgs raised a novel question about how the statute should apply in such a case. As Higgs’ execution date approached — which also coincided with the very end of Trump’s term — the federal government rather sloppily (and tardily) asked that the non-designating judgment be amended or “supplemented” (whatever that means) so that a practicing state could be designated retroactively. The (exasperated) district judge held that he had no power to alter the judgment in that way, and the government appealed to the U.S. Court of Appeals for the 4th Circuit, which aggressively expedited the appellate calendar so that oral argument could take place on Jan. 22 (two days after President Joe Biden’s inauguration). Without offering any substantive reasoning, the Supreme Court used its shadow docket to vacate the lower-court stay, grant certiorari before judgment, summarily reverse on the merits, and order the lower courts to retroactively designate Indiana. I have been able to locate no comparable maneuver (a summary merits decision on a petition for certiorari before judgment) before or since, and neither has my colleague Professor Steve Vladeck, who meticulously tracks the court’s shadow-docket activity. (Vladeck also has argued persuasively that the Supreme Court’s handling of the Texas abortion law is inconsistent with its recent shadow-docket practice in another area: emergency requests related to religious liberty.)
I should mention that the Supreme Court’s criteria for adjudicating stays and those for adjudicating injunctions have some meaningful differences. There is express statutory authority for stays, whereas the authority for court injunctions traces to a more general authority specified in the All Writs Act. Those differences notwithstanding, both require the party seeking emergency relief to establish some elevated likelihood of prevailing on the merits alongside the injury justifying immediate intervention. Uncertainty, whether procedural or substantive, is supposed to be a powerful weight against shadow-docket relief.
The comparison between the Supreme Court’s federal-execution interventions and its S.B. 8 abstention exposes the problems with the rule-of-law story. The court’s treatment of the death-penalty litigation was less about the clear merits of the government’s claims than it was about the justices’ frustration with execution delays and their desire to prevent the Biden administration from influencing sentence implementation. (The Biden administration later declared an execution moratorium.) There is a reasonable debate to be had about whether considerations like those justify more aggressive shadow-docket intervention, and two wrongs don’t make a right. But nobody can reasonably argue that the court’s federal-execution interventions sided with a party that would clearly prevail on the underlying claims, at least based on existing law. The rule-of-law storytelling flooding cable news and social media is therefore farcical. The court refused to enjoin S.B. 8 because five justices chose not to; not because the modern law and norms of shadow-docket practice foreclosed it from doing so.
Posted in Featured, Emergency appeals and applications
Are gun rights vulnerable to the Texas approach to abortion rights?
From the NYT (by law professors Jon Michaels and David Noll):
"Perhaps though, what’s good for the goose will be good for the gander, and blue states will use these same tools [as the Texas legislature] to suppress rights they dislike. Massachusetts could authorize citizens to seek damages from houses of worship that refuse to follow Covid safety protocols; California could give citizens the right to sue neighbors who recklessly keep guns in their homes."
DAR Comment: Do you think that the US Supreme Court would use a shadow docket ruling to allow a California vigilante law against guns to go forward as it has the Texas vigilante law against abortion rights? If your reaction to this thought experiment is no, then you could be thinking that the US Supreme Court decision is ideological and political, not legal. If yes, you may have confidence that the US Supreme Court will follow the law consistently without regard to whether the substantive effect on Constitutional rights pleases "the left" or "the right."
See https://www.nytimes.com/2021/09/04/opinion/texas-abortion-law.html
From the NYT (by law professors Jon Michaels and David Noll):
"Perhaps though, what’s good for the goose will be good for the gander, and blue states will use these same tools [as the Texas legislature] to suppress rights they dislike. Massachusetts could authorize citizens to seek damages from houses of worship that refuse to follow Covid safety protocols; California could give citizens the right to sue neighbors who recklessly keep guns in their homes."
DAR Comment: Do you think that the US Supreme Court would use a shadow docket ruling to allow a California vigilante law against guns to go forward as it has the Texas vigilante law against abortion rights? If your reaction to this thought experiment is no, then you could be thinking that the US Supreme Court decision is ideological and political, not legal. If yes, you may have confidence that the US Supreme Court will follow the law consistently without regard to whether the substantive effect on Constitutional rights pleases "the left" or "the right."
See https://www.nytimes.com/2021/09/04/opinion/texas-abortion-law.html
AAI Podcasts: What’s the Beef? How the Beef Packing Cartel Hurts Producers and Consumers and How Independent Cattle Producers and Processors Can Help Restore Competition and Choice
July 13, 2021 | Diana L. Moss , Mike Callicrate , Patrick Robinette
Food & Agriculture
See https://www.antitrustinstitute.org/work-products/type/podcasts/
From the AAI website: In this podcast, AAI President Diana Moss sits down with two leaders in the independent sector to discuss the fallout from decades of massive consolidation and rising concentration in beef packing. Her guests, Mike Callicrate and Patrick Robinette, run innovative, independent business operations in two different parts of the US. They discuss the state of competition in U.S. beef packing, which is dominated by four packing firms that control over 80% of the market. Next, they turn to problems of market access for smaller ranchers and processors and deceptive labeling that deprives consumers of informed choices. The conversation reveals that an industrial food system with little competition packs significant inefficiency and susceptibility to shocks like COVID-19. On the other hand, smaller operations provide needed competition and resiliency in the beef supply. Moss, Callicrate, and Robinette close with the importance of stronger antitrust enforcement in the beef packing sector and USDA initiatives that promote competition, price transparency, and the importance of alternative supply systems.
Related AAI Work
Public Comments and TestimonyAAI Encourages USDA to Take More Aggressive Role in Crafting Competition Policies to Combat Concentration and Supply Chain Instability in Food and Agriculture https://www.antitrustinstitute.org/work-product/aai-encourages-usda-to-take-more-aggressive-role-in-crafting-competition-policies-to-combat-concentration-and-supply-chain-instability-in-food-and-agriculture/
June 21, 2021 | Diana L. Moss
July 13, 2021 | Diana L. Moss , Mike Callicrate , Patrick Robinette
Food & Agriculture
See https://www.antitrustinstitute.org/work-products/type/podcasts/
From the AAI website: In this podcast, AAI President Diana Moss sits down with two leaders in the independent sector to discuss the fallout from decades of massive consolidation and rising concentration in beef packing. Her guests, Mike Callicrate and Patrick Robinette, run innovative, independent business operations in two different parts of the US. They discuss the state of competition in U.S. beef packing, which is dominated by four packing firms that control over 80% of the market. Next, they turn to problems of market access for smaller ranchers and processors and deceptive labeling that deprives consumers of informed choices. The conversation reveals that an industrial food system with little competition packs significant inefficiency and susceptibility to shocks like COVID-19. On the other hand, smaller operations provide needed competition and resiliency in the beef supply. Moss, Callicrate, and Robinette close with the importance of stronger antitrust enforcement in the beef packing sector and USDA initiatives that promote competition, price transparency, and the importance of alternative supply systems.
Related AAI Work
Public Comments and TestimonyAAI Encourages USDA to Take More Aggressive Role in Crafting Competition Policies to Combat Concentration and Supply Chain Instability in Food and Agriculture https://www.antitrustinstitute.org/work-product/aai-encourages-usda-to-take-more-aggressive-role-in-crafting-competition-policies-to-combat-concentration-and-supply-chain-instability-in-food-and-agriculture/
June 21, 2021 | Diana L. Moss
Who loves the Apple settlement with App Developers? Not everyone.
Apple has reached a settlement with a group of app developers represented by the Hagens, Berman law firm. Apple's description of the settlement is that it would allow developers to urge customers to pay them outside their iPhone apps. The New York Times explained that "The move would allow app makers to avoid paying Apple a commission on their sales and could appease developers and regulators concerned with its control over mobile apps, including strict policies designed to force developers to pay it a cut of their sales." https://www.nytimes.com/2021/08/26/technology/apple-settles-app-store-lawsuit.html
The Hagens, Berman press release says that the settlement will result in the creation of a $100 million Small Developer Assistance Fund and important changes to App Store policies and practices. Also, "small and other U.S. iOS developers will benefit from changes to App Store policies and practices as they relate to App Store search results, app and in-app product price points, appeals from rejections of apps and transparency. Small U.S. iOS developers also will benefit from a pledge that for at least three years following court approval of the settlement, Apple will not raise the 15% commission rate that applies for those participating in its Small Business Program." And, "Apple will permit all U.S. iOS developers to communicate with their customers outside their apps about purchasing methods other than Apple’s in-app purchase (IAP) system. Apple also will remove the prohibition against U.S. developers using information obtained within their apps to communicate with their customers outside their apps about the use of purchasing methods other than IAP, subject to consumer consent and opt-out safeguards." https://www.hbsslaw.com/press/apple-ios-app-developers/us-ios-developers-to-benefit-from-100-million-apple-small-developer-assistance-fund-and-changes-to-app-store-policies-in-developer-antitrust-class-action-settlement
Not everyone thinks the settlement is great news for app developers. David Heinemeier Hansson writes that "Apple's new settlement is a corrupt joke." https://world.hey.com/dhh/apple-s-new-settlement-is-a-corrupt-joke-bd8b9c1e
Here is part of what he says:
This new Apple settlement with a group of class-action legal vultures . . . [is] a pointless settlement that reaffirm existing provisions and then asks for a couple of [trivial improvements resembling a change to] cornflower blue icons. Let's take it step by step again:
1) The plaintiffs – here being the actual lawyers in the class-action proceeding, not the interests of the developers they supposedly represent – have justified their pursuit for loot mainly by getting Apple to reaffirm existing policies. Like having them affirm that "at the request of developers, Apple has agreed that its Search results will continue to be based on objective characteristics like downloads, star ratings, ...". So part of this settlement is that Apple says it'll continue to do search like it's done so far, and that it won't make it worse for users and developers by corrupting it with self-dealings and sold preferences, but only for the next three years? What a concession to extract!
It keeps going on like this, such as the pointless concession that pricing can now be $40.99 and $41.99, in addition to the normal $39.99 and $44.99, or any other number out of a predetermined 500 price points instead of the previous 100. Talk about the many hues of cornflower blue.
But it gets worse, because the trophy of this settlement, as presented in the press, is supposedly that developers can now tell their customers where to buy services outside the app. Except no, that's not actually what's happening! Apple is simply "clarifying" that companies can send an email to their customers, if they've gotten permission to do so, on an opt-in basis. That email may include information about how to buy outside the app.
So the steering provisions of the App Store, that developers are not allowed to tell users inside their app or on the signup screen about other purchasing choices than IAP – the only places that actually matter! – is being cemented with this "clarification". It draws a thicker line, asserts Apple's right to steer in the first place, and offers the meaningless concession of opt-in email, which was something developers had already been doing.
2) The legal vultures running this class-action suit knew that all these clarifications and agreements were cornflower blue requests from the outset. The point of the negotiation was never to extract any meaningful change of policy or behavior, but to provide cover for the process, such that they could claim to have performed their judicial duties to the underlying plaintiffs (developers). While walking away with $30M in fees that they took from an Apple-administered charity provision that's part of the deal.
3) The cynicism of this performance drips in every other sentence of Apple's press release about the matter. Like the aforementioned sentence about how "At the request of developers, Apple has agreed that its Search results will continue to be based on objective characteristics". Yes, you can have your search results in cornflower blue. Because they already were! But also, we may change the color in three years. Of course you legal vultures will be long gone by then. You won't care, we don't care, this is all a performance of compliance!
4) Since the entire game was rigged for the outcome of having the class-action vultures taking a third cut of whatever settlement sum is included from the outset, Apple knew this too. Negotiating around the specific but meaningless points of the deal was just a way to justify that final outcome: Apple pays these lawyers $30m, such that they can print a press release that gullible journalists will try to spin as having some larger meaning, because that story travels better.
5) The only human response is to show our blood-soaked teeth in disdain for such a blatantly corrupt deal. Developers have suffered a litany of indignities under Apple's monopoly power over the years, and now they'll suffer a few more. The twist being that they now come from the hands of a group of legal vultures pretending to advocate on developer's behalf but are really just paid to collude with Apple.
If the developer community had any hopes riding on this class-action lawsuit, this outcome would have been a dagger in the heart. Far worse than if no suit has been undertaken at all. If anything, this settlement cements the tremendous power that Apple has and wields. Even when a class-action lawsuit gets underway, it can be bought with bromides and bribes.
A question about the settlement is how it affects ongoing litigation between app developer Epic and Apple, if at all. Epic and Apple are waiting for a decision from federal judge Yvonne Gonzalez Rogers of U.S. District Court for the Northern District of California.in a separate lawsuit that was filed by Epic Games. Epic is the maker of the popular game Fortnite. Epic wants to force Apple to allow app developers to avoid App Store commissions altogether.
Apple has reached a settlement with a group of app developers represented by the Hagens, Berman law firm. Apple's description of the settlement is that it would allow developers to urge customers to pay them outside their iPhone apps. The New York Times explained that "The move would allow app makers to avoid paying Apple a commission on their sales and could appease developers and regulators concerned with its control over mobile apps, including strict policies designed to force developers to pay it a cut of their sales." https://www.nytimes.com/2021/08/26/technology/apple-settles-app-store-lawsuit.html
The Hagens, Berman press release says that the settlement will result in the creation of a $100 million Small Developer Assistance Fund and important changes to App Store policies and practices. Also, "small and other U.S. iOS developers will benefit from changes to App Store policies and practices as they relate to App Store search results, app and in-app product price points, appeals from rejections of apps and transparency. Small U.S. iOS developers also will benefit from a pledge that for at least three years following court approval of the settlement, Apple will not raise the 15% commission rate that applies for those participating in its Small Business Program." And, "Apple will permit all U.S. iOS developers to communicate with their customers outside their apps about purchasing methods other than Apple’s in-app purchase (IAP) system. Apple also will remove the prohibition against U.S. developers using information obtained within their apps to communicate with their customers outside their apps about the use of purchasing methods other than IAP, subject to consumer consent and opt-out safeguards." https://www.hbsslaw.com/press/apple-ios-app-developers/us-ios-developers-to-benefit-from-100-million-apple-small-developer-assistance-fund-and-changes-to-app-store-policies-in-developer-antitrust-class-action-settlement
Not everyone thinks the settlement is great news for app developers. David Heinemeier Hansson writes that "Apple's new settlement is a corrupt joke." https://world.hey.com/dhh/apple-s-new-settlement-is-a-corrupt-joke-bd8b9c1e
Here is part of what he says:
This new Apple settlement with a group of class-action legal vultures . . . [is] a pointless settlement that reaffirm existing provisions and then asks for a couple of [trivial improvements resembling a change to] cornflower blue icons. Let's take it step by step again:
1) The plaintiffs – here being the actual lawyers in the class-action proceeding, not the interests of the developers they supposedly represent – have justified their pursuit for loot mainly by getting Apple to reaffirm existing policies. Like having them affirm that "at the request of developers, Apple has agreed that its Search results will continue to be based on objective characteristics like downloads, star ratings, ...". So part of this settlement is that Apple says it'll continue to do search like it's done so far, and that it won't make it worse for users and developers by corrupting it with self-dealings and sold preferences, but only for the next three years? What a concession to extract!
It keeps going on like this, such as the pointless concession that pricing can now be $40.99 and $41.99, in addition to the normal $39.99 and $44.99, or any other number out of a predetermined 500 price points instead of the previous 100. Talk about the many hues of cornflower blue.
But it gets worse, because the trophy of this settlement, as presented in the press, is supposedly that developers can now tell their customers where to buy services outside the app. Except no, that's not actually what's happening! Apple is simply "clarifying" that companies can send an email to their customers, if they've gotten permission to do so, on an opt-in basis. That email may include information about how to buy outside the app.
So the steering provisions of the App Store, that developers are not allowed to tell users inside their app or on the signup screen about other purchasing choices than IAP – the only places that actually matter! – is being cemented with this "clarification". It draws a thicker line, asserts Apple's right to steer in the first place, and offers the meaningless concession of opt-in email, which was something developers had already been doing.
2) The legal vultures running this class-action suit knew that all these clarifications and agreements were cornflower blue requests from the outset. The point of the negotiation was never to extract any meaningful change of policy or behavior, but to provide cover for the process, such that they could claim to have performed their judicial duties to the underlying plaintiffs (developers). While walking away with $30M in fees that they took from an Apple-administered charity provision that's part of the deal.
3) The cynicism of this performance drips in every other sentence of Apple's press release about the matter. Like the aforementioned sentence about how "At the request of developers, Apple has agreed that its Search results will continue to be based on objective characteristics". Yes, you can have your search results in cornflower blue. Because they already were! But also, we may change the color in three years. Of course you legal vultures will be long gone by then. You won't care, we don't care, this is all a performance of compliance!
4) Since the entire game was rigged for the outcome of having the class-action vultures taking a third cut of whatever settlement sum is included from the outset, Apple knew this too. Negotiating around the specific but meaningless points of the deal was just a way to justify that final outcome: Apple pays these lawyers $30m, such that they can print a press release that gullible journalists will try to spin as having some larger meaning, because that story travels better.
5) The only human response is to show our blood-soaked teeth in disdain for such a blatantly corrupt deal. Developers have suffered a litany of indignities under Apple's monopoly power over the years, and now they'll suffer a few more. The twist being that they now come from the hands of a group of legal vultures pretending to advocate on developer's behalf but are really just paid to collude with Apple.
If the developer community had any hopes riding on this class-action lawsuit, this outcome would have been a dagger in the heart. Far worse than if no suit has been undertaken at all. If anything, this settlement cements the tremendous power that Apple has and wields. Even when a class-action lawsuit gets underway, it can be bought with bromides and bribes.
A question about the settlement is how it affects ongoing litigation between app developer Epic and Apple, if at all. Epic and Apple are waiting for a decision from federal judge Yvonne Gonzalez Rogers of U.S. District Court for the Northern District of California.in a separate lawsuit that was filed by Epic Games. Epic is the maker of the popular game Fortnite. Epic wants to force Apple to allow app developers to avoid App Store commissions altogether.
Elizabeth Holmes and her company Theranos: The Boies law firm and lessons about aggressive lawyering
As the trial of Elizabeth Holmes for promoting a sham blood analysis device begins, it is timely to revisit John Carreyrou’s book Bad Blood: Secrets and Lies in a Silicon Valley Startup (Knopf). In that book Wall Street Journal reporter John Carreyrou reviewed 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
As the trial of Elizabeth Holmes for promoting a sham blood analysis device begins, it is timely to revisit John Carreyrou’s book Bad Blood: Secrets and Lies in a Silicon Valley Startup (Knopf). In that book Wall Street Journal reporter John Carreyrou reviewed 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
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Why Federal Antitrust Enforcers Should Pursue a Policy of Blocking More Harmful Mergers
July 29, 2021 | Diana L. Moss Excerpt from AAI website: This week, the Antitrust Division of the U.S. Department of Justice (DOJ) forced global insurance behemoths Aon and Willis Towers Watson to abandon their proposed mega-merger. The deal would have reduced competition in insurance brokerage markets from three to only two players, harming American businesses and consumers through higher prices and lower quality for health and retirement benefits products and services. This bold and needed move is a credit to the experienced, acting leadership at the Antitrust Division. It clearly recognizes the trend of declining competition, rising concentration, and growing evidence of harm from decades of weak enforcement. AAI encourages Federal Trade Commission (FTC) Chair, Lina Khan, and nominee for Assistant Attorney General, Jonathan Kanter, to adopt a policy of moving to block more mergers, rather than settling them with remedies such as divestitures and conduct requirements and prohibitions. https://www.antitrustinstitute.org/work-product/why-federal-antitrust-enforcers-should-pursue-a-policy-of-blocking-more-harmful-mergers/ |
Mylan and Upjohn merger result: Joe Manchin scandal -- pharma jobs from WV to India, $31M for family
- The story in Vanity Fair: "'We Can't Reach Him': Joe Manchin Is Ghosting the West Virginia Union Workers Whose Jobs His Daughter -- https://www.vanityfair.com/news/2021/07/joe-manchin-is-ghosting-the-west-virginia-union-workers
- From "Democracy Now" https://www.democracynow.org/2021/7/28/joe_manchin_west_virginia_heather_bresch
ACLED on state “Anti-protest” Legislation
Since June 2020, state officials have introduced at least 100 proposals that would restrict the right to free assembly (PEN America, 13 May 2021). Republican lawmakers have proposed 81 bills in over 30 states during the 2021 legislative session alone, more than double the number introduced in any other year, according to the International Center for Not-for-Profit Law (New York Times, 21 April 2021; International Center for Not-for-Profit Law, 22 April 2021). These bills have become law in states like Oklahoma and Florida, with new legislation increasing the penalties for “unlawful protesting” and “granting immunity to drivers whose vehicles strike and injure protesters in public streets” (New York Times, 21 April 2021).
Although officials have cited instances of protest violence over the past year to justify this new legislative push — with Governor Ron DeSantis labelling Florida’s law “the strongest anti-looting, anti-rioting, pro-law-enforcement piece of legislation in the country” (New York Times, 21 April 2021) — most of these states have experienced low levels of violent or destructive demonstration activity (see map below). ACLED data show that, on average, the states in which strict “anti-protest” laws have been proposed have the same rate of peaceful protests as states that have not pursued such legislation, meaning that violent demonstrations do not feature more prominently in the former than the latter. States like Florida and Oklahoma, which have promulgated some of the most restrictive new laws, have actually seen a lower proportion of demonstrations involving violent or destructive activity than most other states in the country.
excerpt from A Year of Racial Justice Protests: Key Trends in Demonstrations Supporting the BLM Movement | ACLED (acleddata.com)
The popular press covers antitrust reform
A recent New York Times article says that “Outside groups and ideological allies of the administration warn that if Mr. Biden hopes to truly follow in the footsteps of his antitrust idols, Presidents Theodore Roosevelt and Franklin D. Roosevelt, he will need to push for sweeping legislation to grant new powers to federal regulators, particularly in the tech sector. The core federal antitrust laws, which were written more than a century ago, did not envision the kind of commerce that exists today, where big companies may offer customers low prices but at the expense of competition.The administration has quietly supported legislation working its way through the House.” https://www.nytimes.com/2021/07/24/business/biden-antitrust-amazon-google.html
A dedicated reader of this blog [dcconsumerrightscolaition.org] points out a WSJ article by Greg Ip [https://www.wsj.com/articles/antitrusts-new-mission-preserving-democracy-not-efficiency-11625670424 -- pay wall] that provides a succinct, if opinionated, summary of the quandary that faces advocates of antitrust reform. In recent decades the antitrust laws have failed to discourage market dominance by a series of gigantic companies. Notwithstanding the comment in the New York Times, in some areas –agriculture for example – large companies mean elevated prices for consumers. In other areas, companies like Google and Facebook offer low prices to consumers, but arguably squelch competition and facilitate disinformation. Many blame the failures of antitrust enforcement on the idea that prosecutors and courts blindly followed the lead of Judge Robert Bork and narrowly applied a vision of a consumer welfare standard focused largely on lprotecting low consumer prices. Greg Ip points out that many antitrust reformers draw on the broader ideas of Louis Brandeis, who believed that vigorous government action against large companies enlivened democracy.
Greg Ip notes that Brandeis “feared that as the corporations became large and powerful, they took on a life of their own, becoming increasingly insensitive to humanity’s wants and fears,” according to Columbia University law professor and National Economic Council member Tim Wu’s 2008 book [https://globalreports.columbia.edu/books/the-curse-of-bigness/]
Alternatives for reforming the antitrust laws include legislation that would correct perceived shortcomings in court decisions narrowly applying Robert Bork style thinking and narrowly applying consumer welfare principles focused largely on consumer prices. Professor Andy Gavil wrote a brief article on antitrust reform that focused on monopolization law and suggested a relatively simple approach to law reform. See https://equitablegrowth.org/competitive-edge-crafting-a-monopolization-law-for-our-time/ Gavil said:
Fortunately, our understanding of “exclusionary” conduct has advanced, as has our understanding of market power. Exclusionary conduct cases such as Microsoft have provided a structured, burden-shifting framework for evaluating claims of exclusionary conduct within the reasonableness framework first identified by Standard Oil. In addition, the federal government’s Horizontal Merger Guidelines aptly identify the focus of most of modern competition law when they state that their “unifying theme” is that “mergers should not be permitted to create, enhance, or entrench market power or to facilitate its exercise.”
A modern approach to unilateral conduct could draw upon these advances. It might start by revisiting and refreshing the meaning of the common law terminology of [Sherman Act] Section 2. Such a modern framework could:
Such an approach would prohibit exclusionary conduct (unilateral or concerted) that significantly contributes to the creation, entrenchment, or enhancement of market power, allowing for methods of proving power through alternatives to defining markets and calculating market shares.
This more contemporary approach would be more consonant with trends in most other modern antitrust law. It would untether the law of exclusionary conduct from blind and formalistic reliance on market-share benchmarks, while also allowing for cognizable and verifiable efficiency justifications. In theory, Section 2’s common law origins should allow for this kind of evolution in the courts, but it might instead require legislative reform. In the end, under either approach, change would open up needed space for Section 2 to begin to evolve once again, as has Section 1, so it could adapt to the needs of our time.
It is relevant to the Gavil approach that Greg Ip writes that “A federal judge dismissed a lawsuit by the FTC and most state attorneys-general for failing to establish that Facebook Inc. is a monopoly. Legislation proposed by Democrats in the House of Representatives would lower the bar for winning such suits, but their fate is unclear.”
Another and more complex approach to antitrust reform is what might be called an “all of government” approach, where behaviors of large companies, like Facebook, Google, and Amazon, is addressed by an array of new laws and regulations that draw on the Brandeisian impulse to enhance efficiency and support democratic values. It may be difficult to argue against increased efficiency and support for democracy, but Greg Ip worries that the effort to promote new regulation and laws may be difficult. He argues that a (possibly improved version) of the traditional consumer welfare standard is “less at risk of politicization than [new laws based on] beliefs about what’s good or bad for democracy.”
It should be noted that Greg Ip is not at all supportive of the “big is bad” approach to antitrust enforcement. He is biased in favor of big. He writes: “Barring firms from getting big could deprive consumers of the benefits that only big firms can deliver.” That bias would seem to affect his judgment on matters of law reform.
A recent New York Times article says that “Outside groups and ideological allies of the administration warn that if Mr. Biden hopes to truly follow in the footsteps of his antitrust idols, Presidents Theodore Roosevelt and Franklin D. Roosevelt, he will need to push for sweeping legislation to grant new powers to federal regulators, particularly in the tech sector. The core federal antitrust laws, which were written more than a century ago, did not envision the kind of commerce that exists today, where big companies may offer customers low prices but at the expense of competition.The administration has quietly supported legislation working its way through the House.” https://www.nytimes.com/2021/07/24/business/biden-antitrust-amazon-google.html
A dedicated reader of this blog [dcconsumerrightscolaition.org] points out a WSJ article by Greg Ip [https://www.wsj.com/articles/antitrusts-new-mission-preserving-democracy-not-efficiency-11625670424 -- pay wall] that provides a succinct, if opinionated, summary of the quandary that faces advocates of antitrust reform. In recent decades the antitrust laws have failed to discourage market dominance by a series of gigantic companies. Notwithstanding the comment in the New York Times, in some areas –agriculture for example – large companies mean elevated prices for consumers. In other areas, companies like Google and Facebook offer low prices to consumers, but arguably squelch competition and facilitate disinformation. Many blame the failures of antitrust enforcement on the idea that prosecutors and courts blindly followed the lead of Judge Robert Bork and narrowly applied a vision of a consumer welfare standard focused largely on lprotecting low consumer prices. Greg Ip points out that many antitrust reformers draw on the broader ideas of Louis Brandeis, who believed that vigorous government action against large companies enlivened democracy.
Greg Ip notes that Brandeis “feared that as the corporations became large and powerful, they took on a life of their own, becoming increasingly insensitive to humanity’s wants and fears,” according to Columbia University law professor and National Economic Council member Tim Wu’s 2008 book [https://globalreports.columbia.edu/books/the-curse-of-bigness/]
Alternatives for reforming the antitrust laws include legislation that would correct perceived shortcomings in court decisions narrowly applying Robert Bork style thinking and narrowly applying consumer welfare principles focused largely on consumer prices. Professor Andy Gavil wrote a brief article on antitrust reform that focused on monopolization law and suggested a relatively simple approach to law reform. See https://equitablegrowth.org/competitive-edge-crafting-a-monopolization-law-for-our-time/ Gavil said:
Fortunately, our understanding of “exclusionary” conduct has advanced, as has our understanding of market power. Exclusionary conduct cases such as Microsoft have provided a structured, burden-shifting framework for evaluating claims of exclusionary conduct within the reasonableness framework first identified by Standard Oil. In addition, the federal government’s Horizontal Merger Guidelines aptly identify the focus of most of modern competition law when they state that their “unifying theme” is that “mergers should not be permitted to create, enhance, or entrench market power or to facilitate its exercise.”
A modern approach to unilateral conduct could draw upon these advances. It might start by revisiting and refreshing the meaning of the common law terminology of [Sherman Act] Section 2. Such a modern framework could:
- Embrace today’s structured approach to the rule of reason, as did the Court in Microsoft
- Fully integrate a more sophisticated understanding of exclusionary conduct, market power, and anti-competitive effects.
Such an approach would prohibit exclusionary conduct (unilateral or concerted) that significantly contributes to the creation, entrenchment, or enhancement of market power, allowing for methods of proving power through alternatives to defining markets and calculating market shares.
This more contemporary approach would be more consonant with trends in most other modern antitrust law. It would untether the law of exclusionary conduct from blind and formalistic reliance on market-share benchmarks, while also allowing for cognizable and verifiable efficiency justifications. In theory, Section 2’s common law origins should allow for this kind of evolution in the courts, but it might instead require legislative reform. In the end, under either approach, change would open up needed space for Section 2 to begin to evolve once again, as has Section 1, so it could adapt to the needs of our time.
It is relevant to the Gavil approach that Greg Ip writes that “A federal judge dismissed a lawsuit by the FTC and most state attorneys-general for failing to establish that Facebook Inc. is a monopoly. Legislation proposed by Democrats in the House of Representatives would lower the bar for winning such suits, but their fate is unclear.”
Another and more complex approach to antitrust reform is what might be called an “all of government” approach, where behaviors of large companies, like Facebook, Google, and Amazon, is addressed by an array of new laws and regulations that draw on the Brandeisian impulse to enhance efficiency and support democratic values. It may be difficult to argue against increased efficiency and support for democracy, but Greg Ip worries that the effort to promote new regulation and laws may be difficult. He argues that a (possibly improved version) of the traditional consumer welfare standard is “less at risk of politicization than [new laws based on] beliefs about what’s good or bad for democracy.”
It should be noted that Greg Ip is not at all supportive of the “big is bad” approach to antitrust enforcement. He is biased in favor of big. He writes: “Barring firms from getting big could deprive consumers of the benefits that only big firms can deliver.” That bias would seem to affect his judgment on matters of law reform.
DC AG RACINE: Addressing Violent Crime in the District
July 23, 2021
Gun violence and violent crime are impacting the entire District, and residents deserve a thoughtful and long-term response.
Last Friday, six-year-old Niyah Courtney was shot and killed. The next day, tens of thousands of fans at Nationals Park dove for cover thinking that they were in the middle of an active shooter situation. Yesterday, residents near Logan Circle ran for cover as shots were fired and two men were shot.
These are appalling and gut-wrenching events. My heart goes out to the victims and loved ones of those directly impacted by these incidents and the community members shaken by the trauma of this violence in our city.
Gun violence is hurting our whole community, ripping apart families, and creating fear and trauma. No one wants to fear for their children’s lives as they go to school or walk down the street. But in parts of the District, that is a daily reality. Violence has long plagued neighborhoods that too often get overlooked—particularly low-income communities of color. District residents deserve to feel safe in their homes and their neighborhoods, and when they are walking down the street with their families.
It is our job as elected leaders to do everything we can to stop gun violence and violent crime, prevent more senseless deaths, and make every part of the District safer. I may not have all the answers, but my office is doing everything we can to stop the gun violence and violent crime in our community now and in the future.
Our city needs a proactive, comprehensive plan. It needs a clear, consistent, and all-hands-on-deck approach. Some of these steps include action my office is already taking, and some are bigger than my office alone. But we must work together to make meaningful progress.
First, we need aggressive gun safety reform. There are too many guns flooding our city, and there are too many loopholes that enable the floodgates to remain open. We need federal legislation that closes these loopholes, mandates background checks, and helps stop the flow of guns across our country and into our city. My office is fighting the prevalence of illegal ghost guns in the District, which lack serial numbers and can’t be traced. We are suing Polymer80—a leading manufacturer of ghost guns in the United States and the company that manufactured the majority of deadly ghost guns recovered in DC—for illegally advertising and selling them to DC consumers. And we have advocated for strong federal regulation of these firearms.
Second, we must fully invest in community-driven, evidence-based violence interruption programs. We know based on research and data that empowering communities to interrupt violence, intervening with those most likely to commit or be victims of violence, and changing norms around violence can have a long-lasting impact. That’s why we launched Cure the Streets in several neighborhoods that have historically experienced some of the highest rates of gun violence. This public health approach to treating violence is working in these neighborhoods. We’re asking the DC Council to fund an expansion of Cure the Streets so it can operate in more neighborhoods. We’re grateful that the Council took the first steps to expanding the program by adding one additional site in its budget vote earlier this week. But more neighborhoods would benefit from a site. There are also other important violence interruption programs operating around the city that deserve support and investment as well.
Third, we need to hold individuals accountable when they commit crimes and change their behavior so they are less likely to reoffend in the future. As the prosecutor for crime perpetrated by young people in the District, when a case is referred to my office for prosecution, we assess the needs of the victim and the impact of the conduct on public safety. Then, we work to achieve a resolution that supports victims while doing what needs to be done to change the behavior of the youth. This approach helps reduce recidivism and makes our communities safer. We do this so they do not become future violent offenders and instead become contributing members of our communities. And, when appropriate, we prosecute.
Finally, we need to address the root causes of crime in our communities, including poverty, hopelessness, and trauma – to break the cycle of violence. This is a public health crisis as much as it is a public safety crisis. We know there are two Washington, DCs – and our communities east of the river, where most of the gun violence is happening, need investment and support. But too often they are not even part of the conversation. Only when we address the challenges these communities face every day can we make real progress now and in the future.
These are critical steps, but they are not the only solutions. We need more ideas for making the District a safer, more equitable place. We must be thoughtful about our efforts and careful to avoid reactionary tough-on-crime approaches that we know do not actually improve public safety.
Violent crime is on the rise across the country. The District is not immune from it. But that doesn’t excuse us from tackling our problem locally. Unfortunately, the response to gun violence, especially when it happens in Black and brown communities, follows a familiar pattern: thoughts and prayers, vigils, and calls for reform, and then a return to the status quo. All of us have a role to play in stopping this violence, and I will continue to work with the mayor, our law enforcement partners, the Council, advocates, and others to marshal resources, ingenuity, and bold ideas to bring about change.
Read my full statement from earlier this week on my new Medium page.[https://medium.com/@AttorneyGeneralKarlRacine/the-district-needs-a-clear-and-comprehensive-plan-to-combat-violent-crime-bb82ae5c0280]
Karl A. Racine
Attorney General
The Viatris plant in West Virginia has been making generic pharmaceuticals since 1965 – but it’s closing down and laying workers off -- moving manufacture to India and Australia
Michael Sainato
Sun 20 Jun 2021 03.00 EDT “Disbelief. Distraught and traumatized.”
Just some of the words the United Steelworkers Local 8-957 president, Joe Gouzd, used to describe how he and hundreds of other workers felt after their 56-year-old pharmaceutical plant in West Virginia was shut down, sending between 1,500 and 2,000 jobs to India and Australia.
The Viatris plant at Chestnut Ridge, just outside Morgantown, has been in operation since 1965, providing well-paid jobs in one of America’s poorer states. And the timing of the closure has workers furious.
“This is the last generic pharmaceutical manufacturing giant in the US, and executives are offshoring our jobs to India for more profits. What is this going to do to us if we have another pandemic?” said Gouzd.
It is also causing a political row, with Congress accused of inaction and workers denouncing profits before people.
“When is this going to end, losing American jobs? Every politician you hear, part of their political platform is: jobs, domestic jobs, domestic manufacturing, bringing jobs and manufacturing back to America,” said Gouzd.
The offshoring of jobs has taken on new political weight since Donald Trump was elected. But his record in office was just as poor as his predecessors’.
While the US does not track all jobs lost to offshoring, the labor department does count the number of workers who petition for help under a federal law designed to aid those harmed by trade.
According to Reuters, during the four years of Trump, those petitions covered 202,151 workers whose jobs moved overseas, only slightly less than the 209,735 workers covered under Obama.
Biden has proposed taxing companies that offshore jobs, but it remains to be seen whether he will be successful. Viatris may prove his first big test.
DAR comment: The article is clear on the point that the political rhetoric of repatriating jobs to the U.S. rings hollow when large companies offshore jobs in the interests of improved profits. DR
Michael Sainato
Sun 20 Jun 2021 03.00 EDT “Disbelief. Distraught and traumatized.”
Just some of the words the United Steelworkers Local 8-957 president, Joe Gouzd, used to describe how he and hundreds of other workers felt after their 56-year-old pharmaceutical plant in West Virginia was shut down, sending between 1,500 and 2,000 jobs to India and Australia.
The Viatris plant at Chestnut Ridge, just outside Morgantown, has been in operation since 1965, providing well-paid jobs in one of America’s poorer states. And the timing of the closure has workers furious.
“This is the last generic pharmaceutical manufacturing giant in the US, and executives are offshoring our jobs to India for more profits. What is this going to do to us if we have another pandemic?” said Gouzd.
It is also causing a political row, with Congress accused of inaction and workers denouncing profits before people.
“When is this going to end, losing American jobs? Every politician you hear, part of their political platform is: jobs, domestic jobs, domestic manufacturing, bringing jobs and manufacturing back to America,” said Gouzd.
The offshoring of jobs has taken on new political weight since Donald Trump was elected. But his record in office was just as poor as his predecessors’.
While the US does not track all jobs lost to offshoring, the labor department does count the number of workers who petition for help under a federal law designed to aid those harmed by trade.
According to Reuters, during the four years of Trump, those petitions covered 202,151 workers whose jobs moved overseas, only slightly less than the 209,735 workers covered under Obama.
Biden has proposed taxing companies that offshore jobs, but it remains to be seen whether he will be successful. Viatris may prove his first big test.
DAR comment: The article is clear on the point that the political rhetoric of repatriating jobs to the U.S. rings hollow when large companies offshore jobs in the interests of improved profits. DR
U.S. Equal Employment Opportunity Commission
guidance on employer mandates on vaccinations
(from www.eeoc.gov/newsroom/eeoc-issues-updated-covid-19-technical-assistance)
- Federal EEO laws do not prevent an employer from requiring all employees physically entering the workplace to be vaccinated for COVID-19, so long as employers comply with the reasonable accommodation provisions of the ADA and Title VII of the Civil Rights Act of 1964 and other EEO considerations. Other laws, not in EEOC’s jurisdiction, may place additional restrictions on employers. From an EEO perspective, employers should keep in mind that because some individuals or demographic groups may face greater barriers to receiving a COVID-19 vaccination than others, some employees may be more likely to be negatively impacted by a vaccination requirement.
- Federal EEO laws do not prevent or limit employers from offering incentives to employees to voluntarily provide documentation or other confirmation of vaccination obtained from a third party (not the employer) in the community, such as a pharmacy, personal health care provider, or public clinic. If employers choose to obtain vaccination information from their employees, employers must keep vaccination information confidential pursuant to the ADA.
- Employers that are administering vaccines to their employees may offer incentives for employees to be vaccinated, as long as the incentives are not coercive. Because vaccinations require employees to answer pre-vaccination disability-related screening questions, a very large incentive could make employees feel pressured to disclose protected medical information.
- Employers may provide employees and their family members with information to educate them about COVID-19 vaccines and raise awareness about the benefits of vaccination. The technical assistance highlights federal government resources available to those seeking more information about how to get vaccinated.
ep. Ken Buck (Colo.), the top Republican on the House Judiciary antitrust subcommittee, is forming a new “Freedom From Big Tech Caucus”
He will be joined by some other GOP lawmakers who supported antitrust bills advanced by the committee last month.
Rep. Lance Gooden (R-Texas) will serve as co-chairman of the caucus. Other founding members of the caucus include Reps. Madison Cawthorn (R-N.C.), Burgess Owens (R-Utah) and Paul Gosar (R-Ariz.).
The caucus will aim to unite Republicans in Congress to “rein in Big Tech” through “legislation, education, and awareness.”
The announcement outlines a focus on antitrust reform, including restoring “the free and dynamic digital economy,” promoting “competition and innovation,” and supporting small businesses.
Additionally, the caucus said it will aim to protect privacy and data rights, protect children from harmful content online and “end political censorship.”
“Big Tech has abused its market power for decades, and Congress must act to hold these companies accountable and preserve the free market, promote competition and innovation, protect the freedom of speech, and foster a thriving digital economy,” Buck said in a statement.
The formation of the caucus comes as rifts within the House GOP deepen amid the push to pass the six antitrust bills the Judiciary Committee advanced that aim to reform antitrust power and target tech giants.
Rep. Jim Jordan (R-Ohio), ranking member of the Judiciary Committee, opposed the bills, and House Minority Leader Kevin McCarthy (R-Calif.) has also voiced criticism of the legislative package.
Amid the backlash, Jordan last week unveiled his own strategy for taking on Big Tech companies. Jordan’s agenda differed from the bills put forward by the committee, notably by calling for the Federal Trade Commission to be stripped of its antitrust enforcement authority.
Democrats face their own challenges on the bills, especially among a group of California lawmakers who have opposed the bills that target the companies based in their Bay Area districts.
From: https://thehill.com/policy/technology/563344-top-house-antitrust-republican-forms-freedom-from-big-tech-caucus
He will be joined by some other GOP lawmakers who supported antitrust bills advanced by the committee last month.
Rep. Lance Gooden (R-Texas) will serve as co-chairman of the caucus. Other founding members of the caucus include Reps. Madison Cawthorn (R-N.C.), Burgess Owens (R-Utah) and Paul Gosar (R-Ariz.).
The caucus will aim to unite Republicans in Congress to “rein in Big Tech” through “legislation, education, and awareness.”
The announcement outlines a focus on antitrust reform, including restoring “the free and dynamic digital economy,” promoting “competition and innovation,” and supporting small businesses.
Additionally, the caucus said it will aim to protect privacy and data rights, protect children from harmful content online and “end political censorship.”
“Big Tech has abused its market power for decades, and Congress must act to hold these companies accountable and preserve the free market, promote competition and innovation, protect the freedom of speech, and foster a thriving digital economy,” Buck said in a statement.
The formation of the caucus comes as rifts within the House GOP deepen amid the push to pass the six antitrust bills the Judiciary Committee advanced that aim to reform antitrust power and target tech giants.
Rep. Jim Jordan (R-Ohio), ranking member of the Judiciary Committee, opposed the bills, and House Minority Leader Kevin McCarthy (R-Calif.) has also voiced criticism of the legislative package.
Amid the backlash, Jordan last week unveiled his own strategy for taking on Big Tech companies. Jordan’s agenda differed from the bills put forward by the committee, notably by calling for the Federal Trade Commission to be stripped of its antitrust enforcement authority.
Democrats face their own challenges on the bills, especially among a group of California lawmakers who have opposed the bills that target the companies based in their Bay Area districts.
From: https://thehill.com/policy/technology/563344-top-house-antitrust-republican-forms-freedom-from-big-tech-caucus
Protecting the Independence of Public Broadcasting, by Don Allen Resnikoff
https://www.mediaethicsmagazine.com/index.php/browse-back-issues/216-spring-2021-vol-32-no-2/3999344-protecting-the-independence-of-public-broadcasting
Comment by Don Allen Resnikoff:
In my recent article in Media Ethics Magazine [see citation above], I say that U.S. publicly funded broadcasting should be protected from being turned into a partisan or ideological tool. The most effective protection for the independence of public broadcasting is the support of U.S. Presidents, and a Supreme Court that does not unduly limit the permissible delegation of authority to government agencies.
Protecting the autonomy of public broadcasters is complicated by a U.S. Supreme Court decision that reflects a shift to an “originalist” and “conservative” interpretation of the U.S. Constitution. In the case of Seila Law LLC v. Consumer Financial Protection Bureau the Supreme Court determined that the structure of the Consumer Financial Protection Bureau (CFPB), with a single director who could be removed from office only “for cause,” violated the requirements of the Constitution for the separation of powers. The Court explained, in its 5-4 decision, that, as a general matter, leaders of federal agencies serve at the discretion of the President. The President can fire them at his/her discretion.
In interpreting the Constitution so as to clip the independence of the CFPB, the Supreme Court cast a dark constitutional cloud over the established idea that Congress has the power to allow agencies to operate independently of the President. Harvard Law professors Cass Sunstein and Adrian Vermeule wrote that “the court’s approach raises serious doubts about the legal status of the Federal Reserve Board, the Federal Trade Commission, the Nuclear Regulatory Commission and other such entities.” And, of course, public broadcasting.
In a recent opinion issued shortly before publication of my Media Ethics article, Collins et al. v. Yellen, et al., 594 U.S. ____ (2021), the U.S. Supreme Court confirmed its adherence to the principles of the Seila case concerning the independence of government agencies. While the Court reiterated the idea that certain agencies may retain independence because of special circumstances, it decided the Collins case in a way that suggests a possible lack of Court flexibility in responding to the special circumstances of public broadcasting that support agency independence.
Note: My shorter related article on protecting the independence of public broadcasting previously appeared in the DC Bar Washington Lawyer Magazine
Don Allen Resnikoff
https://www.mediaethicsmagazine.com/index.php/browse-back-issues/216-spring-2021-vol-32-no-2/3999344-protecting-the-independence-of-public-broadcasting
Comment by Don Allen Resnikoff:
In my recent article in Media Ethics Magazine [see citation above], I say that U.S. publicly funded broadcasting should be protected from being turned into a partisan or ideological tool. The most effective protection for the independence of public broadcasting is the support of U.S. Presidents, and a Supreme Court that does not unduly limit the permissible delegation of authority to government agencies.
Protecting the autonomy of public broadcasters is complicated by a U.S. Supreme Court decision that reflects a shift to an “originalist” and “conservative” interpretation of the U.S. Constitution. In the case of Seila Law LLC v. Consumer Financial Protection Bureau the Supreme Court determined that the structure of the Consumer Financial Protection Bureau (CFPB), with a single director who could be removed from office only “for cause,” violated the requirements of the Constitution for the separation of powers. The Court explained, in its 5-4 decision, that, as a general matter, leaders of federal agencies serve at the discretion of the President. The President can fire them at his/her discretion.
In interpreting the Constitution so as to clip the independence of the CFPB, the Supreme Court cast a dark constitutional cloud over the established idea that Congress has the power to allow agencies to operate independently of the President. Harvard Law professors Cass Sunstein and Adrian Vermeule wrote that “the court’s approach raises serious doubts about the legal status of the Federal Reserve Board, the Federal Trade Commission, the Nuclear Regulatory Commission and other such entities.” And, of course, public broadcasting.
In a recent opinion issued shortly before publication of my Media Ethics article, Collins et al. v. Yellen, et al., 594 U.S. ____ (2021), the U.S. Supreme Court confirmed its adherence to the principles of the Seila case concerning the independence of government agencies. While the Court reiterated the idea that certain agencies may retain independence because of special circumstances, it decided the Collins case in a way that suggests a possible lack of Court flexibility in responding to the special circumstances of public broadcasting that support agency independence.
Note: My shorter related article on protecting the independence of public broadcasting previously appeared in the DC Bar Washington Lawyer Magazine
Don Allen Resnikoff
Picadio on the 2nd Amendment,
and the true history of militias and guns
Anthony Picadio’s thoughtful article in the July, 2021 Pennsylvania Bar Association Quarterly explains that in the near future the Supreme Court will address the gun rights case New York State Rifle & Pistol Association v. Corlett. This case involves a Constitutional Second Amendment challenge to New York State’s concealed carry law.
Author Picadio reminds us that the U.S. Supreme Court’s Heller case held in 2008, by a 5-4 vote, that the Second Amendment protects an individual’s right to possess a firearm, unconnected to service in a militia. Justice Antonin Scalia wrote the majority opinion in Heller. The opinion reflects Scalia’s dedication to an “originalist” style of Constitutional interpretation, the ostensible goal of which is a careful and deferential approach to the Constitution’s language as it was understood at the time of ratification.
Picadio’s article discusses the views of the three new U.S. Supreme Court Justices, Gorsuch, Kavanaugh and Coney-Barrett. They are all avowed originalists and apparent supporters of an expansive view of personal gun rights.
Picadio argues, among other things, that originalist Constitutional interpretation has not lived up to its promise of neutral, predictable decisions unaffected by a justice’s personal views. Picadio shows how originalism has increased the level of politicization in our judicial system. He writes:
Perhaps the most pernicious effect of originalism has been the politicization of history itself. We now have the situation where a one-vote majority Supreme Court opinion [in Heller] has decided our history. Does it no longer matter what history scholars say about the history of gun regulation in 18th Century England and early America? Does the concept of stare decisis foreclose consideration of further scholarly research? Just posing these questions shows how preposterous it is for a court to re solve, as a matter of law, disputed and contested historical issues.
What is the history of 18th Century gun regulation that Picadio believes has been obscured? A main aspect is that gun regulation was closely related to and supportive of oppression of black Americans. Following is an excerpt from his article on that particular point [footnotes omitted]:
Scalia’s idea that the Second Amendment was not understood as connecting gun ownership to service in a militia is not persuasive. His statement that another reason for the Second Amendment was to protect gun ownership/use for self-defense, is just wrong. To believe that, one would have to believe that James Madison, who sat on the Virginia committee which specifically rejected what Scalia called a Second Amendment analogue [that did not discriminate against blacks], and who was conscious of his state’s history of denying arms to free blacks, had a complete change of heart and drafted a Second Amendment which he knew would conflict with state laws such as Virginia’s [which limited gun ownership by blacks].The more likely conclusion is that Madison wrote the militia clause with the understanding that it would limit the interpretation of the operative clause and that was surely the understanding of those in the slave states which ratified the Second Amendment. Only by limiting the right to bear arms to members of all white militias could Madison ensure that guns would not be available to free blacks.
To be clear, the points discussed here are just a part of Anthony Picadio’s discussion of what lies ahead in the U.S. Supreme Court’s consideration of Second Amendment issues.
NOTE: Picadio’s article will also appear in the Transpartisan Review at: transpartisanreview.org
This posting is by Don Allen Resnikoff, who takes full responsibility for its content
The challenges to new FTC Chair Khan in plain sight
From https://newsupdate.uk/one-of-big-techs-biggest-critics-is-now-its-regulator/
“She brings to the job what I would call the boldest vision for the agency in its history,” William Kovacic, a former chairman of the agency, said of her approach to competition law. “So in that respect, she is a potentially transformative figure.”
The question is how much she will be able to accomplish.
Her fast ascent from researcher to leader of a large federal agency underscores the growing concerns about the power of the big tech companies — and big business in general — in Washington. In her new job, she will command more than 1,000 investigators, lawyers and economists who are responsible for policing the American economy.
Her reach will extend far beyond the tech giants and the antitrust legal critiques where she made her name. The F.T.C. investigates unfair or deceptive practices by companies in addition to antitrust violations. This year alone, it has challenged the merger of two cement producers in Pennsylvania, cracked down on unsupported statements about treatments for Covid-19 and reached a deal with two liquor companies over a merger it said would hurt competition for cheap sparkling wine.
But Ms. Khan will also confront her share of limits. In order to create new rules or take major actions against companies, she will need to persuade at least two of the four other commissioners to agree with her. She will also need to make decisions that can hold up in the courts, which have tended to push back against aggressive antitrust enforcement.
“If you want your vision to endure,” Mr. Kovacic said, “you have to change law and policy, and you can’t do that by yourself.”
From https://newsupdate.uk/one-of-big-techs-biggest-critics-is-now-its-regulator/
“She brings to the job what I would call the boldest vision for the agency in its history,” William Kovacic, a former chairman of the agency, said of her approach to competition law. “So in that respect, she is a potentially transformative figure.”
The question is how much she will be able to accomplish.
Her fast ascent from researcher to leader of a large federal agency underscores the growing concerns about the power of the big tech companies — and big business in general — in Washington. In her new job, she will command more than 1,000 investigators, lawyers and economists who are responsible for policing the American economy.
Her reach will extend far beyond the tech giants and the antitrust legal critiques where she made her name. The F.T.C. investigates unfair or deceptive practices by companies in addition to antitrust violations. This year alone, it has challenged the merger of two cement producers in Pennsylvania, cracked down on unsupported statements about treatments for Covid-19 and reached a deal with two liquor companies over a merger it said would hurt competition for cheap sparkling wine.
But Ms. Khan will also confront her share of limits. In order to create new rules or take major actions against companies, she will need to persuade at least two of the four other commissioners to agree with her. She will also need to make decisions that can hold up in the courts, which have tended to push back against aggressive antitrust enforcement.
“If you want your vision to endure,” Mr. Kovacic said, “you have to change law and policy, and you can’t do that by yourself.”
NJ Governor Murphy Signs Landmark Legislation to Permanently Establish the Community College Opportunity Grant Program
02/26/2021
New Law Will Continue to Guarantee Tuition-Free Community College Education to More than 50,000 New Jersey Students Each Academic Year
JERSEY CITY – Fulfilling his promise to make tuition-free community college a reality, Governor Phil Murphy today signed A4410, permanently establishing the Community College Opportunity Grant Program (CCOG), which will allow qualified students to attend any New Jersey community college without tuition or educational fees.
“For far too long, higher education has been out of reach for countless New Jerseyans due to its high cost,” said Governor Murphy. “Today’s bill signing underscores our continued commitment to college affordability, ensuring that our young people and working adults have the opportunity to earn post-secondary degrees and advance their promising careers.”
“Today represents a huge win for college affordability and a transformative moment in our state’s history. In the years to come, CCOG will continue offering thousands more eligible students equitable access to a college education for free,” said Dr. Brian Bridges, Secretary of Higher Education. “To emerge stronger and fairer from the COVID-19 pandemic, we are investing in future generations today by expanding affordable options to ensure students’ lifelong success.”
“New Jersey now sends a clear message: county college is tuition-free for students with family incomes of $65,000 or below,” said David Socolow, Executive Director of the New Jersey Higher Education Student Assistance Authority (HESAA). “Governor Murphy has enabled HESAA to back up that promise by filling students’ remaining financial aid gaps with more than 25,000 Community College Opportunity Grants since the spring 2019 semester. The impact of this commitment reaches still further, by making an up-front, tuition-free price guarantee that enables tens of thousands of additional students to focus on their postsecondary education without concern about paying the tuition sticker price. Many students can now consider enrolling in college with full confidence that their entire county college tuition will be covered by the State of New Jersey. By raising awareness that college is more affordable, we can encourage more students to pursue courses of study that will enhance their lives and careers here in the Garden State.”
CCOG, which will be administered by the Higher Education Student Assistance Authority (HESAA), will provide last-dollar grants to eligible county college students for those tuition costs and fees not already covered by any other State, federal, and institutional need-based grants and merit scholarships. Students with adjusted gross incomes of $65,000 or less will be eligible to receive this financial grant for a total of five (5) semesters. This legislation also directs the Legislature to appropriate funding for the “Student Success Incentive” to the Office of the Secretary of Higher Education, for distribution to each county college. This funding will be used to support outreach and student success initiatives to further the goals of the CCOG grant program.
From https://www.nj.gov/governor/news/news/562021/20210226a.shtml
DAR Comment: When I attended New Jersey's Rutgers University some years ago, the tuition and room and board were not free, but close to it. My family had no money to contribute, but with a small home town newspaper scholarship and part time work I lived comfortably at college, and graduated without debt. I later attended law school on a partial scholarship. As a consequence of the opportunities extended to me I have enjoyed an interesting legal career, lived comfortably, and provided a comfortable upbringing for my children. I've attended reunions at Rutgers where I've chatted with others from poor families who were able to pursue satisfying careers because of the minimal tuition and room and board costs they experienced at Rutgers. In recent years opportunities for excellent and low-cost college education have melted away for students from families with small financial resources--costs for tuition and room and board at Rutgers have increased dramatically. The New Jersey initiative, while limited to community colleges, is a welcome step to restoring advanced education opportunities for students from poor families.
02/26/2021
New Law Will Continue to Guarantee Tuition-Free Community College Education to More than 50,000 New Jersey Students Each Academic Year
JERSEY CITY – Fulfilling his promise to make tuition-free community college a reality, Governor Phil Murphy today signed A4410, permanently establishing the Community College Opportunity Grant Program (CCOG), which will allow qualified students to attend any New Jersey community college without tuition or educational fees.
“For far too long, higher education has been out of reach for countless New Jerseyans due to its high cost,” said Governor Murphy. “Today’s bill signing underscores our continued commitment to college affordability, ensuring that our young people and working adults have the opportunity to earn post-secondary degrees and advance their promising careers.”
“Today represents a huge win for college affordability and a transformative moment in our state’s history. In the years to come, CCOG will continue offering thousands more eligible students equitable access to a college education for free,” said Dr. Brian Bridges, Secretary of Higher Education. “To emerge stronger and fairer from the COVID-19 pandemic, we are investing in future generations today by expanding affordable options to ensure students’ lifelong success.”
“New Jersey now sends a clear message: county college is tuition-free for students with family incomes of $65,000 or below,” said David Socolow, Executive Director of the New Jersey Higher Education Student Assistance Authority (HESAA). “Governor Murphy has enabled HESAA to back up that promise by filling students’ remaining financial aid gaps with more than 25,000 Community College Opportunity Grants since the spring 2019 semester. The impact of this commitment reaches still further, by making an up-front, tuition-free price guarantee that enables tens of thousands of additional students to focus on their postsecondary education without concern about paying the tuition sticker price. Many students can now consider enrolling in college with full confidence that their entire county college tuition will be covered by the State of New Jersey. By raising awareness that college is more affordable, we can encourage more students to pursue courses of study that will enhance their lives and careers here in the Garden State.”
CCOG, which will be administered by the Higher Education Student Assistance Authority (HESAA), will provide last-dollar grants to eligible county college students for those tuition costs and fees not already covered by any other State, federal, and institutional need-based grants and merit scholarships. Students with adjusted gross incomes of $65,000 or less will be eligible to receive this financial grant for a total of five (5) semesters. This legislation also directs the Legislature to appropriate funding for the “Student Success Incentive” to the Office of the Secretary of Higher Education, for distribution to each county college. This funding will be used to support outreach and student success initiatives to further the goals of the CCOG grant program.
From https://www.nj.gov/governor/news/news/562021/20210226a.shtml
DAR Comment: When I attended New Jersey's Rutgers University some years ago, the tuition and room and board were not free, but close to it. My family had no money to contribute, but with a small home town newspaper scholarship and part time work I lived comfortably at college, and graduated without debt. I later attended law school on a partial scholarship. As a consequence of the opportunities extended to me I have enjoyed an interesting legal career, lived comfortably, and provided a comfortable upbringing for my children. I've attended reunions at Rutgers where I've chatted with others from poor families who were able to pursue satisfying careers because of the minimal tuition and room and board costs they experienced at Rutgers. In recent years opportunities for excellent and low-cost college education have melted away for students from families with small financial resources--costs for tuition and room and board at Rutgers have increased dramatically. The New Jersey initiative, while limited to community colleges, is a welcome step to restoring advanced education opportunities for students from poor families.
Book review by Don Allen Resnikoff
The Twilight of Democracy: The Seductive Lure of Authoritarianism
Anne Applebaum. Doubleday (224p) 2020
Anne Applebaum’s book The Twilight of Democracy describes how a significant number of well-educated and sophisticated people in countries around the world are supporting anti-democratic movements and opposing democracy. Instead, they support autocracy. The reasoning of such people is not ideology so much as support for the status quo, a continuation of a social hierarchy where the established insider group is preserved, and groups perceived as outsiders are quashed.
Applebaum makes subordinate but important points about the role of false narratives in advancing anti-democratic movements. Often the false narratives used by anti-democratic movements involve conspiracy theories, where people perceived as outsiders are accused of conspiring against the established insider group. False narratives are a particularly interesting phenomena because they are, Applebaum argues, relevant even in countries like the U.S., where responsible journalists can present the truth about false narratives.
A question raised by the false narratives story is what journalists and ordinary citizens can do to counter false narratives. In a world where the media and citizens sometimes isolate themselves in “echo chambers” of limited information, simply presenting the truth may not be enough.
Turning to Applebaum’s stories, she tells us that when Poland’s right-wing Law and Justice Party gained political control in 2015, it took over the state’s public radio and TV outlets. The new government fired established reporters and replaced them with right-wing political loyalists.
Applebaum reports that the state public broadcaster programming became “straightforward ruling party propaganda” and “lies.” There were “twisted news reports” and “extensive vendettas against people and organizations whom the ruling party didn’t like.” In Poland the tradition of privately operated broadcasting was weak, so state control of the public broadcasting gave the government a very powerful voice.
Applebaum reports that the state broadcaster’s vendettas had lethal effects. On one occasion the state broadcaster’s persistent (and, according to Applebaum, incorrect and unfair) attacks on a town’s mayor inspired a deranged person to kill the mayor.
In her book, and in a Washington Post Op-Ed, Applebaum tells how the Polish government concocted a conspiracy theory that had great political benefits to the right-wing government, and that achieved acceptance among the Polish people because of Polish government control of broadcasting.[i] She offers the story as a warning to U.S. citizens about the path for an autocratic government in the United States. Applebaum’s intention is to provide a preview of possible bad political developments in the United States – the growth of anti-democratic movements.
The lesson Anne Applebaum offers is that propagation of false conspiratorial narratives provides groundwork for undermining the rule of law. In conspiracy theories the conspirators are characterized as evil, allowing the anti-democratic forces to argue that extra-legal and autocratic strategies to crush them are appropriate. Applebaum believes that such autocratic strategies and related opposition to the rule of law are a threat in the United States
The genesis of the conspiracy story pressed by the right-wing Polish government was the crash of a plane that had carried the Polish president, Lech Kaczynski, and other high level officials. Several dozen senior military figures and politicians were on the plane. All died.
The president’s twin brother, Jaroslaw Kaczynski, began to promote a false conspiracy theory. At the core of the conspiracy idea was the thought that the crash was not an accident, but the work of secret forces, particularly elite groups manipulated by foreigners. The alleged “conspirators” were “left wing” people with ties to Western democracies.
Applebaum reports that the use of the concocted conspiracy theory was a successful political strategy. It propelled the right-wing nationalist-populist party, Law and Justice, to political successes.
The conspiracy theory about the plane crash was plainly false, according to Applebaum. Applebaum says that the truth is that within hours of the crash, forensic experts were on the ground. They immediately obtained the black boxes and transcribed them meticulously. The cockpit tape can be heard online, and it is strong evidence, in Applebaum’s view. “The president was late; . . . When Russian air traffic controllers wanted to divert the plane because of heavy fog, he did not agree. The chief of the Air Force sat in the cockpit during the final minutes of the flight and pushed the pilots to land: ‘Be bold, you’ll make it,’ he told them. According to the official report, written by the country’s top aviation experts, the plane hit a tree, then the ground, and then broke up.”[ii]
It is significant that the ability of the right-wing Polish government to successfully promote a false narrative of a conspiracy of foreign-influenced left-wing forces depended not only on the government’s control of government-run broadcasting, but also on lack of alternate information sources. The Polish government wielded effective autocratic control over all dissemination of information. That is different than the situation in the United States, where there are multiple and sometimes competing source of information.
Despite the differences between Poland and the U.S. with regard to journalistic freedom, Anne Applebaum’s message is clear. Autocratic government tendencies are aided by use of fake narratives about political enemies. That is true even in the United States, where there is alternate media that is independent of government and can report the facts.
The political harm that can be caused in the United States by false conspiratorial narratives is clear, according to Anne Applebaum: undermining democracy and the rule of law.
i https://www.washingtonpost.com/opinions/global-opinions/in-poland-a-preview-of-what-trump-could-do-to-america/2016/09/19/71515d02-7e86-11e6-8d13-d7c704ef9fd9_story.html
[ii] ibid
The Twilight of Democracy: The Seductive Lure of Authoritarianism
Anne Applebaum. Doubleday (224p) 2020
Anne Applebaum’s book The Twilight of Democracy describes how a significant number of well-educated and sophisticated people in countries around the world are supporting anti-democratic movements and opposing democracy. Instead, they support autocracy. The reasoning of such people is not ideology so much as support for the status quo, a continuation of a social hierarchy where the established insider group is preserved, and groups perceived as outsiders are quashed.
Applebaum makes subordinate but important points about the role of false narratives in advancing anti-democratic movements. Often the false narratives used by anti-democratic movements involve conspiracy theories, where people perceived as outsiders are accused of conspiring against the established insider group. False narratives are a particularly interesting phenomena because they are, Applebaum argues, relevant even in countries like the U.S., where responsible journalists can present the truth about false narratives.
A question raised by the false narratives story is what journalists and ordinary citizens can do to counter false narratives. In a world where the media and citizens sometimes isolate themselves in “echo chambers” of limited information, simply presenting the truth may not be enough.
Turning to Applebaum’s stories, she tells us that when Poland’s right-wing Law and Justice Party gained political control in 2015, it took over the state’s public radio and TV outlets. The new government fired established reporters and replaced them with right-wing political loyalists.
Applebaum reports that the state public broadcaster programming became “straightforward ruling party propaganda” and “lies.” There were “twisted news reports” and “extensive vendettas against people and organizations whom the ruling party didn’t like.” In Poland the tradition of privately operated broadcasting was weak, so state control of the public broadcasting gave the government a very powerful voice.
Applebaum reports that the state broadcaster’s vendettas had lethal effects. On one occasion the state broadcaster’s persistent (and, according to Applebaum, incorrect and unfair) attacks on a town’s mayor inspired a deranged person to kill the mayor.
In her book, and in a Washington Post Op-Ed, Applebaum tells how the Polish government concocted a conspiracy theory that had great political benefits to the right-wing government, and that achieved acceptance among the Polish people because of Polish government control of broadcasting.[i] She offers the story as a warning to U.S. citizens about the path for an autocratic government in the United States. Applebaum’s intention is to provide a preview of possible bad political developments in the United States – the growth of anti-democratic movements.
The lesson Anne Applebaum offers is that propagation of false conspiratorial narratives provides groundwork for undermining the rule of law. In conspiracy theories the conspirators are characterized as evil, allowing the anti-democratic forces to argue that extra-legal and autocratic strategies to crush them are appropriate. Applebaum believes that such autocratic strategies and related opposition to the rule of law are a threat in the United States
The genesis of the conspiracy story pressed by the right-wing Polish government was the crash of a plane that had carried the Polish president, Lech Kaczynski, and other high level officials. Several dozen senior military figures and politicians were on the plane. All died.
The president’s twin brother, Jaroslaw Kaczynski, began to promote a false conspiracy theory. At the core of the conspiracy idea was the thought that the crash was not an accident, but the work of secret forces, particularly elite groups manipulated by foreigners. The alleged “conspirators” were “left wing” people with ties to Western democracies.
Applebaum reports that the use of the concocted conspiracy theory was a successful political strategy. It propelled the right-wing nationalist-populist party, Law and Justice, to political successes.
The conspiracy theory about the plane crash was plainly false, according to Applebaum. Applebaum says that the truth is that within hours of the crash, forensic experts were on the ground. They immediately obtained the black boxes and transcribed them meticulously. The cockpit tape can be heard online, and it is strong evidence, in Applebaum’s view. “The president was late; . . . When Russian air traffic controllers wanted to divert the plane because of heavy fog, he did not agree. The chief of the Air Force sat in the cockpit during the final minutes of the flight and pushed the pilots to land: ‘Be bold, you’ll make it,’ he told them. According to the official report, written by the country’s top aviation experts, the plane hit a tree, then the ground, and then broke up.”[ii]
It is significant that the ability of the right-wing Polish government to successfully promote a false narrative of a conspiracy of foreign-influenced left-wing forces depended not only on the government’s control of government-run broadcasting, but also on lack of alternate information sources. The Polish government wielded effective autocratic control over all dissemination of information. That is different than the situation in the United States, where there are multiple and sometimes competing source of information.
Despite the differences between Poland and the U.S. with regard to journalistic freedom, Anne Applebaum’s message is clear. Autocratic government tendencies are aided by use of fake narratives about political enemies. That is true even in the United States, where there is alternate media that is independent of government and can report the facts.
The political harm that can be caused in the United States by false conspiratorial narratives is clear, according to Anne Applebaum: undermining democracy and the rule of law.
i https://www.washingtonpost.com/opinions/global-opinions/in-poland-a-preview-of-what-trump-could-do-to-america/2016/09/19/71515d02-7e86-11e6-8d13-d7c704ef9fd9_story.html
[ii] ibid
Five recent proposed antitrust reform bills
From: https://deadline.com/2021/06/house-antitrust-apple-amazon-facebook-google-1234773904/
With links to the text of proposed bills
-The Platform Competition and Opportunity Act: prohibits acquisitions of competitive threats by dominant platforms, as well acquisitions that expand or entrench the market power of online platforms.
Facebook in particular has been taken to task for buying Instagram and other smaller rivals to maintain its social media dominance.
https://www.congress.gov/bill/117th-congress/house-bill/3826
–The Ending Platform Monopolies Act: eliminates the ability of dominant platforms to leverage their control over across multiple business lines to self-preference and disadvantage competitors in ways that undermine free and fair competition.
This would lead breakups of Amazon and other big tech companies by prohibiting them from owning a business that uses the platform “for the sale or provision of products or services” or that sells services as a condition of accessing the platform. Companies couldn’t own businesses that create conflicts of interest, where the platform has incentive and ability to advantage its own products over competitors. Retailers on Amazon’s marketplace have accused the company of mining their data to undercut them.
https://www.congress.gov/bill/117th-congress/house-bill/3825
-The American Innovation and Choice Online Act: prohibits discriminatory conduct by dominant platforms, including a ban on self-preferencing “and picking winners and losers online.”
https://www.congress.gov/bill/117th-congress/house-bill/3816
–The Merger Filing Fee Modernization Act: updates filing fees for mergers for the first time in two decades to ensure that Department of Justice and Federal Trade Commission have the resources they need to aggressively enforce the antitrust laws. It raises the fees for mergers valued at over $1 billion and lowers them for deals of under $500,000.
https://www.congress.gov/bill/117th-congress/senate-bill/228
--The Augmenting Compatibility and Competition by Enabling Service Switching (ACCESS) Act: promotes competition online by lowering barriers to entry and switching costs for businesses and consumers through interoperability and data portability requirements.
https://www.congress.gov/bill/116th-congress/senate-bill/2658/all-info
From: https://deadline.com/2021/06/house-antitrust-apple-amazon-facebook-google-1234773904/
With links to the text of proposed bills
-The Platform Competition and Opportunity Act: prohibits acquisitions of competitive threats by dominant platforms, as well acquisitions that expand or entrench the market power of online platforms.
Facebook in particular has been taken to task for buying Instagram and other smaller rivals to maintain its social media dominance.
https://www.congress.gov/bill/117th-congress/house-bill/3826
–The Ending Platform Monopolies Act: eliminates the ability of dominant platforms to leverage their control over across multiple business lines to self-preference and disadvantage competitors in ways that undermine free and fair competition.
This would lead breakups of Amazon and other big tech companies by prohibiting them from owning a business that uses the platform “for the sale or provision of products or services” or that sells services as a condition of accessing the platform. Companies couldn’t own businesses that create conflicts of interest, where the platform has incentive and ability to advantage its own products over competitors. Retailers on Amazon’s marketplace have accused the company of mining their data to undercut them.
https://www.congress.gov/bill/117th-congress/house-bill/3825
-The American Innovation and Choice Online Act: prohibits discriminatory conduct by dominant platforms, including a ban on self-preferencing “and picking winners and losers online.”
https://www.congress.gov/bill/117th-congress/house-bill/3816
–The Merger Filing Fee Modernization Act: updates filing fees for mergers for the first time in two decades to ensure that Department of Justice and Federal Trade Commission have the resources they need to aggressively enforce the antitrust laws. It raises the fees for mergers valued at over $1 billion and lowers them for deals of under $500,000.
https://www.congress.gov/bill/117th-congress/senate-bill/228
--The Augmenting Compatibility and Competition by Enabling Service Switching (ACCESS) Act: promotes competition online by lowering barriers to entry and switching costs for businesses and consumers through interoperability and data portability requirements.
https://www.congress.gov/bill/116th-congress/senate-bill/2658/all-info
AAI Has Allergic Reaction to Misguided Decision in EpiPen Monopolization Case (Sanofi v. Mylan)
AAI filed an amicus brief urging the Tenth Circuit Court of Appeals to reverse a district court order granting summary judgment to the defendant Mylan in a closely watched monopolization case involving the ubiquitous EpiPen, a device used to treat allergy patients who suffer from life-threatening anaphylaxis.
The AAI brief argues that the district court failed to account for Mylan’s overwhelming monopoly power in assessing the likelihood that its conduct would have anticompetitive effects in the EAI market. Although the district court accurately cited language from a different case emphasizing that exclusive dealing is common in the economy and can often be procompetitive, it neglected to account for the economic realities of the EAI market, in which Mylan was eliminating its only capable rival. Because the court failed to appreciate that competition cannot exist without competitors, it did not recognize that conduct eliminating the Auvi-Q on some basis other than efficiency was all but assured of causing cognizable harm under the antitrust laws.
Read More - https://www.antitrustinstitute.org/work-product/aai-has-allergic-reaction-to-misguided-decision-in-epipen-monopolization-case-sanofi-v-mylan/
AAI filed an amicus brief urging the Tenth Circuit Court of Appeals to reverse a district court order granting summary judgment to the defendant Mylan in a closely watched monopolization case involving the ubiquitous EpiPen, a device used to treat allergy patients who suffer from life-threatening anaphylaxis.
The AAI brief argues that the district court failed to account for Mylan’s overwhelming monopoly power in assessing the likelihood that its conduct would have anticompetitive effects in the EAI market. Although the district court accurately cited language from a different case emphasizing that exclusive dealing is common in the economy and can often be procompetitive, it neglected to account for the economic realities of the EAI market, in which Mylan was eliminating its only capable rival. Because the court failed to appreciate that competition cannot exist without competitors, it did not recognize that conduct eliminating the Auvi-Q on some basis other than efficiency was all but assured of causing cognizable harm under the antitrust laws.
Read More - https://www.antitrustinstitute.org/work-product/aai-has-allergic-reaction-to-misguided-decision-in-epipen-monopolization-case-sanofi-v-mylan/
Statute advocated by Maryland Consumer Rights Coalition becomes law -- protects people with medical bills they can't pay
the Medical Debt Protection Act (HB565/SB514) is now law. The legislation, sponsored by Del. Lorig Charkoudian and Sen. Brian Feldman offers the strongest protections for patients with medical debt in the country. Among its many strong provisions, it prohibits liens on homes for anyone with medical debt, prohibits wage garnishment for patients who qualify for free or reduced-cost care, prohibits the use of body attachments for any medical debt collection efforts, creates an income-based repayment plan of no more than 5% of a person’s gross monthly income for all patients with medical debt, and establishes a moratorium on medical debt collection from June through January 2022.
Source: MCRC
the Medical Debt Protection Act (HB565/SB514) is now law. The legislation, sponsored by Del. Lorig Charkoudian and Sen. Brian Feldman offers the strongest protections for patients with medical debt in the country. Among its many strong provisions, it prohibits liens on homes for anyone with medical debt, prohibits wage garnishment for patients who qualify for free or reduced-cost care, prohibits the use of body attachments for any medical debt collection efforts, creates an income-based repayment plan of no more than 5% of a person’s gross monthly income for all patients with medical debt, and establishes a moratorium on medical debt collection from June through January 2022.
Source: MCRC
DC AG Newsletter on Amazon suit
New Antitrust Lawsuit Against Amazon
May was quite the month.
* * *
And at the end of the month, my office announced a new antitrust lawsuit against Amazon. Through this suit, we’re seeking to end Amazon’s anticompetitive practices that have raised prices for consumers and stifled innovation and choice across the entire online retail market.
The lawsuit alleges that the pricing agreements Amazon imposes on third-party sellers are anticompetitive and allow Amazon to illegally build and maintain monopoly power in the online retail market in violation of District law.
For years, Amazon has controlled online retail prices through its restrictive contracts and policies. Amazon requires third-party sellers to agree that they won’t offer their products anywhere else online–including their own websites–for a lower price than on Amazon.
These agreements result in an artificially high price across the online retail marketplace. They ensure that high fees charged to third-party sellers by Amazon–as much as 40% of the product price–are incorporated not only in the price charged on Amazon, but also in the prices charged on competing platforms across the online retail sales market.
Amazon has used its dominant position in the online retail market to win at all costs. My office filed this antitrust lawsuit to put an end to Amazon’s illegal control of prices across the online retail market. We need a fair online marketplace that expands options available to District residents and promotes competition, innovation, and choice.
To learn more about the case, read this New York Times article. [Amazon Accused of Manipulating Prices by D.C. Attorney General - The New York Times (nytimes.com), https://www.nytimes.com/2021/05/25/business/amazon-dc-lawsuit.html]
To learn more about the significance of the case, read this other New York Times article. [The Big Deal in Amazon’s Antitrust Case - The New York Times (nytimes.com),https://www.nytimes.com/2021/05/25/technology/amazon-antitrust-lawsuit.html]
Thank you.
Karl A. Racine
Attorney General
New Antitrust Lawsuit Against Amazon
May was quite the month.
* * *
And at the end of the month, my office announced a new antitrust lawsuit against Amazon. Through this suit, we’re seeking to end Amazon’s anticompetitive practices that have raised prices for consumers and stifled innovation and choice across the entire online retail market.
The lawsuit alleges that the pricing agreements Amazon imposes on third-party sellers are anticompetitive and allow Amazon to illegally build and maintain monopoly power in the online retail market in violation of District law.
For years, Amazon has controlled online retail prices through its restrictive contracts and policies. Amazon requires third-party sellers to agree that they won’t offer their products anywhere else online–including their own websites–for a lower price than on Amazon.
These agreements result in an artificially high price across the online retail marketplace. They ensure that high fees charged to third-party sellers by Amazon–as much as 40% of the product price–are incorporated not only in the price charged on Amazon, but also in the prices charged on competing platforms across the online retail sales market.
Amazon has used its dominant position in the online retail market to win at all costs. My office filed this antitrust lawsuit to put an end to Amazon’s illegal control of prices across the online retail market. We need a fair online marketplace that expands options available to District residents and promotes competition, innovation, and choice.
To learn more about the case, read this New York Times article. [Amazon Accused of Manipulating Prices by D.C. Attorney General - The New York Times (nytimes.com), https://www.nytimes.com/2021/05/25/business/amazon-dc-lawsuit.html]
To learn more about the significance of the case, read this other New York Times article. [The Big Deal in Amazon’s Antitrust Case - The New York Times (nytimes.com),https://www.nytimes.com/2021/05/25/technology/amazon-antitrust-lawsuit.html]
Thank you.
Karl A. Racine
Attorney General
Amazon will rely on high burden of proof – experts
In a lawsuit filed May 25 in Washington, D.C., Superior Court, Washington, D.C.'s Attorney General Karl Racine claimed Amazon artificially inflated prices across the entire online retail market by prohibiting merchants that sell on Amazon's site from charging lower prices for the same products elsewhere. The lawsuit seeks to stop Amazon’s use of the price agreements, recover damages and impose penalties to discourage similar conduct by Amazon and other companies.
But experts say the suit is limited in scope because any judgment would apply to the district alone. A lack of successfully litigated cases focused on this issue could also pose an obstacle.
"There isn't a body of litigation that has looked at this in detail, in this setting, in trial proceedings," said former Federal Trade Commission Chair William Kovacic. "Without the benefit of cases that have said 'this practice is anti-competitive,' you have to explore some new terrain. The burden is always on the plaintiff to show anti-competitive effects."
Meanwhile, Amazon will likely bring an expert forward who argues that the company's pricing practices are pro-competitive or have no competitive effect, said Kovacic, who currently serves as a law professor at George Washington University. "Amazon will say 'this hasn't been condemned in the United States before,'" Kovacic said.
In an email statement to S&P Global Market Intelligence June 1, an Amazon spokesperson said sellers set their own prices for the products they offer in its store.
"Amazon takes pride in the fact that we offer low prices across the broadest selection, and like any store, we reserve the right not to highlight offers to customers that are not priced competitively," the spokesperson said. "The relief the AG seeks would force Amazon to feature higher prices to customers, oddly going against core objectives of antitrust law."
The suit takes on extra significance given that independent third-party merchants account for a majority of physical gross merchandise sales on Amazon's site, at 60% as of 2019, according to data from Marketplace Pulse, a firm that collects data on e-commerce companies, including Amazon.
Many Amazon sellers are increasingly diversifying to online platforms run by Walmart Inc., eBay Inc., Target Corp. and others to reach new consumers in the wake of the pandemic. Despite this, Amazon remains the dominant source for many of these sales.
"The perception is that they have almost zero negotiating leverage" when it comes to price, said Tuna Amobi, media and entertainment analyst with CFRA Research.
The suit rekindles some antitrust concerns with Amazon's price parity provision under its "most favored nation" agreements in which the company previously prohibited sellers from offering products at lower prices on competing platforms, Amobi said.
Amazon replaced the provision in 2019 with a "fair pricing policy," which has the same effect of blocking sellers from offering lower prices to consumers on other retail sites, Amobi said.
"The argument now is that Amazon really didn't follow through with the spirit of [removing the price parity provision] and kept enforcing it indirectly," Amobi said.
Under Amazon's fair pricing policy, third-party sellers can be sanctioned or removed from Amazon if they offer their products for lower prices or under better terms on a competing platform, according to the Washington, D.C., suit.
The lawsuit adds to increasing scrutiny over Amazon's relationship with its third-party sellers, including a probe launched by the FTC in concert with the attorneys general in New York and California.
But the district lawsuit's relatively limited scope, coupled with a high bar to prove fault, means little near-term material risk, Amobi said.
"It just seems to be a high bar to prove that these merchants had actually suffered direct losses," Amobi said. "Amazon has said merchants had the discretion to set their own prices. They are just requiring them to not offer lower prices elsewhere."
Kovacic said the plaintiff can, however, point to substantial academic literature that supports the theory of the district's case along with cases in Europe, where competition authorities in the United Kingdom and Germany launched investigations into whether Amazon’s price parity provision is anti-competitive.
According to the suit, Amazon informed European regulators in 2013 that it would abandon the provision across the European Union, but the provision "remained in place for years longer in the United States and elsewhere."
From: https://www.spglobal.com/marketintelligence/en/news-insights/latest-news-headlines/dc-s-antitrust-suit-against-amazon-will-rely-on-high-burden-of-proof-8211-experts-64539029
- Author Katie Arcieri
In a lawsuit filed May 25 in Washington, D.C., Superior Court, Washington, D.C.'s Attorney General Karl Racine claimed Amazon artificially inflated prices across the entire online retail market by prohibiting merchants that sell on Amazon's site from charging lower prices for the same products elsewhere. The lawsuit seeks to stop Amazon’s use of the price agreements, recover damages and impose penalties to discourage similar conduct by Amazon and other companies.
But experts say the suit is limited in scope because any judgment would apply to the district alone. A lack of successfully litigated cases focused on this issue could also pose an obstacle.
"There isn't a body of litigation that has looked at this in detail, in this setting, in trial proceedings," said former Federal Trade Commission Chair William Kovacic. "Without the benefit of cases that have said 'this practice is anti-competitive,' you have to explore some new terrain. The burden is always on the plaintiff to show anti-competitive effects."
Meanwhile, Amazon will likely bring an expert forward who argues that the company's pricing practices are pro-competitive or have no competitive effect, said Kovacic, who currently serves as a law professor at George Washington University. "Amazon will say 'this hasn't been condemned in the United States before,'" Kovacic said.
In an email statement to S&P Global Market Intelligence June 1, an Amazon spokesperson said sellers set their own prices for the products they offer in its store.
"Amazon takes pride in the fact that we offer low prices across the broadest selection, and like any store, we reserve the right not to highlight offers to customers that are not priced competitively," the spokesperson said. "The relief the AG seeks would force Amazon to feature higher prices to customers, oddly going against core objectives of antitrust law."
The suit takes on extra significance given that independent third-party merchants account for a majority of physical gross merchandise sales on Amazon's site, at 60% as of 2019, according to data from Marketplace Pulse, a firm that collects data on e-commerce companies, including Amazon.
Many Amazon sellers are increasingly diversifying to online platforms run by Walmart Inc., eBay Inc., Target Corp. and others to reach new consumers in the wake of the pandemic. Despite this, Amazon remains the dominant source for many of these sales.
"The perception is that they have almost zero negotiating leverage" when it comes to price, said Tuna Amobi, media and entertainment analyst with CFRA Research.
The suit rekindles some antitrust concerns with Amazon's price parity provision under its "most favored nation" agreements in which the company previously prohibited sellers from offering products at lower prices on competing platforms, Amobi said.
Amazon replaced the provision in 2019 with a "fair pricing policy," which has the same effect of blocking sellers from offering lower prices to consumers on other retail sites, Amobi said.
"The argument now is that Amazon really didn't follow through with the spirit of [removing the price parity provision] and kept enforcing it indirectly," Amobi said.
Under Amazon's fair pricing policy, third-party sellers can be sanctioned or removed from Amazon if they offer their products for lower prices or under better terms on a competing platform, according to the Washington, D.C., suit.
The lawsuit adds to increasing scrutiny over Amazon's relationship with its third-party sellers, including a probe launched by the FTC in concert with the attorneys general in New York and California.
But the district lawsuit's relatively limited scope, coupled with a high bar to prove fault, means little near-term material risk, Amobi said.
"It just seems to be a high bar to prove that these merchants had actually suffered direct losses," Amobi said. "Amazon has said merchants had the discretion to set their own prices. They are just requiring them to not offer lower prices elsewhere."
Kovacic said the plaintiff can, however, point to substantial academic literature that supports the theory of the district's case along with cases in Europe, where competition authorities in the United Kingdom and Germany launched investigations into whether Amazon’s price parity provision is anti-competitive.
According to the suit, Amazon informed European regulators in 2013 that it would abandon the provision across the European Union, but the provision "remained in place for years longer in the United States and elsewhere."
From: https://www.spglobal.com/marketintelligence/en/news-insights/latest-news-headlines/dc-s-antitrust-suit-against-amazon-will-rely-on-high-burden-of-proof-8211-experts-64539029
NYT Dealbook: “New York May Change How America Does Antitrust”
Last year, Gianaris introduced a bill to update New York state’s antitrust law, with the goal being to move away from the monopoly friendly standard judges use right now to understand what constitutes a market power, which is known as the ‘consumer welfare’ standard. This week, the updated bill is likely to pass the full state Senate, and will be headed for the New York Assembly. It is a serious effort. Gianaris is a powerful player in New York politics, and the legislation has the support of New York’s Attorney General, Letitia James, who is also leading one of the key antitrust cases against Facebook.
You can tell it matters because the New York Times’s Dealbook - read by investors - reported on it last week.
What would this bill do? It would change standards for how a firm is considered to be too powerful. While changing standards seems technical and wonky, such a change would in fact be a revolutionary act to break the power that dominant firms have over our economy. (I testified on behalf of the bill last year, and my organization has written an explainer of the legislation.)
Right now, to be considered subject to monopolization law, a firm has to have 70-90% of a market, plus it has to engage in egregious behavior that economists measure as inefficient. This bill would blow up that entire framework. First, a firm would only have to have 40% of a market to be considered dominant. Plus, firms that are powerful enough to set wages across an industry, ahem Amazon, would also be considered dominant. It wouldn’t be illegal to be dominant, but under this legislative framework, dominant firms would no longer be allowed to engage in predatory conduct or block competitors from the market.
The legislation would also expand what would be considered anti-competitive behavior. A bunch of stuff that is now dead-letter law, like predatory pricing or selling below cost to capture market share, could come back. The bill would also let private actors sue under these new standards, so it would allow newspapers, grocery stores, pharmacists, manufacturer and employees to sue if they are being abused by a powerful buyer, seller, and/or distributor.
Credit: Matt Stoller
Last year, Gianaris introduced a bill to update New York state’s antitrust law, with the goal being to move away from the monopoly friendly standard judges use right now to understand what constitutes a market power, which is known as the ‘consumer welfare’ standard. This week, the updated bill is likely to pass the full state Senate, and will be headed for the New York Assembly. It is a serious effort. Gianaris is a powerful player in New York politics, and the legislation has the support of New York’s Attorney General, Letitia James, who is also leading one of the key antitrust cases against Facebook.
You can tell it matters because the New York Times’s Dealbook - read by investors - reported on it last week.
What would this bill do? It would change standards for how a firm is considered to be too powerful. While changing standards seems technical and wonky, such a change would in fact be a revolutionary act to break the power that dominant firms have over our economy. (I testified on behalf of the bill last year, and my organization has written an explainer of the legislation.)
Right now, to be considered subject to monopolization law, a firm has to have 70-90% of a market, plus it has to engage in egregious behavior that economists measure as inefficient. This bill would blow up that entire framework. First, a firm would only have to have 40% of a market to be considered dominant. Plus, firms that are powerful enough to set wages across an industry, ahem Amazon, would also be considered dominant. It wouldn’t be illegal to be dominant, but under this legislative framework, dominant firms would no longer be allowed to engage in predatory conduct or block competitors from the market.
The legislation would also expand what would be considered anti-competitive behavior. A bunch of stuff that is now dead-letter law, like predatory pricing or selling below cost to capture market share, could come back. The bill would also let private actors sue under these new standards, so it would allow newspapers, grocery stores, pharmacists, manufacturer and employees to sue if they are being abused by a powerful buyer, seller, and/or distributor.
Credit: Matt Stoller
AAI Urges Ninth Circuit to Reinstate Conspiracy Case Against the National Association of Realtors (The PLS.com v. NAR, et al.)
June 2, 2021 | Laura Alexander , Joshua P. Davis , John B. Kirkwood
Private Enforcement , Section 1 of the Sherman Act , Collusion
AAI submitted an amicus brief asking the Ninth Circuit Court of Appeals to overturn the dismissal of a complaint from pocket-listing network PLS.com against the National Association of Realtors (NAR) and several of its affiliated multiple listing (MLS) services.
NAR has long dominated the market for residential real estate transactions and its affiliated MLSs have held a comparable monopoly on residential real estate listing networks. NAR has been the subject of multiple consent decrees from the Department of Justice over the years, including related to its MLS listing policies. PLS is a recent entrant to the residential real estate listing market, which sought to provide a nationwide electronic platform for pocket listings. Pocket listings are listings that contain less information about a property than a traditional MLS listing, and they are desired by buyers and sellers who wish to maintain privacy.
PLS alleged that, faced with the threat of competition from PLS’s nationwide pocket listing network, NAR and its affiliated MLSs conspired to enact a Clear Cooperation Policy that, effectively, excluded PLS from the market entirely. The district court, after hearing oral argument, dismissed PLS’s complaint for lack of antitrust standing and denied PLS leave to amend.
AAI’s brief argues that reversal is warranted because the district court baselessly imposed an “ultimate consumer harm” requirement for plaintiffs to establish antitrust standing and wrongly concluded the Clear Competition Policy was “competitively neutral” because the court did not understand the nature of platform competition. The brief points out that an “ultimate consumer harm” requirement contravenes the logic and purpose of the direct purchaser rule and would needlessly hamper private antitrust enforcement and burden courts. In the brief, AAI also argues that far from being competitively neutral, the Clear Competition Policy seeks to eliminate the ability of realtors and brokers to use more than one listing network, which reinforces the barriers to entry in this market from network effects.
The brief was written by AAI Vice President of Policy Laura Alexander. A group of law and economics professors, including Professors and AAI Board Members Josh Davis and John Kirkwood, filed a separate amicus brief in support of PLS.
AAI Amicus Brief https://www.antitrustinstitute.org/wp-content/uploads/2021/06/2021-06-02-Amicus-Brief-iso-PLS-FINAL.pdf
June 2, 2021 | Laura Alexander , Joshua P. Davis , John B. Kirkwood
Private Enforcement , Section 1 of the Sherman Act , Collusion
AAI submitted an amicus brief asking the Ninth Circuit Court of Appeals to overturn the dismissal of a complaint from pocket-listing network PLS.com against the National Association of Realtors (NAR) and several of its affiliated multiple listing (MLS) services.
NAR has long dominated the market for residential real estate transactions and its affiliated MLSs have held a comparable monopoly on residential real estate listing networks. NAR has been the subject of multiple consent decrees from the Department of Justice over the years, including related to its MLS listing policies. PLS is a recent entrant to the residential real estate listing market, which sought to provide a nationwide electronic platform for pocket listings. Pocket listings are listings that contain less information about a property than a traditional MLS listing, and they are desired by buyers and sellers who wish to maintain privacy.
PLS alleged that, faced with the threat of competition from PLS’s nationwide pocket listing network, NAR and its affiliated MLSs conspired to enact a Clear Cooperation Policy that, effectively, excluded PLS from the market entirely. The district court, after hearing oral argument, dismissed PLS’s complaint for lack of antitrust standing and denied PLS leave to amend.
AAI’s brief argues that reversal is warranted because the district court baselessly imposed an “ultimate consumer harm” requirement for plaintiffs to establish antitrust standing and wrongly concluded the Clear Competition Policy was “competitively neutral” because the court did not understand the nature of platform competition. The brief points out that an “ultimate consumer harm” requirement contravenes the logic and purpose of the direct purchaser rule and would needlessly hamper private antitrust enforcement and burden courts. In the brief, AAI also argues that far from being competitively neutral, the Clear Competition Policy seeks to eliminate the ability of realtors and brokers to use more than one listing network, which reinforces the barriers to entry in this market from network effects.
The brief was written by AAI Vice President of Policy Laura Alexander. A group of law and economics professors, including Professors and AAI Board Members Josh Davis and John Kirkwood, filed a separate amicus brief in support of PLS.
AAI Amicus Brief https://www.antitrustinstitute.org/wp-content/uploads/2021/06/2021-06-02-Amicus-Brief-iso-PLS-FINAL.pdf
Letter from Senators Rounds and Smith on meat packers "stranglehold"
May 27, 2021
The Honorable Merrick Garland Attorney General
U.S. Department of Justice 950 Pennsylvania Avenue, NW Washington, DC 20530
Dear Attorney General Garland,
The time has come for the government to determine whether the stranglehold large meatpackers have over the beef processing market violate our antitrust laws and principles of fair competition.
For over 100 years, the purpose of antitrust laws in our country has been to preserve the process of fair competition for the benefit of consumers. Too much market power often yields less competition and is ripe for market abuse. Yet as you know, four large meat packing companies control over 80% of the processing market in today’s economy and are seemingly able to control prices at their will, or even defy expectations of market fundamentals.
In the last several years, the price of live cattle in the United States market has plummeted, while the price of boxed beef has significantly increased, raising consumer prices at the grocery store. Concurrently, the major packing companies realized significant profits, while both U.S. beef consumers and independent cattle producers paid the price. These large price disparities are leading independent cattle producers to go broke and causing consumers to pay an unnecessary, over-inflated premium on beef.
These difficulties faced by consumers and producers are not experienced by meatpackers. For example, in the past decade, there have been repeated instances in the market which demonstrates a disconnection between the price of live cattle purchased by meatpackers and the value of choice beef cutout sold by meatpackers (see chart 1; the gap between these two values is isolated and displayed in chart 3).
These persistent irregularities reveal an unfairness in the producer-meatpacker relationship and possibly anticompetitive behavior in the beef industry.
One potential explanation for this disparity may be the ability of meatpackers to import beef from foreign countries, either through external sources or their own vertically integrated sources. Based on data from the United States Department of Agriculture (USDA) Global Agricultural Trade System (GATS), as the price increases for live cattle, there is a subsequent and consistent increase experienced in beef importation (see chart 2). Furthermore, the initiation of plummeting prices in the live cattle market appears to correspond almost exactly with the repeal of Mandatory Country of Origin Labeling, which demonstrates the negative impact of imports on domestic beef prices (also chart 2).These trends indicate a potential existence of collaborative price-fixing activity or other anticompetitive behavior on behalf of the largest beef meatpacking companies in the United States. These issues deserve meaningful investigation, especially given the unprecedented consolidation of this industry.
The U.S. meatpacking industry is more consolidated today, than it was in 1921 when the Packers and Stockyards Act was enacted. Four companies operate 18 of the top 20 beef slaughter facilities in the country, which constitutes 94% of this capacity. Ironically, two of the four giant domestic processors are foreign owned. In our opinion, that concentration has caused a market disconnect, resulting in tangible market manipulation that has economically disadvantaged American ranchers and ultimately, American consumers who want to buy U.S. beef at an affordable price.
As stated by Congress, the purpose of the Packers and Stockyards Act is, "to assure fair competition and fair trade practices, to safeguard farmers and ranchers...to protect consumers...and to protect members of the livestock, meat, and poultry industries from unfair, deceptive, unjustly discriminatory and monopolistic practices................ " It is truly
unfortunate that exactly 100 years later, the problem is actually worse.
In the last 30 years, there has been no major expansion of beef packing capacity in the United States. Beef packers continue to bring foreign beef into their facilities and place “Product of the U.S.A.” on the final product. This is, at the very least, highly misleading and undermines the price and quality of U.S. beef. Without mandatory country of origin labeling for beef – packers are provided a federal sanction to undercut American producers and dupe American consumers.
U.S. meatpackers also take advantage of their vast resources to hold what is known in the industry as a captive supply. Through forward contracting and formula based sales, packers, collectively, can easily predict their needs many months in advance. These captive supply practices allow meatpackers to exert more control, limit competition and depress sales in the live cash market.
Additionally, legalizing the sale of state inspected meat in interstate commerce has been thwarted, forcing local producers to bottleneck their beef processing at major U.S. meat packing facilities to get the federal stamp of approval.
Arguably, every piece of beef legislation introduced before Congress is the direct result of our attempts to put a band-aid on the real issue: packer concentration.
Exactly 100 years ago, the United States saw fit to break up the packing industry because of concentration and market manipulation. Since that time, packer concentration and foreign influence has significantly grown and until the question of whether consolidation of power in the meatpacking industry has amounted to violations of our antitrust laws is fully answered, this market will continue to suffer for both the consumer and the producer.
From our perspective, the anticompetitive practices occurring in the industry today are unambiguous and either our antitrust laws are not being enforced or they are not capable of addressing the apparent oligopoly that so plainly exists. This is where we need to work together. In the past 18 months, the Department of Justice has received multiple letters raising these concerns, and collectively, we urge your department to take decisive action.
President Biden prioritizes “Buy American” policies that would benefit both consumers and producers and we believe our requests outlined here today support that mission. Unfortunately, the current situation involves multi-national meatpacking companies that continue to get fat off of the high price they impose on retailers and consumers, and the low price they set for producers.
This needs to change.
Our American ranchers work hard every day to produce the best beef in the world. They battle the wind, the rain, the snow and the sun. They shouldn’t have to battle a problem their government has an obligation to fix. If we do not take action, current U.S. policies will be identified as the cause for the demise of the American rancher and American consumers will be forced to pay a higher price for a much lower quality product. The time has come to either enforce or examine our antitrust laws to restore fairness to the marketplace. American producers and consumers depend on us.
We look forward to your response.
Sincerely,
M. Michael Rounds
United States Senator
Tina Smith
United States Senator
CC: President Biden, Secretary Vilsack
May 27, 2021
The Honorable Merrick Garland Attorney General
U.S. Department of Justice 950 Pennsylvania Avenue, NW Washington, DC 20530
Dear Attorney General Garland,
The time has come for the government to determine whether the stranglehold large meatpackers have over the beef processing market violate our antitrust laws and principles of fair competition.
For over 100 years, the purpose of antitrust laws in our country has been to preserve the process of fair competition for the benefit of consumers. Too much market power often yields less competition and is ripe for market abuse. Yet as you know, four large meat packing companies control over 80% of the processing market in today’s economy and are seemingly able to control prices at their will, or even defy expectations of market fundamentals.
In the last several years, the price of live cattle in the United States market has plummeted, while the price of boxed beef has significantly increased, raising consumer prices at the grocery store. Concurrently, the major packing companies realized significant profits, while both U.S. beef consumers and independent cattle producers paid the price. These large price disparities are leading independent cattle producers to go broke and causing consumers to pay an unnecessary, over-inflated premium on beef.
These difficulties faced by consumers and producers are not experienced by meatpackers. For example, in the past decade, there have been repeated instances in the market which demonstrates a disconnection between the price of live cattle purchased by meatpackers and the value of choice beef cutout sold by meatpackers (see chart 1; the gap between these two values is isolated and displayed in chart 3).
These persistent irregularities reveal an unfairness in the producer-meatpacker relationship and possibly anticompetitive behavior in the beef industry.
One potential explanation for this disparity may be the ability of meatpackers to import beef from foreign countries, either through external sources or their own vertically integrated sources. Based on data from the United States Department of Agriculture (USDA) Global Agricultural Trade System (GATS), as the price increases for live cattle, there is a subsequent and consistent increase experienced in beef importation (see chart 2). Furthermore, the initiation of plummeting prices in the live cattle market appears to correspond almost exactly with the repeal of Mandatory Country of Origin Labeling, which demonstrates the negative impact of imports on domestic beef prices (also chart 2).These trends indicate a potential existence of collaborative price-fixing activity or other anticompetitive behavior on behalf of the largest beef meatpacking companies in the United States. These issues deserve meaningful investigation, especially given the unprecedented consolidation of this industry.
The U.S. meatpacking industry is more consolidated today, than it was in 1921 when the Packers and Stockyards Act was enacted. Four companies operate 18 of the top 20 beef slaughter facilities in the country, which constitutes 94% of this capacity. Ironically, two of the four giant domestic processors are foreign owned. In our opinion, that concentration has caused a market disconnect, resulting in tangible market manipulation that has economically disadvantaged American ranchers and ultimately, American consumers who want to buy U.S. beef at an affordable price.
As stated by Congress, the purpose of the Packers and Stockyards Act is, "to assure fair competition and fair trade practices, to safeguard farmers and ranchers...to protect consumers...and to protect members of the livestock, meat, and poultry industries from unfair, deceptive, unjustly discriminatory and monopolistic practices................ " It is truly
unfortunate that exactly 100 years later, the problem is actually worse.
In the last 30 years, there has been no major expansion of beef packing capacity in the United States. Beef packers continue to bring foreign beef into their facilities and place “Product of the U.S.A.” on the final product. This is, at the very least, highly misleading and undermines the price and quality of U.S. beef. Without mandatory country of origin labeling for beef – packers are provided a federal sanction to undercut American producers and dupe American consumers.
U.S. meatpackers also take advantage of their vast resources to hold what is known in the industry as a captive supply. Through forward contracting and formula based sales, packers, collectively, can easily predict their needs many months in advance. These captive supply practices allow meatpackers to exert more control, limit competition and depress sales in the live cash market.
Additionally, legalizing the sale of state inspected meat in interstate commerce has been thwarted, forcing local producers to bottleneck their beef processing at major U.S. meat packing facilities to get the federal stamp of approval.
Arguably, every piece of beef legislation introduced before Congress is the direct result of our attempts to put a band-aid on the real issue: packer concentration.
Exactly 100 years ago, the United States saw fit to break up the packing industry because of concentration and market manipulation. Since that time, packer concentration and foreign influence has significantly grown and until the question of whether consolidation of power in the meatpacking industry has amounted to violations of our antitrust laws is fully answered, this market will continue to suffer for both the consumer and the producer.
From our perspective, the anticompetitive practices occurring in the industry today are unambiguous and either our antitrust laws are not being enforced or they are not capable of addressing the apparent oligopoly that so plainly exists. This is where we need to work together. In the past 18 months, the Department of Justice has received multiple letters raising these concerns, and collectively, we urge your department to take decisive action.
President Biden prioritizes “Buy American” policies that would benefit both consumers and producers and we believe our requests outlined here today support that mission. Unfortunately, the current situation involves multi-national meatpacking companies that continue to get fat off of the high price they impose on retailers and consumers, and the low price they set for producers.
This needs to change.
Our American ranchers work hard every day to produce the best beef in the world. They battle the wind, the rain, the snow and the sun. They shouldn’t have to battle a problem their government has an obligation to fix. If we do not take action, current U.S. policies will be identified as the cause for the demise of the American rancher and American consumers will be forced to pay a higher price for a much lower quality product. The time has come to either enforce or examine our antitrust laws to restore fairness to the marketplace. American producers and consumers depend on us.
We look forward to your response.
Sincerely,
M. Michael Rounds
United States Senator
Tina Smith
United States Senator
CC: President Biden, Secretary Vilsack
Fauci responds to attacks by Senator Josh Hawley and others concerning Fauci's role in investigation of pandemic source in China
https://www.rollingstone.com/politics/politics-news/fauci-calls-baseless-republican-attacks-on-him-anti-science-nonsense-1179115/
https://www.rollingstone.com/politics/politics-news/fauci-calls-baseless-republican-attacks-on-him-anti-science-nonsense-1179115/
Jeff Greenfield on PBS: How the recent rise in crime could impact Dems’ prospects in 2022
https://www.pbs.org/newshour/show/how-the-rise-in-crime-could-impact-dems-prospects-in-2022
Excerpts:
Hari Sreenivasan:
All through the '60s, crime rose sharply. The violent crime rate doubled in that decade. And then when you add in upheaval in the cities, upheaval on campus, the whole issue of disorder and lawlessness became a national political issue, particularly in 1968 in the campaigns of George Wallace and especially in the campaign of Richard Nixon.
And that issue hung around for decades. In 1986, there were three justices of the California Supreme Court removed by the voters for not being tough enough on crime. And I know you'll remember in 1988, Michael Dukakis' presidential campaign was hobbled by the issue that there had been a furlough program where convicted criminals were let out for a while and one of them went on a crime spree, which resulted in a major effort by the Bush campaign in its commercials.
Jeff Greenfield:
Bill Clinton, when he ran for president in 1992, made a point of appearing in front of police officers and presenting both as a candidate and as president, a very tough crime package supported in no small measure by then Senator Joe Biden.
The major thing that happened is that crime went down, nationally, it went down, and in some cases dramatically. In New York in 1990, there were some 2,200 murders. By 2018, there were fewer than 300. And when there's less crime, it's less on people's minds. Then you had the murder of George Floyd and the massive protests against police violence against Blacks so that in 2020, Biden was apologizing for the tough, draconian crime bills that he sponsored back in the '90s. There was also a demand on the part of some progressives to defund the police, although Biden himself opposed that. And at the same time, you began to see another rise in crime so that crime began to rear its ugly head again in the last election.
Hari Sreenivasan:
We saw, in effect, an effect in the November election about the topic of crime.
Jeff Greenfield:
Absolutely. Because of the violence that was on television screens, the occasional sporadic violence around protests and the fact that crime jumped in 2020. In many big cities, though, the murder rate, the homicide rate went up sharply. And what people like Jim Clyburn, one of the most influential Democrats in the House of Representatives, said after is that the whole issue of crime hurt congressional Democrats running in many purple districts. It may explain why Donald Trump, who ran a very, very strong law and order campaign, got more of the brown and Black votes in many parts of the country. These were middle class folks who were upset by violence.
And so now you have the specter of a president trying to run on what he's doing for the economy. Who could be politically threatened by the fact that when crime rises, it becomes a central issue to people because it is literally about their safety. And that's a very real possibility that will hinder Biden's attempt to win back reluctant Democrats to say, look what we're doing for you. Because if the response was, yeah, but I'm not safe in my neighborhood, that can be a powerful political tool. As you mentioned, we saw that a generation ago.
This posting is by Don Resnikoff, who takes responsibility for the posting
https://www.pbs.org/newshour/show/how-the-rise-in-crime-could-impact-dems-prospects-in-2022
Excerpts:
Hari Sreenivasan:
All through the '60s, crime rose sharply. The violent crime rate doubled in that decade. And then when you add in upheaval in the cities, upheaval on campus, the whole issue of disorder and lawlessness became a national political issue, particularly in 1968 in the campaigns of George Wallace and especially in the campaign of Richard Nixon.
And that issue hung around for decades. In 1986, there were three justices of the California Supreme Court removed by the voters for not being tough enough on crime. And I know you'll remember in 1988, Michael Dukakis' presidential campaign was hobbled by the issue that there had been a furlough program where convicted criminals were let out for a while and one of them went on a crime spree, which resulted in a major effort by the Bush campaign in its commercials.
Jeff Greenfield:
Bill Clinton, when he ran for president in 1992, made a point of appearing in front of police officers and presenting both as a candidate and as president, a very tough crime package supported in no small measure by then Senator Joe Biden.
The major thing that happened is that crime went down, nationally, it went down, and in some cases dramatically. In New York in 1990, there were some 2,200 murders. By 2018, there were fewer than 300. And when there's less crime, it's less on people's minds. Then you had the murder of George Floyd and the massive protests against police violence against Blacks so that in 2020, Biden was apologizing for the tough, draconian crime bills that he sponsored back in the '90s. There was also a demand on the part of some progressives to defund the police, although Biden himself opposed that. And at the same time, you began to see another rise in crime so that crime began to rear its ugly head again in the last election.
Hari Sreenivasan:
We saw, in effect, an effect in the November election about the topic of crime.
Jeff Greenfield:
Absolutely. Because of the violence that was on television screens, the occasional sporadic violence around protests and the fact that crime jumped in 2020. In many big cities, though, the murder rate, the homicide rate went up sharply. And what people like Jim Clyburn, one of the most influential Democrats in the House of Representatives, said after is that the whole issue of crime hurt congressional Democrats running in many purple districts. It may explain why Donald Trump, who ran a very, very strong law and order campaign, got more of the brown and Black votes in many parts of the country. These were middle class folks who were upset by violence.
And so now you have the specter of a president trying to run on what he's doing for the economy. Who could be politically threatened by the fact that when crime rises, it becomes a central issue to people because it is literally about their safety. And that's a very real possibility that will hinder Biden's attempt to win back reluctant Democrats to say, look what we're doing for you. Because if the response was, yeah, but I'm not safe in my neighborhood, that can be a powerful political tool. As you mentioned, we saw that a generation ago.
This posting is by Don Resnikoff, who takes responsibility for the posting
Is criminal justice reform to blame for the rise in crime in NYC
https://www.pbs.org/newshour/show/is-criminal-justice-reform-to-blame-for-the-rise-in-crime-in-nyc
Following up on Jeff Greenfield's comments that recent increases in urban crime are a political threat to Democrats, Jullian Harris-Calvin of the Vera Institute of Justice in New York argues that criminal justice reform is not to blame for the recent rise in crime in NYC. Also that the recent rise in crime is exaggerated -- even with the recent rise in crime the crime level is much lower than decades ago. Ms. Harris-Calvin argues a balanced approach to the legal issues: effective policing and appropriate reform in matters of policing and incarceration policies. DAR
https://www.pbs.org/newshour/show/is-criminal-justice-reform-to-blame-for-the-rise-in-crime-in-nyc
Following up on Jeff Greenfield's comments that recent increases in urban crime are a political threat to Democrats, Jullian Harris-Calvin of the Vera Institute of Justice in New York argues that criminal justice reform is not to blame for the recent rise in crime in NYC. Also that the recent rise in crime is exaggerated -- even with the recent rise in crime the crime level is much lower than decades ago. Ms. Harris-Calvin argues a balanced approach to the legal issues: effective policing and appropriate reform in matters of policing and incarceration policies. DAR
from https://www.reuters.com/business/sustainable-business/shareholder-activism-reaches-milestone-exxon-board-vote-nears-end-2021-05-26/
Exxon loses board seats to activist hedge fund in landmark climate vote
Jennifer HillerSvea Herbst-bayliss
The success by hedge fund Engine No. 1 in its showdown with Exxon shocked an energy industry struggling to address growing investor concerns about global warming. It happened on the same day activists scored a big win against another oil major, Royal Dutch Shell - a Dutch court ordered the company to drastically deepen pledged cuts to greenhouse gas emissions.
Eight of Exxon's nominees including CEO Darren Woods were re-elected to its 12-member board of directors, along with two of Engine No. 1's nominees, the company said. The counting is not finished, so Engine No. 1 could potentially see three of its four nominees join the Exxon board.
The result will add to pressure on Woods, who campaigned to convince shareholders to shoot down the board challenge and argued the company was already advancing low carbon projects and improving profits.
"Today, we heard shareholders communicate a desire for ExxonMobil to further these efforts," Woods said in a statement. "We're well positioned to do that."
Under Woods, Exxon incurred a $22 billion loss last year as COVID-19 pandemic destroyed fuel demand worldwide. Exxon has lagged other oil majors in its response to climate change concerns, forecasting many more years of oil and gas demand growth and doubling down on spending to boost its output - in contrast to global rivals that have scaled back fossil fuel investments.
"It's a huge deal. It shows not just that there is more seriousness apparent in the thinking among investors about climate change, it's a rebuff of the whole attitude of the Exxon board," said Ric Marshall, executive director of ESG Research at MSCI.
The dissident shareholder group led by Engine No. 1 put up a slate of four nominees in the first big boardroom contest at an oil major that makes climate change the central issue. The fund's stake in Exxon - an energy behemoth with a market value of close to $250 billion - is worth just $50 million.
NEW DIRECTION
The two Engine No. 1 nominees elected were Gregory Goff, a 64-year-old former top executive at Marathon Petroleum (MPC.N) and Andeavor, and former Neste Oyj (NESTE.HE) executive Kaisa Hietala.
"We welcome the new directors, Gregory Goff and Kaisa Hietala, to the board and look forward to working with them constructively and collectively on behalf of all shareholders," CEO Woods said at the end of Exxon's shareholder meeting.
Vote counting to determine the final two seats was continuing. That left the re-election of directors Steven Kandarian, Douglas Oberhelman, Samuel Palmisano and Wan Zulkiflee up in the air. Alexander Karsner, one of Engine No. 1's nominees, was still in the running, Exxon said.
Governments and companies have moved to reduce emissions from fossil fuels that are warming the planet by investing in wind and solar energy. Investors led by Engine No. 1 have said Woods needed to make big changes to ensure Exxon's future value to investors.
The fund successfully rallied support from institutional investors and shareholder advisory firms upset with Irving, Texas-based Exxon for its weak financial performance in recent years. Among those were BlackRock Inc (BLK.N), Exxon's second-largest shareholder, who agreed to vote for three members of Engine No. 1's slate.
BlackRock said the three bring "fresh perspectives and relevant transformative energy experience" that would help Exxon evaluate "the risks and opportunities presented by the energy transition," according to a note posted on its website.
**
Woods had argued that Exxon's board understood the company's complexity and that Exxon supports a path toward carbon reductions in the Paris accord, the international agreement aimed at combating climate change.
However, in another signal of investor dissatisfaction with the company's approach to climate change, shareholders also approved measures calling on Exxon to provide more information on its climate and grassroots lobbying efforts.
"Exxon Mobil shareholders chose real action to address the climate crisis over business as usual in the fossil fuel industry," said New York State Comptroller Thomas DiNapoli, who in April said the state's pension fund backed Engine No. 1.
DiNapoli said that for years, investors have "received platitudes and gaslighting in response" from Exxon in response to concerns about the climate crisis.
Exxon had fought to keep climate activists at bay, spending tens of millions of dollars on a high-profile PR campaign, agreeing to publish more details of its emissions and coming out in support of carbon reduction. Activists said it was too little, too late, and that Exxon needs a less reactive strategy.
DAR Comment: Hedge fund Engine No. 1's leadership of dissident shareholders such as pension funds suggests further disruption of corporate governance for an array of companies. Potentially that suggests a path to a corporate governance model that better serves the consumer interest on matters like climate change. But that path is not at all clear. A main goal of a company like ExxonMobil is still about making money, and it is not at all clear that the Engine 1 hedge fund leaders or the new board members want to undermine that goal. Pension fund stockholders have a similar incentive to support profitability. On the other hand, disruption of the usual manner of electing directors does support hope for a governance model for corporations that is more responsive to public concerns on issues like climate change.
Exxon loses board seats to activist hedge fund in landmark climate vote
Jennifer HillerSvea Herbst-bayliss
- excerpts:
The success by hedge fund Engine No. 1 in its showdown with Exxon shocked an energy industry struggling to address growing investor concerns about global warming. It happened on the same day activists scored a big win against another oil major, Royal Dutch Shell - a Dutch court ordered the company to drastically deepen pledged cuts to greenhouse gas emissions.
Eight of Exxon's nominees including CEO Darren Woods were re-elected to its 12-member board of directors, along with two of Engine No. 1's nominees, the company said. The counting is not finished, so Engine No. 1 could potentially see three of its four nominees join the Exxon board.
The result will add to pressure on Woods, who campaigned to convince shareholders to shoot down the board challenge and argued the company was already advancing low carbon projects and improving profits.
"Today, we heard shareholders communicate a desire for ExxonMobil to further these efforts," Woods said in a statement. "We're well positioned to do that."
Under Woods, Exxon incurred a $22 billion loss last year as COVID-19 pandemic destroyed fuel demand worldwide. Exxon has lagged other oil majors in its response to climate change concerns, forecasting many more years of oil and gas demand growth and doubling down on spending to boost its output - in contrast to global rivals that have scaled back fossil fuel investments.
"It's a huge deal. It shows not just that there is more seriousness apparent in the thinking among investors about climate change, it's a rebuff of the whole attitude of the Exxon board," said Ric Marshall, executive director of ESG Research at MSCI.
The dissident shareholder group led by Engine No. 1 put up a slate of four nominees in the first big boardroom contest at an oil major that makes climate change the central issue. The fund's stake in Exxon - an energy behemoth with a market value of close to $250 billion - is worth just $50 million.
NEW DIRECTION
The two Engine No. 1 nominees elected were Gregory Goff, a 64-year-old former top executive at Marathon Petroleum (MPC.N) and Andeavor, and former Neste Oyj (NESTE.HE) executive Kaisa Hietala.
"We welcome the new directors, Gregory Goff and Kaisa Hietala, to the board and look forward to working with them constructively and collectively on behalf of all shareholders," CEO Woods said at the end of Exxon's shareholder meeting.
Vote counting to determine the final two seats was continuing. That left the re-election of directors Steven Kandarian, Douglas Oberhelman, Samuel Palmisano and Wan Zulkiflee up in the air. Alexander Karsner, one of Engine No. 1's nominees, was still in the running, Exxon said.
Governments and companies have moved to reduce emissions from fossil fuels that are warming the planet by investing in wind and solar energy. Investors led by Engine No. 1 have said Woods needed to make big changes to ensure Exxon's future value to investors.
The fund successfully rallied support from institutional investors and shareholder advisory firms upset with Irving, Texas-based Exxon for its weak financial performance in recent years. Among those were BlackRock Inc (BLK.N), Exxon's second-largest shareholder, who agreed to vote for three members of Engine No. 1's slate.
BlackRock said the three bring "fresh perspectives and relevant transformative energy experience" that would help Exxon evaluate "the risks and opportunities presented by the energy transition," according to a note posted on its website.
**
Woods had argued that Exxon's board understood the company's complexity and that Exxon supports a path toward carbon reductions in the Paris accord, the international agreement aimed at combating climate change.
However, in another signal of investor dissatisfaction with the company's approach to climate change, shareholders also approved measures calling on Exxon to provide more information on its climate and grassroots lobbying efforts.
"Exxon Mobil shareholders chose real action to address the climate crisis over business as usual in the fossil fuel industry," said New York State Comptroller Thomas DiNapoli, who in April said the state's pension fund backed Engine No. 1.
DiNapoli said that for years, investors have "received platitudes and gaslighting in response" from Exxon in response to concerns about the climate crisis.
Exxon had fought to keep climate activists at bay, spending tens of millions of dollars on a high-profile PR campaign, agreeing to publish more details of its emissions and coming out in support of carbon reduction. Activists said it was too little, too late, and that Exxon needs a less reactive strategy.
DAR Comment: Hedge fund Engine No. 1's leadership of dissident shareholders such as pension funds suggests further disruption of corporate governance for an array of companies. Potentially that suggests a path to a corporate governance model that better serves the consumer interest on matters like climate change. But that path is not at all clear. A main goal of a company like ExxonMobil is still about making money, and it is not at all clear that the Engine 1 hedge fund leaders or the new board members want to undermine that goal. Pension fund stockholders have a similar incentive to support profitability. On the other hand, disruption of the usual manner of electing directors does support hope for a governance model for corporations that is more responsive to public concerns on issues like climate change.
S. 3084
AN ACT To invest in innovation through research and development, and to improve the competitiveness of the United States. . . .
1. SHORT TITLE; TABLE OF CONTENTS. 1(a) SHORTTITLE.—This Act may be cited as the 2‘‘American Innovation and Competitiveness Act’’
A copy of the proposed Act is here: https://www.congress.gov/114/bills/s3084/BILLS-114s3084es.pdf
AN ACT To invest in innovation through research and development, and to improve the competitiveness of the United States. . . .
1. SHORT TITLE; TABLE OF CONTENTS. 1(a) SHORTTITLE.—This Act may be cited as the 2‘‘American Innovation and Competitiveness Act’’
A copy of the proposed Act is here: https://www.congress.gov/114/bills/s3084/BILLS-114s3084es.pdf
Can Americam mask makers survive Chinese competition? American mask makers speak.
The following letter from American mask makers to the President outlines the perceived problems of American manufacturers facing Chinese competition
The majority of U.S. Mask Manufacturing will go offline in 60 days; 2,647 jobs already lostUpdated: May 13
Dear President Biden:
We write to you with a request for immediate help against unfair trade practices by foreign nations that threaten the viability of the U.S. domestic PPE mask manufacturing industry, as well as future U.S. pandemic preparedness efforts. Purchasing existing stockpiles from U.S. manufacturers and taking urgent regulatory action on procurement is needed for the continued health of our nation.
The American Mask Manufacturer’s Association (AMMA) represents the 26 small business Mask Manufacturers that answered America’s call for emergency PPE during the onset of the COVID-19 pandemic. While none of our members had made masks before this crisis, we refused to stand idly by while our nation's doctors, nurses, and neighbors were dying without the proper PPE that China hoarded from the rest of the world.
We responded in the most American way possible, as entrepreneurs and as builders. With no federal funding, our 26 member companies sprang into action—and in less than a year, created the manufacturing capacity for 3.69 billion surgical masks and 1.06 billion N95-style respirators. At the same time, we created 7,823 good-paying jobs.
Being entrepreneurs, we built our business models on pre-pandemic mask-market prices, creating companies that would serve our country long after the current crisis. With recent advances in robotics and automation, we proved our ability to make far higher quality and safer masks than China. These are masks that the U.S. Government and private healthcare organizations would prefer to purchase if prices were comparable.
Fearing America’s manufacturing independence, China has changed the rules and is effectively dumping masks on the U.S. market at well below actual costs. This has made it impossible for our U.S. manufacturers to compete—and as a result, 260 million American-made masks sit in U.S. warehouses unused today.
If this remains unchanged, 54% of our production will go offline in 60 days and 84.6% in less than a year.
There are $0.03 - $0.06 of raw materials in every surgical mask produced--that price is the same everywhere in the world. Yet somehow, we are seeing Chinese masks sold for less than $0.01 here in the United States.
And it’s not just masks. The entire supply chain is at risk.
For example, three of our members make their own meltblown, the key filtration material in N95 and Surgical masks that makes them effective. Meltblown is also the leading reason for production shortages and astronomical prices at the peak of the pandemic. Berry-Amendment compliant meltblown costs between $7-$12 per pound, but our members can make it for a cost of $3-$4 per pound. China is selling N95-quality meltblown at $1.22 per pound—12% cheaper than the cost of raw materials. Because of this, one of our members has stopped producing meltblown altogether. Other U.S. nonwoven manufacturers, like Cummins Filtration, are turning off their meltblown lines this month.
It is even more concerning to find that many of these cheaply sold Chinese products fail to meet American standards.
The National Personal Protective Technology Laboratory (NPPTL), a division of the CDC, recently completed a series of tests on KN95’s imported into the United States. Of 326 total masks tested, NPPTL found that 31.5%, or 103 masks, failed to meet the Chinese KN95 standard (GB 2626-2019) and the NIOSH standard (42 CFR Part 84) of 95% particulate filtration protection.
Additionally, the Emergency Care Research Institute (ERCI) found that 70% of Chinese KN95 masks tested failed to meet minimum standards, concluding that “U.S. hospitals bought hundreds of thousands of masks produced in China [that] aren’t safe and effective against the spread of COVID-19.”
As a result, U.S. state and national government and private healthcare systems have filled their warehouses with cheap, ineffective Chinese products that put our citizens at risk.
If China is allowed to continue dumping masks for a fraction of the costs of materials, we will be more dependent on China for PPE than before the pandemic--putting our healthcare workers at risk for current and future pandemics. These unfair trade practices threaten the viability of our industry and the welfare of every single American.
This is not only a matter of national security but of national pride. American industry responded to this crisis--please help us fight China’s unfair trade practices that are destroying what we have striven so hard to build.
In support of our shared interests, we ask that you strongly consider the following actions:
Our entire membership is made up of diverse women and men who believe strongly in the free market, and do not want a government handout. We did not ask for federal funds to build our factories here in America, and we are not asking for a bailout now. If not for unfair and potentially illegal trade practices, all our businesses would be thriving today. That said, if the government and your administration no longer need our factories to produce PPE, we would still mark the past 12 months as a success and triumph of American spirit in a time of need.
We know your administration is working hard to ensure the long-term survival of American PPE producers, and for that we are grateful. However, the tactics being employed against us by foreign manufacturers are immediate threats to our ability to stay in business. We have already had to lay off significant numbers of our workforce and the majority of production facilities will be forced to permanently shutter mask manufacturing in less than 60 days.
If America needs our production capabilities to protect the country in the future, we need swift and decisive action that only you can provide.
Thank you, Mr. President, and your Administration, for your strong leadership to protect the American public from this deadly virus. Through partnership and collaboration, we can end this pandemic and protect against the next.
Sincerely,
Lloyd Armbrust President, AMMA Founder, Armbrust Inc.
Luis Arguello, President, Demetech
Dan Izhaky, President, United Safety Technology
Brian Wolin, CEO, Protective Health Gear Howard Sherman, CEO, Premier Guard USA
Glenn Ferreri, President, Premier Guard USA Brian Goldmeier, Partner, Made In America PPE
Chet Desai, Partner, Made In America PPE Amir Tafreshi, Founder & CEO, Lutema USA
Eddie Phanichkul, Founder & CMO, Lutema USA
Paul Hickey, President & Co-Founder, PureVita
Lee Mornan, VP of Sales & Marketing, Altor Safety
Todd Raines, President, NFI Masks LLC J
ason Greene, Owner, Medicair Inc.
Avi Polischuk, Owner, Medicair Inc.
Jeremy A. Briggs, Esq., President, Luosh USA
Landon Morales, President, Armbrust Inc.
Brent Dillie, Chairman, AMMA, Managing Partner, Premium-PPE
Clayton Geye, CEO , Indiana Face Mask
James Wyner, CEO Shawmut Corporation
Matt Brandman, CEO, American Surgical Mask
Kahoru Watanabe, Co-Founder, American Surgical Mask
Tim Ziegenfus, CEO, ATI Corporation of North America
Richard Gehricke, COO, ATI Corporation of North America Connor Knapp, Founder, NYPPE LLC Thomas Allen Jr., COO, NYPPE LLC Charles Park, PZero Innovations Inc.
Ryan Gehricke, COO, Carolina Facemask and PPE
Rodney McAbery, Vice President, Guardsman Global
Adam Harmon, President, ALG Health
Dakota Hendrickson, Founder, Filti
George Tsatsos, VP of Sales,
Filti Kan Chou, President of CW Horizon LLC
Chris Dement, Co-Founder, Premium-PPE
Daniel C. Murphy, CEO, DediCare Medical Solutions, LLC
cc: Jeffrey Zients, Coordinator and Counselor to the President, COVID-19 Pandemic Response Timothy Manning, Supply Coordinator, White House COVID-19 Response Celeste Drake, Made in America Director, Office of Management and Budget
Sources:
Bradsher, Keith, and Liz Alderman. The World Needs Masks. China Makes Them, but Has Been Hoarding Them. New York Times, 2020. NY Times, https://www.nytimes.com/2020/03/13/business/masks-china-coronavirus.html.
Centers for Disease Control and Prevention. NPPTL Respirator Assessments to Support the COVID-19 Response. CDC, 2021. CDC, https://www.cdc.gov/niosh/npptl/respirators/testing/NonNIOSHresults.html.
ECRI. “Up to 70% of Chinese KN95 Masks Tested by ECRI Don’t Meet Minimum Standards.” ERCI.org, 2020, https://www.ecri.org/press/up-to-70-of-chinese-kn95-masks-tested-by-ecri-dont-meet-min imum-standards. Accessed 22 September 2020.
Kates, Graham. N95 mask shortage comes down to this key material: "The supply chain has gotten nuts". CBS News, 2020. CBS News, https://www.cbsnews.com/news/n95-mask-shortage-melt-blown-filters/.
See https://www.ammaunited.org/post/the-majority-of-u-s-mask-manufacturing-will-go-offline-in-60-days-2-647-jobs-already-lost
The following letter from American mask makers to the President outlines the perceived problems of American manufacturers facing Chinese competition
The majority of U.S. Mask Manufacturing will go offline in 60 days; 2,647 jobs already lostUpdated: May 13
Dear President Biden:
We write to you with a request for immediate help against unfair trade practices by foreign nations that threaten the viability of the U.S. domestic PPE mask manufacturing industry, as well as future U.S. pandemic preparedness efforts. Purchasing existing stockpiles from U.S. manufacturers and taking urgent regulatory action on procurement is needed for the continued health of our nation.
The American Mask Manufacturer’s Association (AMMA) represents the 26 small business Mask Manufacturers that answered America’s call for emergency PPE during the onset of the COVID-19 pandemic. While none of our members had made masks before this crisis, we refused to stand idly by while our nation's doctors, nurses, and neighbors were dying without the proper PPE that China hoarded from the rest of the world.
We responded in the most American way possible, as entrepreneurs and as builders. With no federal funding, our 26 member companies sprang into action—and in less than a year, created the manufacturing capacity for 3.69 billion surgical masks and 1.06 billion N95-style respirators. At the same time, we created 7,823 good-paying jobs.
Being entrepreneurs, we built our business models on pre-pandemic mask-market prices, creating companies that would serve our country long after the current crisis. With recent advances in robotics and automation, we proved our ability to make far higher quality and safer masks than China. These are masks that the U.S. Government and private healthcare organizations would prefer to purchase if prices were comparable.
Fearing America’s manufacturing independence, China has changed the rules and is effectively dumping masks on the U.S. market at well below actual costs. This has made it impossible for our U.S. manufacturers to compete—and as a result, 260 million American-made masks sit in U.S. warehouses unused today.
If this remains unchanged, 54% of our production will go offline in 60 days and 84.6% in less than a year.
There are $0.03 - $0.06 of raw materials in every surgical mask produced--that price is the same everywhere in the world. Yet somehow, we are seeing Chinese masks sold for less than $0.01 here in the United States.
And it’s not just masks. The entire supply chain is at risk.
For example, three of our members make their own meltblown, the key filtration material in N95 and Surgical masks that makes them effective. Meltblown is also the leading reason for production shortages and astronomical prices at the peak of the pandemic. Berry-Amendment compliant meltblown costs between $7-$12 per pound, but our members can make it for a cost of $3-$4 per pound. China is selling N95-quality meltblown at $1.22 per pound—12% cheaper than the cost of raw materials. Because of this, one of our members has stopped producing meltblown altogether. Other U.S. nonwoven manufacturers, like Cummins Filtration, are turning off their meltblown lines this month.
It is even more concerning to find that many of these cheaply sold Chinese products fail to meet American standards.
The National Personal Protective Technology Laboratory (NPPTL), a division of the CDC, recently completed a series of tests on KN95’s imported into the United States. Of 326 total masks tested, NPPTL found that 31.5%, or 103 masks, failed to meet the Chinese KN95 standard (GB 2626-2019) and the NIOSH standard (42 CFR Part 84) of 95% particulate filtration protection.
Additionally, the Emergency Care Research Institute (ERCI) found that 70% of Chinese KN95 masks tested failed to meet minimum standards, concluding that “U.S. hospitals bought hundreds of thousands of masks produced in China [that] aren’t safe and effective against the spread of COVID-19.”
As a result, U.S. state and national government and private healthcare systems have filled their warehouses with cheap, ineffective Chinese products that put our citizens at risk.
If China is allowed to continue dumping masks for a fraction of the costs of materials, we will be more dependent on China for PPE than before the pandemic--putting our healthcare workers at risk for current and future pandemics. These unfair trade practices threaten the viability of our industry and the welfare of every single American.
This is not only a matter of national security but of national pride. American industry responded to this crisis--please help us fight China’s unfair trade practices that are destroying what we have striven so hard to build.
In support of our shared interests, we ask that you strongly consider the following actions:
- Immediately remove the FDA’s EUA for non-U.S. based manufacturers, as we have demonstrated that there is ample U.S. production and supply.
- Immediately require the federal government, and anyone receiving federal dollars for PPE reimbursement, to buy Berry-Amendment Compliant masks.
- Review the Strategic National Stockpile. Specifically, remove masks that fail to meet American standards and require private industry and state and local governments to do the same.
- A law or regulatory action requiring hospitals and organization that accept federal funds to purchase 40% of their PPE from domestic manufacturers by 2023. This will bring investment to every level of our industry and allow the market to do its job.
Our entire membership is made up of diverse women and men who believe strongly in the free market, and do not want a government handout. We did not ask for federal funds to build our factories here in America, and we are not asking for a bailout now. If not for unfair and potentially illegal trade practices, all our businesses would be thriving today. That said, if the government and your administration no longer need our factories to produce PPE, we would still mark the past 12 months as a success and triumph of American spirit in a time of need.
We know your administration is working hard to ensure the long-term survival of American PPE producers, and for that we are grateful. However, the tactics being employed against us by foreign manufacturers are immediate threats to our ability to stay in business. We have already had to lay off significant numbers of our workforce and the majority of production facilities will be forced to permanently shutter mask manufacturing in less than 60 days.
If America needs our production capabilities to protect the country in the future, we need swift and decisive action that only you can provide.
Thank you, Mr. President, and your Administration, for your strong leadership to protect the American public from this deadly virus. Through partnership and collaboration, we can end this pandemic and protect against the next.
Sincerely,
Lloyd Armbrust President, AMMA Founder, Armbrust Inc.
Luis Arguello, President, Demetech
Dan Izhaky, President, United Safety Technology
Brian Wolin, CEO, Protective Health Gear Howard Sherman, CEO, Premier Guard USA
Glenn Ferreri, President, Premier Guard USA Brian Goldmeier, Partner, Made In America PPE
Chet Desai, Partner, Made In America PPE Amir Tafreshi, Founder & CEO, Lutema USA
Eddie Phanichkul, Founder & CMO, Lutema USA
Paul Hickey, President & Co-Founder, PureVita
Lee Mornan, VP of Sales & Marketing, Altor Safety
Todd Raines, President, NFI Masks LLC J
ason Greene, Owner, Medicair Inc.
Avi Polischuk, Owner, Medicair Inc.
Jeremy A. Briggs, Esq., President, Luosh USA
Landon Morales, President, Armbrust Inc.
Brent Dillie, Chairman, AMMA, Managing Partner, Premium-PPE
Clayton Geye, CEO , Indiana Face Mask
James Wyner, CEO Shawmut Corporation
Matt Brandman, CEO, American Surgical Mask
Kahoru Watanabe, Co-Founder, American Surgical Mask
Tim Ziegenfus, CEO, ATI Corporation of North America
Richard Gehricke, COO, ATI Corporation of North America Connor Knapp, Founder, NYPPE LLC Thomas Allen Jr., COO, NYPPE LLC Charles Park, PZero Innovations Inc.
Ryan Gehricke, COO, Carolina Facemask and PPE
Rodney McAbery, Vice President, Guardsman Global
Adam Harmon, President, ALG Health
Dakota Hendrickson, Founder, Filti
George Tsatsos, VP of Sales,
Filti Kan Chou, President of CW Horizon LLC
Chris Dement, Co-Founder, Premium-PPE
Daniel C. Murphy, CEO, DediCare Medical Solutions, LLC
cc: Jeffrey Zients, Coordinator and Counselor to the President, COVID-19 Pandemic Response Timothy Manning, Supply Coordinator, White House COVID-19 Response Celeste Drake, Made in America Director, Office of Management and Budget
Sources:
Bradsher, Keith, and Liz Alderman. The World Needs Masks. China Makes Them, but Has Been Hoarding Them. New York Times, 2020. NY Times, https://www.nytimes.com/2020/03/13/business/masks-china-coronavirus.html.
Centers for Disease Control and Prevention. NPPTL Respirator Assessments to Support the COVID-19 Response. CDC, 2021. CDC, https://www.cdc.gov/niosh/npptl/respirators/testing/NonNIOSHresults.html.
ECRI. “Up to 70% of Chinese KN95 Masks Tested by ECRI Don’t Meet Minimum Standards.” ERCI.org, 2020, https://www.ecri.org/press/up-to-70-of-chinese-kn95-masks-tested-by-ecri-dont-meet-min imum-standards. Accessed 22 September 2020.
Kates, Graham. N95 mask shortage comes down to this key material: "The supply chain has gotten nuts". CBS News, 2020. CBS News, https://www.cbsnews.com/news/n95-mask-shortage-melt-blown-filters/.
See https://www.ammaunited.org/post/the-majority-of-u-s-mask-manufacturing-will-go-offline-in-60-days-2-647-jobs-already-lost
Matt Gaetz explains the 2nd Amendment
Matt Gaetz says the 2nd amendment is about “maintaining within the citizenry the ability to maintain an armed rebellion against the government”
https://twitter.com/i/status/1398058997312278528
https://www.washingtonpost.com/politics/2021/05/28/gaetz-silicon-valley-second-amendment/
Matt Gaetz says the 2nd amendment is about “maintaining within the citizenry the ability to maintain an armed rebellion against the government”
https://twitter.com/i/status/1398058997312278528
https://www.washingtonpost.com/politics/2021/05/28/gaetz-silicon-valley-second-amendment/
CA bill would help fast food workers
Excerpt from https://www.foodandpower.net/latest/fast-food-labor-standard-setting-2021
Last month workers rallied for the FAST Recovery Act, a California bill that would create a council of labor and business interests to set stronger wages and working conditions across the industry. It would also make fast food brands liable for labor violations at all their independently owned franchises.
Excerpt from https://www.foodandpower.net/latest/fast-food-labor-standard-setting-2021
Last month workers rallied for the FAST Recovery Act, a California bill that would create a council of labor and business interests to set stronger wages and working conditions across the industry. It would also make fast food brands liable for labor violations at all their independently owned franchises.
DC AG press release https://oag.dc.gov/release/ag-racine-files-antitrust-lawsuit-against-amazon
AG Racine Files Antitrust Lawsuit Against Amazon to End its Illegal Control of Prices Across Online Retail Market
May 25, 2021Amazon Has Illegally Used and Maintained its Monopoly Power, Raising Prices for Consumers & Stifling Competition in Online Retail Sales by Imposing Restrictive Agreements on Third-Party Sellers
WASHINGTON, D.C. – Attorney General Karl A. Racine today filed an antitrust lawsuit against Amazon.com, Inc., (Amazon) seeking to end its anticompetitive practices that have raised prices for consumers and stifled innovation and choice across the entire online retail market.
The Office of the Attorney General (OAG) alleges that Amazon fixed online retail prices through contract provisions and policies it previously and currently applies to third-party sellers on its platform. These provisions and policies, known as “most favored nation” (MFN) agreements, prevent third-party sellers that offer products on Amazon.com from offering their products at lower prices or on better terms on any other online platform, including their own websites. These agreements effectively require third-party sellers to incorporate the high fees charged by Amazon – as much as 40% of the total product price – not only into the price charged to customers on Amazon’s platform, but also on any other online retail platform. As a result, these agreements impose an artificially high price floor across the online retail marketplace and allow Amazon to build and maintain monopoly power in violation of the District of Columbia’s Antitrust Act. The effects of these agreements continue to be far-reaching as they harm consumers and third-party sellers, and suppress competition, choice, and innovation. OAG is seeking to put an end to Amazon’s control over online retail pricing, as well as damages, penalties, and attorney’s fees.
“Amazon has used its dominant position in the online retail market to win at all costs. It maximizes its profits at the expense of third-party sellers and consumers, while harming competition, stifling innovation, and illegally tilting the playing field in its favor,” said AG Racine. “We filed this antitrust lawsuit to put an end to Amazon’s illegal control of prices across the online retail market. We need a fair online marketplace that expands options available to District residents and promotes competition, innovation, and choice.”
Amazon is the world’s largest online retailer, controlling 50-70% of the online market sales. Amazon sells its own products, and some products it sources wholesale from major manufacturers, through its online platform. It also allows independent third-party sellers to sell their own products on Amazon.com through what it calls “Amazon Marketplace.” Because of the company’s dominance and vast base of customers, over two million independent third-party sellers rely on Amazon Marketplace.
In 2019, Amazon claimed to have removed its price parity policy that explicitly prohibited third-party sellers from offering their products on a competing online retail sales platform, including the third-party sellers’ own website, at a lower price or on better terms than offered the products on Amazon. But in fact, Amazon quickly and quietly replaced the price parity policy with an effectively-identical substitute, its Fair Pricing Policy. Under the Fair Pricing Policy, third-party sellers can be sanctioned or removed from Amazon altogether if they offer their products for lower prices or under better terms on a competing online platform.
The lawsuit alleges that the pricing agreements Amazon imposes on third-party sellers are facially anticompetitive and allow Amazon to illegally build and maintain monopoly power in the online retail market in violation of the District of Columbia’s Antitrust Act. Specifically, the lawsuit alleges that Amazon:
The complaint, filed in D.C. Superior Court, is available here. https://oag.dc.gov/sites/default/files/2021-05/Amazon-Complaint-.pdf
AG Racine Files Antitrust Lawsuit Against Amazon to End its Illegal Control of Prices Across Online Retail Market
May 25, 2021Amazon Has Illegally Used and Maintained its Monopoly Power, Raising Prices for Consumers & Stifling Competition in Online Retail Sales by Imposing Restrictive Agreements on Third-Party Sellers
WASHINGTON, D.C. – Attorney General Karl A. Racine today filed an antitrust lawsuit against Amazon.com, Inc., (Amazon) seeking to end its anticompetitive practices that have raised prices for consumers and stifled innovation and choice across the entire online retail market.
The Office of the Attorney General (OAG) alleges that Amazon fixed online retail prices through contract provisions and policies it previously and currently applies to third-party sellers on its platform. These provisions and policies, known as “most favored nation” (MFN) agreements, prevent third-party sellers that offer products on Amazon.com from offering their products at lower prices or on better terms on any other online platform, including their own websites. These agreements effectively require third-party sellers to incorporate the high fees charged by Amazon – as much as 40% of the total product price – not only into the price charged to customers on Amazon’s platform, but also on any other online retail platform. As a result, these agreements impose an artificially high price floor across the online retail marketplace and allow Amazon to build and maintain monopoly power in violation of the District of Columbia’s Antitrust Act. The effects of these agreements continue to be far-reaching as they harm consumers and third-party sellers, and suppress competition, choice, and innovation. OAG is seeking to put an end to Amazon’s control over online retail pricing, as well as damages, penalties, and attorney’s fees.
“Amazon has used its dominant position in the online retail market to win at all costs. It maximizes its profits at the expense of third-party sellers and consumers, while harming competition, stifling innovation, and illegally tilting the playing field in its favor,” said AG Racine. “We filed this antitrust lawsuit to put an end to Amazon’s illegal control of prices across the online retail market. We need a fair online marketplace that expands options available to District residents and promotes competition, innovation, and choice.”
Amazon is the world’s largest online retailer, controlling 50-70% of the online market sales. Amazon sells its own products, and some products it sources wholesale from major manufacturers, through its online platform. It also allows independent third-party sellers to sell their own products on Amazon.com through what it calls “Amazon Marketplace.” Because of the company’s dominance and vast base of customers, over two million independent third-party sellers rely on Amazon Marketplace.
In 2019, Amazon claimed to have removed its price parity policy that explicitly prohibited third-party sellers from offering their products on a competing online retail sales platform, including the third-party sellers’ own website, at a lower price or on better terms than offered the products on Amazon. But in fact, Amazon quickly and quietly replaced the price parity policy with an effectively-identical substitute, its Fair Pricing Policy. Under the Fair Pricing Policy, third-party sellers can be sanctioned or removed from Amazon altogether if they offer their products for lower prices or under better terms on a competing online platform.
The lawsuit alleges that the pricing agreements Amazon imposes on third-party sellers are facially anticompetitive and allow Amazon to illegally build and maintain monopoly power in the online retail market in violation of the District of Columbia’s Antitrust Act. Specifically, the lawsuit alleges that Amazon:
- Raises prices for consumers: Amazon’s MFNs harm consumers by artificially inflating prices they pay for products purchased across the online retail market. When third-party sellers sell on Amazon, they must pass on the cost of Amazon’s high fees and commissions to consumers. While third-party sellers can sell their products for lower prices on other platforms and on their own websites, where fees are lower or non-existent, Amazon’s MFNs prevent sellers from passing on these savings to consumers. These agreements create an artificially high price “floor” across the entire online market and prevent other platforms from enticing consumers away from Amazon with lower prices and gaining market share. Without these restraints, products would be available to consumers at lower prices.
- Stifles competition in the online retail market: Amazon maintains its dominance in online retail by preventing other platforms from competing on price to win market share. The most important factor in online shoppers’ purchasing decisions is price. By ensuring that third-party sellers cannot offer lower prices elsewhere online, Amazon insulates itself from meaningful competition.
- Deprives consumers of choice: Amazon’s anticompetitive actions have resulted in less choice for consumers in the online retail market, suppressed innovation, and reduced investment in potentially-competing platforms.
The complaint, filed in D.C. Superior Court, is available here. https://oag.dc.gov/sites/default/files/2021-05/Amazon-Complaint-.pdf
Notable quote on the difficulties of bringing antitrust litigation
“To mount a credible antitrust campaign, you need to have a significant war chest,” said David Kesselman, an antitrust lawyer in Los Angeles who has followed the [Apple/Epic] case. “And the problem for many smaller companies and smaller businesses is that they don’t have the wherewithal to mount that type of a fight.”
From article on Apple/EPic litigation https://www.nytimes.com/2021/05/24/technology/apple-epic-antitrust-trial.html
“To mount a credible antitrust campaign, you need to have a significant war chest,” said David Kesselman, an antitrust lawyer in Los Angeles who has followed the [Apple/Epic] case. “And the problem for many smaller companies and smaller businesses is that they don’t have the wherewithal to mount that type of a fight.”
From article on Apple/EPic litigation https://www.nytimes.com/2021/05/24/technology/apple-epic-antitrust-trial.html
The Department of Agriculture will distribute loan forgiveness funds to thousands of minority and disadvantaged farmers
The forgiveness funds are part of a program established under the American Rescue Plan.
The fund, which is meant to provide government aid to “socially disadvantaged farmers and ranchers,” marks a “major civil rights victory,” Agriculture Secretary Tom Vilsack said in a USA Today op-ed published Friday.
“For Black and minority farmers, the American Rescue Plan could represent one of the most significant pieces of civil rights legislation in decades,” he wrote. “That’s because deep within the law is a provision that responds to decades of systemic discrimination perpetrated against farmers and ranchers of color by the U.S. Department of Agriculture.”
The law specifically directs the USDA to pay off the farm loans of nearly 16,000 minority farmers, and Vilsack told The Washington Post on Friday that those who will benefit include Black, American Indian, Hispanic, Alaskan Native, Asian American and Pacific Islander farmers.
“Today, after months of planning, USDA begins this historic debt relief program,” the secretary wrote in his op-ed.
Vilsack told the Post that farmers “will get a letter that advises them that their debt is in the process of being paid,” and eligible farmers and ranchers will receive an additional 20 percent of the loan as a cash payment to compensate for the burden that comes with a large debt relief.
The launch comes after Black farmers had accused the USDA of delaying its start to the program, while white farmers and some lawmakers have criticized it as being discriminatory, and banks have argued it could negatively harm lending institutions.
The program is currently facing multiple lawsuits, including from America First Legal (AFL), the legal group started by former President Trump aide Stephen Miller.
AFL argued in its lawsuit filed late last month that the USDA through its fund for disadvantaged farmers and ranchers is “actively and invidiously discriminating against American citizens solely based upon their race.”
“White farmers and ranchers are not included within the definition of ‘socially disadvantaged farmers and ranchers,’ making them ineligible for aid under these federal programs,” the lawsuit argued.
“These racial exclusions are patently unconstitutional, and the Court should permanently enjoin their enforcement,” the AFL added.
In another lawsuit, a group of white Midwestern farmers alleged they were denied participation in the loan forgiveness program because of their race, arguing that if they were considered eligible, “they would have the opportunity to make additional investments in their property, expand their farms, purchase equipment and supplies, and otherwise support their families and local communities.”
Credit: https://thehill.com/policy/finance/554807-usda-to-start-loan-forgiveness-for-thousands-of-farmers-of-color-in-june
The forgiveness funds are part of a program established under the American Rescue Plan.
The fund, which is meant to provide government aid to “socially disadvantaged farmers and ranchers,” marks a “major civil rights victory,” Agriculture Secretary Tom Vilsack said in a USA Today op-ed published Friday.
“For Black and minority farmers, the American Rescue Plan could represent one of the most significant pieces of civil rights legislation in decades,” he wrote. “That’s because deep within the law is a provision that responds to decades of systemic discrimination perpetrated against farmers and ranchers of color by the U.S. Department of Agriculture.”
The law specifically directs the USDA to pay off the farm loans of nearly 16,000 minority farmers, and Vilsack told The Washington Post on Friday that those who will benefit include Black, American Indian, Hispanic, Alaskan Native, Asian American and Pacific Islander farmers.
“Today, after months of planning, USDA begins this historic debt relief program,” the secretary wrote in his op-ed.
Vilsack told the Post that farmers “will get a letter that advises them that their debt is in the process of being paid,” and eligible farmers and ranchers will receive an additional 20 percent of the loan as a cash payment to compensate for the burden that comes with a large debt relief.
The launch comes after Black farmers had accused the USDA of delaying its start to the program, while white farmers and some lawmakers have criticized it as being discriminatory, and banks have argued it could negatively harm lending institutions.
The program is currently facing multiple lawsuits, including from America First Legal (AFL), the legal group started by former President Trump aide Stephen Miller.
AFL argued in its lawsuit filed late last month that the USDA through its fund for disadvantaged farmers and ranchers is “actively and invidiously discriminating against American citizens solely based upon their race.”
“White farmers and ranchers are not included within the definition of ‘socially disadvantaged farmers and ranchers,’ making them ineligible for aid under these federal programs,” the lawsuit argued.
“These racial exclusions are patently unconstitutional, and the Court should permanently enjoin their enforcement,” the AFL added.
In another lawsuit, a group of white Midwestern farmers alleged they were denied participation in the loan forgiveness program because of their race, arguing that if they were considered eligible, “they would have the opportunity to make additional investments in their property, expand their farms, purchase equipment and supplies, and otherwise support their families and local communities.”
Credit: https://thehill.com/policy/finance/554807-usda-to-start-loan-forgiveness-for-thousands-of-farmers-of-color-in-june
Banker groups oppose U.S. Dept. of Agriculture loan relief to African-American Socially Disadvantaged Farmers
DAR Comment: The core of the bankers objection is this (quoting from the Bankers' letter):
This provision requires USDA to pay off direct and guaranteed farm loans in existence as of January 1, 2021 by providing up to 120 percent of the outstanding indebtedness for each SDA borrower. USDA has sent a letter to all guaranteed lenders noting the agency is establishing a process for these loan payments. The sudden, abrupt payoff of any category of guaranteed loans could have adverse consequences if not implemented in a manner that minimizes disruptions to lenders participating in USDA’s guaranteed loan programs or acting as secondary market purchasers of the loan guarantees. USDA’s implementation of this provision should help ensure lenders are incentivized to continue meeting guaranteed loan demand in the future while ensuring the overall reliability and predictability of USDA guaranteed loan programs.
Recognizing lenders’ costs of funding and servicing loans, USDA should ensure lenders are made whole by being compensated for lost income due to these loan payoffs.
The Bankers' letter and materials follow:
April 9, 2021
The Honorable Tom Vilsack Secretary of Agriculture
U.S. Department of Agriculture 1400 Independence Avenue, SW Washington, D.C. 20250
Dear Secretary Vilsack:
On behalf of the commercial banking industry and the more than 52,000 bank locations serving American citizens, we write to share our recommendations on USDA’s implementation of Section 1005 of the American Rescue Plan Act related to Socially Disadvantaged Farmers and Ranchers (SDA). This provision requires USDA to pay off direct and guaranteed farm loans in existence as of January 1, 2021 by providing up to 120 percent of the outstanding indebtedness for each SDA borrower. USDA has sent a letter to all guaranteed lenders noting the agency is establishing a process for these loan payments.
The sudden, abrupt payoff of any category of guaranteed loans could have adverse consequences if not implemented in a manner that minimizes disruptions to lenders participating in USDA’s guaranteed loan programs or acting as secondary market purchasers of the loan guarantees. USDA’s implementation of this provision should help ensure lenders are incentivized to continue meeting guaranteed loan demand in the future while ensuring the overall reliability and predictability of USDA guaranteed loan programs.
Recognizing lenders’ costs of funding and servicing loans, USDA should ensure lenders are made whole by being compensated for lost income due to these loan payoffs. Second, purchasers of USDA loan guarantees in the secondary market should be paid for lost premium values and the loans’ multi-year payment streams being halted. The Secondary market provides liquidity to lenders allowing additional guarantees to be extended to SDA and other borrowers. Finally, USDA could consider assuming the payments of those loans that are not delinquent and have not been associated with previous legal challenges.
Please see the attachment for an explanation of these recommendations which we would be pleased to further discuss with USDA officials. The fact there are thousands of guaranteed loans from commercial lenders to SDA borrowers demonstrates an ongoing willingness to partner with all farm and ranch borrowers and USDA. Our recommendations will help ensure these partnerships remain intact.
Sincerely,
American Bankers Association
Independent Community Bankers of America National Rural Lenders Association
Attachment
Recommendations on Relieving Indebtedness of SDA Borrowers
Implementing Section 1005 of the American Rescue Plan Act
The American Rescue Plan Act of 2021 (ARPA) was signed into law on March 12, 2021. Section 1005 of the Act requires USDA to pay off all direct and guaranteed loans to Socially Disadvantaged Farmers and Ranchers (SDA) that existed as of January 1, 2021. Each SDA borrower is eligible to receive up to 120 percent of their outstanding loan indebtedness. The sudden, abrupt payoff of any category of guaranteed loans could result in an interest income loss to banks holding these loans and a loss on the premiums paid by secondary market purchasers/investors. To ensure lenders continue using USDA guaranteed loans to meet future guaranteed borrower demand, USDA should incorporate the following recommendations.
Recognize lenders’ costs of funding, maintaining, and servicing loans and ensure lenders are made whole by being compensated for lost income due to the loan payoffs.
For example, a large community bank which has an SDA farm/ranch portfolio of over $200 million calculates they could lose millions of dollars in net income per year if their portfolio of SDA loans is quickly paid off. A $200mm-plus loan balance going to zero will have a significant financial impact on the bank’s balance sheet, capital position and income statements alarming bank regulators. Such a loss will also undoubtedly reduce the bank’s ability to retain employees.
Another example is a smaller community bank with over $10 million in SDA farm/ranch loans comprising over ten percent of their portfolio. This bank estimates the sudden payoff of these loans will cause an annual loss of net income of over $300,000 per year for several years and raise concerns alluded to above.
Providing agricultural loans involves a substantial cost for lenders related to the costs of securing funding for loan-making and underwriting activities which include analyzing producers’ creditworthiness and ability to cash flow and correctly assessing the value of the farm/ranch assets. Loans must be approved by a loan review committee and lenders’ staff must monitor loan payments and asset quality, often with on-site inspections and periodic follow-up and consultation with borrowers and in some cases pursue collection efforts.
If USDA does not compensate lenders for such disruptions or avoid sudden loan payoffs, the likely result will be less access to credit for those seeking USDA guaranteed loans in the future, including SDA farmers/ranchers.
Other than the additional twenty percent to pay SDA taxes, USDA could assume payment of loans that are not delinquent or were not part of previous legal challenges.
Payments of existing loan terms on loans that were not part of the previous court challenges ensures SDA farmers/ranchers who are not delinquent are also immediately relieved from the burden of repaying their guaranteed loans while maintaining the payment schedule originally set up by the bank and agreed to by the farm or ranch customer. Instead, USDA would make the payments. This process protects the banks’ investment in loan-making to guaranteed borrowers and would be similar to how some PPP loan payments were made by the SBA.
Purchasers of USDA loan guarantees in the secondary market should be paid for lost premium values and the loans’ multi-year payment streams being halted.
The Secondary market provides liquidity to lenders allowing additional guarantees to be extended to farmers and ranchers. Commercial lenders have, over several decades, partnered with USDA to build this reliable and vibrant secondary market to serve all guaranteed loan borrowers. However, there is real concern about the ability of both lenders and investors to continue to facilitate credit availability in the secondary market going forward should consideration not be given to their considerable existing investments.
Presently, lenders can sell the guaranteed portion of their USDA loans to secondary market purchasers, including Farmer Mac, regional brokers, and loan aggregators. By selling the guarantees, lenders replenish their funds when liquidity is tight, allowing them to subsequently make new loans. The secondary market also allows lenders to provide long-term fixed rate loans resulting in longer terms at lower interest rates, reducing costs for farm and ranch borrowers.
Additionally, secondary market purchasers pay a premium for these guarantees based on the expectation of a dependable income stream over a multi-year period (typically 8-10 years). Due to the perception of reliability of payments, the guarantees are considered tradable, thus generating premiums from interested purchasers. The premiums on these loan purchases could disappear overnight with demand for purchasing USDA guarantees drying up.
In sum, the secondary market for USDA guaranteed farm loans provides favorable terms for farm borrowers, needed liquidity for lenders, and consistent, predictable yield for investors. The government guarantees help provide a market for these loans and mitigates credit risk in a vitally important sector filled with great uncertainty. The guarantees also provide bank regulators with assurance of limited risks to the financial institution which made the loan(s). However, if paying off entire categories of guarantee borrowers is not implemented properly, USDA’s actions could severely damage the secondary market by making the market unreliable and pricing unpredictable. This would cause a significant loss of available capital for lending under the USDA programs harming all guaranteed borrowers as well as the overall integrity of USDA’s guaranteed programs.
Conclusion
The fact there are thousands of guaranteed loans from commercial lenders to SDA borrowers demonstrates an ongoing willingness to partner with SDA borrowers as active partners sharing in the risks of keeping their operations viable for their families and their futures. Commercial lenders should not be hindered from continuing to work with all guaranteed loan borrowers. We urge USDA to assist both SDA farmers/ranchers as required by statute and their lenders who have worked so diligently on their behalf.
Finally, USDA should consider the necessity of maintaining the integrity of their guaranteed loan programs, which can only be accomplished if those lenders dealing with USDA loan guarantees are protected from the sudden, unexpected loss of income from abrupt loan payoffs and detrimental disruptions to the secondary market. Adopting the above recommendations will help accomplish these objectives.
https://www.icba.org/docs/default-source/icba/advocacy-documents/letters-to-regulators/letter-to-usda-on-sda-loan-payoffs.pdf?sfvrsn=1e780e17_0
DAR Comment: The core of the bankers objection is this (quoting from the Bankers' letter):
This provision requires USDA to pay off direct and guaranteed farm loans in existence as of January 1, 2021 by providing up to 120 percent of the outstanding indebtedness for each SDA borrower. USDA has sent a letter to all guaranteed lenders noting the agency is establishing a process for these loan payments. The sudden, abrupt payoff of any category of guaranteed loans could have adverse consequences if not implemented in a manner that minimizes disruptions to lenders participating in USDA’s guaranteed loan programs or acting as secondary market purchasers of the loan guarantees. USDA’s implementation of this provision should help ensure lenders are incentivized to continue meeting guaranteed loan demand in the future while ensuring the overall reliability and predictability of USDA guaranteed loan programs.
Recognizing lenders’ costs of funding and servicing loans, USDA should ensure lenders are made whole by being compensated for lost income due to these loan payoffs.
The Bankers' letter and materials follow:
April 9, 2021
The Honorable Tom Vilsack Secretary of Agriculture
U.S. Department of Agriculture 1400 Independence Avenue, SW Washington, D.C. 20250
Dear Secretary Vilsack:
On behalf of the commercial banking industry and the more than 52,000 bank locations serving American citizens, we write to share our recommendations on USDA’s implementation of Section 1005 of the American Rescue Plan Act related to Socially Disadvantaged Farmers and Ranchers (SDA). This provision requires USDA to pay off direct and guaranteed farm loans in existence as of January 1, 2021 by providing up to 120 percent of the outstanding indebtedness for each SDA borrower. USDA has sent a letter to all guaranteed lenders noting the agency is establishing a process for these loan payments.
The sudden, abrupt payoff of any category of guaranteed loans could have adverse consequences if not implemented in a manner that minimizes disruptions to lenders participating in USDA’s guaranteed loan programs or acting as secondary market purchasers of the loan guarantees. USDA’s implementation of this provision should help ensure lenders are incentivized to continue meeting guaranteed loan demand in the future while ensuring the overall reliability and predictability of USDA guaranteed loan programs.
Recognizing lenders’ costs of funding and servicing loans, USDA should ensure lenders are made whole by being compensated for lost income due to these loan payoffs. Second, purchasers of USDA loan guarantees in the secondary market should be paid for lost premium values and the loans’ multi-year payment streams being halted. The Secondary market provides liquidity to lenders allowing additional guarantees to be extended to SDA and other borrowers. Finally, USDA could consider assuming the payments of those loans that are not delinquent and have not been associated with previous legal challenges.
Please see the attachment for an explanation of these recommendations which we would be pleased to further discuss with USDA officials. The fact there are thousands of guaranteed loans from commercial lenders to SDA borrowers demonstrates an ongoing willingness to partner with all farm and ranch borrowers and USDA. Our recommendations will help ensure these partnerships remain intact.
Sincerely,
American Bankers Association
Independent Community Bankers of America National Rural Lenders Association
Attachment
Recommendations on Relieving Indebtedness of SDA Borrowers
Implementing Section 1005 of the American Rescue Plan Act
The American Rescue Plan Act of 2021 (ARPA) was signed into law on March 12, 2021. Section 1005 of the Act requires USDA to pay off all direct and guaranteed loans to Socially Disadvantaged Farmers and Ranchers (SDA) that existed as of January 1, 2021. Each SDA borrower is eligible to receive up to 120 percent of their outstanding loan indebtedness. The sudden, abrupt payoff of any category of guaranteed loans could result in an interest income loss to banks holding these loans and a loss on the premiums paid by secondary market purchasers/investors. To ensure lenders continue using USDA guaranteed loans to meet future guaranteed borrower demand, USDA should incorporate the following recommendations.
Recognize lenders’ costs of funding, maintaining, and servicing loans and ensure lenders are made whole by being compensated for lost income due to the loan payoffs.
For example, a large community bank which has an SDA farm/ranch portfolio of over $200 million calculates they could lose millions of dollars in net income per year if their portfolio of SDA loans is quickly paid off. A $200mm-plus loan balance going to zero will have a significant financial impact on the bank’s balance sheet, capital position and income statements alarming bank regulators. Such a loss will also undoubtedly reduce the bank’s ability to retain employees.
Another example is a smaller community bank with over $10 million in SDA farm/ranch loans comprising over ten percent of their portfolio. This bank estimates the sudden payoff of these loans will cause an annual loss of net income of over $300,000 per year for several years and raise concerns alluded to above.
Providing agricultural loans involves a substantial cost for lenders related to the costs of securing funding for loan-making and underwriting activities which include analyzing producers’ creditworthiness and ability to cash flow and correctly assessing the value of the farm/ranch assets. Loans must be approved by a loan review committee and lenders’ staff must monitor loan payments and asset quality, often with on-site inspections and periodic follow-up and consultation with borrowers and in some cases pursue collection efforts.
If USDA does not compensate lenders for such disruptions or avoid sudden loan payoffs, the likely result will be less access to credit for those seeking USDA guaranteed loans in the future, including SDA farmers/ranchers.
Other than the additional twenty percent to pay SDA taxes, USDA could assume payment of loans that are not delinquent or were not part of previous legal challenges.
Payments of existing loan terms on loans that were not part of the previous court challenges ensures SDA farmers/ranchers who are not delinquent are also immediately relieved from the burden of repaying their guaranteed loans while maintaining the payment schedule originally set up by the bank and agreed to by the farm or ranch customer. Instead, USDA would make the payments. This process protects the banks’ investment in loan-making to guaranteed borrowers and would be similar to how some PPP loan payments were made by the SBA.
Purchasers of USDA loan guarantees in the secondary market should be paid for lost premium values and the loans’ multi-year payment streams being halted.
The Secondary market provides liquidity to lenders allowing additional guarantees to be extended to farmers and ranchers. Commercial lenders have, over several decades, partnered with USDA to build this reliable and vibrant secondary market to serve all guaranteed loan borrowers. However, there is real concern about the ability of both lenders and investors to continue to facilitate credit availability in the secondary market going forward should consideration not be given to their considerable existing investments.
Presently, lenders can sell the guaranteed portion of their USDA loans to secondary market purchasers, including Farmer Mac, regional brokers, and loan aggregators. By selling the guarantees, lenders replenish their funds when liquidity is tight, allowing them to subsequently make new loans. The secondary market also allows lenders to provide long-term fixed rate loans resulting in longer terms at lower interest rates, reducing costs for farm and ranch borrowers.
Additionally, secondary market purchasers pay a premium for these guarantees based on the expectation of a dependable income stream over a multi-year period (typically 8-10 years). Due to the perception of reliability of payments, the guarantees are considered tradable, thus generating premiums from interested purchasers. The premiums on these loan purchases could disappear overnight with demand for purchasing USDA guarantees drying up.
In sum, the secondary market for USDA guaranteed farm loans provides favorable terms for farm borrowers, needed liquidity for lenders, and consistent, predictable yield for investors. The government guarantees help provide a market for these loans and mitigates credit risk in a vitally important sector filled with great uncertainty. The guarantees also provide bank regulators with assurance of limited risks to the financial institution which made the loan(s). However, if paying off entire categories of guarantee borrowers is not implemented properly, USDA’s actions could severely damage the secondary market by making the market unreliable and pricing unpredictable. This would cause a significant loss of available capital for lending under the USDA programs harming all guaranteed borrowers as well as the overall integrity of USDA’s guaranteed programs.
Conclusion
The fact there are thousands of guaranteed loans from commercial lenders to SDA borrowers demonstrates an ongoing willingness to partner with SDA borrowers as active partners sharing in the risks of keeping their operations viable for their families and their futures. Commercial lenders should not be hindered from continuing to work with all guaranteed loan borrowers. We urge USDA to assist both SDA farmers/ranchers as required by statute and their lenders who have worked so diligently on their behalf.
Finally, USDA should consider the necessity of maintaining the integrity of their guaranteed loan programs, which can only be accomplished if those lenders dealing with USDA loan guarantees are protected from the sudden, unexpected loss of income from abrupt loan payoffs and detrimental disruptions to the secondary market. Adopting the above recommendations will help accomplish these objectives.
https://www.icba.org/docs/default-source/icba/advocacy-documents/letters-to-regulators/letter-to-usda-on-sda-loan-payoffs.pdf?sfvrsn=1e780e17_0
Doctors Now Must Provide Patients Their Health Data, Online and On Demand
By Sarah Kwon
MAY 18, 2021
Excerpts:
On April 5, a federal rule went into effect that requires health care providers to give patients electronic access to their health information without delay upon request, at no cost. Many patients may now find their doctors’ clinical notes, test results and other medical data posted to their electronic portal as soon as they are available.
Advocates herald the rule as a long-awaited opportunity for patients to control their data and health. “This levels the playing field,” said Jan Walker, co-founder of OpenNotes, a group that has pushed for providers to share notes with patients. “A decade ago, the medical record belonged to the physician.”
But the rollout of the rule has hit bumps, as doctors learn that patients might see information before they do. Like Ramsey, some patients have felt distressed when seeing test results dropped into their portal without a physician’s explanation. And doctors’ groups say they are confused and concerned about whether the notes of adolescent patients who don’t want their parents to see sensitive information can be exempt — or if they will have to breach their patients’ trust.
Patients have long had a legal right to their medical records but often have had to pay fees, wait weeks or sift through reams of paper to see them. The rule aims not only to remove these barriers, but also to enable patients to access their health records through smartphone apps, and prevent health care providers from withholding information from other providers and health IT companies when a patient wants it to be shared. Privacy rules under the Health Insurance Portability and Accountability Act, which limit sharing of personal health information outside a clinic, remain in place, although privacy advocates have warned that patients who choose to share their data with consumer apps will put their data at risk.
Studies have shown numerous benefits of note sharing. Patients who read their notes understand more about their health, better remember their treatment plan and are more likely to stick to their medication regimen. Non-white, older or less educated patients report even greater benefits than others.
While most doctors who have shared notes with patients think it’s a good idea, the policy has drawbacks. One recent study found that half of doctors reported writing their notes less candidly after they were opened to patients. Another study, published in February, found that 1 in 10 patients had ever felt offended or judged after reading a note. The study’s lead author, Dr. Leonor Fernandez, of Beth Israel Deaconess Medical Center, said there is a “legacy of certain ways of expressing things in medicine that didn’t really take into account how it reads when you’re a patient.”
The AMA is advocating for “tweaks” to the rule, he said, like allowing brief delays in releasing results for a few of the highest-stakes tests, like those diagnosing cancer, and more clarity on whether the harm exception applies to adolescent patients who might face emotional distress if their doctor breached their trust by sharing sensitive information with their parents. The Office of the National Coordinator for Health Information Technology, the federal agency overseeing the rule, responded in an email that it has heard these concerns, but has also heard from clinicians that patients value receiving this information in a timely fashion, and that patients can decide whether they want to look at results once they receive them or wait until they can review them with their doctor. It added that the rule does not require giving parents access to protected health information if they did not already have that right under HIPAA.
Patient advocate Cynthia Fisher believes there should be no exceptions to immediately releasing results, noting that many patients want and need test results as soon as possible, and that delays can lead to worse health outcomes. Instead of facing long wait times to discuss diagnoses with their doctors, she said, patients can now take their results elsewhere. “We can’t assume the consumer is ignorant and unresourceful,” she said. In the meantime, hospitals and doctors are finding ways to adapt, and their tactics could have lasting implications for patient knowledge and physician workload. At Massachusetts General Hospital, a guide for patients on how to interpret medical terminology in radiology reports is being developed, said Dr. William Mehan, a neuroradiologist. An internal survey run after radiology results became immediately available to patients found that some doctors were monitoring their inbox after hours in case results arrived. “Burnout has come up in this conversation,” Mehan said. Some electronic health records enable doctors to withhold test results at the time they are ordered, said Jodi Daniel, a partner at the law firm Crowell & Moring. Doctors who can do this could ask patients whether they want their results released immediately or if they want their doctor to communicate the result, assuming they meet certain criteria for exceptions under the rule, she said. Chantal Worzala, a health technology policy consultant, said more is to come. “There will be a lot more conversation about the tools that individuals want and need in order to access and understand their health information,” she said.
This story was produced by KHN, which publishes California Healthline, an editorially independent service of the California Health Care Foundation.
AAI: Study Finds Private Equity Investment Accelerates Concentration and Undermines a Stable, Competitive Healthcare Industry
May 18, 2021 | Laura Alexander , Dr. Richard Scheffler
Health & Pharmaceuticals , Competition Policy https://www.antitrustinstitute.org/issues/competition-policy
A decade’s worth of evidence supports troubling findings that private equity business practices have a negative impact on competition in healthcare and on patients. A new white paper, produced by experts at the American Antitrust Institute (AAI) and UC Berkeley, calls for immediate attention to the role that private equity investment plays in harming patients and impairing the functioning of the healthcare industry. In this groundbreaking new white paper, Soaring Private Equity Investment in the Healthcare Sector: Consolidation Accelerated, Competition Undermined, and Patients at Risk, AAI’s Laura Alexander and Professor Richard Scheffler of The Nicholas C. Petris Center on Health Care Markets and Consumer Welfare in the School of Public Health at UC Berkeley detail the emerging threat posed by private equity investment in healthcare markets.
“The report documents the astronomical growth of private equity’s investment in healthcare, which focuses on short-term profits and not the wellbeing of patients, and its consequences” says UC Berkeley School of Public Health Professor and Petris Center Director Richard Scheffler.
The paper’s major conclusions include:
“The ramifications of private equity investment in healthcare are still unfolding,” says study co-author and AAI Vice President of Policy Laura Alexander. “But given the speed with which private equity is transforming healthcare markets and the implications for competition, patients, and public health, the time to act is now.”
Media Contacts:Laura Alexander
American Antitrust Institute
lalexander@antitrustinstitute.org
(202) 276-4050
Dr. Richard Scheffler
Petris Center
rscheff@berkeley.edu
(510) 508-5079
AAI Private Equity Healthcare Report -- https://www.antitrustinstitute.org/wp-content/uploads/2021/05/Private-Equity-I-Healthcare-Report-FINAL.pdf
May 18, 2021 | Laura Alexander , Dr. Richard Scheffler
Health & Pharmaceuticals , Competition Policy https://www.antitrustinstitute.org/issues/competition-policy
A decade’s worth of evidence supports troubling findings that private equity business practices have a negative impact on competition in healthcare and on patients. A new white paper, produced by experts at the American Antitrust Institute (AAI) and UC Berkeley, calls for immediate attention to the role that private equity investment plays in harming patients and impairing the functioning of the healthcare industry. In this groundbreaking new white paper, Soaring Private Equity Investment in the Healthcare Sector: Consolidation Accelerated, Competition Undermined, and Patients at Risk, AAI’s Laura Alexander and Professor Richard Scheffler of The Nicholas C. Petris Center on Health Care Markets and Consumer Welfare in the School of Public Health at UC Berkeley detail the emerging threat posed by private equity investment in healthcare markets.
“The report documents the astronomical growth of private equity’s investment in healthcare, which focuses on short-term profits and not the wellbeing of patients, and its consequences” says UC Berkeley School of Public Health Professor and Petris Center Director Richard Scheffler.
The paper’s major conclusions include:
- Private equity investment in healthcare has grown dramatically—to nearly $750 billion in the last decade—and is poised to increase even further due to the COVID-19 pandemic’s impact on the healthcare sector and its projected growth.
- The private equity business model is fundamentally incompatible with a stable, competitive healthcare system that serves patients and promotes the health and wellbeing of the population.
- Private equity’s focus on short-term revenue generation and consolidation undermines competition and destabilizes healthcare markets.
- Private equity acts as an anticompetitive catalyst in healthcare markets, amplifying and accelerating concentration and anticompetitive practices.
- Private equity funds operate under the public and regulatory “radar,” leaving the vast majority of private equity deals in healthcare unreported, unreviewed, and unregulated.
- Urgent action is needed to oversee, investigate, and understand the impact of private equity on patients and healthcare markets, including changes to antitrust reporting requirements, withdrawal of the Department of Justice’s guidance on remedies, and study of additional oversight of healthcare mergers by the Department of Health and Human Services.
“The ramifications of private equity investment in healthcare are still unfolding,” says study co-author and AAI Vice President of Policy Laura Alexander. “But given the speed with which private equity is transforming healthcare markets and the implications for competition, patients, and public health, the time to act is now.”
Media Contacts:Laura Alexander
American Antitrust Institute
lalexander@antitrustinstitute.org
(202) 276-4050
Dr. Richard Scheffler
Petris Center
rscheff@berkeley.edu
(510) 508-5079
AAI Private Equity Healthcare Report -- https://www.antitrustinstitute.org/wp-content/uploads/2021/05/Private-Equity-I-Healthcare-Report-FINAL.pdf
"Pay-day" high interest lenders have made big money from desperate borrowers during the pandemic
It is one of the cruel ironies of the pandemic: At a time of great suffering for millions of working-class Americans, the odd financial rhythms of the past year—with its waves of job layoffs, followed by unprecedented government stimulus and a sharp economic rebound—have helped some of these high-interest lenders rake in record earnings. That the windfall for these companies came just as the Federal Reserve was making near zero-rate loans available for corporate America and the wealthy only further riles up the industry’s biggest critics.
“Debt collectors had a big year, and so did predatory lenders,” said Lauren Saunders, associate director at the National Consumer Law Center, a non-profit that advocates for low-income borrowers. “The idea that any company could keep charging 100% or 200% interest or more during this time of crisis is really outrageous.”
What’s more, consumer advocates point to studies that show Black and Latino communities are disproportionately targeted by providers of high-cost loans.
In Michigan, areas that are more than a quarter Black and Latino have 7.6 payday stores for every 100,000 people, or about 50% more than elsewhere, according to data collected by the Center for Responsible Lending. A forthcoming study from the University of Houston that was provided to Bloomberg shows similar disparities when it comes to online advertising.
From: Bloomberg Payday, Predatory Lenders Racked Up Record Profits in 2020 (bloomberg.com) https://www.bloomberg.com/graphics/2021-payday-loan-lenders/?cmpid=BBD051721_BIZ&utm_medium=email&utm_source=newsletter&utm_term=210517&utm_campaign=bloombergdaily
It is one of the cruel ironies of the pandemic: At a time of great suffering for millions of working-class Americans, the odd financial rhythms of the past year—with its waves of job layoffs, followed by unprecedented government stimulus and a sharp economic rebound—have helped some of these high-interest lenders rake in record earnings. That the windfall for these companies came just as the Federal Reserve was making near zero-rate loans available for corporate America and the wealthy only further riles up the industry’s biggest critics.
“Debt collectors had a big year, and so did predatory lenders,” said Lauren Saunders, associate director at the National Consumer Law Center, a non-profit that advocates for low-income borrowers. “The idea that any company could keep charging 100% or 200% interest or more during this time of crisis is really outrageous.”
What’s more, consumer advocates point to studies that show Black and Latino communities are disproportionately targeted by providers of high-cost loans.
In Michigan, areas that are more than a quarter Black and Latino have 7.6 payday stores for every 100,000 people, or about 50% more than elsewhere, according to data collected by the Center for Responsible Lending. A forthcoming study from the University of Houston that was provided to Bloomberg shows similar disparities when it comes to online advertising.
From: Bloomberg Payday, Predatory Lenders Racked Up Record Profits in 2020 (bloomberg.com) https://www.bloomberg.com/graphics/2021-payday-loan-lenders/?cmpid=BBD051721_BIZ&utm_medium=email&utm_source=newsletter&utm_term=210517&utm_campaign=bloombergdaily
Expanding citations from Matt Stoller's blog on U.S. waiving IP protections for Covid vaccines
FTC releases a report about repair restrictions and how they limit your ability to fix products that break.
by
Emily Wu, May 6, 2021
Attorney, Federal Trade Commission
When you buy a new smartphone, computer, home appliance, or other product, you may not always think about whether it can be fixed if it breaks or has an issue. But here’s the thing: some manufacturers prevent you from fixing the things you buy. They might do things like gluing in batteries, limiting the availability of spare parts, and not giving you the repair instructions and software to help figure out the problem.
The FTC released a report today about repair restrictions and how they limit your ability to fix products that break. The report suggests what the FTC, lawmakers, and manufacturers can do to make it easier for you to fix the things that you own.
But there are some things that you can do yourself. Before you buy, do some research online to find out:
If you’re told that your warranty was voided or that it will be voided because of independent repair, we want to hear about it. Report it to the FTC at ReportFraud.ftc.gov.
by
Emily Wu, May 6, 2021
Attorney, Federal Trade Commission
When you buy a new smartphone, computer, home appliance, or other product, you may not always think about whether it can be fixed if it breaks or has an issue. But here’s the thing: some manufacturers prevent you from fixing the things you buy. They might do things like gluing in batteries, limiting the availability of spare parts, and not giving you the repair instructions and software to help figure out the problem.
The FTC released a report today about repair restrictions and how they limit your ability to fix products that break. The report suggests what the FTC, lawmakers, and manufacturers can do to make it easier for you to fix the things that you own.
But there are some things that you can do yourself. Before you buy, do some research online to find out:
- What is the average lifespan of the product?
- What is likely to go wrong with it if it breaks?
- How hard will it be to fix the problem?
If you’re told that your warranty was voided or that it will be voided because of independent repair, we want to hear about it. Report it to the FTC at ReportFraud.ftc.gov.
Spotify’s Joe Rogan encouraged “healthy” 21-year-olds not to get a coronavirus vaccine
From: https://www.mediamatters.org/joe-rogan-experience/spotifys-joe-rogan-encourages-healthy-21-year-olds-not-get-coronavirus-vaccine
WRITTEN BY ALEX PATERSON
On the April 23 edition of his Spotify podcast, Joe Rogan encouraged healthy young people not to get a COVID-19 vaccine, saying, “If you're like 21 years old, and you say to me, should I get vaccinated? I'll go no.”
Experts estimate that in order to achieve herd immunity, society may need to get to a critical mass of 70% to 90% of people vaccinated.
Rogan is one of the most influential podcast hosts in the world. His show is broadcast exclusively on Spotify and is the most popular podcast on the platform. He has frequently used his podcast to spread conspiracy theories, espouse dangerous COVID-19 misinformation, and attack trans people.
DAR Comment: Joe Ragan is plainly not a medical expert. He did graduate from Newton South High School in Massachusetts in 1985. He started college at the University of Massachusetts Boston, but dropped out. He may have taken courses in advanced biology and immunology, but maybe not. His main professional accomplishments include stand-up comedian and podcast blogger. His anti-vax opinions are arguably blatantly wrong and misleading. Does Spotify have the legal right to censor or refuse to post Regan's comments, as YouTube previously did? If yes, is a company's blocking of his comments an offensive example of "cancel culture," or a common sense effort by an independent, non-government business to limit patently wrong and harmful ranting by a right-wing nut?
Why would anyone accept comedian and blogger Joe Rogan's information about the utility of a COVID vaccine?
Assuming for the purpose of argument that Joe Rogan's information about lack of purpose for a Covid vaccicnation is blatantly wrong and misleading, why would anyone credit his expertise when ample information suggesting the contrary is available through newspapers, broadcast journalism, and the internet? The common sense response is that people are often imperfect in absorbing information, particularly information that is not congenial to their prejudices. Here is a snippet from the abstract of a recent scholarly article that reflects that thought:
An emerging research consensus finds that corrective information is typically at least somewhat effective at increasing belief accuracy when received by respondents. However, the research that I review suggests that the accuracy-increasing effects of corrective information like fact checks often do not last or accumulate; instead, they frequently seem to decay or be overwhelmed by cues from elites and the media promoting more congenial but less accurate claims. As a result, misperceptions typically persist in public opinion for years after they have been debunked. Given these realities, the primary challenge for scientific communication is not to prevent backfire effects but instead, to understand how to target corrective information better and to make it more effective. Ultimately, however, the best approach is to disrupt the formation of linkages between group identities and false claims and to reduce the flow of cues reinforcing those claims from elites and the media. Doing so will require a shift from a strategy focused on providing information to the public to one that considers the roles of intermediaries in forming and maintaining belief systems.
From the Abstract, Why the backfire effect does not explain the durability of political misperceptions by Brendan Nyhan
https://www.pnas.org/content/118/15/e1912440117
Assuming for the purpose of argument that Joe Rogan's information about lack of purpose for a Covid vaccicnation is blatantly wrong and misleading, why would anyone credit his expertise when ample information suggesting the contrary is available through newspapers, broadcast journalism, and the internet? The common sense response is that people are often imperfect in absorbing information, particularly information that is not congenial to their prejudices. Here is a snippet from the abstract of a recent scholarly article that reflects that thought:
An emerging research consensus finds that corrective information is typically at least somewhat effective at increasing belief accuracy when received by respondents. However, the research that I review suggests that the accuracy-increasing effects of corrective information like fact checks often do not last or accumulate; instead, they frequently seem to decay or be overwhelmed by cues from elites and the media promoting more congenial but less accurate claims. As a result, misperceptions typically persist in public opinion for years after they have been debunked. Given these realities, the primary challenge for scientific communication is not to prevent backfire effects but instead, to understand how to target corrective information better and to make it more effective. Ultimately, however, the best approach is to disrupt the formation of linkages between group identities and false claims and to reduce the flow of cues reinforcing those claims from elites and the media. Doing so will require a shift from a strategy focused on providing information to the public to one that considers the roles of intermediaries in forming and maintaining belief systems.
From the Abstract, Why the backfire effect does not explain the durability of political misperceptions by Brendan Nyhan
https://www.pnas.org/content/118/15/e1912440117
Can employers mandate employees to take fully approved (not emergency approved) vaccines? Probably yes
Pfizer has announced that it will seek full authorization for its COVID vaccine, superseding its current emergency authorization. Moderna is likely to follow.
There has been a lot of speculation about whether employers can require employees to take COVID vaccine when the authorization is merely and emergency authorization. But the issue is different when the vaccine is fully approved by the FDA, as explained in a blog by Brownstein Hyatt Farber Schreck (see https://www.jdsupra.com/legalnews/can-employers-mandate-covid-19-vaccines-6532002/). The blog explains, among other things, that:
Employers generally can mandate “ordinary” vaccines, subject to business considerations, taking into account accommodations that may be required under the American with Disabilities Act, or due to certain medical conditions (such as pregnancy or strong allergies to vaccine components), or for religious reasons. Requests for religious accommodation may be based on objections to the concept of vaccines generally, or specific to a particular vaccine (e.g., gene-based vaccines). This analysis applies in the context of vaccines approved by the FDA through its formal process under which, after consideration of evidence from human studies, the agency determines that vaccines are safe and effective. For example, the FDA has formally approved many influenza vaccines, which in turn have been mandated by some employers (such as health care providers) in accordance with EEOC guidance.
In addition, the The FDCA is a federal regulatory statute that preempts conflicting state laws. This preemptive force should include the individual’s right of refusal of a fully authorized vaccine.
Pfizer has announced that it will seek full authorization for its COVID vaccine, superseding its current emergency authorization. Moderna is likely to follow.
There has been a lot of speculation about whether employers can require employees to take COVID vaccine when the authorization is merely and emergency authorization. But the issue is different when the vaccine is fully approved by the FDA, as explained in a blog by Brownstein Hyatt Farber Schreck (see https://www.jdsupra.com/legalnews/can-employers-mandate-covid-19-vaccines-6532002/). The blog explains, among other things, that:
Employers generally can mandate “ordinary” vaccines, subject to business considerations, taking into account accommodations that may be required under the American with Disabilities Act, or due to certain medical conditions (such as pregnancy or strong allergies to vaccine components), or for religious reasons. Requests for religious accommodation may be based on objections to the concept of vaccines generally, or specific to a particular vaccine (e.g., gene-based vaccines). This analysis applies in the context of vaccines approved by the FDA through its formal process under which, after consideration of evidence from human studies, the agency determines that vaccines are safe and effective. For example, the FDA has formally approved many influenza vaccines, which in turn have been mandated by some employers (such as health care providers) in accordance with EEOC guidance.
In addition, the The FDCA is a federal regulatory statute that preempts conflicting state laws. This preemptive force should include the individual’s right of refusal of a fully authorized vaccine.
Mayor Bowser Announces $350 Million Rent and Utility Assistance Program for DC Residents
https://mayor.dc.gov/release/mayor-bowser-announces-350-million-rent-and-utility-assistance-program-dc-residents
Monday, April 12, 2021
Stronger Together by Assisting You (STAY DC) and Other Efforts Will Provide Support to DC Residents(WASHINGTON, DC) – Today, Mayor Muriel Bowser launched a new program to provide financial assistance to DC residents struggling to make rent and utility payments due to the COVID-19 pandemic. Through the Stronger Together by Assisting You (STAY DC) program, renters and housing providers can apply for grant funding to cover past and future rental payments in addition to utilities like water, gas, and electricity.
“A strong recovery starts with ensuring everyone in our community has safe and stable housing. This is about getting Washingtonians the money they need to pay their bills now so that they can stay in their homes once the public health emergency ends,” said Mayor Bowser. “We are grateful that the Biden Administration recognized the need for this investment and delivered on providing the resources necessary to address unprecedented levels of housing instability.”
To qualify for STAY DC, you must be a renter or housing provider in the District who is at risk, or has a tenant at risk, of not paying rent or utilities on a residential dwelling. An applicant’s total 2020 annual household income, as set by the U.S. Department of Housing and Urban Development, may not exceed designated levels according to household size. For example, a family of four must make less than $82,300. Eligible households may receive up to 12 months of assistance going back to April 1, 2020, and 3 months of assistance for future payments at a time for a total of 18 months of assistance.
“Since the beginning of this pandemic, the District has prioritized meeting the needs of our neighbors who have been negatively impacted by our public health emergency,” said Deputy Mayor for Planning and Economic Development John Falcicchio. “STAY DC will help us prevent housing instability by ensuring District residents can keep a roof over their heads and their utilities on, without sacrificing other basic needs.”
Renters and housing providers can begin submitting applications for rental and utility assistance today at stay.dc.gov, a user-friendly portal that provides a seamless and accessible process for renters and housing providers to facilitate requests for aid, as well as manage and track applications. Applicants can call the STAY DC Call Center at 833-4-STAYDC for support throughout their application process, Monday through Friday from 7 am to 7pm. Residents will also be able to work with Community Based Organizations (CBO) to submit paper applications.
“We want to take this opportunity to thank our robust network of Community Based Organizations who spread the word and assist residents with applying for assistance as only they know how,” said Department of Housing and Community Development (DHCD) Director Polly Donaldson. “With this new program we build on our year-long rental assistance efforts to date and are expanding our communications and outreach efforts so our residents can STAY in DC.”
The STAY DC program will be administered by the Department of Human Services (DHS) in collaboration with the Office of the Deputy Mayor for Planning and Economic Development (DMPED), the Office of the Deputy Mayor for Health and Human Services (DMHHS), and the Department of Housing and Community Development (DHCD). STAY DC replaces the District’s COVID-19 Housing Assistance Program (CHAP) and will augment the Emergency Rental Assistance Program (ERAP) and Low-Income Home Energy Assistance Program (LIHEAP).
“STAY DC provides an essential resource for residents in the District,” said DHS Director Laura Zeilinger. “We understand how important housing stability is to the wellbeing of our neighbors, especially during this unprecedented time, and STAY DC is a critical resource to help families who have suffered financially, keep their homes and meet their financial needs.”
Funding for the program comes from the December Congressional Appropriations Act that made available $25 billion to States, U.S. Territories, local governments, and Indian tribes. The District’s share of the allocation is $200 million which is the minimum amount states may receive under the legislation. Additionally, the American Rescue Plan Act makes an additional $21.5 billion available with the District’s share of the allocation at $152 million meaning a total of $352 million is available for STAY DC and related efforts.
More information, including eligibility requirements, can be found at stay.dc.gov.
Stronger Together by Assisting You (STAY DC) and Other Efforts Will Provide Support to DC Residents
(WASHINGTON, DC) – Today, Mayor Muriel Bowser launched a new program to provide financial assistance to DC residents struggling to make rent and utility payments due to the COVID-19 pandemic. Through the Stronger Together by Assisting You (STAY DC) program, renters and housing providers can apply for grant funding to cover past and future rental payments in addition to utilities like water, gas, and electricity.
“A strong recovery starts with ensuring everyone in our community has safe and stable housing. This is about getting Washingtonians the money they need to pay their bills now so that they can stay in their homes once the public health emergency ends,” said Mayor Bowser. “We are grateful that the Biden Administration recognized the need for this investment and delivered on providing the resources necessary to address unprecedented levels of housing instability.”
To qualify for STAY DC, you must be a renter or housing provider in the District who is at risk, or has a tenant at risk, of not paying rent or utilities on a residential dwelling. An applicant’s total 2020 annual household income, as set by the U.S. Department of Housing and Urban Development, may not exceed designated levels according to household size. For example, a family of four must make less than $82,300. Eligible households may receive up to 12 months of assistance going back to April 1, 2020, and 3 months of assistance for future payments at a time for a total of 18 months of assistance.
“Since the beginning of this pandemic, the District has prioritized meeting the needs of our neighbors who have been negatively impacted by our public health emergency,” said Deputy Mayor for Planning and Economic Development John Falcicchio. “STAY DC will help us prevent housing instability by ensuring District residents can keep a roof over their heads and their utilities on, without sacrificing other basic needs.”
Renters and housing providers can begin submitting applications for rental and utility assistance today at stay.dc.gov, a user-friendly portal that provides a seamless and accessible process for renters and housing providers to facilitate requests for aid, as well as manage and track applications. Applicants can call the STAY DC Call Center at 833-4-STAYDC for support throughout their application process, Monday through Friday from 7 am to 7pm. Residents will also be able to work with Community Based Organizations (CBO) to submit paper applications.
“We want to take this opportunity to thank our robust network of Community Based Organizations who spread the word and assist residents with applying for assistance as only they know how,” said Department of Housing and Community Development (DHCD) Director Polly Donaldson. “With this new program we build on our year-long rental assistance efforts to date and are expanding our communications and outreach efforts so our residents can STAY in DC.”
The STAY DC program will be administered by the Department of Human Services (DHS) in collaboration with the Office of the Deputy Mayor for Planning and Economic Development (DMPED), the Office of the Deputy Mayor for Health and Human Services (DMHHS), and the Department of Housing and Community Development (DHCD). STAY DC replaces the District’s COVID-19 Housing Assistance Program (CHAP) and will augment the Emergency Rental Assistance Program (ERAP) and Low-Income Home Energy Assistance Program (LIHEAP).
“STAY DC provides an essential resource for residents in the District,” said DHS Director Laura Zeilinger. “We understand how important housing stability is to the wellbeing of our neighbors, especially during this unprecedented time, and STAY DC is a critical resource to help families who have suffered financially, keep their homes and meet their financial needs.”
Funding for the program comes from the December Congressional Appropriations Act that made available $25 billion to States, U.S. Territories, local governments, and Indian tribes. The District’s share of the allocation is $200 million which is the minimum amount states may receive under the legislation. Additionally, the American Rescue Plan Act makes an additional $21.5 billion available with the District’s share of the allocation at $152 million meaning a total of $352 million is available for STAY DC and related efforts.
More information, including eligibility requirements, can be found at stay.dc.gov.
https://mayor.dc.gov/release/mayor-bowser-announces-350-million-rent-and-utility-assistance-program-dc-residents
Monday, April 12, 2021
Stronger Together by Assisting You (STAY DC) and Other Efforts Will Provide Support to DC Residents(WASHINGTON, DC) – Today, Mayor Muriel Bowser launched a new program to provide financial assistance to DC residents struggling to make rent and utility payments due to the COVID-19 pandemic. Through the Stronger Together by Assisting You (STAY DC) program, renters and housing providers can apply for grant funding to cover past and future rental payments in addition to utilities like water, gas, and electricity.
“A strong recovery starts with ensuring everyone in our community has safe and stable housing. This is about getting Washingtonians the money they need to pay their bills now so that they can stay in their homes once the public health emergency ends,” said Mayor Bowser. “We are grateful that the Biden Administration recognized the need for this investment and delivered on providing the resources necessary to address unprecedented levels of housing instability.”
To qualify for STAY DC, you must be a renter or housing provider in the District who is at risk, or has a tenant at risk, of not paying rent or utilities on a residential dwelling. An applicant’s total 2020 annual household income, as set by the U.S. Department of Housing and Urban Development, may not exceed designated levels according to household size. For example, a family of four must make less than $82,300. Eligible households may receive up to 12 months of assistance going back to April 1, 2020, and 3 months of assistance for future payments at a time for a total of 18 months of assistance.
“Since the beginning of this pandemic, the District has prioritized meeting the needs of our neighbors who have been negatively impacted by our public health emergency,” said Deputy Mayor for Planning and Economic Development John Falcicchio. “STAY DC will help us prevent housing instability by ensuring District residents can keep a roof over their heads and their utilities on, without sacrificing other basic needs.”
Renters and housing providers can begin submitting applications for rental and utility assistance today at stay.dc.gov, a user-friendly portal that provides a seamless and accessible process for renters and housing providers to facilitate requests for aid, as well as manage and track applications. Applicants can call the STAY DC Call Center at 833-4-STAYDC for support throughout their application process, Monday through Friday from 7 am to 7pm. Residents will also be able to work with Community Based Organizations (CBO) to submit paper applications.
“We want to take this opportunity to thank our robust network of Community Based Organizations who spread the word and assist residents with applying for assistance as only they know how,” said Department of Housing and Community Development (DHCD) Director Polly Donaldson. “With this new program we build on our year-long rental assistance efforts to date and are expanding our communications and outreach efforts so our residents can STAY in DC.”
The STAY DC program will be administered by the Department of Human Services (DHS) in collaboration with the Office of the Deputy Mayor for Planning and Economic Development (DMPED), the Office of the Deputy Mayor for Health and Human Services (DMHHS), and the Department of Housing and Community Development (DHCD). STAY DC replaces the District’s COVID-19 Housing Assistance Program (CHAP) and will augment the Emergency Rental Assistance Program (ERAP) and Low-Income Home Energy Assistance Program (LIHEAP).
“STAY DC provides an essential resource for residents in the District,” said DHS Director Laura Zeilinger. “We understand how important housing stability is to the wellbeing of our neighbors, especially during this unprecedented time, and STAY DC is a critical resource to help families who have suffered financially, keep their homes and meet their financial needs.”
Funding for the program comes from the December Congressional Appropriations Act that made available $25 billion to States, U.S. Territories, local governments, and Indian tribes. The District’s share of the allocation is $200 million which is the minimum amount states may receive under the legislation. Additionally, the American Rescue Plan Act makes an additional $21.5 billion available with the District’s share of the allocation at $152 million meaning a total of $352 million is available for STAY DC and related efforts.
More information, including eligibility requirements, can be found at stay.dc.gov.
Stronger Together by Assisting You (STAY DC) and Other Efforts Will Provide Support to DC Residents
(WASHINGTON, DC) – Today, Mayor Muriel Bowser launched a new program to provide financial assistance to DC residents struggling to make rent and utility payments due to the COVID-19 pandemic. Through the Stronger Together by Assisting You (STAY DC) program, renters and housing providers can apply for grant funding to cover past and future rental payments in addition to utilities like water, gas, and electricity.
“A strong recovery starts with ensuring everyone in our community has safe and stable housing. This is about getting Washingtonians the money they need to pay their bills now so that they can stay in their homes once the public health emergency ends,” said Mayor Bowser. “We are grateful that the Biden Administration recognized the need for this investment and delivered on providing the resources necessary to address unprecedented levels of housing instability.”
To qualify for STAY DC, you must be a renter or housing provider in the District who is at risk, or has a tenant at risk, of not paying rent or utilities on a residential dwelling. An applicant’s total 2020 annual household income, as set by the U.S. Department of Housing and Urban Development, may not exceed designated levels according to household size. For example, a family of four must make less than $82,300. Eligible households may receive up to 12 months of assistance going back to April 1, 2020, and 3 months of assistance for future payments at a time for a total of 18 months of assistance.
“Since the beginning of this pandemic, the District has prioritized meeting the needs of our neighbors who have been negatively impacted by our public health emergency,” said Deputy Mayor for Planning and Economic Development John Falcicchio. “STAY DC will help us prevent housing instability by ensuring District residents can keep a roof over their heads and their utilities on, without sacrificing other basic needs.”
Renters and housing providers can begin submitting applications for rental and utility assistance today at stay.dc.gov, a user-friendly portal that provides a seamless and accessible process for renters and housing providers to facilitate requests for aid, as well as manage and track applications. Applicants can call the STAY DC Call Center at 833-4-STAYDC for support throughout their application process, Monday through Friday from 7 am to 7pm. Residents will also be able to work with Community Based Organizations (CBO) to submit paper applications.
“We want to take this opportunity to thank our robust network of Community Based Organizations who spread the word and assist residents with applying for assistance as only they know how,” said Department of Housing and Community Development (DHCD) Director Polly Donaldson. “With this new program we build on our year-long rental assistance efforts to date and are expanding our communications and outreach efforts so our residents can STAY in DC.”
The STAY DC program will be administered by the Department of Human Services (DHS) in collaboration with the Office of the Deputy Mayor for Planning and Economic Development (DMPED), the Office of the Deputy Mayor for Health and Human Services (DMHHS), and the Department of Housing and Community Development (DHCD). STAY DC replaces the District’s COVID-19 Housing Assistance Program (CHAP) and will augment the Emergency Rental Assistance Program (ERAP) and Low-Income Home Energy Assistance Program (LIHEAP).
“STAY DC provides an essential resource for residents in the District,” said DHS Director Laura Zeilinger. “We understand how important housing stability is to the wellbeing of our neighbors, especially during this unprecedented time, and STAY DC is a critical resource to help families who have suffered financially, keep their homes and meet their financial needs.”
Funding for the program comes from the December Congressional Appropriations Act that made available $25 billion to States, U.S. Territories, local governments, and Indian tribes. The District’s share of the allocation is $200 million which is the minimum amount states may receive under the legislation. Additionally, the American Rescue Plan Act makes an additional $21.5 billion available with the District’s share of the allocation at $152 million meaning a total of $352 million is available for STAY DC and related efforts.
More information, including eligibility requirements, can be found at stay.dc.gov.
The NYT questions the ethics of the Trump campaign’s automatic donation multiplier clauses, but are the clauses illegal? Should they be?
A New York Times expose' finds ethically questionable behavior in the Trump campaign’s use of clauses that automatically multiply a donor’s contribution. The NYT article explains that he campaign set up recurring donations by default for online donors. Contributors had to wade through a fine-print disclaimer and manually uncheck a box to opt out. As time went on, the Trump team made that disclaimer increasingly opaque. It introduced a second prechecked box, known internally as a “money bomb,” that doubled a person’s contribution. Eventually its solicitations featured lines of text in bold and capital letters that overwhelmed the opt-out language.
See https://www.nytimes.com/2021/04/03/us/politics/trump-donations.html
The Times writers are careful not to charge that the Trump campaign’s strategies are illegal under state or federal law, and whether they are illegal is a point that could be debated. Several States have statutes that limit automatic renewals in certain contexts. For example, New York, somewhat like California, has a statute that requires, among other things, that companies present “automatic renewal offer terms” in a “clear and conspicuous manner before the subscription or purchasing agreement is fulfilled” and that no consumers’ credit card be changed for renewal without “affirmative consent.” See https://www.natlawreview.com/article/new-york-s-broad-automatic-renewal-law-and-accompanying-compliance-issues-coming
An FTC statement explains that companies have an obligation to explain the details of the deal up front, clearly disclose any automatic renewal terms, get consumers’ express consent before billing, and offer simple ways to cancel. The FTC entered into a $10 million settlement with online learning company ABCmouse for allegedly violating those established consumer protection principles. “The case offers lessons for subscription-based businesses about the perils of snaring customers in a negative option trap.” See https://ftc.gov/news-events/press-releases/2020/09/childrens-online-learning-program-abcmouse-pay-10-million-settle
There is a law reform point implied in the New York Times expose'. Arguably, there ought to be a legislative proposal from a member of Congress clearly prohibiting what the Trump campaign did, if the practice is as unfair and onerous as the Times expose' suggests.
A New York Times expose' finds ethically questionable behavior in the Trump campaign’s use of clauses that automatically multiply a donor’s contribution. The NYT article explains that he campaign set up recurring donations by default for online donors. Contributors had to wade through a fine-print disclaimer and manually uncheck a box to opt out. As time went on, the Trump team made that disclaimer increasingly opaque. It introduced a second prechecked box, known internally as a “money bomb,” that doubled a person’s contribution. Eventually its solicitations featured lines of text in bold and capital letters that overwhelmed the opt-out language.
See https://www.nytimes.com/2021/04/03/us/politics/trump-donations.html
The Times writers are careful not to charge that the Trump campaign’s strategies are illegal under state or federal law, and whether they are illegal is a point that could be debated. Several States have statutes that limit automatic renewals in certain contexts. For example, New York, somewhat like California, has a statute that requires, among other things, that companies present “automatic renewal offer terms” in a “clear and conspicuous manner before the subscription or purchasing agreement is fulfilled” and that no consumers’ credit card be changed for renewal without “affirmative consent.” See https://www.natlawreview.com/article/new-york-s-broad-automatic-renewal-law-and-accompanying-compliance-issues-coming
An FTC statement explains that companies have an obligation to explain the details of the deal up front, clearly disclose any automatic renewal terms, get consumers’ express consent before billing, and offer simple ways to cancel. The FTC entered into a $10 million settlement with online learning company ABCmouse for allegedly violating those established consumer protection principles. “The case offers lessons for subscription-based businesses about the perils of snaring customers in a negative option trap.” See https://ftc.gov/news-events/press-releases/2020/09/childrens-online-learning-program-abcmouse-pay-10-million-settle
There is a law reform point implied in the New York Times expose'. Arguably, there ought to be a legislative proposal from a member of Congress clearly prohibiting what the Trump campaign did, if the practice is as unfair and onerous as the Times expose' suggests.
A Sober Look at SPACs - Investors beware
Yale Journal on Regulation, Forthcoming
Stanford Law and Economics Olin Working Paper No. 559
NYU Law and Economics Research Paper No. 20-48
57 Pages Posted: 16 Nov 2020 Last revised: 6 Mar 2021
Michael KlausnerStanford Law School; European Corporate Governance Institute (ECGI)
Michael OhlroggeNew York University School of Law
Emily Ruanaffiliation not provided to SSRN
Date Written: October 28, 2020
Abstract:
A Special Purpose Acquisition Company (“SPAC”) is a publicly listed firm with a two-year lifespan during which it is expected to find a private company with which to merge and thereby bring public. SPACs have been touted as a cheaper way to go public than an IPO. This paper analyzes the structure of SPACs and the costs built into their structure. We find that costs built into the SPAC structure are subtle, opaque, and far higher than has been previously recognized. Although SPACs raise $10 per share from investors in their IPOs, by the time the median SPAC merges with a target, it holds just $6.67 in cash for each outstanding share. We find, first, that for a large majority of SPACs, post-merger share prices fall, and second, that these price drops are highly correlated with the extent of dilution, or cash shortfall, in a SPAC. This implies that SPAC investors are bearing the cost of the dilution built into the SPAC structure, and in effect subsidizing the companies they bring public. We question whether this is a sustainable situation. We nonetheless propose regulatory measures that would eliminate preferences SPACs enjoy and make them more transparent, and we suggest alternative means by which companies can go public that retain the benefits of SPACs without the costs.
Keywords: SPAC, Securities Law
Suggested Citation:
Klausner, Michael D. and Ohlrogge, Michael and Ruan, Emily, A Sober Look at SPACs (October 28, 2020). Yale Journal on Regulation, Forthcoming, Stanford Law and Economics Olin Working Paper No. 559, NYU Law and Economics Research Paper No. 20-48, Available at SSRN: https://ssrn.com/abstract=3720919 or http://dx.doi.org/10.2139/ssrn.3720919
Download This Paper https://papers.ssrn.com/sol3/Delivery.cfm/SSRN_ID3771578_code2160765.pdf?abstractid=3720919&mirid=1
Open PDF in Browser https://papers.ssrn.com/sol3/Delivery.cfm/SSRN_ID3771578_code2160765.pdf?abstractid=3720919&mirid=1&type=2
See also https://www.nytimes.com/2021/03/31/business/dealbook/spac-sponsors.html
Yale Journal on Regulation, Forthcoming
Stanford Law and Economics Olin Working Paper No. 559
NYU Law and Economics Research Paper No. 20-48
57 Pages Posted: 16 Nov 2020 Last revised: 6 Mar 2021
Michael KlausnerStanford Law School; European Corporate Governance Institute (ECGI)
Michael OhlroggeNew York University School of Law
Emily Ruanaffiliation not provided to SSRN
Date Written: October 28, 2020
Abstract:
A Special Purpose Acquisition Company (“SPAC”) is a publicly listed firm with a two-year lifespan during which it is expected to find a private company with which to merge and thereby bring public. SPACs have been touted as a cheaper way to go public than an IPO. This paper analyzes the structure of SPACs and the costs built into their structure. We find that costs built into the SPAC structure are subtle, opaque, and far higher than has been previously recognized. Although SPACs raise $10 per share from investors in their IPOs, by the time the median SPAC merges with a target, it holds just $6.67 in cash for each outstanding share. We find, first, that for a large majority of SPACs, post-merger share prices fall, and second, that these price drops are highly correlated with the extent of dilution, or cash shortfall, in a SPAC. This implies that SPAC investors are bearing the cost of the dilution built into the SPAC structure, and in effect subsidizing the companies they bring public. We question whether this is a sustainable situation. We nonetheless propose regulatory measures that would eliminate preferences SPACs enjoy and make them more transparent, and we suggest alternative means by which companies can go public that retain the benefits of SPACs without the costs.
Keywords: SPAC, Securities Law
Suggested Citation:
Klausner, Michael D. and Ohlrogge, Michael and Ruan, Emily, A Sober Look at SPACs (October 28, 2020). Yale Journal on Regulation, Forthcoming, Stanford Law and Economics Olin Working Paper No. 559, NYU Law and Economics Research Paper No. 20-48, Available at SSRN: https://ssrn.com/abstract=3720919 or http://dx.doi.org/10.2139/ssrn.3720919
Download This Paper https://papers.ssrn.com/sol3/Delivery.cfm/SSRN_ID3771578_code2160765.pdf?abstractid=3720919&mirid=1
Open PDF in Browser https://papers.ssrn.com/sol3/Delivery.cfm/SSRN_ID3771578_code2160765.pdf?abstractid=3720919&mirid=1&type=2
See also https://www.nytimes.com/2021/03/31/business/dealbook/spac-sponsors.html
PBS segment on "Renters hit by pandemic juggle assistance, eviction laws"
See PBS NewsHour | Renters hit by pandemic juggle assistance, eviction laws | Season 2021 | PBS
Posting by Don ALlen Resnikoff
PBS reporter John Yang explores the operation of a landlord-tenant court diversion program in Franklin County, Ohio, where an eviction defendant has the benefit of a diversion program which provides landlords and tenants with an alternative to court actions against tenants. The program provides emergency funds for rent, and mediation. Landlords generally are called upon to voluntarily cooperate, which they will be inclined to do because emergency funds mean that the rent will be paid.
As I pointed out in an earlier article, a number of jurisdictions have similar programs.
Here is a description from the Connecticut Eviction and Foreclosure Prevention Program (EFPP):
The EFPP is designed to prevent evictions and foreclosures through mediation and a Rent Bank. Five community-based agencies operate the program. A trained mediator acts as a third party facilitator to help develop mutually agreed upon solutions to identified problems which may include back rent or mortgage payments, repairs, housing code violations and communication problems. The Rent Bank provides funds to eligible families to help pay rent or mortgage arrears. A family may consist of a single individual, roommates, an extended family, or a one or two parent family.
Following is information about other similar programs:
In Grand Rapids: the Eviction Prevention Program pilot in the 61st District Court
In Massachusetts, the HomeStart Eviction Prevention program
In Phoenix: the Arizona Department of Housing’s Eviction Prevention Assistance, along with an article about its roll-out
In Philadelphia: the Philadelphia Eviction Prevention Project, which also includes other services like a helpline for tenants, training workshops, a legal help website, and connections to legal services.
In Connecticut: the Eviction and Foreclosure Prevention Program
In Jacksonville, FL: the Emergency Assistance Program from the city’s Social Service Division These programs seem to me to be a model worth considering for DC.
See https://evictioninnovation.org/innovations/
See PBS NewsHour | Renters hit by pandemic juggle assistance, eviction laws | Season 2021 | PBS
Posting by Don ALlen Resnikoff
PBS reporter John Yang explores the operation of a landlord-tenant court diversion program in Franklin County, Ohio, where an eviction defendant has the benefit of a diversion program which provides landlords and tenants with an alternative to court actions against tenants. The program provides emergency funds for rent, and mediation. Landlords generally are called upon to voluntarily cooperate, which they will be inclined to do because emergency funds mean that the rent will be paid.
As I pointed out in an earlier article, a number of jurisdictions have similar programs.
Here is a description from the Connecticut Eviction and Foreclosure Prevention Program (EFPP):
The EFPP is designed to prevent evictions and foreclosures through mediation and a Rent Bank. Five community-based agencies operate the program. A trained mediator acts as a third party facilitator to help develop mutually agreed upon solutions to identified problems which may include back rent or mortgage payments, repairs, housing code violations and communication problems. The Rent Bank provides funds to eligible families to help pay rent or mortgage arrears. A family may consist of a single individual, roommates, an extended family, or a one or two parent family.
Following is information about other similar programs:
In Grand Rapids: the Eviction Prevention Program pilot in the 61st District Court
In Massachusetts, the HomeStart Eviction Prevention program
In Phoenix: the Arizona Department of Housing’s Eviction Prevention Assistance, along with an article about its roll-out
In Philadelphia: the Philadelphia Eviction Prevention Project, which also includes other services like a helpline for tenants, training workshops, a legal help website, and connections to legal services.
In Connecticut: the Eviction and Foreclosure Prevention Program
In Jacksonville, FL: the Emergency Assistance Program from the city’s Social Service Division These programs seem to me to be a model worth considering for DC.
See https://evictioninnovation.org/innovations/
Should local regulations require that vehicles commonly used on city streets be equipped with technology that protects pedestrians?
The adult daughter of a family friend was hit by a motor vehicle while she was carefully and legally crossing a street. Tragically, she died as a result. A question that comes to mind is whether there are safety features of vehicles that could avoid such deaths. What are those features, and should they be required on all vehicles, or at least on vehicles commonly used on city streets, such as delivery vehicles.
A GAO report from a few years ago says this:
Automakers have developed vehicle features intended to avoid pedestrian crashes and mitigate the extent of injury to pedestrians. Crash avoidance features (also known as “active” safety features) rely on cameras, radar, and other devices to detect a pedestrian and then act to alert a driver to take action, or automatically apply a vehicle’s brakes to slow or stop the vehicle to avoid striking a pedestrian. One pedestrian crash avoidance system is referred to as pedestrian automatic emergency braking, which uses a camera, radar, or a combination, to automatically apply brakes to avoid a collision.
Crash mitigation features (also known as “passive” safety features) generally involve the use of pedestrian-friendly vehicle components that are designed to reduce the severity of injuries should a pedestrian be hit. Passive safety features can include energy absorbing bumper material, hoods that provide space between the hood and the hard components in the engine compartment, and contoured vehicle front-ends intended to reduce harm to pedestrians.
See https://www.gao.gov/assets/gao-20-419.pdf
The GAO recommends that the National Highway Traffic Safety Administration (NHTSA) have clear testing standards for pedestrian safety technology. A related idea that comes to mind is local regulation that requires vehicles commonly used on city streets to be equipped with technology that protects pedestrians. Taxis and delivery vehicles are examples.
Posting by Don Allen Resnikoff
The adult daughter of a family friend was hit by a motor vehicle while she was carefully and legally crossing a street. Tragically, she died as a result. A question that comes to mind is whether there are safety features of vehicles that could avoid such deaths. What are those features, and should they be required on all vehicles, or at least on vehicles commonly used on city streets, such as delivery vehicles.
A GAO report from a few years ago says this:
Automakers have developed vehicle features intended to avoid pedestrian crashes and mitigate the extent of injury to pedestrians. Crash avoidance features (also known as “active” safety features) rely on cameras, radar, and other devices to detect a pedestrian and then act to alert a driver to take action, or automatically apply a vehicle’s brakes to slow or stop the vehicle to avoid striking a pedestrian. One pedestrian crash avoidance system is referred to as pedestrian automatic emergency braking, which uses a camera, radar, or a combination, to automatically apply brakes to avoid a collision.
Crash mitigation features (also known as “passive” safety features) generally involve the use of pedestrian-friendly vehicle components that are designed to reduce the severity of injuries should a pedestrian be hit. Passive safety features can include energy absorbing bumper material, hoods that provide space between the hood and the hard components in the engine compartment, and contoured vehicle front-ends intended to reduce harm to pedestrians.
See https://www.gao.gov/assets/gao-20-419.pdf
The GAO recommends that the National Highway Traffic Safety Administration (NHTSA) have clear testing standards for pedestrian safety technology. A related idea that comes to mind is local regulation that requires vehicles commonly used on city streets to be equipped with technology that protects pedestrians. Taxis and delivery vehicles are examples.
Posting by Don Allen Resnikoff
In April, 2020, SCOTUS decided that nonunanimous jury convictions in criminal cases are unconstitutional. A recent PBS program tells the stories of people previously convicted by nonunanimous juries.
Posting by Don Allen Resnikoff
In April, 2020, The Supreme Court of the United States ruled in Ramos v. Louisiana, 590 U.S. ___ (2020) [see https://supreme.justia.com/cases/federal/us/590/18-5924/] that nonunanimous jury convictions are unconstitutional. At the time, Oregon and Louisiana, were the only two states which still allowed nonunanimous jury convictions.
From Justice Gorsuch’s opinion for the majority in Ramos v. Louisiana:
Why do Louisiana and Oregon allow nonunanimous convictions? Though it’s hard to say why these laws persist, their origins are clear. Louisiana first endorsed nonunanimous verdicts for serious crimes at a constitutional convention in 1898. According to one committee chairman, the avowed purpose of that convention was to “establish the supremacy of the white race,” and the resulting document included many of the trappings of the Jim Crow era: a poll tax, a combined literacy and property ownership test, and a grandfather clause that in practice exempted white residents from the most onerous of these requirements.1 Nor was it only the prospect of African-Americans voting that concerned the delegates. Just a week before the convention, the U. S. Senate passed a resolution calling for an investigation into whether Louisiana was systemically excluding African-Americans from juries. Seeking to avoid unwanted national attention, and aware that this Court would strike down any policy of overt discrimination against African-American jurors as a violation of the Fourteenth Amendment, the delegates sought to undermine African-American participation on juries in another way. With a careful eye on racial demographics, the convention delegates sculpted a “facially race-neutral” rule permitting 10-to-2 verdicts in order “to ensure that African-American juror service would be meaningless.” Adopted in the 1930s, Oregon’s rule permitting nonunanimous verdicts can be similarly traced to the rise of the Ku Klux Klan and efforts to dilute “the influence of racial, ethnic, and religious minorities on Oregon juries.”
With regard to hardship caused in Louisiana and Oregon to State government burdened with retrials of nonunanimous jury convictions, Justice Gorsuch wrote:
[P]rior convictions in only two States are potentially affected by our judgment. Those States credibly claim that the number of nonunanimous felony convictions still on direct appeal are somewhere in the hundreds, and retrying or plea bargaining these cases will surely impose a cost. But new rules of criminal procedures usually do . . . .
So, what are the stories of people previously convicted by nonunanimous juries? That is the focus of a recently broadcast PBS segment:
https://www.thirteen.org/programs/pbs-newshour/non-unanimous-juries-were-outlawed-why-two-states-used-them-1616964936/
Capital requirements for banks: Is the Fed pruning its magic money tree?
Current news headlines are that the Fed has decided to end temporary exemptions from capital requirements for banks. See https://www.nytimes.com/2021/03/19/business/economy/federal-reserve-bank-leverage.html
That news is just one development in a long simmering controversy about whether regulators should impose stringent capital requirements on banks in order to preserve bank stability, that is, to avoid the sort of instability that affected banks in the 2008 financial crisis.
In their book The Bankers New Clothes, authors Admati and Hellwig argued that string capital requirements are crucial. See http://bankersnewclothes.com/ That website includes two videos of Ms. Admati explaining her views.
The New York Times very briefly summarized Ms. Admati's views as follows:
Ms. Admati’s simple message is that the government is overlooking the best way to strengthen the financial system. Regulators, she says, need to worry less about what banks do with their money, and more about where the money comes from.
Companies other than banks get money mostly by selling shares to investors or by reinvesting profits. Banks, by contrast, can rely almost entirely on borrowed funds, including the money they get from depositors. Ms. Admati argues that banks are taking larger risks than other kinds of companies because they use other people’s money, and the results are that they keep crashing the economy.
Her solution is to make banks behave more like other companies by forcing them to reduce sharply their reliance on borrowed money. That would likely make the banking industry more stodgy and less profitable — reducing the economic risks, the executive bonuses and, for shareholders, both the risks and the profits. https://www.nytimes.com/2014/08/10/business/when-she-talks-banks-shudder.html#after-story-ad-1
It is important to note that the Admati view about substantial capital requirements for banks is opposed by some. Some opposition comes from what may be called the "magic money tree" theory about banking: "All money comes from a magic tree, in the sense that money is spirited from thin air. There is no gold standard. Banks do not work to a money-multiplier model, where they extend loans as a multiple of the deposits they already hold. Money is created on faith alone, whether that is faith in ever-increasing housing prices or any other given investment." The magic money tree idea is discussed, and rebutted, in an article at https://www.forbes.com/sites/francescoppola/2017/10/31/how-bank-lending-really-creates-money-and-why-the-magic-money-tree-is-not-cost-free/?sh=6ffaa3883073
Posting by Don Allen Resnikoff
Current news headlines are that the Fed has decided to end temporary exemptions from capital requirements for banks. See https://www.nytimes.com/2021/03/19/business/economy/federal-reserve-bank-leverage.html
That news is just one development in a long simmering controversy about whether regulators should impose stringent capital requirements on banks in order to preserve bank stability, that is, to avoid the sort of instability that affected banks in the 2008 financial crisis.
In their book The Bankers New Clothes, authors Admati and Hellwig argued that string capital requirements are crucial. See http://bankersnewclothes.com/ That website includes two videos of Ms. Admati explaining her views.
The New York Times very briefly summarized Ms. Admati's views as follows:
Ms. Admati’s simple message is that the government is overlooking the best way to strengthen the financial system. Regulators, she says, need to worry less about what banks do with their money, and more about where the money comes from.
Companies other than banks get money mostly by selling shares to investors or by reinvesting profits. Banks, by contrast, can rely almost entirely on borrowed funds, including the money they get from depositors. Ms. Admati argues that banks are taking larger risks than other kinds of companies because they use other people’s money, and the results are that they keep crashing the economy.
Her solution is to make banks behave more like other companies by forcing them to reduce sharply their reliance on borrowed money. That would likely make the banking industry more stodgy and less profitable — reducing the economic risks, the executive bonuses and, for shareholders, both the risks and the profits. https://www.nytimes.com/2014/08/10/business/when-she-talks-banks-shudder.html#after-story-ad-1
It is important to note that the Admati view about substantial capital requirements for banks is opposed by some. Some opposition comes from what may be called the "magic money tree" theory about banking: "All money comes from a magic tree, in the sense that money is spirited from thin air. There is no gold standard. Banks do not work to a money-multiplier model, where they extend loans as a multiple of the deposits they already hold. Money is created on faith alone, whether that is faith in ever-increasing housing prices or any other given investment." The magic money tree idea is discussed, and rebutted, in an article at https://www.forbes.com/sites/francescoppola/2017/10/31/how-bank-lending-really-creates-money-and-why-the-magic-money-tree-is-not-cost-free/?sh=6ffaa3883073
Posting by Don Allen Resnikoff
The NY AG suit against Amazon for failing to provide workplace safety
ViewDocument (state.ny.us) https://iapps.courts.state.ny.us/nyscef/ViewDocument?docIndex=muvelgaOEvSt6Yc1gGqzAg==V
excerpt:
3. Throughout the historic pandemic, Amazon has repeatedly and persistently failed to comply with its obligation to institute reasonable and adequate measures to protect its workers from the spread of the virus in its New York City facilities JFK8, a Staten Island fulfillment center, and DBK1, a Queens distribution center. Amazon’s flagrant disregard for health and safety requirements has threatened serious illness and grave harm to the thousands of workers in these facilities and poses a continued substantial and specific danger to the public health.
4. Since at least March 2020 when the COVID-19 outbreak began to devastate New York City, Amazon failed to comply with requirements for cleaning and disinfection when infected workers had been present in its facilities; Amazon failed to adequately identify and notify potential contacts of such infected workers; and Amazon failed to ensure that its discipline and productivity policies, and productivity rates automated by line-speeds, permitted its employees to take the time necessary to engage in hygiene, sanitation, social-distancing, and necessary cleaning practices.
5. When Amazon employees began to object to Amazon’s inadequate practices and to make complaints to Amazon management, government agencies, and the media, Amazon took swift retaliatory action to silence workers’ complaints. In late-March 2020, Amazon fired employee Christian Smalls, and in early-April 2020, Amazon issued a final written warning to employee Derrick Palmer. Amazon’s actions against these visible critics who advocated for Amazon to fully comply with legal health requirements sent a chilling message to other Amazon employees.
6. Amazon’s response to the pandemic continues to be deficient.
ViewDocument (state.ny.us) https://iapps.courts.state.ny.us/nyscef/ViewDocument?docIndex=muvelgaOEvSt6Yc1gGqzAg==V
excerpt:
3. Throughout the historic pandemic, Amazon has repeatedly and persistently failed to comply with its obligation to institute reasonable and adequate measures to protect its workers from the spread of the virus in its New York City facilities JFK8, a Staten Island fulfillment center, and DBK1, a Queens distribution center. Amazon’s flagrant disregard for health and safety requirements has threatened serious illness and grave harm to the thousands of workers in these facilities and poses a continued substantial and specific danger to the public health.
4. Since at least March 2020 when the COVID-19 outbreak began to devastate New York City, Amazon failed to comply with requirements for cleaning and disinfection when infected workers had been present in its facilities; Amazon failed to adequately identify and notify potential contacts of such infected workers; and Amazon failed to ensure that its discipline and productivity policies, and productivity rates automated by line-speeds, permitted its employees to take the time necessary to engage in hygiene, sanitation, social-distancing, and necessary cleaning practices.
5. When Amazon employees began to object to Amazon’s inadequate practices and to make complaints to Amazon management, government agencies, and the media, Amazon took swift retaliatory action to silence workers’ complaints. In late-March 2020, Amazon fired employee Christian Smalls, and in early-April 2020, Amazon issued a final written warning to employee Derrick Palmer. Amazon’s actions against these visible critics who advocated for Amazon to fully comply with legal health requirements sent a chilling message to other Amazon employees.
6. Amazon’s response to the pandemic continues to be deficient.
The FCC approves emergency program to bring high speed internet to the underserved - local implementation required
DAR Comment: The FCC's emergency program establishes the Emergency Broadband Benefit Program to support broadband services and devices to help low-income households stay connected during the COVID-19 pandemic. The Order explains that virtual learning, telemedicine, and telework have increased every household’s need for access to broadband services. The cost of broadband services can be difficult to overcome for lowincome families and for families that have been struggling during the pandemic.
The Washington Post explains that many will see their Internet bills reduced by as much as $50 a month in credits paid to their Internet service providers, and residents of tribal areas are eligible for even larger discounts. However, "It may take up to two months before Americans can take advantage of it; the government must still fine-tune its systems so that families can apply for, and providers can receive, the emergency benefits. That task is likely to be a tall one for Washington, which historically has struggled to deploy complicated technology under tight time constraints." See https://www.washingtonpost.com/technology/2021/02/26/broadband-internet-subsidies-coronavirus/
The Post reports that AT&T has said that it intends to participate. CenturyLink, Charter, Comcast, Frontier, T-Mobile and Verizon did not immediately commit to accepting the emergency benefits, although many companies and their trade groups have said in recent days they support the FCC’s work and intend to review its new implementing rules.
The FCC has announced that it is mobilizing people and organizations to help share important consumer information about the Emergency Broadband Benefit. Since iImplementation of the FCC emergency internet program turns on efforts of btoadband providers, one thing that public interest organizations might do is to encourage and applaud efforts by broadband providers to participate in and supplement the FCC initiative on broadband for the underserved.
The FCC Order: https://docs.fcc.gov/public/attachments/FCC-21-29A1.pdf
From the Introduction:
In this Order, we establish the Emergency Broadband Benefit Program to support broadband services and devices to help low-income households stay connected during the COVID-19 pandemic.1 Efforts to slow the spread of COVID-19 have resulted in the dramatic disruption of many aspects of Americans’ lives, including social distancing measures to prevent person-to-person transmission that have required the closure of businesses and schools across the country for indefinite periods of times, which in turn has caused millions of Americans to become newly unemployed or unable to find work. These closures have also led people to turn to virtual learning, telemedicine, and telework to enable social distancing measures, which has only increased every household’s need for access to broadband services. The cost of broadband services, however, can be difficult to overcome for lowincome families and for families that have been struggling during the pandemic.
Excerpt from Provider Election Process to Participate in the Emergency Broadband Benefit Program
21. We direct USAC, under the supervision of and in coordination with the Bureau, to establish and administer a process to enable all participating EBB Program [broadband service] providers to file election notices containing information sufficient to effectively administer the program. We direct USAC to collect information in such notices that includes: (1) the states in which the provider plans to participate in the EBB Program; (2) a statement that, in each such state, the provider was a “broadband provider” as of December 1, 2020; (3) a list of states where the provider is an existing ETC, if any; (4) a list of states where the provider received FCC approval, whether automatic or expedited, to participate, if any; (5) whether the provider intends to distribute connected devices under the EBB Program; (6) a description of the Internet service offerings for which the provider plans to seek reimbursement from the EBB Program in each state; (7) documentation demonstrating the standard rates for those services; and (8) any other administrative information necessary for USAC to establish participating providers in the EBB Program.
DAR Comment: It makes sense for local government and citizen groups to follow up with local broadband providers concerning utilization of the FCC initiative
DAR Comment: The FCC's emergency program establishes the Emergency Broadband Benefit Program to support broadband services and devices to help low-income households stay connected during the COVID-19 pandemic. The Order explains that virtual learning, telemedicine, and telework have increased every household’s need for access to broadband services. The cost of broadband services can be difficult to overcome for lowincome families and for families that have been struggling during the pandemic.
The Washington Post explains that many will see their Internet bills reduced by as much as $50 a month in credits paid to their Internet service providers, and residents of tribal areas are eligible for even larger discounts. However, "It may take up to two months before Americans can take advantage of it; the government must still fine-tune its systems so that families can apply for, and providers can receive, the emergency benefits. That task is likely to be a tall one for Washington, which historically has struggled to deploy complicated technology under tight time constraints." See https://www.washingtonpost.com/technology/2021/02/26/broadband-internet-subsidies-coronavirus/
The Post reports that AT&T has said that it intends to participate. CenturyLink, Charter, Comcast, Frontier, T-Mobile and Verizon did not immediately commit to accepting the emergency benefits, although many companies and their trade groups have said in recent days they support the FCC’s work and intend to review its new implementing rules.
The FCC has announced that it is mobilizing people and organizations to help share important consumer information about the Emergency Broadband Benefit. Since iImplementation of the FCC emergency internet program turns on efforts of btoadband providers, one thing that public interest organizations might do is to encourage and applaud efforts by broadband providers to participate in and supplement the FCC initiative on broadband for the underserved.
The FCC Order: https://docs.fcc.gov/public/attachments/FCC-21-29A1.pdf
From the Introduction:
In this Order, we establish the Emergency Broadband Benefit Program to support broadband services and devices to help low-income households stay connected during the COVID-19 pandemic.1 Efforts to slow the spread of COVID-19 have resulted in the dramatic disruption of many aspects of Americans’ lives, including social distancing measures to prevent person-to-person transmission that have required the closure of businesses and schools across the country for indefinite periods of times, which in turn has caused millions of Americans to become newly unemployed or unable to find work. These closures have also led people to turn to virtual learning, telemedicine, and telework to enable social distancing measures, which has only increased every household’s need for access to broadband services. The cost of broadband services, however, can be difficult to overcome for lowincome families and for families that have been struggling during the pandemic.
Excerpt from Provider Election Process to Participate in the Emergency Broadband Benefit Program
21. We direct USAC, under the supervision of and in coordination with the Bureau, to establish and administer a process to enable all participating EBB Program [broadband service] providers to file election notices containing information sufficient to effectively administer the program. We direct USAC to collect information in such notices that includes: (1) the states in which the provider plans to participate in the EBB Program; (2) a statement that, in each such state, the provider was a “broadband provider” as of December 1, 2020; (3) a list of states where the provider is an existing ETC, if any; (4) a list of states where the provider received FCC approval, whether automatic or expedited, to participate, if any; (5) whether the provider intends to distribute connected devices under the EBB Program; (6) a description of the Internet service offerings for which the provider plans to seek reimbursement from the EBB Program in each state; (7) documentation demonstrating the standard rates for those services; and (8) any other administrative information necessary for USAC to establish participating providers in the EBB Program.
DAR Comment: It makes sense for local government and citizen groups to follow up with local broadband providers concerning utilization of the FCC initiative
Before Boulder shooting, NRA victory blocking local gun control
A Colorado judge blocked Boulder from enforcing its two-year-old assault rifle ban on March 12, ruling it violated a 2003 state law prohibiting municipalities from enacting their own firearms regulations. Boulder city spokeswoman Shannon Aulabaugh said city attorneys would meet to decide on whether to appeal the ruling by Boulder County District Court Judge Andrew Hartman, The Denver Post reported March 18, but in the meantime, the Boulder Police Department wouldn't enforce the ban on AR-15-style rifles and large-capacity magazines.
The National Rifle Association celebrated the ruling last Tuesday, noting its supporting role in striking down the ban. A week later, a gunman opened fire in a Boulder supermarket, killing 10 people, including a Boulder Police officer.
Source: Yahoo News
A Colorado judge blocked Boulder from enforcing its two-year-old assault rifle ban on March 12, ruling it violated a 2003 state law prohibiting municipalities from enacting their own firearms regulations. Boulder city spokeswoman Shannon Aulabaugh said city attorneys would meet to decide on whether to appeal the ruling by Boulder County District Court Judge Andrew Hartman, The Denver Post reported March 18, but in the meantime, the Boulder Police Department wouldn't enforce the ban on AR-15-style rifles and large-capacity magazines.
The National Rifle Association celebrated the ruling last Tuesday, noting its supporting role in striking down the ban. A week later, a gunman opened fire in a Boulder supermarket, killing 10 people, including a Boulder Police officer.
Source: Yahoo News
To get rich, become a doctor or a lawyer. My mother said it years ago, and now David Brooks of the NYT says it -- Don Allen Resnikoff
Excerpt from Brooks NYT column:
So what profession is most likely to get you rich? Medicine! You get to save lives and make bank all at once! One third of doctors overall, including about 58.6 percent of surgeons, are in the top one percent of earners. There are more doctors and surgeons in the top one percent than any other job category. According to Rothwell’s book, in Spain, Sweden and Iceland, doctors earn twice as much as the average worker, but in the United States physicians and surgeons earn nearly five times as much.
Why is that? First, there’s our screwed-up health care system in which nearly 18 percent of gross domestic product flows into medicine and disproportionately toward a relatively small number of doctors. Second, there are huge barriers of entry into that profession — including, of course, the strenuous education that’s required. The number of medical school students is limited. In 2018-2019, only 41 percent of applicants who applied to medical school actually got into one. Plus, a 1997 federal law capped the number of residency slots that Medicare funds would support.
It typically takes a minimum of 11 years of difficult training to become a doctor, costing hundreds of thousands of dollars. Once you’re a doctor, you are protected by state laws from competition from lower cost workers. Rothwell cites research suggesting that nurse practitioners and dental hygienists can perform many duties now done by doctors and dentists, at lower cost.
If you’re squeamish around blood, you can go into law. Census data for 2019 shows that about 14.5 percent of lawyers are in the top one percent of earners. And for some of the same reasons: high barriers to entry, limits on competition from less costly alternatives and limits on innovation. For example, in most states it’s illegal for a nonlawyer to own a law firm. If some MBA has an innovative idea for how to streamline practices, she is not allowed to start a firm and use that idea.
https://www.nytimes.com/2021/02/25/opinion/inequality-medicine-law.html?
Don Resnikoff comment:
I won't comment about being a doctor, but since I've worked as a lawyer for many years I will comment about that. For starters, I am not now and have never been within the top 1% of earners, or even close. I am financially comfortable, as they say, at a modest level.
Next, while I have had a good career as a lawyer, mostly in public service, with stints in private practice, I've had to take the bad with the good. I'll mention just one bad here, because it has been on my mind recently. It is that cases I've worked on tend to go on for a very long time. Working on those cases has been interesting for me, but protracted litigation can disserve the goal of achieving a just result.
One famous example is US v IBM. The case took roughly 700 trial days over seven years. I was not on the case for all seven years, just the last few after the Government rested its affirmative case. A 1981 New York Times article says "The judge presiding over the Federal Government's antitrust case against the International Business Machines Corporation set a June 1 deadline yesterday for the six-year-old trial to end. . . . He indicated yesterday that since the trial was near its end, both sides should be able to meet the deadline easily. Thomas D. Barr, I.B.M.'s lead attorney, said I.B.M. would have no trouble meeting the deadline. Donald A. Resnikoff, of the Justice Department, agreed the deadline was desirable but expressed reservations."
I can't now recall what my reservations were, and I haven't gone back to check the transcript.
Much later, after I retired from USDOJ, I worked for the DC AG's Office on antitrust matters, and was assigned to assist one of the State groups working on the US and State AG case against Microsoft. The suit began on May 18, 1998, with the U.S. Department of Justice and the AGs of twenty U.S. states and the District of Columbia suing Microsoft for illegally thwarting competition in order to protect and extend its software monopoly. In June, 2004, a U.S. appeals court unanimously approved settlement of the case, rejecting objections of the District of Columbia, among others, that the settlement sanctions were inadequate. (See Wikipedia for a short summary.)
My private practice experience has been similar with regard to long cases. In 2011 I was one of two attorneys who signed a Complaint concerning bank and payment system practices affecting the ATM industry. The case is still in active litigation 10 years later, although I no longer work on it.
In 2014 I began work on a case for a gasoline station operator concerning disputed franchise arrangements. Litigation began in 2016, and is still ongoing. Again, I will not work on the litigation through to the end. A younger lawyer will do that.
The long cases I've mentioned have been extremely interesting to me, and arguably even somewhat important. But the time required to bring them to conclusion is frustrating . Delay means expense for the litigants, with a just result being deferred, or worse. In both the government IBM and Microsoft cases, the disadvantaged competitors and their technologies that were at issue when the litigations began were no longer available for rescue by the time the cases ended.
Excerpt from Brooks NYT column:
So what profession is most likely to get you rich? Medicine! You get to save lives and make bank all at once! One third of doctors overall, including about 58.6 percent of surgeons, are in the top one percent of earners. There are more doctors and surgeons in the top one percent than any other job category. According to Rothwell’s book, in Spain, Sweden and Iceland, doctors earn twice as much as the average worker, but in the United States physicians and surgeons earn nearly five times as much.
Why is that? First, there’s our screwed-up health care system in which nearly 18 percent of gross domestic product flows into medicine and disproportionately toward a relatively small number of doctors. Second, there are huge barriers of entry into that profession — including, of course, the strenuous education that’s required. The number of medical school students is limited. In 2018-2019, only 41 percent of applicants who applied to medical school actually got into one. Plus, a 1997 federal law capped the number of residency slots that Medicare funds would support.
It typically takes a minimum of 11 years of difficult training to become a doctor, costing hundreds of thousands of dollars. Once you’re a doctor, you are protected by state laws from competition from lower cost workers. Rothwell cites research suggesting that nurse practitioners and dental hygienists can perform many duties now done by doctors and dentists, at lower cost.
If you’re squeamish around blood, you can go into law. Census data for 2019 shows that about 14.5 percent of lawyers are in the top one percent of earners. And for some of the same reasons: high barriers to entry, limits on competition from less costly alternatives and limits on innovation. For example, in most states it’s illegal for a nonlawyer to own a law firm. If some MBA has an innovative idea for how to streamline practices, she is not allowed to start a firm and use that idea.
https://www.nytimes.com/2021/02/25/opinion/inequality-medicine-law.html?
Don Resnikoff comment:
I won't comment about being a doctor, but since I've worked as a lawyer for many years I will comment about that. For starters, I am not now and have never been within the top 1% of earners, or even close. I am financially comfortable, as they say, at a modest level.
Next, while I have had a good career as a lawyer, mostly in public service, with stints in private practice, I've had to take the bad with the good. I'll mention just one bad here, because it has been on my mind recently. It is that cases I've worked on tend to go on for a very long time. Working on those cases has been interesting for me, but protracted litigation can disserve the goal of achieving a just result.
One famous example is US v IBM. The case took roughly 700 trial days over seven years. I was not on the case for all seven years, just the last few after the Government rested its affirmative case. A 1981 New York Times article says "The judge presiding over the Federal Government's antitrust case against the International Business Machines Corporation set a June 1 deadline yesterday for the six-year-old trial to end. . . . He indicated yesterday that since the trial was near its end, both sides should be able to meet the deadline easily. Thomas D. Barr, I.B.M.'s lead attorney, said I.B.M. would have no trouble meeting the deadline. Donald A. Resnikoff, of the Justice Department, agreed the deadline was desirable but expressed reservations."
I can't now recall what my reservations were, and I haven't gone back to check the transcript.
Much later, after I retired from USDOJ, I worked for the DC AG's Office on antitrust matters, and was assigned to assist one of the State groups working on the US and State AG case against Microsoft. The suit began on May 18, 1998, with the U.S. Department of Justice and the AGs of twenty U.S. states and the District of Columbia suing Microsoft for illegally thwarting competition in order to protect and extend its software monopoly. In June, 2004, a U.S. appeals court unanimously approved settlement of the case, rejecting objections of the District of Columbia, among others, that the settlement sanctions were inadequate. (See Wikipedia for a short summary.)
My private practice experience has been similar with regard to long cases. In 2011 I was one of two attorneys who signed a Complaint concerning bank and payment system practices affecting the ATM industry. The case is still in active litigation 10 years later, although I no longer work on it.
In 2014 I began work on a case for a gasoline station operator concerning disputed franchise arrangements. Litigation began in 2016, and is still ongoing. Again, I will not work on the litigation through to the end. A younger lawyer will do that.
The long cases I've mentioned have been extremely interesting to me, and arguably even somewhat important. But the time required to bring them to conclusion is frustrating . Delay means expense for the litigants, with a just result being deferred, or worse. In both the government IBM and Microsoft cases, the disadvantaged competitors and their technologies that were at issue when the litigations began were no longer available for rescue by the time the cases ended.
WashPost on right to counsel in civil cases
editorial excerpt:
Most European countries have long-standing rules granting a right to counsel to litigants in property and monetary cases, as well as ones in which life and liberty hang in the balance. In England, Parliament acted more than 500 years ago to ensure that paupers would be provided lawyers when suing in King Henry VII’s courts; that right found its way into laws in some of the original 13 colonies.
In today’s United States, lawmakers and judges have carved out a hodgepodge, varying wildly from state to state and even by locality, under which certain at-risk individuals may qualify for court-appointed counsel in some types of civil matters. In most states, for instance, that’s the case when authorities seek to remove children permanently from their parents and send them to foster care, owing to alleged neglect or abuse. In a handful of big cities, other laws enacted in recent years grant a right to counsel to tenants facing eviction, an event that often triggers a cascade of other problems, such as homelessness.
Far more often, however, poor people unversed in the law are on their own when states have not specified a right to counsel and judges cannot or will not provide one. That produces appalling results across a range of legal disputes.
https://www.washingtonpost.com/opinions/2021/02/26/noncriminal-cases-right-to-lawyer-representation/?arc404=true
editorial excerpt:
Most European countries have long-standing rules granting a right to counsel to litigants in property and monetary cases, as well as ones in which life and liberty hang in the balance. In England, Parliament acted more than 500 years ago to ensure that paupers would be provided lawyers when suing in King Henry VII’s courts; that right found its way into laws in some of the original 13 colonies.
In today’s United States, lawmakers and judges have carved out a hodgepodge, varying wildly from state to state and even by locality, under which certain at-risk individuals may qualify for court-appointed counsel in some types of civil matters. In most states, for instance, that’s the case when authorities seek to remove children permanently from their parents and send them to foster care, owing to alleged neglect or abuse. In a handful of big cities, other laws enacted in recent years grant a right to counsel to tenants facing eviction, an event that often triggers a cascade of other problems, such as homelessness.
Far more often, however, poor people unversed in the law are on their own when states have not specified a right to counsel and judges cannot or will not provide one. That produces appalling results across a range of legal disputes.
https://www.washingtonpost.com/opinions/2021/02/26/noncriminal-cases-right-to-lawyer-representation/?arc404=true
Public Citizen wants WTO to waive IP protections to aid international distribution of vaccines
EXCERPT from https://www.citizen.org/article/rethinking-trade-podcast-u-s-officials-are-blocking-global-covid-19-vaccine-access-at-the-wto/
World Trade Organization (WTO) rules undermine access to COVID-19 vaccines and medicines. That’s why scores of countries are demanding that the WTO’s monopoly protections for pharmaceutical corporations be temporarily waived so COVID-19 vaccines and treatments can be produced worldwide. This is essential to ensure enough affordable doses to end the pandemic and save lives. But U.S. trade officials are blocking the waiver, insisting that even during this deadly global pandemic, Big Pharma profits should come first. The question is: Will this position change under a Biden administration?
EXCERPT from https://www.citizen.org/article/rethinking-trade-podcast-u-s-officials-are-blocking-global-covid-19-vaccine-access-at-the-wto/
World Trade Organization (WTO) rules undermine access to COVID-19 vaccines and medicines. That’s why scores of countries are demanding that the WTO’s monopoly protections for pharmaceutical corporations be temporarily waived so COVID-19 vaccines and treatments can be produced worldwide. This is essential to ensure enough affordable doses to end the pandemic and save lives. But U.S. trade officials are blocking the waiver, insisting that even during this deadly global pandemic, Big Pharma profits should come first. The question is: Will this position change under a Biden administration?
Lori Wallach of Public Citizen on US reliance on overseas production for COVID gear
EXCERPT from https://www.citizen.org/wp-content/uploads/Public-Citizen-Written-Testimony-Covid-and-trade-with-Add-Submission.pdf:
As production of key parts and assembly of goods in diverse sectors has become both geographically concentrated and concentrated in fewer companies,whenproduction in a key country, region or company is disrupted –whether by illness in the current instance or natural disaster, war or other calamity–world supplies are affected. Experts have warned about the perils of hyperglobalized supply chains for years. As Barry Lynn’s 2005 book “End of the Line”warned: “In September 1999, an earthquake devastated much of Taiwan, toppling buildings, knocking out electricity, and killing 2,500 people. Within days, factories as far away as California and Texas began to close. Cut off from their supplies of semiconductor chips, companies like Dell and Hewlett-Packard began to shutter assembly lines and send workers home. A disaster that only a decade earlier would have been mainly local in nature almost cascaded into a grave global crisis. The quake, in an instant, illustrated just how closely connected the world had become and just how radically different are the risks we all now face.”1The COVID-19 crisis forced people throughout the United States to recognize a problem previously mainly experienced by those in venues hurt by outsourcing and trade-related job loss: The United States no longer can make many basic goods it needs.
https://www.citizen.org/wp-content/uploads/Public-Citizen-Written-Testimony-Covid-and-trade-with-Add-Submission.pdf
EXCERPT from https://www.citizen.org/wp-content/uploads/Public-Citizen-Written-Testimony-Covid-and-trade-with-Add-Submission.pdf:
As production of key parts and assembly of goods in diverse sectors has become both geographically concentrated and concentrated in fewer companies,whenproduction in a key country, region or company is disrupted –whether by illness in the current instance or natural disaster, war or other calamity–world supplies are affected. Experts have warned about the perils of hyperglobalized supply chains for years. As Barry Lynn’s 2005 book “End of the Line”warned: “In September 1999, an earthquake devastated much of Taiwan, toppling buildings, knocking out electricity, and killing 2,500 people. Within days, factories as far away as California and Texas began to close. Cut off from their supplies of semiconductor chips, companies like Dell and Hewlett-Packard began to shutter assembly lines and send workers home. A disaster that only a decade earlier would have been mainly local in nature almost cascaded into a grave global crisis. The quake, in an instant, illustrated just how closely connected the world had become and just how radically different are the risks we all now face.”1The COVID-19 crisis forced people throughout the United States to recognize a problem previously mainly experienced by those in venues hurt by outsourcing and trade-related job loss: The United States no longer can make many basic goods it needs.
https://www.citizen.org/wp-content/uploads/Public-Citizen-Written-Testimony-Covid-and-trade-with-Add-Submission.pdf
WSJ:WeWork’s Adam Neumann to Get Extra $50 Million Payout in SoftBank SettlementDeal
By
Maureen Farrell
and
Eliot Brown
Updated Feb. 24, 2021 10:13 pm ET
WeWork co-founder and former Chief Executive Adam Neumann is set to reap an extra $50 million windfall and other benefits as part of an agreement that would settle a bitter dispute he and other early investors in the shared-office-space provider have waged with SoftBank Group Corp., according to people familiar with the matter.
As The Wall Street Journal reported earlier this week, the parties are closing in on a deal in which SoftBank, WeWork’s majority shareholder, would buy about $1.5 billion of stock from other investors, including nearly $500 million from Mr. Neumann. That is about half as much as it previously planned to buy.
But part of the deal not previously reported sets Mr. Neumann apart from other shareholders. It calls for SoftBank to give the 41-year-old the $50 million special payout and extend by five years a $430 million loan it made to him in late 2019, the people said. SoftBank is also slated to pay $50 million for Mr. Neumann’s legal fees. It isn’t clear how much it is paying for the other shareholders’ legal fees.
The settlement between SoftBank, Mr. Neumann and the other shareholders isn’t final and the terms could still change, the people cautioned. Should the parties reach agreement, potentially in the next few days, it would avert an early-March trial.
WeWork is separately negotiating a combination with a special-purpose acquisition company called BowX Acquisition Corp. that would provide the startup with a public listing, people familiar with the discussions said. While the talks could still fall apart and other options are being considered, WeWork and BowX could reach agreement as soon as next week, some of the people said.
_
Excerpts from The New Yorker: “How Venture Capitalists Are Deforming Capitalism”
Even the worst-run startup can beat competitors if investors prop it up. The V.C. firm Benchmark helped enable WeWork to make one wild mistake after another—hoping that its gamble would pay off before disaster struck.
By Charles Duhigg
November 23, 2020
From the start, venture capitalists have presented their profession as an elevated calling. They weren’t mere speculators—they were midwives to innovation. The first V.C. firms were designed to make money by identifying and supporting the most brilliant startup ideas, providing the funds and the strategic advice that daring entrepreneurs needed in order to prosper. For decades, such boasts were merited. Genentech, which helped invent synthetic insulin, in the nineteen-seventies, succeeded in large part because of the stewardship of the venture capitalist Tom Perkins, whose company, Kleiner Perkins, made an initial hundred-thousand-dollar investment. Perkins demanded a seat on Genentech’s board of directors, and then began spending one afternoon a week in the startup’s offices, scrutinizing spending reports and browbeating inexperienced executives. In subsequent years, Kleiner Perkins nurtured such tech startups as Amazon, Google, Sun Microsystems, and Compaq. When Perkins died, in 2016, at the age of eighty-four, an obituary in the Financial Times remembered him as “part of a new movement in finance that saw investors roll up their sleeves and play an active role in management.”
The V.C. industry has grown exponentially since Perkins’s heyday, but it has also become increasingly avaricious and cynical. It is now dominated by a few dozen firms, which, collectively, control hundreds of billions of dollars. Most professional V.C.s fit a narrow mold: according to surveys, just under half of them attended either Harvard or Stanford, and eighty per cent are male. Although V.C.s depict themselves as perpetually on the hunt for radical business ideas, they often seem to be hyping the same Silicon Valley trends—and their managerial oversight has dwindled, making their investments look more like trading-floor bets. Steve Blank, an entrepreneur who currently teaches at Stanford’s engineering school, said, “I’ve watched the industry become a money-hungry mob. V.C.s today aren’t interested in the public good. They’re not interested in anything except optimizing their own profits and chasing the herd, and so they waste billions of dollars that could have gone to innovation that actually helps people.”
This clubby, self-serving approach has made many V.C.s rich. In January, 2020, the National Venture Capital Association hailed a “record decade” of “hyper growth” in which its members had given nearly eight hundred billion dollars to startups, “fueling the economy of tomorrow.” The pandemic has slowed things down, but not much. According to a report by PitchBook, a company that provides data on the industry, five of the top twenty venture-capital firms are currently making more deals than they did last year.
In recent decades, the gambles taken by V.C.s have grown dramatically larger. A million-dollar investment in a thriving young company might yield ten million dollars in profits. A fifty-million-dollar investment in the same startup could deliver half a billion dollars. “Honestly, it stopped making sense to look at investments that were smaller than thirty or forty million,” a prominent venture capitalist told me. “It’s the same amount of due diligence, the same amount of time going to board meetings, the same amount of work, regardless of how much you invest.”
Critics of the venture-capital industry have observed that, lately, it has given one dubious startup after another gigantic infusions of money. The blood-testing company Theranos received seven hundred million dollars from a number of investors, including Rupert Murdoch and Betsy DeVos, before it was revealed as a fraud; in 2018, its founders were indicted. Juicero, which sold a Wi-Fi-enabled juice press for seven hundred dollars, raised more than a hundred million dollars from such sources as Google’s investment arm, but shut down after only four years. (Consumers posted videos demonstrating that they could press juice just as efficiently with their own hands.) Two years ago, when Wag!, an Uber-like service for dog walking, went looking for seventy-five million dollars in venture capital, its founders—among them, a pair of brothers in their twenties, with little business experience—discovered that investors were interested, as long as Wag! agreed to accept three hundred million dollars. The startup planned to use those funds to expand internationally, but it was too poorly run to flourish. It began shedding its employees after, among other things, the New York City Council accused the firm of losing dogs.
Increasingly, the venture-capital industry has become fixated on creating “unicorns”: startups whose valuations exceed a billion dollars. Some of these companies become lasting successes, but many of them—such as Uber, the data-mining giant Palantir, and the scandal-plagued software firm Zenefits—never seemed to have a realistic plan for turning a profit. A 2018 paper co-written by Martin Kenney, a professor at the University of California, Davis, argued that, thanks to the prodigious bets made by today’s V.C.s, “money-losing firms can continue operating and undercutting incumbents for far longer than previously.” In the traditional capitalist model, the most efficient and capable company succeeds; in the new model, the company with the most funding wins. Such firms are often “destroying economic value”—that is, undermining sound rivals—and creating “disruption without social benefit.”
Many venture capitalists say that they have no choice but to flood startups with cash. In order for a Silicon Valley startup to become a true unicorn, it typically must wipe out its competitors and emerge as the dominant brand. Jeff Housenbold, a managing partner at SoftBank, told me, “Once Uber is founded, within a year you suddenly have three hundred copycats. The only way to protect your company is to get big fast by investing hundreds of millions.” What’s more, V.C.s say, the big venture firms are all looking at the same deals, and trying to persuade the same coveted entrepreneurs to accept their investment dollars. To win, V.C.s must give entrepreneurs what they demand.
Particularly in Silicon Valley, founders often want venture capitalists who promise not to interfere or to ask too many questions. V.C.s have started boasting that they are “founder-friendly” and uninterested in, say, spending an afternoon a week at a company’s offices or second-guessing a young C.E.O. Josh Lerner, a professor at Harvard Business School, told me, “Proclaiming founder loyalty is kind of expected now.” One of the bigger V.C. firms, the Founders Fund, which has more than six billion dollars under management, declares on its Web site that it “has never removed a single founder” and that, when it finds entrepreneurs with “audacious vision,” “a near-messianic attitude,” and “wild-eyed passion,” it essentially seeks to give them veto-proof authority over the board of directors, so that an entrepreneur need never worry about being reined in, let alone fired.
Whereas venture capitalists like Tom Perkins once prided themselves on installing good governance and closely monitoring companies, V.C.s today are more likely to encourage entrepreneurs’ undisciplined eccentricities. Masayoshi Son, the SoftBank venture capitalist who promised WeWork $4.4 billion after less than twenty minutes, embodies this approach. In 2016, he began raising a hundred-billion-dollar Vision Fund, the largest pool of money ever devoted to venture-capital investment. “Masa decided to deliberately inject cocaine into the bloodstream of these young companies,” a former SoftBank senior executive said. “You approach an entrepreneur and say, ‘Hey, either take a billion dollars from me right now, or I’ll give it to your competitor and you’ll go out of business.’ ” This strategy might sound reckless, but it has paid off handsomely for Son. In the mid-nineties, he gave billions of dollars to hundreds of tech firms, including twenty million dollars to a small Chinese online marketplace named Alibaba. When the first Internet bubble burst, in 2001, Son lost almost seventy billion dollars, but Alibaba had enough of a war chest to outlast its competitors, and today it’s valued at more than seven hundred billion dollars. SoftBank’s stake in the firm is more than a hundred billion dollars—far exceeding all of Son’s other losses. “Venture capital has become a lottery,” the former SoftBank executive told me. “Masa is not a particularly deep thinker, but he has one strength: he’s devoted to buying more lottery tickets than anyone else.”
* * *
As the venture-capital industry has become specialized and concentrated—last year, the ten largest firms raised sixteen billion dollars, nearly a third of all new V.C. fund-raising—it has become even more cliquish. Today, most major V.C. deals are “syndicated,” or divvied up, among the big firms. This cartel-like atmosphere has encouraged V.C.s to remain silent when confronted with unethical behavior. Kraus, who has been critical of the industry’s myopia, told me, “If you’re on a board that empowered some wacky founder, or you didn’t pay attention to governance—or something happened that, in retrospect, sort of skirted the law, like at Uber—you’re fine, as long as you post decent returns.” He added, “You’re remembered for your winners, not your losers. In ten years, no one is going to remember all the bad stuff at WeWork. All they’ll remember is who made money.”
Politicians have generally been reluctant to criticize the venture-capital industry, in part because it has successfully portrayed itself as crucial to innovation. Martin Kenney, the professor at the University of California, Davis, said, “Obama loved Silicon Valley and V.C.s, and Trump craved their approval.” He went on, “Regulators have been totally defanged from doing real investigations of venture-capital firms. I think people are finally waking up to the damage the tech industry and V.C.s can do, but it’s slow going.” Senator Elizabeth Warren has proposed reforms that would make it easier for shareholders to sue directors who fail to report unethical behavior. Other Democrats have proposed laws that would force venture capitalists to pay higher taxes. President-elect Joe Biden supports greater protections for stockholding employees. While campaigning in Pennsylvania, he promised, “I’ll be laser-focussed on working families, the middle-class families I came from here in Scranton, not the wealthy investor class—they don’t need me.”
* * *
For decades, venture capitalists have succeeded in defining themselves as judicious meritocrats who direct money to those who will use it best. But examples like WeWork make it harder to believe that V.C.s help balance greedy impulses with enlightened innovation. Rather, V.C.s seem to embody the cynical shape of modern capitalism, which too often rewards crafty middlemen and bombastic charlatans rather than hardworking employees and creative businesspeople. Jeremy Neuner, the NextSpace co-founder, said, “You can’t blame Adam Neumann for being Adam Neumann. It was clear to everyone he was selling something too good to be true. He never pretended to be sensible, or down to earth, or anything besides a crazy optimist. But you can blame the venture capitalists.” Neuner went on, “When you get involved in the startup world, you meet all these amazing entrepreneurs with fantastic ideas, and, over time, you watch them get pushed by V.C.s to take too much money, and make bad choices, and grow as fast as possible. And then they blow up. And, eventually, you start to realize: no matter what happens, the V.C.s still end up rich.” ♦
Published in the print edition of the November 30, 2020, issue of the New Yorker, https://www.newyorker.com/magazine/2020/11/30 , with the headline “The Enablers.”
Charles Duhigg is the author of “The Power of Habit” and “Smarter Faster Better.” He was a member of the Times team that won the 2013 Pulitzer Prize for explanatory reporting.
By
Maureen Farrell
and
Eliot Brown
Updated Feb. 24, 2021 10:13 pm ET
WeWork co-founder and former Chief Executive Adam Neumann is set to reap an extra $50 million windfall and other benefits as part of an agreement that would settle a bitter dispute he and other early investors in the shared-office-space provider have waged with SoftBank Group Corp., according to people familiar with the matter.
As The Wall Street Journal reported earlier this week, the parties are closing in on a deal in which SoftBank, WeWork’s majority shareholder, would buy about $1.5 billion of stock from other investors, including nearly $500 million from Mr. Neumann. That is about half as much as it previously planned to buy.
But part of the deal not previously reported sets Mr. Neumann apart from other shareholders. It calls for SoftBank to give the 41-year-old the $50 million special payout and extend by five years a $430 million loan it made to him in late 2019, the people said. SoftBank is also slated to pay $50 million for Mr. Neumann’s legal fees. It isn’t clear how much it is paying for the other shareholders’ legal fees.
The settlement between SoftBank, Mr. Neumann and the other shareholders isn’t final and the terms could still change, the people cautioned. Should the parties reach agreement, potentially in the next few days, it would avert an early-March trial.
WeWork is separately negotiating a combination with a special-purpose acquisition company called BowX Acquisition Corp. that would provide the startup with a public listing, people familiar with the discussions said. While the talks could still fall apart and other options are being considered, WeWork and BowX could reach agreement as soon as next week, some of the people said.
_
Excerpts from The New Yorker: “How Venture Capitalists Are Deforming Capitalism”
Even the worst-run startup can beat competitors if investors prop it up. The V.C. firm Benchmark helped enable WeWork to make one wild mistake after another—hoping that its gamble would pay off before disaster struck.
By Charles Duhigg
November 23, 2020
From the start, venture capitalists have presented their profession as an elevated calling. They weren’t mere speculators—they were midwives to innovation. The first V.C. firms were designed to make money by identifying and supporting the most brilliant startup ideas, providing the funds and the strategic advice that daring entrepreneurs needed in order to prosper. For decades, such boasts were merited. Genentech, which helped invent synthetic insulin, in the nineteen-seventies, succeeded in large part because of the stewardship of the venture capitalist Tom Perkins, whose company, Kleiner Perkins, made an initial hundred-thousand-dollar investment. Perkins demanded a seat on Genentech’s board of directors, and then began spending one afternoon a week in the startup’s offices, scrutinizing spending reports and browbeating inexperienced executives. In subsequent years, Kleiner Perkins nurtured such tech startups as Amazon, Google, Sun Microsystems, and Compaq. When Perkins died, in 2016, at the age of eighty-four, an obituary in the Financial Times remembered him as “part of a new movement in finance that saw investors roll up their sleeves and play an active role in management.”
The V.C. industry has grown exponentially since Perkins’s heyday, but it has also become increasingly avaricious and cynical. It is now dominated by a few dozen firms, which, collectively, control hundreds of billions of dollars. Most professional V.C.s fit a narrow mold: according to surveys, just under half of them attended either Harvard or Stanford, and eighty per cent are male. Although V.C.s depict themselves as perpetually on the hunt for radical business ideas, they often seem to be hyping the same Silicon Valley trends—and their managerial oversight has dwindled, making their investments look more like trading-floor bets. Steve Blank, an entrepreneur who currently teaches at Stanford’s engineering school, said, “I’ve watched the industry become a money-hungry mob. V.C.s today aren’t interested in the public good. They’re not interested in anything except optimizing their own profits and chasing the herd, and so they waste billions of dollars that could have gone to innovation that actually helps people.”
This clubby, self-serving approach has made many V.C.s rich. In January, 2020, the National Venture Capital Association hailed a “record decade” of “hyper growth” in which its members had given nearly eight hundred billion dollars to startups, “fueling the economy of tomorrow.” The pandemic has slowed things down, but not much. According to a report by PitchBook, a company that provides data on the industry, five of the top twenty venture-capital firms are currently making more deals than they did last year.
In recent decades, the gambles taken by V.C.s have grown dramatically larger. A million-dollar investment in a thriving young company might yield ten million dollars in profits. A fifty-million-dollar investment in the same startup could deliver half a billion dollars. “Honestly, it stopped making sense to look at investments that were smaller than thirty or forty million,” a prominent venture capitalist told me. “It’s the same amount of due diligence, the same amount of time going to board meetings, the same amount of work, regardless of how much you invest.”
Critics of the venture-capital industry have observed that, lately, it has given one dubious startup after another gigantic infusions of money. The blood-testing company Theranos received seven hundred million dollars from a number of investors, including Rupert Murdoch and Betsy DeVos, before it was revealed as a fraud; in 2018, its founders were indicted. Juicero, which sold a Wi-Fi-enabled juice press for seven hundred dollars, raised more than a hundred million dollars from such sources as Google’s investment arm, but shut down after only four years. (Consumers posted videos demonstrating that they could press juice just as efficiently with their own hands.) Two years ago, when Wag!, an Uber-like service for dog walking, went looking for seventy-five million dollars in venture capital, its founders—among them, a pair of brothers in their twenties, with little business experience—discovered that investors were interested, as long as Wag! agreed to accept three hundred million dollars. The startup planned to use those funds to expand internationally, but it was too poorly run to flourish. It began shedding its employees after, among other things, the New York City Council accused the firm of losing dogs.
Increasingly, the venture-capital industry has become fixated on creating “unicorns”: startups whose valuations exceed a billion dollars. Some of these companies become lasting successes, but many of them—such as Uber, the data-mining giant Palantir, and the scandal-plagued software firm Zenefits—never seemed to have a realistic plan for turning a profit. A 2018 paper co-written by Martin Kenney, a professor at the University of California, Davis, argued that, thanks to the prodigious bets made by today’s V.C.s, “money-losing firms can continue operating and undercutting incumbents for far longer than previously.” In the traditional capitalist model, the most efficient and capable company succeeds; in the new model, the company with the most funding wins. Such firms are often “destroying economic value”—that is, undermining sound rivals—and creating “disruption without social benefit.”
Many venture capitalists say that they have no choice but to flood startups with cash. In order for a Silicon Valley startup to become a true unicorn, it typically must wipe out its competitors and emerge as the dominant brand. Jeff Housenbold, a managing partner at SoftBank, told me, “Once Uber is founded, within a year you suddenly have three hundred copycats. The only way to protect your company is to get big fast by investing hundreds of millions.” What’s more, V.C.s say, the big venture firms are all looking at the same deals, and trying to persuade the same coveted entrepreneurs to accept their investment dollars. To win, V.C.s must give entrepreneurs what they demand.
Particularly in Silicon Valley, founders often want venture capitalists who promise not to interfere or to ask too many questions. V.C.s have started boasting that they are “founder-friendly” and uninterested in, say, spending an afternoon a week at a company’s offices or second-guessing a young C.E.O. Josh Lerner, a professor at Harvard Business School, told me, “Proclaiming founder loyalty is kind of expected now.” One of the bigger V.C. firms, the Founders Fund, which has more than six billion dollars under management, declares on its Web site that it “has never removed a single founder” and that, when it finds entrepreneurs with “audacious vision,” “a near-messianic attitude,” and “wild-eyed passion,” it essentially seeks to give them veto-proof authority over the board of directors, so that an entrepreneur need never worry about being reined in, let alone fired.
Whereas venture capitalists like Tom Perkins once prided themselves on installing good governance and closely monitoring companies, V.C.s today are more likely to encourage entrepreneurs’ undisciplined eccentricities. Masayoshi Son, the SoftBank venture capitalist who promised WeWork $4.4 billion after less than twenty minutes, embodies this approach. In 2016, he began raising a hundred-billion-dollar Vision Fund, the largest pool of money ever devoted to venture-capital investment. “Masa decided to deliberately inject cocaine into the bloodstream of these young companies,” a former SoftBank senior executive said. “You approach an entrepreneur and say, ‘Hey, either take a billion dollars from me right now, or I’ll give it to your competitor and you’ll go out of business.’ ” This strategy might sound reckless, but it has paid off handsomely for Son. In the mid-nineties, he gave billions of dollars to hundreds of tech firms, including twenty million dollars to a small Chinese online marketplace named Alibaba. When the first Internet bubble burst, in 2001, Son lost almost seventy billion dollars, but Alibaba had enough of a war chest to outlast its competitors, and today it’s valued at more than seven hundred billion dollars. SoftBank’s stake in the firm is more than a hundred billion dollars—far exceeding all of Son’s other losses. “Venture capital has become a lottery,” the former SoftBank executive told me. “Masa is not a particularly deep thinker, but he has one strength: he’s devoted to buying more lottery tickets than anyone else.”
* * *
As the venture-capital industry has become specialized and concentrated—last year, the ten largest firms raised sixteen billion dollars, nearly a third of all new V.C. fund-raising—it has become even more cliquish. Today, most major V.C. deals are “syndicated,” or divvied up, among the big firms. This cartel-like atmosphere has encouraged V.C.s to remain silent when confronted with unethical behavior. Kraus, who has been critical of the industry’s myopia, told me, “If you’re on a board that empowered some wacky founder, or you didn’t pay attention to governance—or something happened that, in retrospect, sort of skirted the law, like at Uber—you’re fine, as long as you post decent returns.” He added, “You’re remembered for your winners, not your losers. In ten years, no one is going to remember all the bad stuff at WeWork. All they’ll remember is who made money.”
Politicians have generally been reluctant to criticize the venture-capital industry, in part because it has successfully portrayed itself as crucial to innovation. Martin Kenney, the professor at the University of California, Davis, said, “Obama loved Silicon Valley and V.C.s, and Trump craved their approval.” He went on, “Regulators have been totally defanged from doing real investigations of venture-capital firms. I think people are finally waking up to the damage the tech industry and V.C.s can do, but it’s slow going.” Senator Elizabeth Warren has proposed reforms that would make it easier for shareholders to sue directors who fail to report unethical behavior. Other Democrats have proposed laws that would force venture capitalists to pay higher taxes. President-elect Joe Biden supports greater protections for stockholding employees. While campaigning in Pennsylvania, he promised, “I’ll be laser-focussed on working families, the middle-class families I came from here in Scranton, not the wealthy investor class—they don’t need me.”
* * *
For decades, venture capitalists have succeeded in defining themselves as judicious meritocrats who direct money to those who will use it best. But examples like WeWork make it harder to believe that V.C.s help balance greedy impulses with enlightened innovation. Rather, V.C.s seem to embody the cynical shape of modern capitalism, which too often rewards crafty middlemen and bombastic charlatans rather than hardworking employees and creative businesspeople. Jeremy Neuner, the NextSpace co-founder, said, “You can’t blame Adam Neumann for being Adam Neumann. It was clear to everyone he was selling something too good to be true. He never pretended to be sensible, or down to earth, or anything besides a crazy optimist. But you can blame the venture capitalists.” Neuner went on, “When you get involved in the startup world, you meet all these amazing entrepreneurs with fantastic ideas, and, over time, you watch them get pushed by V.C.s to take too much money, and make bad choices, and grow as fast as possible. And then they blow up. And, eventually, you start to realize: no matter what happens, the V.C.s still end up rich.” ♦
Published in the print edition of the November 30, 2020, issue of the New Yorker, https://www.newyorker.com/magazine/2020/11/30 , with the headline “The Enablers.”
Charles Duhigg is the author of “The Power of Habit” and “Smarter Faster Better.” He was a member of the Times team that won the 2013 Pulitzer Prize for explanatory reporting.
Annals of the law: "viewed in context, Mr. Carlson cannot be understood to have been stating facts"
UNITED STATES DISTRICT COURT SOUTHERN DISTRICT OF NEW YORK KAREN MCDOUGAL, Plaintiff, -againstFOX NEWS NETWORK, LLC Defendant. 1:19-cv-11161 (MKV) OPINION AND ORDER GRANTING MOTION TO DISMISS MARY KAY VYSKOCIL, United States District Judge 9/24/2020:
Excerpts:
Fox News first argues that, viewed in context, Mr. Carlson cannot be understood to have been stating facts, but instead that he was delivering an opinion using hyperbole for effect. See Def. Br. at 12-15. Fox News cites to a litany of cases which hold that accusing a person of “extortion” or “blackmail” simply is “rhetorical hyperbole,” incapable of being defamatory.
* * *
Plaintiff Karen McDougal filed this action asserting a single claim of slander per se after she allegedly was defamed by a segment on the popular program “Tucker Carlson Tonight,” which is produced by Defendant Fox News Network, LLC (“Fox News”) and airs on Fox News Channel. Specifically, Ms. McDougal alleges that the host of the show, Tucker Carlson, accused her of extorting now-President Donald J. Trump out of approximately $150,000 in exchange for her silence about an alleged affair between Ms. McDougal and President Trump. After the case was removed from New York state court, Fox News moved to dismiss Ms. McDougal’s claim on the grounds that Mr. Carlson’s statements were not statements of fact and that she failed adequately to allege actual malice. For the reasons stated herein, Fox News’s Motion to Dismiss is GRANTED.
https://images.law.com/contrib/content/uploads/documents/389/116288/McDougal-Defamation-Dismiss.pdf
UNITED STATES DISTRICT COURT SOUTHERN DISTRICT OF NEW YORK KAREN MCDOUGAL, Plaintiff, -againstFOX NEWS NETWORK, LLC Defendant. 1:19-cv-11161 (MKV) OPINION AND ORDER GRANTING MOTION TO DISMISS MARY KAY VYSKOCIL, United States District Judge 9/24/2020:
Excerpts:
Fox News first argues that, viewed in context, Mr. Carlson cannot be understood to have been stating facts, but instead that he was delivering an opinion using hyperbole for effect. See Def. Br. at 12-15. Fox News cites to a litany of cases which hold that accusing a person of “extortion” or “blackmail” simply is “rhetorical hyperbole,” incapable of being defamatory.
* * *
Plaintiff Karen McDougal filed this action asserting a single claim of slander per se after she allegedly was defamed by a segment on the popular program “Tucker Carlson Tonight,” which is produced by Defendant Fox News Network, LLC (“Fox News”) and airs on Fox News Channel. Specifically, Ms. McDougal alleges that the host of the show, Tucker Carlson, accused her of extorting now-President Donald J. Trump out of approximately $150,000 in exchange for her silence about an alleged affair between Ms. McDougal and President Trump. After the case was removed from New York state court, Fox News moved to dismiss Ms. McDougal’s claim on the grounds that Mr. Carlson’s statements were not statements of fact and that she failed adequately to allege actual malice. For the reasons stated herein, Fox News’s Motion to Dismiss is GRANTED.
https://images.law.com/contrib/content/uploads/documents/389/116288/McDougal-Defamation-Dismiss.pdf
Slate/Mark Joseph Stern on the SCOTUS "Shadow Docket"
EXCERPT:
Over the past few years, the Supreme Court has dramatically altered the way it decides most cases—without acknowledging or justifying this radical shift. More and more often, the justices forgo the usual appeals procedure in favor of rushed decision-making behind closed doors in what’s known as “the shadow docket.” They issue late-night opinions on the merits of a case without hearing arguments or receiving full briefing, and often refuse to reveal who authored the opinion, or even how each justice voted. The public is then left to guess why or how the law has changed and what reasoning the court has embraced. These emergency orders are supposed to be a rare exception; today, however, the court regularly uses them to make law in hugely controversial cases, including disputes over the border wall, COVID-19 restrictions, and executions. On Thursday, the House Judiciary Committee held a hearing to decide what, if anything, Congress can do to address a problem that’s spiraling out of control.
https://slate.com/news-and-politics/2021/02/supreme-court-shadow-docket-house-hearing.html?
EXCERPT:
Over the past few years, the Supreme Court has dramatically altered the way it decides most cases—without acknowledging or justifying this radical shift. More and more often, the justices forgo the usual appeals procedure in favor of rushed decision-making behind closed doors in what’s known as “the shadow docket.” They issue late-night opinions on the merits of a case without hearing arguments or receiving full briefing, and often refuse to reveal who authored the opinion, or even how each justice voted. The public is then left to guess why or how the law has changed and what reasoning the court has embraced. These emergency orders are supposed to be a rare exception; today, however, the court regularly uses them to make law in hugely controversial cases, including disputes over the border wall, COVID-19 restrictions, and executions. On Thursday, the House Judiciary Committee held a hearing to decide what, if anything, Congress can do to address a problem that’s spiraling out of control.
https://slate.com/news-and-politics/2021/02/supreme-court-shadow-docket-house-hearing.html?
COVID variants and life after vaccination
DAR comment:
Many sources, like the Economist article excerpted below, predict that people currently vaccinated against COVID may remain susceptible to emerging mutant strains. For the elderly and other susceptible people, vaccination may not mean that precautions should be dropped. Such measures as social distancing will remain important. The hopeful news within that bad news is that mutants may not spread as rapidly as feared, and vaccines can be tweaked in the future to address mutant COVID strains, and even current vaccines are likely to deter life-threatening illness from mutants. DAR
EXCERPTS:
Another reason for covid-19’s persistence is that, even as vaccines are making sars-cov-2 less infectious and protecting people against death, new viral variants are undoing some of their good work. For one thing, successful variants are more infectious—anything from 25-40% in the case of b.1.1.7 which was first found in Britain. Infection is governed by the dizzying mathematics of exponential growth, so cases and deaths accumulate rapidly even if the variant is no more deadly. To get a given level of viral suppression, more onerous social distancing is needed.
In addition, new variants may withstand current vaccines. The ones found in Brazil and South Africa may also be defeating the immunity acquired from a previous covid-19 infection. The hope is that such cases will be milder, because the immune system has been primed by the first encounter with the disease. Even if that is true, the virus will continue to circulate, finding unprotected people and—because that is what viruses do—evolving new strains, some of which will be better at evading the defences that societies have mounted against them.
For all these reasons, governments need to start planning for covid-19 as an endemic disease. . . . The adjustment to living with covid-19 begins with medical science. Work has already started on tweaking vaccines to confer protection against variants. That should go along with more surveillance of mutations that are spreading and accelerated regulatory approval for booster shots. Meanwhile treatments will be required to save more of those who contract the disease from death or serious illness. The best outcome would be for a combination of acquired immunity, regular booster jabs of tweaked vaccines and a menu of therapies to ensure that covid-19 need rarely be life-threatening. But that outcome is not guaranteed.
To the extent that medicine alone cannot prevent lethal outbreaks of covid-19, the burden will also fall on behaviour, just as it has in most of the pandemic. But rather than national lockdowns and months-long school closures, which come at a huge price, the responsibility should fall more heavily on individuals. Habits like mask-wearing may become part of everyday life. Vaccine passports and restrictions in crowded spaces could become mandatory. Vulnerable people will have to maintain great vigilance.
https://www.economist.com/leaders/2021/02/13/how-well-will-vaccines-work
Similarly from WSJ
Research by Dr. Lessells and his colleagues showed that the B.1.351 variant had initially spread most rapidly in the South African province of Eastern Cape, where many residents had already contracted Covid-19 and recovered. He and his colleagues also showed in a series of lab experiments that antibodies from previously infected individuals were less effective against B.1.351 than earlier coronavirus variants.
Data from another study in South Africa seemed to back those findings, suggesting that previous infection may not fully protect against infection by the variant.
from:https://www.wsj.com/articles/covid-19-vaccination-delays-could-bring-more-virus-variants-impede-efforts-to-end-pandemic-11613817002?mod=hp_lead_pos1
DAR comment:
Many sources, like the Economist article excerpted below, predict that people currently vaccinated against COVID may remain susceptible to emerging mutant strains. For the elderly and other susceptible people, vaccination may not mean that precautions should be dropped. Such measures as social distancing will remain important. The hopeful news within that bad news is that mutants may not spread as rapidly as feared, and vaccines can be tweaked in the future to address mutant COVID strains, and even current vaccines are likely to deter life-threatening illness from mutants. DAR
EXCERPTS:
Another reason for covid-19’s persistence is that, even as vaccines are making sars-cov-2 less infectious and protecting people against death, new viral variants are undoing some of their good work. For one thing, successful variants are more infectious—anything from 25-40% in the case of b.1.1.7 which was first found in Britain. Infection is governed by the dizzying mathematics of exponential growth, so cases and deaths accumulate rapidly even if the variant is no more deadly. To get a given level of viral suppression, more onerous social distancing is needed.
In addition, new variants may withstand current vaccines. The ones found in Brazil and South Africa may also be defeating the immunity acquired from a previous covid-19 infection. The hope is that such cases will be milder, because the immune system has been primed by the first encounter with the disease. Even if that is true, the virus will continue to circulate, finding unprotected people and—because that is what viruses do—evolving new strains, some of which will be better at evading the defences that societies have mounted against them.
For all these reasons, governments need to start planning for covid-19 as an endemic disease. . . . The adjustment to living with covid-19 begins with medical science. Work has already started on tweaking vaccines to confer protection against variants. That should go along with more surveillance of mutations that are spreading and accelerated regulatory approval for booster shots. Meanwhile treatments will be required to save more of those who contract the disease from death or serious illness. The best outcome would be for a combination of acquired immunity, regular booster jabs of tweaked vaccines and a menu of therapies to ensure that covid-19 need rarely be life-threatening. But that outcome is not guaranteed.
To the extent that medicine alone cannot prevent lethal outbreaks of covid-19, the burden will also fall on behaviour, just as it has in most of the pandemic. But rather than national lockdowns and months-long school closures, which come at a huge price, the responsibility should fall more heavily on individuals. Habits like mask-wearing may become part of everyday life. Vaccine passports and restrictions in crowded spaces could become mandatory. Vulnerable people will have to maintain great vigilance.
https://www.economist.com/leaders/2021/02/13/how-well-will-vaccines-work
Similarly from WSJ
Research by Dr. Lessells and his colleagues showed that the B.1.351 variant had initially spread most rapidly in the South African province of Eastern Cape, where many residents had already contracted Covid-19 and recovered. He and his colleagues also showed in a series of lab experiments that antibodies from previously infected individuals were less effective against B.1.351 than earlier coronavirus variants.
Data from another study in South Africa seemed to back those findings, suggesting that previous infection may not fully protect against infection by the variant.
from:https://www.wsj.com/articles/covid-19-vaccination-delays-could-bring-more-virus-variants-impede-efforts-to-end-pandemic-11613817002?mod=hp_lead_pos1
Real estate agents caught on tape steering buyers away from homes with less commission
“I’m not even going to show it to them, to be honest with you,” the real estate agent said. “I can’t help you to sell something that’s wiping out my profession.”
In recording after recording, Houston real estate agents are heard saying they will not show certain homes to their clients — even though the houses meet all the buyers’ desires. Conversations recorded by California-based discount brokerage REX show that many actually steer clients away from homes that offer less lucrative commissions. See Houston real estate agents caught on tape steering buyers away from homes with less commission - Coque Nexus 5
When Stephens Research hosted am investors conference about REX, it described REX his way: REX was created in 2015 to bring residential real estate into line with today's expectations by using AI and big data to push past the outmoded practices of traditional real estate brokers to provide a superior outcome for both buyers and sellers at lower costs. In general, the REX fee is 70% less than traditional agent commissions, which usually totals 5-6%. REX is also unique in that it operates outside of the standard MLS system, which allows the Company to control/minimalize both the sell side and buy side fees (ex. Redfin charges 1.0%-1.5% on the sell side but the consumer typically still pays the standard 2.5%-3.0% for the buy side agent). See https://www.stephens.com/institutional-equities-and-research/research/events/a-conversation-with-rex-homes/
Here are excerpts from the USDOJ press release reflecting a settlement with the NAR this past November that relates to broker practices concerning buyer brokers:
The Department of Justice today filed a civil lawsuit against the National Association of REALTORS® (NAR) alleging that NAR established and enforced illegal restraints on the ways that REALTORS® compete.
The Antitrust Division simultaneously filed a proposed settlement that requires NAR to repeal and modify its rules to provide greater transparency to home buyers about the commissions of brokers representing home buyers (buyer brokers), cease misrepresenting that buyer broker services are free, eliminate rules that prohibit filtering multiple listing services (MLS) listings based on the level of buyer broker commissions, and change its rules and policy which limit access to lockboxes to only NAR-affiliated real estate brokers.
According to the complaint, NAR’s anticompetitive rules, policies, and practices include: (i) prohibiting MLSs that are affiliated with NAR from disclosing to prospective buyers the commission that the buyer broker will earn; (ii) allowing buyer brokers to misrepresent to buyers that a buyer broker’s services are free; (iii) enabling buyer brokers to filter MLS listings based on the level of buyer broker commissions offered; and (iv) limiting access to the lockboxes that provide licensed brokers with access to homes for sale to brokers who work for a NAR-affiliated MLS. These NAR rules, policies, practices have been widely adopted by NAR-affiliated MLSs resulting in decreased competition among real estate brokers. See https://www.justice.gov/opa/pr/justice-department-files-antitrust-case-and-simultaneous-settlement-requiring-national
“I’m not even going to show it to them, to be honest with you,” the real estate agent said. “I can’t help you to sell something that’s wiping out my profession.”
In recording after recording, Houston real estate agents are heard saying they will not show certain homes to their clients — even though the houses meet all the buyers’ desires. Conversations recorded by California-based discount brokerage REX show that many actually steer clients away from homes that offer less lucrative commissions. See Houston real estate agents caught on tape steering buyers away from homes with less commission - Coque Nexus 5
When Stephens Research hosted am investors conference about REX, it described REX his way: REX was created in 2015 to bring residential real estate into line with today's expectations by using AI and big data to push past the outmoded practices of traditional real estate brokers to provide a superior outcome for both buyers and sellers at lower costs. In general, the REX fee is 70% less than traditional agent commissions, which usually totals 5-6%. REX is also unique in that it operates outside of the standard MLS system, which allows the Company to control/minimalize both the sell side and buy side fees (ex. Redfin charges 1.0%-1.5% on the sell side but the consumer typically still pays the standard 2.5%-3.0% for the buy side agent). See https://www.stephens.com/institutional-equities-and-research/research/events/a-conversation-with-rex-homes/
Here are excerpts from the USDOJ press release reflecting a settlement with the NAR this past November that relates to broker practices concerning buyer brokers:
The Department of Justice today filed a civil lawsuit against the National Association of REALTORS® (NAR) alleging that NAR established and enforced illegal restraints on the ways that REALTORS® compete.
The Antitrust Division simultaneously filed a proposed settlement that requires NAR to repeal and modify its rules to provide greater transparency to home buyers about the commissions of brokers representing home buyers (buyer brokers), cease misrepresenting that buyer broker services are free, eliminate rules that prohibit filtering multiple listing services (MLS) listings based on the level of buyer broker commissions, and change its rules and policy which limit access to lockboxes to only NAR-affiliated real estate brokers.
According to the complaint, NAR’s anticompetitive rules, policies, and practices include: (i) prohibiting MLSs that are affiliated with NAR from disclosing to prospective buyers the commission that the buyer broker will earn; (ii) allowing buyer brokers to misrepresent to buyers that a buyer broker’s services are free; (iii) enabling buyer brokers to filter MLS listings based on the level of buyer broker commissions offered; and (iv) limiting access to the lockboxes that provide licensed brokers with access to homes for sale to brokers who work for a NAR-affiliated MLS. These NAR rules, policies, practices have been widely adopted by NAR-affiliated MLSs resulting in decreased competition among real estate brokers. See https://www.justice.gov/opa/pr/justice-department-files-antitrust-case-and-simultaneous-settlement-requiring-national
Confused COVID vaccine scheduling blamed on inadequate Maryland State computer software by Montgomery County Executive Elrich
On a recent radio program, hosted by Harold Fisher, Montgomery County Executive Marc Elrich indicated that a software problem was allowing Montgomery County teachers and staff to sign up for vaccine appointments, even though they are not yet eligible in Montgomery County. Elrich said the state's website was unable to set criteria that would differentiate counties and their current vaccine priority groups.
See https://www.wusa9.com/article/news/local/maryland-vaccine-appointments-for-teachers-some-turned-away/65-fdaf261f-b839-44b0-ab04-98c1721c940b
Similarly, Elrich explained in a recent public video report that because the state's website softeware was unable to set criteria that would differentiate current vaccine priority groups, people are sometimes able to use shared computer links to sign up for vaccinations out of the priority order set by the County. He asked that people not do that. He expressed hope that the State would develop software that can differentiate between priority groups.
See https://www.youtube.com/watch?v=_nlr04wV5n0&feature=youtu.be -- beginning at minute 7.00
--
NYT Opinion https://www.nytimes.com/section/opinion
Yes, It Matters That People Are Jumping the Vaccine Line
By Elisabeth Rosenthal
EXCERPT:
For weeks Americans have watched those who are well connected, wealthy or crafty “jump the line” to get a vaccine, while others are stuck, endlessly waiting on hold to get an appointment, watching sign-up websites crash or loitering outside clinics in the often-futile hope of getting a shot.
To eliminate this knock-out-your-neighbor race to score a vaccine, the administration needs to find ways to build trust in the system. It will take more than “more people, more places, more supply” to end the Darwinian competition and restore confidence and order.
That’s in part because, desperate to end their own pandemic nightmare, many of our most respected institutions and politicians have behaved badly.
Yes, It Matters That People Are Jumping the Vaccine Line
By Elisabeth Rosenthal
EXCERPT:
For weeks Americans have watched those who are well connected, wealthy or crafty “jump the line” to get a vaccine, while others are stuck, endlessly waiting on hold to get an appointment, watching sign-up websites crash or loitering outside clinics in the often-futile hope of getting a shot.
To eliminate this knock-out-your-neighbor race to score a vaccine, the administration needs to find ways to build trust in the system. It will take more than “more people, more places, more supply” to end the Darwinian competition and restore confidence and order.
That’s in part because, desperate to end their own pandemic nightmare, many of our most respected institutions and politicians have behaved badly.
Matt Stiller: big pharma chains= slow vaccine rollout
(From his newsletter BIG)
The government partnered with chains CVS and Walgreens to deploy the vaccine, and these chains have done a bad job. There’s a natural experiment showing how independently owned pharmacies have outperformed the chains. Roughly 35% of pharmacies are independent, so we can look at where there are a lot of chain pharmacies, and where there aren’t, and then compare the two. A lot of the places dominated by chains, like Virginia and California, are blue states with significant public health systems and expertise, while red states like South Dakota and Alaska tend to have more suspicion of government and have more independent pharmacies.
And what do we find? Illinois, where Walgreens has its headquarters, is 11th slowest in the country in terms of vaccine roll-out (based on the percentage of supply used). Rhode Island, where that wonderful consumer-based CVS is based, is one of the very worst, in the bottom five. Who is doing well? The leading states are rural, South Dakota, West Virginia, and New Mexico. Now, rolling out this kind of campaign is difficult, and the type of drug store ownership structure is only one factor. State leadership and public institutional make-up matters. But private infrastructure is key as well. And in fact, if you look at one state that has been leading since the beginning of the roll-out - West Virginia - one reason it has done a better job is precisely because it doesn’t really have very many chain pharmacies.
West Virginia is poor and rural, precisely what would make it harder to organize a vaccine strategy. And yet, the state, with its strategy based on independent pharmacies, managed to offer vaccines to every nursing home resident by the end of December, a month before nearly everyone else. As NPR’s Alex Leo reported, West Virginia stumbled into its independent pharmacy strategy by accident. The Trump administration organized the vaccine roll-out with a recommendation that states partner with large chains CVS and Walgreens on vaccinating people in nursing homes and long-term assisted living facilities. But in West Virginia, there just aren’t have enough CVS or Walgreens stores for the partnership to make sense. So instead, the state had to go directly to its local pharmacies, of which there are 250, mostly in rural areas.
It was a blessing in disguise, as these pharmacies turned out to be better than the unwieldy “bureaucracy of huge national chains,” as Leo put it. The small pharmacies already had data on many patients, and they could schedule appointments, match doses, and handle paperwork quickly, all of which confounded the giants.
(From his newsletter BIG)
The government partnered with chains CVS and Walgreens to deploy the vaccine, and these chains have done a bad job. There’s a natural experiment showing how independently owned pharmacies have outperformed the chains. Roughly 35% of pharmacies are independent, so we can look at where there are a lot of chain pharmacies, and where there aren’t, and then compare the two. A lot of the places dominated by chains, like Virginia and California, are blue states with significant public health systems and expertise, while red states like South Dakota and Alaska tend to have more suspicion of government and have more independent pharmacies.
And what do we find? Illinois, where Walgreens has its headquarters, is 11th slowest in the country in terms of vaccine roll-out (based on the percentage of supply used). Rhode Island, where that wonderful consumer-based CVS is based, is one of the very worst, in the bottom five. Who is doing well? The leading states are rural, South Dakota, West Virginia, and New Mexico. Now, rolling out this kind of campaign is difficult, and the type of drug store ownership structure is only one factor. State leadership and public institutional make-up matters. But private infrastructure is key as well. And in fact, if you look at one state that has been leading since the beginning of the roll-out - West Virginia - one reason it has done a better job is precisely because it doesn’t really have very many chain pharmacies.
West Virginia is poor and rural, precisely what would make it harder to organize a vaccine strategy. And yet, the state, with its strategy based on independent pharmacies, managed to offer vaccines to every nursing home resident by the end of December, a month before nearly everyone else. As NPR’s Alex Leo reported, West Virginia stumbled into its independent pharmacy strategy by accident. The Trump administration organized the vaccine roll-out with a recommendation that states partner with large chains CVS and Walgreens on vaccinating people in nursing homes and long-term assisted living facilities. But in West Virginia, there just aren’t have enough CVS or Walgreens stores for the partnership to make sense. So instead, the state had to go directly to its local pharmacies, of which there are 250, mostly in rural areas.
It was a blessing in disguise, as these pharmacies turned out to be better than the unwieldy “bureaucracy of huge national chains,” as Leo put it. The small pharmacies already had data on many patients, and they could schedule appointments, match doses, and handle paperwork quickly, all of which confounded the giants.
NYT Reports on misbahavior and ripoffs by "consumer complaint" sites
EXCERPT (slightly edited)
Ripoff Report is one of hundreds of “complaint sites” — others include She’s a Homewrecker, Cheaterbot and Deadbeats Exposed — that let people anonymously expose an unreliable handyman, a cheating ex, a sexual predator. Ripoff Report offers “arbitration services,” which cost up to $2,000, to get rid of “substantially false” information.
But there is no fact-checking. The sites often charge money to take down posts, even defamatory ones. And there is limited accountability. Ripoff Report, like the others, notes on its site that, thanks to Section 230 of the federal Communications Decency Act, it isn’t responsible for what its users post.
If someone posts false information about you on the Ripoff Report, the CDA prohibits you from holding us liable for the statements which others have written. You can always sue the author if you want, but you can’t sue Ripoff Report just because we provide a forum for speech.
With that impunity, Ripoff Report and its ilk are willing to host pure, uncensored vengeance.
https://www.nytimes.com/2021/01/30/technology/change-my-google-results.html?action=click&module=Top%20Stories&pgtype=Homepage
EXCERPT (slightly edited)
Ripoff Report is one of hundreds of “complaint sites” — others include She’s a Homewrecker, Cheaterbot and Deadbeats Exposed — that let people anonymously expose an unreliable handyman, a cheating ex, a sexual predator. Ripoff Report offers “arbitration services,” which cost up to $2,000, to get rid of “substantially false” information.
But there is no fact-checking. The sites often charge money to take down posts, even defamatory ones. And there is limited accountability. Ripoff Report, like the others, notes on its site that, thanks to Section 230 of the federal Communications Decency Act, it isn’t responsible for what its users post.
If someone posts false information about you on the Ripoff Report, the CDA prohibits you from holding us liable for the statements which others have written. You can always sue the author if you want, but you can’t sue Ripoff Report just because we provide a forum for speech.
With that impunity, Ripoff Report and its ilk are willing to host pure, uncensored vengeance.
https://www.nytimes.com/2021/01/30/technology/change-my-google-results.html?action=click&module=Top%20Stories&pgtype=Homepage
The next USDOJ Antitrust chief should be an experienced litigator for plaintiffs, preferably for government plaintiffs
By Don Allen Resnikoff
The Hill for 1/19/21 reports that that President-elect Joe Biden’s top candidate to run the Department of Justice’s antitrust division is Renata Hesse. She is known for representing Google in some antitrust cases with co-counsel Ted Cruz (R-Texas).
Renata Hesse’s resume on the Sullivan and Cromwell website says that she is co-head of the Firm’s Antitrust Group. Her practice focuses on antitrust counseling, cartels and merger clearance.
The resume also refers to her experience with the USDOJ Antitrust Division. That experience includes including leading the Antitrust Division at the Department of Justice twice as Acting Assistant Attorney General and serving that division for more than 15 years. During her time at the Division, Ms. Hesse worked on a number of high profile transactions, as well as other key initiatives related to the licensing and enforcement of standards-essential patents. She also had oversight of the criminal program as the Principal Deputy Assistant Attorney General, where she was a decision-maker on a range of significant criminal matters. Ms. Hesse was previously Chief of the Networks and Technology Section and a Trial Attorney in two Division sections.
Renata Hesse is plainly a well-qualified and excellent candidate, but I hope that there is a wide competition for the USDOJ antitrust chief position that includes consideration of a candidate’s court room experience organizing and litigating complex cases for plaintiffs, particularly government plaintiffs.
My experience as a USDOJ trial attorney is that relatively few USDOJ antitrust cases actually go to trial – most are settled without a trial. As a consequence of apparent lack of confidence in the litigation abilties of regular government staff, USDOJ has on occasion bypassed staff and hired outside counsel to litigate its antitrust cases. A well known example is USDOJ engagement of David Boies as lead litigator for its antitrust lawsuit against Microsoft in the late 1990s.
Some insight into the USDOJ’s current in-house litigation staff resources was provided by past USDOJ antitrust chief Makan Delrahim’s line-up of USDOJ lawyers for its recently announced action against Google.
Delrahim’s choice as lead lawyer was Kenneth Dintzer, a longtime trial attorney now in the DOJ’s Civil Division – not the Antitrust Division. Dintzer has handled high-profile cases for the department over more than 20 years. Dintzer led the government’s antitrust prosecution of General Electric Co. for allegedly anticompetitive medical imaging supply arrangements with hospitals in the mid-1990s.
“The Division has tremendous confidence in the hardworking litigation team led by Ken Dintzer, one of the Department’s most experienced and talented trial lawyers,” said a USDOJ representative.
There are other possible candidates to lead the USDOJ’s Antitrust Division with substantial court room experience and demonstrated ability in organizing and litigating complex cases for government plaintiffs.
One is Thomas Greene. His resume on the Hastings College of Law website reflects that he is a trial attorney with the Antitrust Division of the U.S. Department of Justice where he investigates and prosecutes criminal and civil antitrust actions. He was previously special trial counsel for the Federal Trade Commission’s Bureau of Competition where he led successful challenges against major health care mergers in Idaho and Illinois.
Also, he served in the California Attorney General’s Office where he was chief of antitrust. Among other cases, he successfully argued an appeal to the United States Supreme Court vindicating indirect purchaser remedies under state antitrust law, California v. ARC America Corp., 490 U.S. 93 (1989), and served as national class counsel in California v. Hartford Fire Insurance Co. He also served as the Chair of the Multistate Antitrust Task Force of the National Association of Attorneys General.
In addition to antitrust litigation, he led special task forces litigating cases against major tobacco manufacturers and energy companies, and subsequently served as Chief Assistant Attorney General for the Public Rights Division, the 300-attorney, affirmative litigation arm of the California Attorney General’s Office.
Another attorney with a strong background representing government plaintiffs in litigation is Jay Himes. His resume on the Labaton Sucharow website reflects that prior to joining Labaton Sucharow, Jay served for nearly eight years as the Antitrust Bureau Chief in the New York Attorney General's office. In that role, he was the States’ principal representative in the marathon 2001 negotiations that led to settlement of the governments’ landmark monopolization case against Microsoft. Thereafter, Jay partnered with U.S. DOJ officials to lead the Microsoft judgment monitoring and enforcement effort, an activity that continued throughout his time at the Attorney General's office.
During his tenure as New York's chief antitrust official, Jay also led significant, high-profile antitrust investigations and enforcement actions. These cases included In re Buspirone Antitrust Litigation ($100 million settlement), In re Cardizem CD Antitrust Litigation ($80 million settlement), and In re Compact Disc Antitrust Litigation ($67 million settlement). Under Jay's leadership, the New York Bureau secured what were at the time the two largest antitrust civil penalties recoveries ever achieved under the State's antitrust statute.
By Don Allen Resnikoff
The Hill for 1/19/21 reports that that President-elect Joe Biden’s top candidate to run the Department of Justice’s antitrust division is Renata Hesse. She is known for representing Google in some antitrust cases with co-counsel Ted Cruz (R-Texas).
Renata Hesse’s resume on the Sullivan and Cromwell website says that she is co-head of the Firm’s Antitrust Group. Her practice focuses on antitrust counseling, cartels and merger clearance.
The resume also refers to her experience with the USDOJ Antitrust Division. That experience includes including leading the Antitrust Division at the Department of Justice twice as Acting Assistant Attorney General and serving that division for more than 15 years. During her time at the Division, Ms. Hesse worked on a number of high profile transactions, as well as other key initiatives related to the licensing and enforcement of standards-essential patents. She also had oversight of the criminal program as the Principal Deputy Assistant Attorney General, where she was a decision-maker on a range of significant criminal matters. Ms. Hesse was previously Chief of the Networks and Technology Section and a Trial Attorney in two Division sections.
Renata Hesse is plainly a well-qualified and excellent candidate, but I hope that there is a wide competition for the USDOJ antitrust chief position that includes consideration of a candidate’s court room experience organizing and litigating complex cases for plaintiffs, particularly government plaintiffs.
My experience as a USDOJ trial attorney is that relatively few USDOJ antitrust cases actually go to trial – most are settled without a trial. As a consequence of apparent lack of confidence in the litigation abilties of regular government staff, USDOJ has on occasion bypassed staff and hired outside counsel to litigate its antitrust cases. A well known example is USDOJ engagement of David Boies as lead litigator for its antitrust lawsuit against Microsoft in the late 1990s.
Some insight into the USDOJ’s current in-house litigation staff resources was provided by past USDOJ antitrust chief Makan Delrahim’s line-up of USDOJ lawyers for its recently announced action against Google.
Delrahim’s choice as lead lawyer was Kenneth Dintzer, a longtime trial attorney now in the DOJ’s Civil Division – not the Antitrust Division. Dintzer has handled high-profile cases for the department over more than 20 years. Dintzer led the government’s antitrust prosecution of General Electric Co. for allegedly anticompetitive medical imaging supply arrangements with hospitals in the mid-1990s.
“The Division has tremendous confidence in the hardworking litigation team led by Ken Dintzer, one of the Department’s most experienced and talented trial lawyers,” said a USDOJ representative.
There are other possible candidates to lead the USDOJ’s Antitrust Division with substantial court room experience and demonstrated ability in organizing and litigating complex cases for government plaintiffs.
One is Thomas Greene. His resume on the Hastings College of Law website reflects that he is a trial attorney with the Antitrust Division of the U.S. Department of Justice where he investigates and prosecutes criminal and civil antitrust actions. He was previously special trial counsel for the Federal Trade Commission’s Bureau of Competition where he led successful challenges against major health care mergers in Idaho and Illinois.
Also, he served in the California Attorney General’s Office where he was chief of antitrust. Among other cases, he successfully argued an appeal to the United States Supreme Court vindicating indirect purchaser remedies under state antitrust law, California v. ARC America Corp., 490 U.S. 93 (1989), and served as national class counsel in California v. Hartford Fire Insurance Co. He also served as the Chair of the Multistate Antitrust Task Force of the National Association of Attorneys General.
In addition to antitrust litigation, he led special task forces litigating cases against major tobacco manufacturers and energy companies, and subsequently served as Chief Assistant Attorney General for the Public Rights Division, the 300-attorney, affirmative litigation arm of the California Attorney General’s Office.
Another attorney with a strong background representing government plaintiffs in litigation is Jay Himes. His resume on the Labaton Sucharow website reflects that prior to joining Labaton Sucharow, Jay served for nearly eight years as the Antitrust Bureau Chief in the New York Attorney General's office. In that role, he was the States’ principal representative in the marathon 2001 negotiations that led to settlement of the governments’ landmark monopolization case against Microsoft. Thereafter, Jay partnered with U.S. DOJ officials to lead the Microsoft judgment monitoring and enforcement effort, an activity that continued throughout his time at the Attorney General's office.
During his tenure as New York's chief antitrust official, Jay also led significant, high-profile antitrust investigations and enforcement actions. These cases included In re Buspirone Antitrust Litigation ($100 million settlement), In re Cardizem CD Antitrust Litigation ($80 million settlement), and In re Compact Disc Antitrust Litigation ($67 million settlement). Under Jay's leadership, the New York Bureau secured what were at the time the two largest antitrust civil penalties recoveries ever achieved under the State's antitrust statute.
USDOJ press release:
Three Individuals Affiliated With the Oath Keepers Indicted in Federal Court for Conspiracy to Obstruct Congress on Jan. 6, 2021
Three individuals associated with the Oath Keepers, a paramilitary organization focused on recruitment of current and former military, law enforcement, and first responder personnel, were indicted today in federal court in the District of Columbia for conspiring to obstruct Congress, among other charges.
Jessica Marie Watkins, 38, and Donovan Ray Crowl, 50, both of Champaign County, Ohio; and Thomas Caldwell, 65, of Clarke County, Virginia, were indicted today in federal court in the District of Columbia on charges of conspiracy, obstructing an official proceeding, destruction of government property, and unlawful entry on restricted building or grounds, in violation of 18 U.S.C. §§ 371, 1512, 1361, and 1752. Watkins and Crowl were arrested on Jan. 18; Caldwell was arrested on Jan. 19. All three individuals originally were charged by criminal complaint. The maximum penalty for Obstructing an Official Proceeding is a sentence of up to 20 years in prison.
According to the charging documents, Watkins, Crowl, and Caldwell communicated with each another in advance of the Jan. 6, 2021, incursion on the U.S. Capitol and coordinated their attack. Watkins, Crowl, and Caldwell are all affiliated with the Oath Keepers, while Watkins and Crowl are also members of the Ohio State Regular Militia. Watkins claimed to be a commanding officer within the Ohio State Regular Militia in a social media post.
According to the indictment, the three defendants initiated their communications and coordination in November 2020 and continued through on or about Jan. 19, 2021, when Caldwell was arrested. The exchanges vary in topics from a call to action to logistics, including lodging options, coordinating calls to discuss the plan, and joining forces with other Oath Keeper chapters. On Dec. 31, 2020, Caldwell posted, “THIS IS OUR CALL TO ACTION, FREINDS! SEE YOU ON THE 6TH IN WASHINGTON, D.C. ALONG WITH 2 MILLION OTHER LIKE-MINDED PATRIOTS.” In a subsequent post on Jan. 2, 2021, Caldwell stated, “It begins for real Jan 5 and 6 on Washington D.C. when we mobilize in the streets. Let them try to certify some crud on capitol hill with a million or more patriots in the streets. This kettle is set to boil…”
According to the criminal complaint filed on Jan. 19, on Jan. 6, the three documented their participation and whereabouts in or around the U.S. Capitol on social media. Caldwell posted messages on Facebook such as, “We are surging forward. Doors breached[.]” and at 3:05 p.m. posted just, “Inside.” Watkins posted photos of herself, and with Crowl, on her Parler account and captioned a photo by stating, “Me before forcing entry into the Capitol Building. #stopthesteal2 #stormthecapitol #oathkeepers #ohiomilitia.” Subsequently, she posted a video of herself inside the Capitol captioned, “Yeah. We stormed the Capitol today. Teargassed, the whole, 9. Pushed our way into the Rotunda. Made it into the Senate even. The news is lying (even Fox) about the Historical Events we created today.”
In addition to the communication via Facebook and Parler, the FBI obtained an audio recording of Zello communications between Watkins and other suspected Oath Keepers during the Capitol incursion on a channel called “Stop the Steal J6.” As alleged in the indictment, in one transmission Watkins stated, “We have a good group. We have about 30-40 of us. We are sticking together and sticking to the plan.” An unknown male responds, “We’ll see you soon, Jess. Airborne.” Following the U.S. Capitol incursion, Watkins and Crowl each interviewed with the media. During the interviews, both confirmed membership of the Oath Keepers.
Excerpt from https://www.justice.gov/opa/pr/three-individuals-affiliated-oath-keepers-indicted-federal-court-conspiracy-obstruct
Three Individuals Affiliated With the Oath Keepers Indicted in Federal Court for Conspiracy to Obstruct Congress on Jan. 6, 2021
Three individuals associated with the Oath Keepers, a paramilitary organization focused on recruitment of current and former military, law enforcement, and first responder personnel, were indicted today in federal court in the District of Columbia for conspiring to obstruct Congress, among other charges.
Jessica Marie Watkins, 38, and Donovan Ray Crowl, 50, both of Champaign County, Ohio; and Thomas Caldwell, 65, of Clarke County, Virginia, were indicted today in federal court in the District of Columbia on charges of conspiracy, obstructing an official proceeding, destruction of government property, and unlawful entry on restricted building or grounds, in violation of 18 U.S.C. §§ 371, 1512, 1361, and 1752. Watkins and Crowl were arrested on Jan. 18; Caldwell was arrested on Jan. 19. All three individuals originally were charged by criminal complaint. The maximum penalty for Obstructing an Official Proceeding is a sentence of up to 20 years in prison.
According to the charging documents, Watkins, Crowl, and Caldwell communicated with each another in advance of the Jan. 6, 2021, incursion on the U.S. Capitol and coordinated their attack. Watkins, Crowl, and Caldwell are all affiliated with the Oath Keepers, while Watkins and Crowl are also members of the Ohio State Regular Militia. Watkins claimed to be a commanding officer within the Ohio State Regular Militia in a social media post.
According to the indictment, the three defendants initiated their communications and coordination in November 2020 and continued through on or about Jan. 19, 2021, when Caldwell was arrested. The exchanges vary in topics from a call to action to logistics, including lodging options, coordinating calls to discuss the plan, and joining forces with other Oath Keeper chapters. On Dec. 31, 2020, Caldwell posted, “THIS IS OUR CALL TO ACTION, FREINDS! SEE YOU ON THE 6TH IN WASHINGTON, D.C. ALONG WITH 2 MILLION OTHER LIKE-MINDED PATRIOTS.” In a subsequent post on Jan. 2, 2021, Caldwell stated, “It begins for real Jan 5 and 6 on Washington D.C. when we mobilize in the streets. Let them try to certify some crud on capitol hill with a million or more patriots in the streets. This kettle is set to boil…”
According to the criminal complaint filed on Jan. 19, on Jan. 6, the three documented their participation and whereabouts in or around the U.S. Capitol on social media. Caldwell posted messages on Facebook such as, “We are surging forward. Doors breached[.]” and at 3:05 p.m. posted just, “Inside.” Watkins posted photos of herself, and with Crowl, on her Parler account and captioned a photo by stating, “Me before forcing entry into the Capitol Building. #stopthesteal2 #stormthecapitol #oathkeepers #ohiomilitia.” Subsequently, she posted a video of herself inside the Capitol captioned, “Yeah. We stormed the Capitol today. Teargassed, the whole, 9. Pushed our way into the Rotunda. Made it into the Senate even. The news is lying (even Fox) about the Historical Events we created today.”
In addition to the communication via Facebook and Parler, the FBI obtained an audio recording of Zello communications between Watkins and other suspected Oath Keepers during the Capitol incursion on a channel called “Stop the Steal J6.” As alleged in the indictment, in one transmission Watkins stated, “We have a good group. We have about 30-40 of us. We are sticking together and sticking to the plan.” An unknown male responds, “We’ll see you soon, Jess. Airborne.” Following the U.S. Capitol incursion, Watkins and Crowl each interviewed with the media. During the interviews, both confirmed membership of the Oath Keepers.
Excerpt from https://www.justice.gov/opa/pr/three-individuals-affiliated-oath-keepers-indicted-federal-court-conspiracy-obstruct
Biden Appointee fires Trump Allies at Radio Free Europe And Other Overseas Networks
By Don Allen Resnikoff
National Public Radio (NPR) and other media report that the new acting head of the U.S. Agency for Global Media, Kelu Chao, has fired the presidents and boards of Radio Free Europe/Radio Liberty, Radio Free Asia and the Middle East Broadcasting Networks. https://www.npr.org/2021/01/22/959848852/usagm-chief-fires-trump-allies-over-radio-free-europe-and-other-networks
In June of 2020 the Trump Administration installed political ally Michael Pack as head of the Agency for Global Media, which has a supervisory role over the Voice of America and other publicly funded broadcasters that serve overseas audiences. Prior to his VOA appointment, Pack ran the conservative Claremont Institute and was a colleague of right-wing political strategist Steve Bannon.
Shortly after Pack took on his Global Media position, the Director and Deputy Director of Voice of America resigned, and Pack fired and replaced the heads of three other networks managed by Global Media — Radio Free Asia, Radio Free Europe/Radio Liberty and the Middle East Broadcasting Networks — as well as the Open Technology Fund. Pack dissolved the networks’ bipartisan advisory boards and replaced them with panels composed of people widely considered to be Trump loyalists.
In the final days of the Trump administration more than two dozen VOA newsroom employees signed a petition demanding the immediate resignation of their director and top deputy. Staff complained that the director and deputy had abdicated their responsibility to remain independent of government influence.
The Trump administrations misuse of the Voice of America and other publicly funded overseas broadcasters is a reminder that U.S. publicly funded broadcasting should be protected from ever being turned into a narrow partisan or ideological tool. This caution applies to the Voice of America (VOA) and other broadcasters to overseas audiences, but also to domestic broadcasters of the Corporation for Public Broadcasting (CPB) and the Public Broadcasting Service (PBS).
Concern about possible future partisan misuse of domestic public broadcasting is suggested by past partisan misuse of the Voice of America and other overseas broadcasters during the Trump administration.
Anne Applebaum’s June, 2020 article in The Atlantic explains that the Voice of America “was never meant to be the tool of one political party, but rather to present America from a broad, nonpartisan perspective.” The Guardian newspaper warns against allowing Government “to turn the US Agency for Global Media (USAGM) into a loyal state broadcaster of the kind normally found in authoritarian societies.”
By Don Allen Resnikoff
National Public Radio (NPR) and other media report that the new acting head of the U.S. Agency for Global Media, Kelu Chao, has fired the presidents and boards of Radio Free Europe/Radio Liberty, Radio Free Asia and the Middle East Broadcasting Networks. https://www.npr.org/2021/01/22/959848852/usagm-chief-fires-trump-allies-over-radio-free-europe-and-other-networks
In June of 2020 the Trump Administration installed political ally Michael Pack as head of the Agency for Global Media, which has a supervisory role over the Voice of America and other publicly funded broadcasters that serve overseas audiences. Prior to his VOA appointment, Pack ran the conservative Claremont Institute and was a colleague of right-wing political strategist Steve Bannon.
Shortly after Pack took on his Global Media position, the Director and Deputy Director of Voice of America resigned, and Pack fired and replaced the heads of three other networks managed by Global Media — Radio Free Asia, Radio Free Europe/Radio Liberty and the Middle East Broadcasting Networks — as well as the Open Technology Fund. Pack dissolved the networks’ bipartisan advisory boards and replaced them with panels composed of people widely considered to be Trump loyalists.
In the final days of the Trump administration more than two dozen VOA newsroom employees signed a petition demanding the immediate resignation of their director and top deputy. Staff complained that the director and deputy had abdicated their responsibility to remain independent of government influence.
The Trump administrations misuse of the Voice of America and other publicly funded overseas broadcasters is a reminder that U.S. publicly funded broadcasting should be protected from ever being turned into a narrow partisan or ideological tool. This caution applies to the Voice of America (VOA) and other broadcasters to overseas audiences, but also to domestic broadcasters of the Corporation for Public Broadcasting (CPB) and the Public Broadcasting Service (PBS).
Concern about possible future partisan misuse of domestic public broadcasting is suggested by past partisan misuse of the Voice of America and other overseas broadcasters during the Trump administration.
Anne Applebaum’s June, 2020 article in The Atlantic explains that the Voice of America “was never meant to be the tool of one political party, but rather to present America from a broad, nonpartisan perspective.” The Guardian newspaper warns against allowing Government “to turn the US Agency for Global Media (USAGM) into a loyal state broadcaster of the kind normally found in authoritarian societies.”
Grounds for prosecuting Trump-inspired rioters: Inciting to riot, Anti-Riot Act of 1968, 18 U.S.C. § 2101 and 2102
By Don Allen Resnikoff
The grounds for prosecuting Trump-inspired rioters who invaded the U.S. Capital building certainly include such straightforward charges as felony destruction of government property, weapons-related offenses, and assault. Among more complex and interesting possible charges is inciting to riot, based on the Anti-Riot Act of 1968, 18 U.S.C. § 2101 and 2102. Media reports of FBI and other government investigations suggest significant pre-planning of the invasion of the Capital.
The 1968 Act was successfully used as a basis for a federal prosecution just a few months ago, in the case of United States v. Miselis.
The statute has a checkered history because of complaints that it violates Constitutional free speech rights.
The Anti-Riot Act was passed as a section of the Civil Rights Act of 1968. The Anti-Riot Act appears to have been a response to the urban riots of 1964–1967, which some legislators saw as being incited by agitators from outside of affected cities. The passage of time has made the problem of remote inciting to riot more serious, because of the modern use of the internet to encourage and facilitate violent actions. There has been a lot of media reporting about use of the internet to encourage and facilitate the recent violence at the Capital building.
The 1968 law provides, in part: “a) (1) Whoever travels in interstate or foreign commerce or uses any facility of interstate or foreign commerce or uses any facility of interstate or foreign commerce, including, but not limited to, the mail, telegraph, telephone, radio, or television, with intent – (A) to incite a riot; or (B) to organize, promote, encourage, participate in, or carry on a riot; or (C) to commit any act of violence in furtherance of a riot; or (D) to aid or abet any person in inciting or participating in or carrying on a riot or committing any act of violence in furtherance of a riot. . . . ”
The statute was famously used to prosecute leaders of demonstrations at the 1968 Democratic National Convention in Chicago. The defendants in that case are often called “the Chicago 7.” Their story is told in a recent movie and a recently re-issued book of trial transcript excerpts.
When the 7th Circuit Court of Appeals vacated the convictions of the Chicago 7 defendants for inciting a riot in 1972, one judge wrote that the charging statute, the 1968 Anti-Riot Act, violates the Constitution because it is “intended to preclude, under pain of prosecution, advocacy of violence even though only an idea or expression of belief.”
Since the time of the 1969-70 Chicago 7 trial, prosecutions relying on the Anti-Riot Act of 1968 have been infrequent, but recently there have been several Anti-Riot prosecutions, including against white neo-Nazi groups. The government’s position in the recent cases is that the statute is Constitutionally valid.
Judicial reaction has been mixed. In the 2019 California federal case of U.S. v. Robert Rundo, et al., No. 18-00759-CJC (Central District Ca., 2019) [See https://www.courthousenews.com/wp-content/uploads/2019/06/USvRundoetal-DISMISSAL.pdf], the Court granted Defendants’ motion to dismiss the Indictment on the grounds that the Anti-Riot Act is unconstitutionally overbroad in violation of the First Amendment.
But in United States v. Miselis, No. 19-4550 (4th Cir. Aug. 24, 2020) the appellate Court construed the Anti-Riot Act so as to give it some actionable scope within the Constitution, allowing it to be used as the basis for a criminal conviction. The Court explained while that the Anti-Riot Act “sweeps up a substantial amount of speech that remains protected advocacy,” the statute also “comports with the First Amendment,” so that “the appropriate remedy is to invalidate the statute only to the extent that it reaches too far, while leaving the remainder intact.” The Court pointed out that “because the factual bases for the defendants' guilty pleas conclusively establish that their own substantive offense conduct—which involves no First Amendment activity—falls under the Anti-Riot Act's surviving applications, their convictions stand.” So, in Miselis, the criminal conviction was allowed to stand.
It will be interesting to see whether and how the Government will use the Anti-Riot Act of 1968 in charging criminal incitement against persons having a role in inciting the Trump-inspired rioting involving invasion of the U.S. Capital building.
Don Allen Resnikoff is fully responsible for the content of this posting
By Don Allen Resnikoff
The grounds for prosecuting Trump-inspired rioters who invaded the U.S. Capital building certainly include such straightforward charges as felony destruction of government property, weapons-related offenses, and assault. Among more complex and interesting possible charges is inciting to riot, based on the Anti-Riot Act of 1968, 18 U.S.C. § 2101 and 2102. Media reports of FBI and other government investigations suggest significant pre-planning of the invasion of the Capital.
The 1968 Act was successfully used as a basis for a federal prosecution just a few months ago, in the case of United States v. Miselis.
The statute has a checkered history because of complaints that it violates Constitutional free speech rights.
The Anti-Riot Act was passed as a section of the Civil Rights Act of 1968. The Anti-Riot Act appears to have been a response to the urban riots of 1964–1967, which some legislators saw as being incited by agitators from outside of affected cities. The passage of time has made the problem of remote inciting to riot more serious, because of the modern use of the internet to encourage and facilitate violent actions. There has been a lot of media reporting about use of the internet to encourage and facilitate the recent violence at the Capital building.
The 1968 law provides, in part: “a) (1) Whoever travels in interstate or foreign commerce or uses any facility of interstate or foreign commerce or uses any facility of interstate or foreign commerce, including, but not limited to, the mail, telegraph, telephone, radio, or television, with intent – (A) to incite a riot; or (B) to organize, promote, encourage, participate in, or carry on a riot; or (C) to commit any act of violence in furtherance of a riot; or (D) to aid or abet any person in inciting or participating in or carrying on a riot or committing any act of violence in furtherance of a riot. . . . ”
The statute was famously used to prosecute leaders of demonstrations at the 1968 Democratic National Convention in Chicago. The defendants in that case are often called “the Chicago 7.” Their story is told in a recent movie and a recently re-issued book of trial transcript excerpts.
When the 7th Circuit Court of Appeals vacated the convictions of the Chicago 7 defendants for inciting a riot in 1972, one judge wrote that the charging statute, the 1968 Anti-Riot Act, violates the Constitution because it is “intended to preclude, under pain of prosecution, advocacy of violence even though only an idea or expression of belief.”
Since the time of the 1969-70 Chicago 7 trial, prosecutions relying on the Anti-Riot Act of 1968 have been infrequent, but recently there have been several Anti-Riot prosecutions, including against white neo-Nazi groups. The government’s position in the recent cases is that the statute is Constitutionally valid.
Judicial reaction has been mixed. In the 2019 California federal case of U.S. v. Robert Rundo, et al., No. 18-00759-CJC (Central District Ca., 2019) [See https://www.courthousenews.com/wp-content/uploads/2019/06/USvRundoetal-DISMISSAL.pdf], the Court granted Defendants’ motion to dismiss the Indictment on the grounds that the Anti-Riot Act is unconstitutionally overbroad in violation of the First Amendment.
But in United States v. Miselis, No. 19-4550 (4th Cir. Aug. 24, 2020) the appellate Court construed the Anti-Riot Act so as to give it some actionable scope within the Constitution, allowing it to be used as the basis for a criminal conviction. The Court explained while that the Anti-Riot Act “sweeps up a substantial amount of speech that remains protected advocacy,” the statute also “comports with the First Amendment,” so that “the appropriate remedy is to invalidate the statute only to the extent that it reaches too far, while leaving the remainder intact.” The Court pointed out that “because the factual bases for the defendants' guilty pleas conclusively establish that their own substantive offense conduct—which involves no First Amendment activity—falls under the Anti-Riot Act's surviving applications, their convictions stand.” So, in Miselis, the criminal conviction was allowed to stand.
It will be interesting to see whether and how the Government will use the Anti-Riot Act of 1968 in charging criminal incitement against persons having a role in inciting the Trump-inspired rioting involving invasion of the U.S. Capital building.
Don Allen Resnikoff is fully responsible for the content of this posting
Informal Auction: Possibly valuable wine in return for contribution to the DC Bar Pro Bono Center
From Don Resnikoff
My wife and I received a gift bottle of wine that could be worth
many hundreds of dollars if it were in perfect condition. The
bottle is Centenary Solera 1845 Bual Madeira shipped by Cossart,
Gordon & Co. Ltd. Given the “provenance,” including that it has
been stored in someone’s residence, and the fill level, experts
have questioned the value.
We would like to use the wine as an
incentive to encourage a substantial charitable donation to the DC
Bar Pro Bono Center. I will be happy to turn over the wine to the
person who promises the highest donation to the Pro Bono
Center, if it is high enough to dissuade me from trying the bottle myself,
and who is willing to take the risk that the wine might or might
not be great. If you are inclined to take a chance on the wine as an
incentive for making a substantial donation to the DC Bar’s Pro
Bono Center, let me know at donresnikoff@donresnikofflaw.com. If your
offer is the best, and high enough to dissuade me from trying the bottle
myself, I’ll let you know. Once I have proof of the donation to the DC Bar
Pro Bono Center I’ll turn over the bottle. (I suggest using Paypal.
See https://www.paypal.com/paypalme/dcbarprobonocenter)
If you are the winning bidder, I hope you’ll then let me know how the wine
tastes!
Here is a picture of our bottle (the bright light behind the bottle is to
make clear the fill level):
From Don Resnikoff
My wife and I received a gift bottle of wine that could be worth
many hundreds of dollars if it were in perfect condition. The
bottle is Centenary Solera 1845 Bual Madeira shipped by Cossart,
Gordon & Co. Ltd. Given the “provenance,” including that it has
been stored in someone’s residence, and the fill level, experts
have questioned the value.
We would like to use the wine as an
incentive to encourage a substantial charitable donation to the DC
Bar Pro Bono Center. I will be happy to turn over the wine to the
person who promises the highest donation to the Pro Bono
Center, if it is high enough to dissuade me from trying the bottle myself,
and who is willing to take the risk that the wine might or might
not be great. If you are inclined to take a chance on the wine as an
incentive for making a substantial donation to the DC Bar’s Pro
Bono Center, let me know at donresnikoff@donresnikofflaw.com. If your
offer is the best, and high enough to dissuade me from trying the bottle
myself, I’ll let you know. Once I have proof of the donation to the DC Bar
Pro Bono Center I’ll turn over the bottle. (I suggest using Paypal.
See https://www.paypal.com/paypalme/dcbarprobonocenter)
If you are the winning bidder, I hope you’ll then let me know how the wine
tastes!
Here is a picture of our bottle (the bright light behind the bottle is to
make clear the fill level):
Here’s more of the story on the wine:
An elderly relative gave us a "thank you" gift of a bottle of Madeira wine that her father gave her in about 1980. The dad said it is “special”. The label says: 1845 Madeira Bual Solera Cossart Centenary. The bottle is Centenary Solera 1845 Bual Madeira shipped by Cossart, Gordon & Co. Ltd.
History: A local expert explained to us that Madeira suffered nearly complete devastation of vineyards from Oidium and Phylloxera during the 1850s and 1870s. With shortages of wines but old stock still around, the Soleras were started during the early to mid 1870s. Basically young wine from the newly planted vines was added to old wine to extend the stock they could actually sell and ship.
The vintage 1845 is the “madre” or mother vintage that was first laid down. In this case the Solera for 1845 Bual Solera was founded in 1875. Each year the casks were topped off or when 10% was ullage. They would add young wine. The average age of the Solera was 50-80 years by the 1950s.
The Soleras were stopped in 1953 when Cossart joined the Madeira Wine Association. The pipes used to store the wine were shipped off and the wine was bottled. This bottling was known as the Centenary wine since the firm was founded in 1745. At least several hundred bottles were sold making it one of the most prolific of the 19th century Soleras.
The expert told us that Madeira is quite robust. If it’s been in bottle for a long time you typically decant it ahead of time at the rate of one day for every decade in bottle.
As for value of the bottle, if the “provenance” and condition were perfect the bottle might be worth $750$-1250. Factors of the provenance make the value of our bottle uncertain, including that it has been stored in someone’s residence for 40 years (we believe horizontally and in a cool location), and that the fill level is below the bottle neck. Your guess is as good as ours on value.
Don Allen Resnikoff
An elderly relative gave us a "thank you" gift of a bottle of Madeira wine that her father gave her in about 1980. The dad said it is “special”. The label says: 1845 Madeira Bual Solera Cossart Centenary. The bottle is Centenary Solera 1845 Bual Madeira shipped by Cossart, Gordon & Co. Ltd.
History: A local expert explained to us that Madeira suffered nearly complete devastation of vineyards from Oidium and Phylloxera during the 1850s and 1870s. With shortages of wines but old stock still around, the Soleras were started during the early to mid 1870s. Basically young wine from the newly planted vines was added to old wine to extend the stock they could actually sell and ship.
The vintage 1845 is the “madre” or mother vintage that was first laid down. In this case the Solera for 1845 Bual Solera was founded in 1875. Each year the casks were topped off or when 10% was ullage. They would add young wine. The average age of the Solera was 50-80 years by the 1950s.
The Soleras were stopped in 1953 when Cossart joined the Madeira Wine Association. The pipes used to store the wine were shipped off and the wine was bottled. This bottling was known as the Centenary wine since the firm was founded in 1745. At least several hundred bottles were sold making it one of the most prolific of the 19th century Soleras.
The expert told us that Madeira is quite robust. If it’s been in bottle for a long time you typically decant it ahead of time at the rate of one day for every decade in bottle.
As for value of the bottle, if the “provenance” and condition were perfect the bottle might be worth $750$-1250. Factors of the provenance make the value of our bottle uncertain, including that it has been stored in someone’s residence for 40 years (we believe horizontally and in a cool location), and that the fill level is below the bottle neck. Your guess is as good as ours on value.
Don Allen Resnikoff
Don Allen Resnikoff article: Threats to the Independence
of Public Broadcasting
Washington Lawyer - January/February 2021 (dcbar.org)
[ http://washingtonlawyer.dcbar.org/januaryfebruary2021/index.php#/p/36 ]
Following is an excerpt from the beginning of the article:
Past steps by the U.S. government limiting the autonomy of Voice of America (VOA) suggest a need for legislative action to safeguard the future
independence of public broadcasting in the United States. The Corporation for Public Broadcasting (CPB) and the Public Broadcasting
Service (PBS) should be protected from ever being turned into a tool of a narrow partisan or ideological point of view.
The challenge of protecting public broadcasting is complicated by the U.S. Supreme Court’s shift to an “originalist” and “conservative” interpretation of the U.S. Constitution. In the recent case of Seila Law LLC v. Consumer Financial Protection Bureau,[footnote omitted] the Supreme Court determined that the structure of the CFPB, with a single director who could be removed from office only “for cause,” violates the separation of powers requirements of the Constitution. Court explained in its 5–4 decision that as a general matter, leaders of federal agencies
serve at the discretion of the president.
In interpreting the Constitution so as to clip the independence of the CFPB, the Supreme Court cast a dark constitutional cloud over the long established idea that Congress has the power to allow agencies to operate independently of the president. In September, Harvard Law
professors Cass Sunstein and Adrian Vermeule wrote that “the court’s approach raises serious doubts about the legal status of the Federal
Reserve Board, the Federal Trade Commission, the Nuclear Regulatory Commission and other such entities.” [footnote omitted]
The constitutional cloud applies to the independence of the CPB and PBS. There is hope for proposals for statutory change that can effectively supplement existing unique statutory provisions protecting the independence of public television and also meet the Supreme Court’s articulated standards.
of Public Broadcasting
Washington Lawyer - January/February 2021 (dcbar.org)
[ http://washingtonlawyer.dcbar.org/januaryfebruary2021/index.php#/p/36 ]
Following is an excerpt from the beginning of the article:
Past steps by the U.S. government limiting the autonomy of Voice of America (VOA) suggest a need for legislative action to safeguard the future
independence of public broadcasting in the United States. The Corporation for Public Broadcasting (CPB) and the Public Broadcasting
Service (PBS) should be protected from ever being turned into a tool of a narrow partisan or ideological point of view.
The challenge of protecting public broadcasting is complicated by the U.S. Supreme Court’s shift to an “originalist” and “conservative” interpretation of the U.S. Constitution. In the recent case of Seila Law LLC v. Consumer Financial Protection Bureau,[footnote omitted] the Supreme Court determined that the structure of the CFPB, with a single director who could be removed from office only “for cause,” violates the separation of powers requirements of the Constitution. Court explained in its 5–4 decision that as a general matter, leaders of federal agencies
serve at the discretion of the president.
In interpreting the Constitution so as to clip the independence of the CFPB, the Supreme Court cast a dark constitutional cloud over the long established idea that Congress has the power to allow agencies to operate independently of the president. In September, Harvard Law
professors Cass Sunstein and Adrian Vermeule wrote that “the court’s approach raises serious doubts about the legal status of the Federal
Reserve Board, the Federal Trade Commission, the Nuclear Regulatory Commission and other such entities.” [footnote omitted]
The constitutional cloud applies to the independence of the CPB and PBS. There is hope for proposals for statutory change that can effectively supplement existing unique statutory provisions protecting the independence of public television and also meet the Supreme Court’s articulated standards.
Monday, January 4, 2021
Two-Sided Market, R&D and Payments System Evolution
By D Daniel Sokol
https://lawprofessors.typepad.com/antitrustprof_blog/2021/01/two-sided-market-rd-and-payments-system-evolution.html?utm_source=feedburner&utm_medium=email&utm_campaign=Feed%3A+typepad%2FFBhU+%28Antitrust+%26+Competition+Policy+Blog%29#
Two-Sided Market, R&D and Payments System Evolution
By:Bin Grace Li; James McAndrews; Zhu Wang
Abstract:It takes many years for more efficient electronic payments to be widely used, and the fees that merchants (consumers) pay for using those services are increasing (decreasing) over time. We address these puzzles by studying payments system evolution with a dynamic model in a twosided market setting. We calibrate the model to the U.S. payment card data, and conduct welfare and policy analysis. Our analysis shows that the market power of electronic payment networks plays important roles in explaining the slow adoption and asymmetric price changes, and the welfare impact of regulations may vary significantly through the endogenous R&D channel.
URL:http://d.repec.org/n?u=RePEc:imf:imfwpa:2019/057&r=com
Two-Sided Market, R&D and Payments System Evolution
By D Daniel Sokol
https://lawprofessors.typepad.com/antitrustprof_blog/2021/01/two-sided-market-rd-and-payments-system-evolution.html?utm_source=feedburner&utm_medium=email&utm_campaign=Feed%3A+typepad%2FFBhU+%28Antitrust+%26+Competition+Policy+Blog%29#
Two-Sided Market, R&D and Payments System Evolution
By:Bin Grace Li; James McAndrews; Zhu Wang
Abstract:It takes many years for more efficient electronic payments to be widely used, and the fees that merchants (consumers) pay for using those services are increasing (decreasing) over time. We address these puzzles by studying payments system evolution with a dynamic model in a twosided market setting. We calibrate the model to the U.S. payment card data, and conduct welfare and policy analysis. Our analysis shows that the market power of electronic payment networks plays important roles in explaining the slow adoption and asymmetric price changes, and the welfare impact of regulations may vary significantly through the endogenous R&D channel.
URL:http://d.repec.org/n?u=RePEc:imf:imfwpa:2019/057&r=com
Linda Greenhouse on Ruth Bader Ginsburg:
How Did a Young, Unknown Lawyer Change the World?Ruth Bader Ginsburg took on the obstacles to women’s equality incrementally, but she was powered by a larger vision.
By Linda Greenhouse
Sept. 24, 2020
I replied that she had a project, a goal from which she never deviated during her long career. It was to have not only the Constitution but also society itself understand men and women as equal.
Fair enough, as far as that explanation goes. But I think it misses something deeper about Justice Ginsburg, who died last Friday at 87. What she had, in addition to passion, skill and a field marshal’s sense of strategy, was imagination.
She envisioned a world different from the one she had grown up in, a better world in which gender was no obstacle to women’s achievement, to their ability to dream big and to realize their aspirations. Then she set out to use the law to usher that world into existence.
Read the full article at https://www.nytimes.com/2020/09/24/opinion/sunday/ginsburg-supreme-court.html
How Did a Young, Unknown Lawyer Change the World?Ruth Bader Ginsburg took on the obstacles to women’s equality incrementally, but she was powered by a larger vision.
By Linda Greenhouse
Sept. 24, 2020
DAR Comment: As we start the New Year, this seems a good moment to read Linda Greenhouse's tribute to Ruth Bader Ginsburg. An axcerpt and citation to the article follow
I replied that she had a project, a goal from which she never deviated during her long career. It was to have not only the Constitution but also society itself understand men and women as equal.
Fair enough, as far as that explanation goes. But I think it misses something deeper about Justice Ginsburg, who died last Friday at 87. What she had, in addition to passion, skill and a field marshal’s sense of strategy, was imagination.
She envisioned a world different from the one she had grown up in, a better world in which gender was no obstacle to women’s achievement, to their ability to dream big and to realize their aspirations. Then she set out to use the law to usher that world into existence.
Read the full article at https://www.nytimes.com/2020/09/24/opinion/sunday/ginsburg-supreme-court.html
Article on section 230 immunity
Posted: 11 Dec 2020 08:20 AM PST
The immunity provided to internet platforms by section 230 of Communications Decency Act is a hot topic these days. Gregory Dickenson has written Rebooting Internet Immunity. Here is the abstract:
We do everything online. We shop, travel, invest, socialize, and even hold garage sales. Even though we may not care whether a company operates online or in the physical world, however, the question has dramatic consequences for the companies themselves. Online and offline entities are governed by different rules. Under Section 230 of the Communications Decency Act, online entities—but not physical-world entities—are immune from lawsuits related to content authored by their users or customers. As a result, online entities have been able to avoid claims for harms caused by their negligence and defective product designs simply because they operate online.
The reason for the disparate treatment is the internet’s dramatic evolution over the last two decades. The internet of 1996 served as an information repository and communications channel and was well governed by Section 230, which treats internet entities as another form of mass media: Because Facebook, Twitter and other online companies could not possibly review the mass of content that flows through their systems, Section 230 immunizes them from claims related to user content. But content distribution is not the internet’s only function, and it is even less so now than it was in 1996. The internet also operates as a platform for the delivery of real-world goods and services and requires a correspondingly diverse immunity doctrine. This Article proposes refining online immunity by limiting it to claims that threaten to impose a content-moderation burden on internet defendants. Where a claim is preventable other than by content moderation—for example, by redesigning an app or website—a plaintiff could freely seek relief, just as in the physical world. This approach empowers courts to identify culpable actors in the virtual world and treat like conduct alike wherever it occurs.
Posted: 11 Dec 2020 08:20 AM PST
The immunity provided to internet platforms by section 230 of Communications Decency Act is a hot topic these days. Gregory Dickenson has written Rebooting Internet Immunity. Here is the abstract:
We do everything online. We shop, travel, invest, socialize, and even hold garage sales. Even though we may not care whether a company operates online or in the physical world, however, the question has dramatic consequences for the companies themselves. Online and offline entities are governed by different rules. Under Section 230 of the Communications Decency Act, online entities—but not physical-world entities—are immune from lawsuits related to content authored by their users or customers. As a result, online entities have been able to avoid claims for harms caused by their negligence and defective product designs simply because they operate online.
The reason for the disparate treatment is the internet’s dramatic evolution over the last two decades. The internet of 1996 served as an information repository and communications channel and was well governed by Section 230, which treats internet entities as another form of mass media: Because Facebook, Twitter and other online companies could not possibly review the mass of content that flows through their systems, Section 230 immunizes them from claims related to user content. But content distribution is not the internet’s only function, and it is even less so now than it was in 1996. The internet also operates as a platform for the delivery of real-world goods and services and requires a correspondingly diverse immunity doctrine. This Article proposes refining online immunity by limiting it to claims that threaten to impose a content-moderation burden on internet defendants. Where a claim is preventable other than by content moderation—for example, by redesigning an app or website—a plaintiff could freely seek relief, just as in the physical world. This approach empowers courts to identify culpable actors in the virtual world and treat like conduct alike wherever it occurs.
As His Term Ends, Trump Faces More Questions on Payments to His Hotel
A civil case being pursued by the attorney general for the District of Columbia has brought renewed attention to what limits there should be on a president’s ability to profit from the office.
https://www.nytimes.com/2020/12/07/us/politics/trump-hotel-payments.html
A civil case being pursued by the attorney general for the District of Columbia has brought renewed attention to what limits there should be on a president’s ability to profit from the office.
https://www.nytimes.com/2020/12/07/us/politics/trump-hotel-payments.html
Naomi Claxton In DC Bar Connect, December 3, 2020
Proskauer's Antitrust Team Recommends that its Clients Conduct a Price-Gouging Audit:
"The definition of price gouging varies significantly from state to state, and consequently, so do the compliance standards. Non-compliance could be met with hefty penalties, as most states charge per individual violation. State attorneys general, private plaintiffs, and the federal government have all been active in price gouging investigations and enforcement actions up and down the supply chain.
Because these price gouging compliance risks are both new and unique to this pandemic, companies cannot necessarily rely on their existing monitoring and risk mitigation systems (for price gouging or otherwise). Even those few companies that had price gouging compliance procedures in place before this pandemic may find that those procedures are out of date or incomplete due to recent changes in the law and changes in enforcement priorities. Given the increased risks to national and multi-state companies across the supply chain, companies should consider conducting what effectively amounts to a 'Price Gouging Audit'."
www.mindingyourbusinesslitigation.com/2020/07/...
NYT: Paycheck Protection … But only for a Few
The government’s Paycheck Protection Program was meant to funnel aid to millions of small businesses so that they could pay their bills during the coronavirus pandemic. But new data shows what many applicants already suspected [https://www.nytimes.com/2020/12/02/business/paycheck-protection-program-coronavirus.html] : Most of the funding went to a tiny fraction of those who needed it. A report from the Small Business Administration revealed that 1 percent of the program’s 5.2 million borrowers received more than a quarter of the $523 billion that was distributed. As for the other 99 percent? Many businesses received much less than what they applied for, and have struggled all the more since the program ended in August. [https://www.nytimes.com/2020/09/01/business/economy/small-businesses-coronavirus.html]
The government’s Paycheck Protection Program was meant to funnel aid to millions of small businesses so that they could pay their bills during the coronavirus pandemic. But new data shows what many applicants already suspected [https://www.nytimes.com/2020/12/02/business/paycheck-protection-program-coronavirus.html] : Most of the funding went to a tiny fraction of those who needed it. A report from the Small Business Administration revealed that 1 percent of the program’s 5.2 million borrowers received more than a quarter of the $523 billion that was distributed. As for the other 99 percent? Many businesses received much less than what they applied for, and have struggled all the more since the program ended in August. [https://www.nytimes.com/2020/09/01/business/economy/small-businesses-coronavirus.html]
Stoller on Slack, Salesforce, and Microsoft
Slack filed a complaint with the EU Competition authority, accusing Microsoft of using its dominant hold on business software tools to exclude Slack’s products. [see https://www.nytimes.com/2020/07/22/technology/slack-microsoft-antitrust.html]
“Slack threatens Microsoft’s hold on business email, the cornerstone of Office, which means Slack threatens Microsoft’s lock on enterprise software,” Jonathan Prince, vice president of communications and policy at Slack, said in a statement. This comment is an echo of the monopoly maintenance claims used against the corporation in the 1998 antitrust case that nearly broke it up.
But there was no action forthcoming. Two months later, Slack warned investors that Microsoft might strike back, writing as an investment risk that “it could be subject to retaliatory or other adverse measures by Microsoft, its employees, or agents in response to the complaint that we filed with the European Commission.” And then finally, this week, Slack threw in the towel, selling itself to Salesforce and ceasing to exist as an independent concern. As Casey Newton put it at Verge, “the medium-term future of work is increasingly a choice between three giants: Microsoft, Salesforce, and (in a distant third) Google. And with that, the golden age of worker choice in productivity tools seems to be coming to an end.” Slack’s fate, Newton notes, “mirrors that of many one-time innovators in enterprise productivity,” such as Mailbox, Acompli, and Evernote.
Had Microsoft been broken up in 1998, had antitrust enforcers acted at any point in the last fifteen years to prohibit predatory pricing or illegal tying in software markets or to slow the massive acquisition spree that both Microsoft and Salesforce have undertaken, Slack would still be an independent company and the enterprise software space would be a vibrant place with lots of choices and competition. But there is effectively no antitrust law if you are powerful. So Slack sold out to a more powerful entity, Salesforce, to protect themselves from Microsoft’s predation, since law enforcers wouldn’t bother to do so.
Now, this is a big merger, and the $27 billion price Salesforce for Slack is paying is no small amount, so clearly, antitrust enforcers will notice the deal and look it over. But my guess is that enforcers will examine this merger with the same care they showed every other transaction they waved through while napping. Of course the deal should be blocked, because the goal is to build out a vertically integrated enterprise sales and software toolset and exclude others from that market. That’s what Salesforce is, a mess of product lines glued together with press releases, market power and political connections.
Source: 12/6/2020 Stoller "BIG" newsletter
Slack filed a complaint with the EU Competition authority, accusing Microsoft of using its dominant hold on business software tools to exclude Slack’s products. [see https://www.nytimes.com/2020/07/22/technology/slack-microsoft-antitrust.html]
“Slack threatens Microsoft’s hold on business email, the cornerstone of Office, which means Slack threatens Microsoft’s lock on enterprise software,” Jonathan Prince, vice president of communications and policy at Slack, said in a statement. This comment is an echo of the monopoly maintenance claims used against the corporation in the 1998 antitrust case that nearly broke it up.
But there was no action forthcoming. Two months later, Slack warned investors that Microsoft might strike back, writing as an investment risk that “it could be subject to retaliatory or other adverse measures by Microsoft, its employees, or agents in response to the complaint that we filed with the European Commission.” And then finally, this week, Slack threw in the towel, selling itself to Salesforce and ceasing to exist as an independent concern. As Casey Newton put it at Verge, “the medium-term future of work is increasingly a choice between three giants: Microsoft, Salesforce, and (in a distant third) Google. And with that, the golden age of worker choice in productivity tools seems to be coming to an end.” Slack’s fate, Newton notes, “mirrors that of many one-time innovators in enterprise productivity,” such as Mailbox, Acompli, and Evernote.
Had Microsoft been broken up in 1998, had antitrust enforcers acted at any point in the last fifteen years to prohibit predatory pricing or illegal tying in software markets or to slow the massive acquisition spree that both Microsoft and Salesforce have undertaken, Slack would still be an independent company and the enterprise software space would be a vibrant place with lots of choices and competition. But there is effectively no antitrust law if you are powerful. So Slack sold out to a more powerful entity, Salesforce, to protect themselves from Microsoft’s predation, since law enforcers wouldn’t bother to do so.
Now, this is a big merger, and the $27 billion price Salesforce for Slack is paying is no small amount, so clearly, antitrust enforcers will notice the deal and look it over. But my guess is that enforcers will examine this merger with the same care they showed every other transaction they waved through while napping. Of course the deal should be blocked, because the goal is to build out a vertically integrated enterprise sales and software toolset and exclude others from that market. That’s what Salesforce is, a mess of product lines glued together with press releases, market power and political connections.
Source: 12/6/2020 Stoller "BIG" newsletter
Greenhouse on US Supreme Court and religious rights
Excerpt:
The Supreme Court has become a prize in a war over how far the country will go to privilege religious rights over other rights, including the right not to be discriminated against. A case the court heard last month, Fulton v. City of Philadelphia, raises the question whether a Catholic social services agency under contract with the city to place children in foster homes can refuse to consider same-sex couples as foster parents despite the city’s nondiscrimination law.
For religious adherents pressing such claims, equal treatment is no longer sufficient. Special treatment is the demand. That’s clear in another Covid-related case that reached the Supreme Court this week. In mid-November, Gov. Andrew Beshear of Kentucky issued a temporary order barring in-person instruction in all public and private schools. A religious school, Danville Christian Academy, promptly won an injunction from a federal district judge.
A three-judge panel of the United States Court of Appeals for the Sixth Circuit stayed the injunction this past weekend. The court observed that because the order applied to religious and secular schools alike, it was “neutral and of general applicability,” key words that under a 1990 Supreme Court decision, Employment Division v. Smith, foreclose a claim under the First Amendment’s Free Exercise Clause for a special religious exemption.
Claiming that “it is called by God to provide in-person instruction to its students,” the school has gone to Justice Kavanaugh, who has supervisory jurisdiction over the Sixth Circuit, asking him to vacate the stay of the injunction. The 35-page brief skips almost entirely over the fact that public schools are under the same strictures, asking instead, “Why can a 12-year-old go to the movies along with two dozen other people, but she can’t watch ‘The Greatest Story Ever Told’ with a smaller group in Bible class?” Justice Kavanaugh has told Governor Beshear to respond by Friday afternoon.
From: https://www.nytimes.com/2020/12/03/opinion/amy-coney-barrett-supreme-court-religion.html
From Slate: Congress considers changes to one of the country’s core internet regulation laws, known as Communications Decency Act Section 230.
Right now, CDA 230 gives platforms themselves broad discretion to take down user speech that they consider “objectionable,” even if that speech doesn’t violate the law. Republicans have claimed (with little support) that the law gives platforms cover for “conservative bias” in content moderation. In earlier proposals, Republicans like Sen. Josh Hawley called for platforms to protect all speech, or to somehow create politically “neutral” rules. The DOJ and Graham bills abandon that approach and instead spell out their drafters’ speech preferences. They would keep immunity in place only for specified categories of lawful-but-awful speech, including pornography, barely legal harassment, and pro-terrorist or pro-suicide material. But platforms would face new legal exposure if they take down content for reasons not included in this government-approved list—such as Holocaust denial, white supremacist racial theories, and electoral disinformation. Apparently in these lawmakers’ value systems, platforms should be free to take down The Virgin Suicides, but not The Protocols of the Elders of Zion, recommendations to cure COVID-19 by ingesting bleach, or misleading information about voting by mail.
From: Lindsey Graham and the DOJ’s suggested Section 230 reform would hurt content moderation. (slate.com)
Right now, CDA 230 gives platforms themselves broad discretion to take down user speech that they consider “objectionable,” even if that speech doesn’t violate the law. Republicans have claimed (with little support) that the law gives platforms cover for “conservative bias” in content moderation. In earlier proposals, Republicans like Sen. Josh Hawley called for platforms to protect all speech, or to somehow create politically “neutral” rules. The DOJ and Graham bills abandon that approach and instead spell out their drafters’ speech preferences. They would keep immunity in place only for specified categories of lawful-but-awful speech, including pornography, barely legal harassment, and pro-terrorist or pro-suicide material. But platforms would face new legal exposure if they take down content for reasons not included in this government-approved list—such as Holocaust denial, white supremacist racial theories, and electoral disinformation. Apparently in these lawmakers’ value systems, platforms should be free to take down The Virgin Suicides, but not The Protocols of the Elders of Zion, recommendations to cure COVID-19 by ingesting bleach, or misleading information about voting by mail.
From: Lindsey Graham and the DOJ’s suggested Section 230 reform would hurt content moderation. (slate.com)
From Tax Policy Center: Balancing Hate, The First Amendment, And Tax-Exempt Status
Is hate speech constitutionally protected? Do groups that express hate in their words and deeds deserve tax-exempt status? Is the IRS equipped to judge what is hate and what is merely odious? Does it even matter?
The House Ways & Means Oversight Subcommittee held a hearing on this fraught subject last week. And the answers, it turns out, are very complicated.
Members heard dramatic and painful testimony from victims of hate. But they also heard important, if less passionate, testimony from the former head of the IRS’s tax-exempt organizations division about how the IRS addresses requests for tax-exempt status and from a law professor who cautioned that the Constitution requires “viewpoint-neutral” administration of requests for tax exemption.
Marcus Owens, the former IRS head of tax-exempt organizations, described the IRS process for permitting tax deductions for contributions to educational, charitable, or religious organizations. He acknowledged that the IRS faces multiple challenges when determining whether an organization meets the tests required for being eligible to receive tax-deductible contributions, for example, by being an educational entity.
Ideally, the IRS would examine a group’s written application, activities, organizing documents, operational plans, and public statements. Under IRS rules, if the group advocates a particular viewpoint, it may qualify as educational as long as it presents “a sufficiently full and fair exposition of the pertinent facts as to permit an individual or the public to form an independent opinion or conclusion;” but it would not qualify if its principle function is “the mere presentation of unsupported opinion.”
Though speech alone is not determinative, courts have ruled that tax-exempt status can be denied for organizations that frequently use inflammatory statements, including ethnic, racial and religious slurs in their communications, coupled with distorted statements presented as fact.
But supervising tax-exempt groups is tangential to the IRS’s core mission of collecting revenue and, faced with reduced resources, the IRS has progressively required or reviewed less information, denied fewer applications for tax-exempt status, and “systematically dismantled” its enforcement structure, Owens testified.
In fiscal year 2018, the IRS examined only 2,816 of the 1.6 million returns filed by tax-exempt organizations. And of the nearly 92,000 new applications it received, the IRS rejected only 71, less than five percent of the number rejected in 2007. This reduced level of activities likely reflects both fewer resources and Congressional criticism of prior policies and procedures.
UCLA law professor Eugene Volokh carefully outlined constitutional limitations the IRS operates under. Hate speech is protected by the Constitution unless it involves imminent threats. While nonprofits have no constitutional right to a tax exemption, they do have a right to be free from discrimination. “The Tax Code indeed subsidizes hate,” he said, “just as it subsidizes Socialism, Satanism, and a wide variety of dangerous and offensive ideas. Under the First Amendment, tax exemptions have to be distributed without discrimination based on viewpoint; that means that evil views have to be treated the same way as good views.”
Excerpt from https://www.taxpolicycenter.org/taxvox/balancing-hate-first-amendment-and-tax-exempt-status
Is hate speech constitutionally protected? Do groups that express hate in their words and deeds deserve tax-exempt status? Is the IRS equipped to judge what is hate and what is merely odious? Does it even matter?
The House Ways & Means Oversight Subcommittee held a hearing on this fraught subject last week. And the answers, it turns out, are very complicated.
Members heard dramatic and painful testimony from victims of hate. But they also heard important, if less passionate, testimony from the former head of the IRS’s tax-exempt organizations division about how the IRS addresses requests for tax-exempt status and from a law professor who cautioned that the Constitution requires “viewpoint-neutral” administration of requests for tax exemption.
Marcus Owens, the former IRS head of tax-exempt organizations, described the IRS process for permitting tax deductions for contributions to educational, charitable, or religious organizations. He acknowledged that the IRS faces multiple challenges when determining whether an organization meets the tests required for being eligible to receive tax-deductible contributions, for example, by being an educational entity.
Ideally, the IRS would examine a group’s written application, activities, organizing documents, operational plans, and public statements. Under IRS rules, if the group advocates a particular viewpoint, it may qualify as educational as long as it presents “a sufficiently full and fair exposition of the pertinent facts as to permit an individual or the public to form an independent opinion or conclusion;” but it would not qualify if its principle function is “the mere presentation of unsupported opinion.”
Though speech alone is not determinative, courts have ruled that tax-exempt status can be denied for organizations that frequently use inflammatory statements, including ethnic, racial and religious slurs in their communications, coupled with distorted statements presented as fact.
But supervising tax-exempt groups is tangential to the IRS’s core mission of collecting revenue and, faced with reduced resources, the IRS has progressively required or reviewed less information, denied fewer applications for tax-exempt status, and “systematically dismantled” its enforcement structure, Owens testified.
In fiscal year 2018, the IRS examined only 2,816 of the 1.6 million returns filed by tax-exempt organizations. And of the nearly 92,000 new applications it received, the IRS rejected only 71, less than five percent of the number rejected in 2007. This reduced level of activities likely reflects both fewer resources and Congressional criticism of prior policies and procedures.
UCLA law professor Eugene Volokh carefully outlined constitutional limitations the IRS operates under. Hate speech is protected by the Constitution unless it involves imminent threats. While nonprofits have no constitutional right to a tax exemption, they do have a right to be free from discrimination. “The Tax Code indeed subsidizes hate,” he said, “just as it subsidizes Socialism, Satanism, and a wide variety of dangerous and offensive ideas. Under the First Amendment, tax exemptions have to be distributed without discrimination based on viewpoint; that means that evil views have to be treated the same way as good views.”
Excerpt from https://www.taxpolicycenter.org/taxvox/balancing-hate-first-amendment-and-tax-exempt-status
Excerpts from The New Yorker: “How Venture Capitalists Are Deforming Capitalism”
Even the worst-run startup can beat competitors if investors prop it up. The V.C. firm Benchmark helped enable WeWork to make one wild mistake after another—hoping that its gamble would pay off before disaster struck.
By Charles Duhigg
November 23, 2020
From the start, venture capitalists have presented their profession as an elevated calling. They weren’t mere speculators—they were midwives to innovation. The first V.C. firms were designed to make money by identifying and supporting the most brilliant startup ideas, providing the funds and the strategic advice that daring entrepreneurs needed in order to prosper. For decades, such boasts were merited. Genentech, which helped invent synthetic insulin, in the nineteen-seventies, succeeded in large part because of the stewardship of the venture capitalist Tom Perkins, whose company, Kleiner Perkins, made an initial hundred-thousand-dollar investment. Perkins demanded a seat on Genentech’s board of directors, and then began spending one afternoon a week in the startup’s offices, scrutinizing spending reports and browbeating inexperienced executives. In subsequent years, Kleiner Perkins nurtured such tech startups as Amazon, Google, Sun Microsystems, and Compaq. When Perkins died, in 2016, at the age of eighty-four, an obituary in the Financial Times remembered him as “part of a new movement in finance that saw investors roll up their sleeves and play an active role in management.”
The V.C. industry has grown exponentially since Perkins’s heyday, but it has also become increasingly avaricious and cynical. It is now dominated by a few dozen firms, which, collectively, control hundreds of billions of dollars. Most professional V.C.s fit a narrow mold: according to surveys, just under half of them attended either Harvard or Stanford, and eighty per cent are male. Although V.C.s depict themselves as perpetually on the hunt for radical business ideas, they often seem to be hyping the same Silicon Valley trends—and their managerial oversight has dwindled, making their investments look more like trading-floor bets. Steve Blank, an entrepreneur who currently teaches at Stanford’s engineering school, said, “I’ve watched the industry become a money-hungry mob. V.C.s today aren’t interested in the public good. They’re not interested in anything except optimizing their own profits and chasing the herd, and so they waste billions of dollars that could have gone to innovation that actually helps people.”
This clubby, self-serving approach has made many V.C.s rich. In January, 2020, the National Venture Capital Association hailed a “record decade” of “hyper growth” in which its members had given nearly eight hundred billion dollars to startups, “fueling the economy of tomorrow.” The pandemic has slowed things down, but not much. According to a report by PitchBook, a company that provides data on the industry, five of the top twenty venture-capital firms are currently making more deals than they did last year.
In recent decades, the gambles taken by V.C.s have grown dramatically larger. A million-dollar investment in a thriving young company might yield ten million dollars in profits. A fifty-million-dollar investment in the same startup could deliver half a billion dollars. “Honestly, it stopped making sense to look at investments that were smaller than thirty or forty million,” a prominent venture capitalist told me. “It’s the same amount of due diligence, the same amount of time going to board meetings, the same amount of work, regardless of how much you invest.”
Critics of the venture-capital industry have observed that, lately, it has given one dubious startup after another gigantic infusions of money. The blood-testing company Theranos received seven hundred million dollars from a number of investors, including Rupert Murdoch and Betsy DeVos, before it was revealed as a fraud; in 2018, its founders were indicted. Juicero, which sold a Wi-Fi-enabled juice press for seven hundred dollars, raised more than a hundred million dollars from such sources as Google’s investment arm, but shut down after only four years. (Consumers posted videos demonstrating that they could press juice just as efficiently with their own hands.) Two years ago, when Wag!, an Uber-like service for dog walking, went looking for seventy-five million dollars in venture capital, its founders—among them, a pair of brothers in their twenties, with little business experience—discovered that investors were interested, as long as Wag! agreed to accept three hundred million dollars. The startup planned to use those funds to expand internationally, but it was too poorly run to flourish. It began shedding its employees after, among other things, the New York City Council accused the firm of losing dogs.
Increasingly, the venture-capital industry has become fixated on creating “unicorns”: startups whose valuations exceed a billion dollars. Some of these companies become lasting successes, but many of them—such as Uber, the data-mining giant Palantir, and the scandal-plagued software firm Zenefits—never seemed to have a realistic plan for turning a profit. A 2018 paper co-written by Martin Kenney, a professor at the University of California, Davis, argued that, thanks to the prodigious bets made by today’s V.C.s, “money-losing firms can continue operating and undercutting incumbents for far longer than previously.” In the traditional capitalist model, the most efficient and capable company succeeds; in the new model, the company with the most funding wins. Such firms are often “destroying economic value”—that is, undermining sound rivals—and creating “disruption without social benefit.”
Many venture capitalists say that they have no choice but to flood startups with cash. In order for a Silicon Valley startup to become a true unicorn, it typically must wipe out its competitors and emerge as the dominant brand. Jeff Housenbold, a managing partner at SoftBank, told me, “Once Uber is founded, within a year you suddenly have three hundred copycats. The only way to protect your company is to get big fast by investing hundreds of millions.” What’s more, V.C.s say, the big venture firms are all looking at the same deals, and trying to persuade the same coveted entrepreneurs to accept their investment dollars. To win, V.C.s must give entrepreneurs what they demand.
Particularly in Silicon Valley, founders often want venture capitalists who promise not to interfere or to ask too many questions. V.C.s have started boasting that they are “founder-friendly” and uninterested in, say, spending an afternoon a week at a company’s offices or second-guessing a young C.E.O. Josh Lerner, a professor at Harvard Business School, told me, “Proclaiming founder loyalty is kind of expected now.” One of the bigger V.C. firms, the Founders Fund, which has more than six billion dollars under management, declares on its Web site that it “has never removed a single founder” and that, when it finds entrepreneurs with “audacious vision,” “a near-messianic attitude,” and “wild-eyed passion,” it essentially seeks to give them veto-proof authority over the board of directors, so that an entrepreneur need never worry about being reined in, let alone fired.
Whereas venture capitalists like Tom Perkins once prided themselves on installing good governance and closely monitoring companies, V.C.s today are more likely to encourage entrepreneurs’ undisciplined eccentricities. Masayoshi Son, the SoftBank venture capitalist who promised WeWork $4.4 billion after less than twenty minutes, embodies this approach. In 2016, he began raising a hundred-billion-dollar Vision Fund, the largest pool of money ever devoted to venture-capital investment. “Masa decided to deliberately inject cocaine into the bloodstream of these young companies,” a former SoftBank senior executive said. “You approach an entrepreneur and say, ‘Hey, either take a billion dollars from me right now, or I’ll give it to your competitor and you’ll go out of business.’ ” This strategy might sound reckless, but it has paid off handsomely for Son. In the mid-nineties, he gave billions of dollars to hundreds of tech firms, including twenty million dollars to a small Chinese online marketplace named Alibaba. When the first Internet bubble burst, in 2001, Son lost almost seventy billion dollars, but Alibaba had enough of a war chest to outlast its competitors, and today it’s valued at more than seven hundred billion dollars. SoftBank’s stake in the firm is more than a hundred billion dollars—far exceeding all of Son’s other losses. “Venture capital has become a lottery,” the former SoftBank executive told me. “Masa is not a particularly deep thinker, but he has one strength: he’s devoted to buying more lottery tickets than anyone else.”
* * *
As the venture-capital industry has become specialized and concentrated—last year, the ten largest firms raised sixteen billion dollars, nearly a third of all new V.C. fund-raising—it has become even more cliquish. Today, most major V.C. deals are “syndicated,” or divvied up, among the big firms. This cartel-like atmosphere has encouraged V.C.s to remain silent when confronted with unethical behavior. Kraus, who has been critical of the industry’s myopia, told me, “If you’re on a board that empowered some wacky founder, or you didn’t pay attention to governance—or something happened that, in retrospect, sort of skirted the law, like at Uber—you’re fine, as long as you post decent returns.” He added, “You’re remembered for your winners, not your losers. In ten years, no one is going to remember all the bad stuff at WeWork. All they’ll remember is who made money.”
Politicians have generally been reluctant to criticize the venture-capital industry, in part because it has successfully portrayed itself as crucial to innovation. Martin Kenney, the professor at the University of California, Davis, said, “Obama loved Silicon Valley and V.C.s, and Trump craved their approval.” He went on, “Regulators have been totally defanged from doing real investigations of venture-capital firms. I think people are finally waking up to the damage the tech industry and V.C.s can do, but it’s slow going.” Senator Elizabeth Warren has proposed reforms that would make it easier for shareholders to sue directors who fail to report unethical behavior. Other Democrats have proposed laws that would force venture capitalists to pay higher taxes. President-elect Joe Biden supports greater protections for stockholding employees. While campaigning in Pennsylvania, he promised, “I’ll be laser-focussed on working families, the middle-class families I came from here in Scranton, not the wealthy investor class—they don’t need me.”
* * *
For decades, venture capitalists have succeeded in defining themselves as judicious meritocrats who direct money to those who will use it best. But examples like WeWork make it harder to believe that V.C.s help balance greedy impulses with enlightened innovation. Rather, V.C.s seem to embody the cynical shape of modern capitalism, which too often rewards crafty middlemen and bombastic charlatans rather than hardworking employees and creative businesspeople. Jeremy Neuner, the NextSpace co-founder, said, “You can’t blame Adam Neumann for being Adam Neumann. It was clear to everyone he was selling something too good to be true. He never pretended to be sensible, or down to earth, or anything besides a crazy optimist. But you can blame the venture capitalists.” Neuner went on, “When you get involved in the startup world, you meet all these amazing entrepreneurs with fantastic ideas, and, over time, you watch them get pushed by V.C.s to take too much money, and make bad choices, and grow as fast as possible. And then they blow up. And, eventually, you start to realize: no matter what happens, the V.C.s still end up rich.” ♦
Published in the print edition of the November 30, 2020, issue of the New Yorker, https://www.newyorker.com/magazine/2020/11/30 , with the headline “The Enablers.”
Charles Duhigg is the author of “The Power of Habit” and “Smarter Faster Better.” He was a member of the Times team that won the 2013 Pulitzer Prize for explanatory reporting.
Even the worst-run startup can beat competitors if investors prop it up. The V.C. firm Benchmark helped enable WeWork to make one wild mistake after another—hoping that its gamble would pay off before disaster struck.
By Charles Duhigg
November 23, 2020
From the start, venture capitalists have presented their profession as an elevated calling. They weren’t mere speculators—they were midwives to innovation. The first V.C. firms were designed to make money by identifying and supporting the most brilliant startup ideas, providing the funds and the strategic advice that daring entrepreneurs needed in order to prosper. For decades, such boasts were merited. Genentech, which helped invent synthetic insulin, in the nineteen-seventies, succeeded in large part because of the stewardship of the venture capitalist Tom Perkins, whose company, Kleiner Perkins, made an initial hundred-thousand-dollar investment. Perkins demanded a seat on Genentech’s board of directors, and then began spending one afternoon a week in the startup’s offices, scrutinizing spending reports and browbeating inexperienced executives. In subsequent years, Kleiner Perkins nurtured such tech startups as Amazon, Google, Sun Microsystems, and Compaq. When Perkins died, in 2016, at the age of eighty-four, an obituary in the Financial Times remembered him as “part of a new movement in finance that saw investors roll up their sleeves and play an active role in management.”
The V.C. industry has grown exponentially since Perkins’s heyday, but it has also become increasingly avaricious and cynical. It is now dominated by a few dozen firms, which, collectively, control hundreds of billions of dollars. Most professional V.C.s fit a narrow mold: according to surveys, just under half of them attended either Harvard or Stanford, and eighty per cent are male. Although V.C.s depict themselves as perpetually on the hunt for radical business ideas, they often seem to be hyping the same Silicon Valley trends—and their managerial oversight has dwindled, making their investments look more like trading-floor bets. Steve Blank, an entrepreneur who currently teaches at Stanford’s engineering school, said, “I’ve watched the industry become a money-hungry mob. V.C.s today aren’t interested in the public good. They’re not interested in anything except optimizing their own profits and chasing the herd, and so they waste billions of dollars that could have gone to innovation that actually helps people.”
This clubby, self-serving approach has made many V.C.s rich. In January, 2020, the National Venture Capital Association hailed a “record decade” of “hyper growth” in which its members had given nearly eight hundred billion dollars to startups, “fueling the economy of tomorrow.” The pandemic has slowed things down, but not much. According to a report by PitchBook, a company that provides data on the industry, five of the top twenty venture-capital firms are currently making more deals than they did last year.
In recent decades, the gambles taken by V.C.s have grown dramatically larger. A million-dollar investment in a thriving young company might yield ten million dollars in profits. A fifty-million-dollar investment in the same startup could deliver half a billion dollars. “Honestly, it stopped making sense to look at investments that were smaller than thirty or forty million,” a prominent venture capitalist told me. “It’s the same amount of due diligence, the same amount of time going to board meetings, the same amount of work, regardless of how much you invest.”
Critics of the venture-capital industry have observed that, lately, it has given one dubious startup after another gigantic infusions of money. The blood-testing company Theranos received seven hundred million dollars from a number of investors, including Rupert Murdoch and Betsy DeVos, before it was revealed as a fraud; in 2018, its founders were indicted. Juicero, which sold a Wi-Fi-enabled juice press for seven hundred dollars, raised more than a hundred million dollars from such sources as Google’s investment arm, but shut down after only four years. (Consumers posted videos demonstrating that they could press juice just as efficiently with their own hands.) Two years ago, when Wag!, an Uber-like service for dog walking, went looking for seventy-five million dollars in venture capital, its founders—among them, a pair of brothers in their twenties, with little business experience—discovered that investors were interested, as long as Wag! agreed to accept three hundred million dollars. The startup planned to use those funds to expand internationally, but it was too poorly run to flourish. It began shedding its employees after, among other things, the New York City Council accused the firm of losing dogs.
Increasingly, the venture-capital industry has become fixated on creating “unicorns”: startups whose valuations exceed a billion dollars. Some of these companies become lasting successes, but many of them—such as Uber, the data-mining giant Palantir, and the scandal-plagued software firm Zenefits—never seemed to have a realistic plan for turning a profit. A 2018 paper co-written by Martin Kenney, a professor at the University of California, Davis, argued that, thanks to the prodigious bets made by today’s V.C.s, “money-losing firms can continue operating and undercutting incumbents for far longer than previously.” In the traditional capitalist model, the most efficient and capable company succeeds; in the new model, the company with the most funding wins. Such firms are often “destroying economic value”—that is, undermining sound rivals—and creating “disruption without social benefit.”
Many venture capitalists say that they have no choice but to flood startups with cash. In order for a Silicon Valley startup to become a true unicorn, it typically must wipe out its competitors and emerge as the dominant brand. Jeff Housenbold, a managing partner at SoftBank, told me, “Once Uber is founded, within a year you suddenly have three hundred copycats. The only way to protect your company is to get big fast by investing hundreds of millions.” What’s more, V.C.s say, the big venture firms are all looking at the same deals, and trying to persuade the same coveted entrepreneurs to accept their investment dollars. To win, V.C.s must give entrepreneurs what they demand.
Particularly in Silicon Valley, founders often want venture capitalists who promise not to interfere or to ask too many questions. V.C.s have started boasting that they are “founder-friendly” and uninterested in, say, spending an afternoon a week at a company’s offices or second-guessing a young C.E.O. Josh Lerner, a professor at Harvard Business School, told me, “Proclaiming founder loyalty is kind of expected now.” One of the bigger V.C. firms, the Founders Fund, which has more than six billion dollars under management, declares on its Web site that it “has never removed a single founder” and that, when it finds entrepreneurs with “audacious vision,” “a near-messianic attitude,” and “wild-eyed passion,” it essentially seeks to give them veto-proof authority over the board of directors, so that an entrepreneur need never worry about being reined in, let alone fired.
Whereas venture capitalists like Tom Perkins once prided themselves on installing good governance and closely monitoring companies, V.C.s today are more likely to encourage entrepreneurs’ undisciplined eccentricities. Masayoshi Son, the SoftBank venture capitalist who promised WeWork $4.4 billion after less than twenty minutes, embodies this approach. In 2016, he began raising a hundred-billion-dollar Vision Fund, the largest pool of money ever devoted to venture-capital investment. “Masa decided to deliberately inject cocaine into the bloodstream of these young companies,” a former SoftBank senior executive said. “You approach an entrepreneur and say, ‘Hey, either take a billion dollars from me right now, or I’ll give it to your competitor and you’ll go out of business.’ ” This strategy might sound reckless, but it has paid off handsomely for Son. In the mid-nineties, he gave billions of dollars to hundreds of tech firms, including twenty million dollars to a small Chinese online marketplace named Alibaba. When the first Internet bubble burst, in 2001, Son lost almost seventy billion dollars, but Alibaba had enough of a war chest to outlast its competitors, and today it’s valued at more than seven hundred billion dollars. SoftBank’s stake in the firm is more than a hundred billion dollars—far exceeding all of Son’s other losses. “Venture capital has become a lottery,” the former SoftBank executive told me. “Masa is not a particularly deep thinker, but he has one strength: he’s devoted to buying more lottery tickets than anyone else.”
* * *
As the venture-capital industry has become specialized and concentrated—last year, the ten largest firms raised sixteen billion dollars, nearly a third of all new V.C. fund-raising—it has become even more cliquish. Today, most major V.C. deals are “syndicated,” or divvied up, among the big firms. This cartel-like atmosphere has encouraged V.C.s to remain silent when confronted with unethical behavior. Kraus, who has been critical of the industry’s myopia, told me, “If you’re on a board that empowered some wacky founder, or you didn’t pay attention to governance—or something happened that, in retrospect, sort of skirted the law, like at Uber—you’re fine, as long as you post decent returns.” He added, “You’re remembered for your winners, not your losers. In ten years, no one is going to remember all the bad stuff at WeWork. All they’ll remember is who made money.”
Politicians have generally been reluctant to criticize the venture-capital industry, in part because it has successfully portrayed itself as crucial to innovation. Martin Kenney, the professor at the University of California, Davis, said, “Obama loved Silicon Valley and V.C.s, and Trump craved their approval.” He went on, “Regulators have been totally defanged from doing real investigations of venture-capital firms. I think people are finally waking up to the damage the tech industry and V.C.s can do, but it’s slow going.” Senator Elizabeth Warren has proposed reforms that would make it easier for shareholders to sue directors who fail to report unethical behavior. Other Democrats have proposed laws that would force venture capitalists to pay higher taxes. President-elect Joe Biden supports greater protections for stockholding employees. While campaigning in Pennsylvania, he promised, “I’ll be laser-focussed on working families, the middle-class families I came from here in Scranton, not the wealthy investor class—they don’t need me.”
* * *
For decades, venture capitalists have succeeded in defining themselves as judicious meritocrats who direct money to those who will use it best. But examples like WeWork make it harder to believe that V.C.s help balance greedy impulses with enlightened innovation. Rather, V.C.s seem to embody the cynical shape of modern capitalism, which too often rewards crafty middlemen and bombastic charlatans rather than hardworking employees and creative businesspeople. Jeremy Neuner, the NextSpace co-founder, said, “You can’t blame Adam Neumann for being Adam Neumann. It was clear to everyone he was selling something too good to be true. He never pretended to be sensible, or down to earth, or anything besides a crazy optimist. But you can blame the venture capitalists.” Neuner went on, “When you get involved in the startup world, you meet all these amazing entrepreneurs with fantastic ideas, and, over time, you watch them get pushed by V.C.s to take too much money, and make bad choices, and grow as fast as possible. And then they blow up. And, eventually, you start to realize: no matter what happens, the V.C.s still end up rich.” ♦
Published in the print edition of the November 30, 2020, issue of the New Yorker, https://www.newyorker.com/magazine/2020/11/30 , with the headline “The Enablers.”
Charles Duhigg is the author of “The Power of Habit” and “Smarter Faster Better.” He was a member of the Times team that won the 2013 Pulitzer Prize for explanatory reporting.
Why it would be a huge mistake to allow Big Tech firms to acquire banks
By
Art Wilmarth
November 26, 2020 9:00 AM EST
https://fortune.com/2020/11/26/big-tech-banking-glass-steagall-act-financial-crisis/
·
Prior to 1980, the Glass-Steagall Act of 1933 maintained a strict separation between our banking system and our capital markets. However, financial regulators opened loopholes in Glass-Steagall during the 1980s and 1990s, allowing banks to engage in securities activities and permitting nonbanks to offer bank-like products.
“Universal banks” (banks engaged in securities activities) and “shadow banks” (nonbanks offering bank-like services) dominated our financial markets after Congress repealed Glass-Steagall in 1999. Universal banks and shadow banks played leading roles in the toxic subprime lending boom that led to the financial crisis of 2007–09.
In response to the financial crisis, the Treasury Department and the Federal Reserve bailed out big banks as well as large shadow banks (including AIG, Morgan Stanley, and Goldman Sachs). Federal agencies also protected short-term financial instruments that functioned as substitutes for bank deposits, such as money market mutual funds, commercial paper, and securities repurchase agreements (“repos”).
The federal government’s response to the financial crisis went far beyond the traditional U.S. policy of protecting banks and bank depositors. Federal authorities effectively wrapped the federal “safety net” around our entire financial system. By doing so, they “bankified” our financial markets.
The Dodd-Frank Act’s regulatory reforms did not correct the deeply flawed structure of the financial system—including the dominance of universal banks and shadow banks—that caused the financial crisis of 2007–09. Consequently, federal agencies felt compelled to provide another series of bailouts when the COVID-19 pandemic triggered a new financial crisis. Federal authorities aggressively intervened in March to protect universal banks, shadow banks, and short-term financial markets from failure. In addition, federal agencies took the unprecedented step of backstopping the corporate bond market.
That extraordinary measure was not coincidental. Universal banks and shadow banks promoted a massive expansion of corporate debt during the past decade. The debts of U.S. corporations reached a record level of $10.5 trillion in March 2020. Almost two-thirds of those debts were either rated as “junk” or received the lowest investment-grade rating (BBB). Corporate debt markets would have collapsed without the federal government’s backstop, with severe knock-on effects for our financial system and economy.
. Now federal regulators are trying to bankify the rest of the economy. The Office of the Comptroller of the Currency (OCC)—the regulator of national banks—wants to give national bank charters to fintechs that offer lending or payment services but do not accept deposits. The Federal Deposit Insurance Corporation (FDIC) is considering a rule that would allow all types of commercial firms to acquire FDIC-insured industrial banks (consumer banks chartered by Utah and several other states).
The OCC’s and FDIC’s initiatives would allow technology firms and other commercial enterprises to obtain banking privileges and benefits—including access to the federal “safety net”—without complying with many of the prudential requirements governing FDIC-insured full-service banks. For example, commercial owners of fintech national banks and industrial banks would not have to comply with the Bank Holding Company (BHC) Act, which prohibits affiliations between FDIC-insured full-service banks and commercial firms. That prohibition is the cornerstone of our historic policy of separating banking and commerce.
The Glass-Steagall and BHC acts separated banking from commerce to prevent undue concentrations of financial and economic power and to minimize conflicts of interest in bank lending and investment advice. A bank that controls—or is controlled by—a commercial firm has powerful and dangerous incentives to use its lending and investment policies to support its commercial affiliate. Problems that arise in the commercial affiliate are likely to infect the bank, as shown by the recent collapse of Wirecard in Germany.
If the OCC’s and FDIC’s initiatives succeed, Congress will face intense pressure to repeal the separation of banking and commerce. Big Tech firms will lobby for permission to acquire full-service banks, and big banks will push for authority to acquire technology firms. If Congress gives in (as it did when it repealed Glass-Steagall), mergers between Big Tech companies and big banks are virtually certain to occur.
The result will be a bankification of our economy. Giant banking-and-commercial conglomerates will spread across the nation. Commercial owners of banks will profit from the federal “safety net,” including the ability to offer FDIC-insured deposits—the cheapest and most stable source of funding available in the private market. Large commercial firms that own sizable banks will be considered “too big to fail” and will enjoy enormous advantages over smaller competitors that can’t afford to acquire banks.
When the next crisis occurs, federal agencies will feel compelled to rescue not only our financial system but also our leading banking-and-commercial conglomerates. Market discipline, which has already been greatly weakened in our financial markets, will largely disappear from the rest of our economy.
Congress should adopt two crucial measures to reverse the bankification of our country. First, Congress should enact a new Glass-Steagall Act to reestablish a strict separation between our banking system and our capital markets. Congress should prohibit banks from underwriting and trading in securities and other capital market instruments, except for government bonds.
Congress should also prohibit nonbanks from offering short-term financial instruments that function as deposit substitutes. Only banks should be allowed to issue money market mutual funds, commercial paper, and repos. Requiring nonbanks to fund their operations with longer-term securities would eliminate the shadow bank business model, restore market discipline, and improve the stability of our financial markets.
Second, Congress should reaffirm the separation of banking and commerce by overruling the OCC’s and FDIC’s initiatives. Both measures would return banks to their traditional roles as objective providers of deposit, credit, payment, and fiduciary services. The “too big to fail” problem would be greatly diminished with the elimination of universal banks and the likely disappearance of shadow banks. Banks and commercial firms would be prevented from exercising any type of control over each other.
Banks and the capital markets would once again become independent sectors with strong incentives to serve the needs of consumers, communities, and Main Street businesses. Our financial system and our economy would become more stable, more competitive, and more productive.
Art Wilmarth is a professor emeritus of law at George Washington University. This essay is based on his recently published book, Taming the Megabanks: Why We Need a New Glass-Steagall Act, and his testimony before the House Financial Services Committee’s Task Force on Financial Technology on Sept. 29, 2020.
By
Art Wilmarth
November 26, 2020 9:00 AM EST
https://fortune.com/2020/11/26/big-tech-banking-glass-steagall-act-financial-crisis/
·
Prior to 1980, the Glass-Steagall Act of 1933 maintained a strict separation between our banking system and our capital markets. However, financial regulators opened loopholes in Glass-Steagall during the 1980s and 1990s, allowing banks to engage in securities activities and permitting nonbanks to offer bank-like products.
“Universal banks” (banks engaged in securities activities) and “shadow banks” (nonbanks offering bank-like services) dominated our financial markets after Congress repealed Glass-Steagall in 1999. Universal banks and shadow banks played leading roles in the toxic subprime lending boom that led to the financial crisis of 2007–09.
In response to the financial crisis, the Treasury Department and the Federal Reserve bailed out big banks as well as large shadow banks (including AIG, Morgan Stanley, and Goldman Sachs). Federal agencies also protected short-term financial instruments that functioned as substitutes for bank deposits, such as money market mutual funds, commercial paper, and securities repurchase agreements (“repos”).
The federal government’s response to the financial crisis went far beyond the traditional U.S. policy of protecting banks and bank depositors. Federal authorities effectively wrapped the federal “safety net” around our entire financial system. By doing so, they “bankified” our financial markets.
The Dodd-Frank Act’s regulatory reforms did not correct the deeply flawed structure of the financial system—including the dominance of universal banks and shadow banks—that caused the financial crisis of 2007–09. Consequently, federal agencies felt compelled to provide another series of bailouts when the COVID-19 pandemic triggered a new financial crisis. Federal authorities aggressively intervened in March to protect universal banks, shadow banks, and short-term financial markets from failure. In addition, federal agencies took the unprecedented step of backstopping the corporate bond market.
That extraordinary measure was not coincidental. Universal banks and shadow banks promoted a massive expansion of corporate debt during the past decade. The debts of U.S. corporations reached a record level of $10.5 trillion in March 2020. Almost two-thirds of those debts were either rated as “junk” or received the lowest investment-grade rating (BBB). Corporate debt markets would have collapsed without the federal government’s backstop, with severe knock-on effects for our financial system and economy.
. Now federal regulators are trying to bankify the rest of the economy. The Office of the Comptroller of the Currency (OCC)—the regulator of national banks—wants to give national bank charters to fintechs that offer lending or payment services but do not accept deposits. The Federal Deposit Insurance Corporation (FDIC) is considering a rule that would allow all types of commercial firms to acquire FDIC-insured industrial banks (consumer banks chartered by Utah and several other states).
The OCC’s and FDIC’s initiatives would allow technology firms and other commercial enterprises to obtain banking privileges and benefits—including access to the federal “safety net”—without complying with many of the prudential requirements governing FDIC-insured full-service banks. For example, commercial owners of fintech national banks and industrial banks would not have to comply with the Bank Holding Company (BHC) Act, which prohibits affiliations between FDIC-insured full-service banks and commercial firms. That prohibition is the cornerstone of our historic policy of separating banking and commerce.
The Glass-Steagall and BHC acts separated banking from commerce to prevent undue concentrations of financial and economic power and to minimize conflicts of interest in bank lending and investment advice. A bank that controls—or is controlled by—a commercial firm has powerful and dangerous incentives to use its lending and investment policies to support its commercial affiliate. Problems that arise in the commercial affiliate are likely to infect the bank, as shown by the recent collapse of Wirecard in Germany.
If the OCC’s and FDIC’s initiatives succeed, Congress will face intense pressure to repeal the separation of banking and commerce. Big Tech firms will lobby for permission to acquire full-service banks, and big banks will push for authority to acquire technology firms. If Congress gives in (as it did when it repealed Glass-Steagall), mergers between Big Tech companies and big banks are virtually certain to occur.
The result will be a bankification of our economy. Giant banking-and-commercial conglomerates will spread across the nation. Commercial owners of banks will profit from the federal “safety net,” including the ability to offer FDIC-insured deposits—the cheapest and most stable source of funding available in the private market. Large commercial firms that own sizable banks will be considered “too big to fail” and will enjoy enormous advantages over smaller competitors that can’t afford to acquire banks.
When the next crisis occurs, federal agencies will feel compelled to rescue not only our financial system but also our leading banking-and-commercial conglomerates. Market discipline, which has already been greatly weakened in our financial markets, will largely disappear from the rest of our economy.
Congress should adopt two crucial measures to reverse the bankification of our country. First, Congress should enact a new Glass-Steagall Act to reestablish a strict separation between our banking system and our capital markets. Congress should prohibit banks from underwriting and trading in securities and other capital market instruments, except for government bonds.
Congress should also prohibit nonbanks from offering short-term financial instruments that function as deposit substitutes. Only banks should be allowed to issue money market mutual funds, commercial paper, and repos. Requiring nonbanks to fund their operations with longer-term securities would eliminate the shadow bank business model, restore market discipline, and improve the stability of our financial markets.
Second, Congress should reaffirm the separation of banking and commerce by overruling the OCC’s and FDIC’s initiatives. Both measures would return banks to their traditional roles as objective providers of deposit, credit, payment, and fiduciary services. The “too big to fail” problem would be greatly diminished with the elimination of universal banks and the likely disappearance of shadow banks. Banks and commercial firms would be prevented from exercising any type of control over each other.
Banks and the capital markets would once again become independent sectors with strong incentives to serve the needs of consumers, communities, and Main Street businesses. Our financial system and our economy would become more stable, more competitive, and more productive.
Art Wilmarth is a professor emeritus of law at George Washington University. This essay is based on his recently published book, Taming the Megabanks: Why We Need a New Glass-Steagall Act, and his testimony before the House Financial Services Committee’s Task Force on Financial Technology on Sept. 29, 2020.
FTC Holds Workshop on Data Portability
By Kim Phan & Katie Morehead on September 29, 2020
POSTED IN DATA PORTABILITY, FEDERAL TRADE COMMISSION (FTC), ONLINE PRIVACY [https://www.cyberadviserblog.com/category/federal-trade-commission/]
On September 22nd, the Federal Trade Commission (FTC) hosted an event, “Data To Go: An FTC Workshop on Data Portability,” [https://www.ftc.gov/news-events/events-calendar/data-go-ftc-workshop-data-portability] to examine the potential benefits and challenges to consumers and competition raised by data portability. Data portability means giving consumers the ability to receive a copy of their data for their own use or and move the data to another entity or service.
The workshop did not focus on any specific policy proposals or legislation, but the FTC expressed a desire to begin discussions as issues associated with data portability continue to evolve. The FTC noted that in addition to providing benefits to consumers, data portability may benefit competition by allowing new entrants to access data they otherwise would not have so that they can grow competing platforms and services. At the same time, the FTC recognizes that there may be challenges to implementing or requiring data portability.
During the workshop, FTC staff discussed several examples of existing data portability laws and regulations, such as the right to data portability under Article 20 of the European Union’s General Data Protection Regulation (GDPR) and the right for consumers to make requests for portable data under the California Consumer Privacy Act (CCPA). The FTC noted that other countries have taken different approaches, like India and the United Kingdom’s data portability regulations that are narrowly tailored to address only the health and financial services sectors.
The panelists of the workshop highlighted a variety of issues and considerations for data portability. From an information security perspective, the panelists discussed how businesses would need to ensure they could verify the identity of the consumer before completing a transfer of data to prevent unauthorized actors from stealing people’s data. From a privacy perspective, the panelists discussed how users should be fully informed about the data they are receiving, to whom they can transfer their data, and how a new entity or service may use the information they are given by the consumer.
Additionally, from an operational perspective, the panelists remarked that the data provided to consumers would need to be interoperable between different systems. In one example discussed by the panelists, if consumers receive their data and are not able to give their information to another entity or use their data with other systems then the ability to port the data loses its effectiveness. The panelists called for businesses or the government to implement some form of standardization so that the data would remain useful to consumers. Some panelists called for a federal privacy and security law that would set protection standards for businesses in regards to data portability.
The FTC is not the only government agency exploring the concept of data portability. The Consumer Financial Protection Bureau (CFPB) recently announced a potential rulemaking under the Dodd-Frank Act Section 1033, which authorizes the CFPB to create rules enhancing consumers’ access to their financial data. The CFPB is asking for comments on similar issues as those discussed during the FTC working surrounding data portability, such as privacy, security, effective consumer control over data access, and accountability for errors and any unauthorized access.
By Kim Phan & Katie Morehead on September 29, 2020
POSTED IN DATA PORTABILITY, FEDERAL TRADE COMMISSION (FTC), ONLINE PRIVACY [https://www.cyberadviserblog.com/category/federal-trade-commission/]
On September 22nd, the Federal Trade Commission (FTC) hosted an event, “Data To Go: An FTC Workshop on Data Portability,” [https://www.ftc.gov/news-events/events-calendar/data-go-ftc-workshop-data-portability] to examine the potential benefits and challenges to consumers and competition raised by data portability. Data portability means giving consumers the ability to receive a copy of their data for their own use or and move the data to another entity or service.
The workshop did not focus on any specific policy proposals or legislation, but the FTC expressed a desire to begin discussions as issues associated with data portability continue to evolve. The FTC noted that in addition to providing benefits to consumers, data portability may benefit competition by allowing new entrants to access data they otherwise would not have so that they can grow competing platforms and services. At the same time, the FTC recognizes that there may be challenges to implementing or requiring data portability.
During the workshop, FTC staff discussed several examples of existing data portability laws and regulations, such as the right to data portability under Article 20 of the European Union’s General Data Protection Regulation (GDPR) and the right for consumers to make requests for portable data under the California Consumer Privacy Act (CCPA). The FTC noted that other countries have taken different approaches, like India and the United Kingdom’s data portability regulations that are narrowly tailored to address only the health and financial services sectors.
The panelists of the workshop highlighted a variety of issues and considerations for data portability. From an information security perspective, the panelists discussed how businesses would need to ensure they could verify the identity of the consumer before completing a transfer of data to prevent unauthorized actors from stealing people’s data. From a privacy perspective, the panelists discussed how users should be fully informed about the data they are receiving, to whom they can transfer their data, and how a new entity or service may use the information they are given by the consumer.
Additionally, from an operational perspective, the panelists remarked that the data provided to consumers would need to be interoperable between different systems. In one example discussed by the panelists, if consumers receive their data and are not able to give their information to another entity or use their data with other systems then the ability to port the data loses its effectiveness. The panelists called for businesses or the government to implement some form of standardization so that the data would remain useful to consumers. Some panelists called for a federal privacy and security law that would set protection standards for businesses in regards to data portability.
The FTC is not the only government agency exploring the concept of data portability. The Consumer Financial Protection Bureau (CFPB) recently announced a potential rulemaking under the Dodd-Frank Act Section 1033, which authorizes the CFPB to create rules enhancing consumers’ access to their financial data. The CFPB is asking for comments on similar issues as those discussed during the FTC working surrounding data portability, such as privacy, security, effective consumer control over data access, and accountability for errors and any unauthorized access.
EPA: Diesel truck owners who defeat polution controls
Brief excerpt from EPA statement:
Emissions controls have been removed from more than 550,000 diesel pickup trucks in the last decade. As a result ofthis tampering, more than 570,000 tons of excess oxides ofnitrogen(NOx) and 5,000 tons ofparticulate matter (PM) will be emitted by these tampered trucks over the lifetime ofthe vehicles. These tampered trucks constitute approximately 15 percent of the nationalpopulation of diesel trucks that were originally certified with emissions controls. But, due to their severe excess NOx emissions, these trucks have an air quality impact equivalent to adding more than 9 million additional (compliant, non- tampered) diesel pickup trucks to our roads. This Report describes these estimates ingreater detail and explains AED's underlying analysis.
https://int.nyt.com/data/documenttools/epa-on-tampered-diesel-pickups-11-20/6d70536b06182ad2/full.pdf
Brief excerpt from EPA statement:
Emissions controls have been removed from more than 550,000 diesel pickup trucks in the last decade. As a result ofthis tampering, more than 570,000 tons of excess oxides ofnitrogen(NOx) and 5,000 tons ofparticulate matter (PM) will be emitted by these tampered trucks over the lifetime ofthe vehicles. These tampered trucks constitute approximately 15 percent of the nationalpopulation of diesel trucks that were originally certified with emissions controls. But, due to their severe excess NOx emissions, these trucks have an air quality impact equivalent to adding more than 9 million additional (compliant, non- tampered) diesel pickup trucks to our roads. This Report describes these estimates ingreater detail and explains AED's underlying analysis.
https://int.nyt.com/data/documenttools/epa-on-tampered-diesel-pickups-11-20/6d70536b06182ad2/full.pdf
DCOAG: Fighting Price Gouging
For more than eight months, an emergency declaration has been in place in the District because of COVID-19. Special protections for District residents have been in place too, including a ban on price gouging. Most—but not all—District businesses have been following the law. In a price gouging lawsuit my office filed this month, we alleged that Capitol Petroleum Group (CPG), a major gasoline seller, overcharged consumers at 54 gas stations in the District during the emergency. Our investigation revealed that CPG unlawfully doubled average profits per gallon of gas at the expense of District consumers and at one point applied a markup of nearly 150% to the prices it charged other retailers.
From: DC OAG newsletter
For more than eight months, an emergency declaration has been in place in the District because of COVID-19. Special protections for District residents have been in place too, including a ban on price gouging. Most—but not all—District businesses have been following the law. In a price gouging lawsuit my office filed this month, we alleged that Capitol Petroleum Group (CPG), a major gasoline seller, overcharged consumers at 54 gas stations in the District during the emergency. Our investigation revealed that CPG unlawfully doubled average profits per gallon of gas at the expense of District consumers and at one point applied a markup of nearly 150% to the prices it charged other retailers.
From: DC OAG newsletter
The House Transportation Committee investigation report on Boeing and the 737.
https://transportation.house.gov/imo/media/doc/2020.09.15%20FINAL%20737%20MAX%20Report%20for%20Public%20Release.pdf
The picture painted in the report is not pretty.
After an exhaustive 18 month investigation, the House Transportation Committee concluded that there were multiple missed opportunities to ensure a safe MAX design and reverse flawed technical design criteria, faulty assumptions about pilot response times and production pressures.
The FAA also bears responsibility for failing to adequately review and correct Boeing’s MAX 737 errors and safety flaws. The FAA failed in its oversight of Boeing and its certification of the aircraft.
The 737 MAX crashes were not the result of a singular failure, technical mistake or mismanaged event. Instead, the two horrific crashes were the culmination of a series of faulty assumptions by Boeing’s engineers, a lack of transparency on Boeing’s management, and grossly inefficient regulation and oversight by the FAA.
From: https://blog.volkovlaw.com/2020/10/boeing-737-max-accountability-shareholder-litigation-against-boeing-board-house-transportation-committee-issues-scathing-report-part-i-of-ii/
https://transportation.house.gov/imo/media/doc/2020.09.15%20FINAL%20737%20MAX%20Report%20for%20Public%20Release.pdf
The picture painted in the report is not pretty.
After an exhaustive 18 month investigation, the House Transportation Committee concluded that there were multiple missed opportunities to ensure a safe MAX design and reverse flawed technical design criteria, faulty assumptions about pilot response times and production pressures.
The FAA also bears responsibility for failing to adequately review and correct Boeing’s MAX 737 errors and safety flaws. The FAA failed in its oversight of Boeing and its certification of the aircraft.
The 737 MAX crashes were not the result of a singular failure, technical mistake or mismanaged event. Instead, the two horrific crashes were the culmination of a series of faulty assumptions by Boeing’s engineers, a lack of transparency on Boeing’s management, and grossly inefficient regulation and oversight by the FAA.
From: https://blog.volkovlaw.com/2020/10/boeing-737-max-accountability-shareholder-litigation-against-boeing-board-house-transportation-committee-issues-scathing-report-part-i-of-ii/
For Billion-Dollar COVID Vaccines, Basic Government-Funded Science Laid the Groundwork
Much of the pioneering work on mRNA vaccines was done with government money, though drugmakers could walk away with big profits
The vaccines made by Pfizer and Moderna, which are likely to be the first to win FDA approval, in particular rely heavily on two fundamental discoveries that emerged from federally funded research: the viral protein designed by Graham and his colleagues, and the concept of RNA modification, first developed by Drew Weissman and Katalin Karikó at the University of Pennsylvania. In fact, Moderna’s founders in 2010 named the company after this concept: “Modified” + “RNA” = Moderna, according to co-founder Robert Langer.
“This is the people’s vaccine,” said corporate critic Peter Maybarduk, director of Public Citizen’s Access to Medicines program. “Federal scientists helped invent it and taxpayers are funding its development. … It should belong to humanity.”
* * *
Under a 1980 law,[Bayh-Dole Act] the NIH will obtain no money from the coronavirus vaccine patent. How much money will eventually go to the discoverers or their institutions isn’t clear. Any existing licensing agreements haven’t been publicized; patent disputes among some of the companies will likely last years. HHS’ big contracts with the vaccine companies are not transparent, and Freedom of Information Act requests have been slow-walked and heavily redacted, said Duke University law professor Arti Rai.
Some basic scientists involved in the enterprise seem to accept the potentially lopsided financial rewards.
“Having public-private partnerships is how things get done,” Graham said. “During this crisis, everything is focused on how can we do the best we can as fast as we can for the public health. All this other stuff is going to have to be figured out later.”
“It’s not a good look to become extremely wealthy off a pandemic,” McLellan said, noting the big stock sales by some vaccine company executives after they received hundreds of millions of dollars in government assistance. Still, “the companies should be able to make some money.”
For [Barney] Graham [who did important basic research at NIH], the lesson of the coronavirus vaccine response is that a few billion dollars a year spent on additional basic research could prevent a thousand times as much loss in death, illness and economic destruction. At a news conference Monday, Graham’s boss at NIH, Anthony Fauci, highlighted the spike protein work.
“We shouldn’t underestimate the value of basic biology research,” Fauci said.
Much of the pioneering work on mRNA vaccines was done with government money, though drugmakers could walk away with big profits
- By Arthur Allen, Kaiser Health News on November 18, 2020
- https://www.scientificamerican.com/article/for-billion-dollar-covid-vaccines-basic-government-funded-science-laid-the-groundwork/
The vaccines made by Pfizer and Moderna, which are likely to be the first to win FDA approval, in particular rely heavily on two fundamental discoveries that emerged from federally funded research: the viral protein designed by Graham and his colleagues, and the concept of RNA modification, first developed by Drew Weissman and Katalin Karikó at the University of Pennsylvania. In fact, Moderna’s founders in 2010 named the company after this concept: “Modified” + “RNA” = Moderna, according to co-founder Robert Langer.
“This is the people’s vaccine,” said corporate critic Peter Maybarduk, director of Public Citizen’s Access to Medicines program. “Federal scientists helped invent it and taxpayers are funding its development. … It should belong to humanity.”
* * *
Under a 1980 law,[Bayh-Dole Act] the NIH will obtain no money from the coronavirus vaccine patent. How much money will eventually go to the discoverers or their institutions isn’t clear. Any existing licensing agreements haven’t been publicized; patent disputes among some of the companies will likely last years. HHS’ big contracts with the vaccine companies are not transparent, and Freedom of Information Act requests have been slow-walked and heavily redacted, said Duke University law professor Arti Rai.
Some basic scientists involved in the enterprise seem to accept the potentially lopsided financial rewards.
“Having public-private partnerships is how things get done,” Graham said. “During this crisis, everything is focused on how can we do the best we can as fast as we can for the public health. All this other stuff is going to have to be figured out later.”
“It’s not a good look to become extremely wealthy off a pandemic,” McLellan said, noting the big stock sales by some vaccine company executives after they received hundreds of millions of dollars in government assistance. Still, “the companies should be able to make some money.”
For [Barney] Graham [who did important basic research at NIH], the lesson of the coronavirus vaccine response is that a few billion dollars a year spent on additional basic research could prevent a thousand times as much loss in death, illness and economic destruction. At a news conference Monday, Graham’s boss at NIH, Anthony Fauci, highlighted the spike protein work.
“We shouldn’t underestimate the value of basic biology research,” Fauci said.
What the EU Gets Right—and the US Gets Wrong—About Antitrust
European regulators focus on how Amazon, Apple, Facebook, and Google use—and abuse–their vast stores of data to maintain advantages over rivals.THERE’S A GROWING bipartisan consensus in the US to rein in the massive power accumulated by dominant tech firms. From state capitals to Congress, officials have launched multiple investigations of whether the big four of Amazon, Apple, Facebook, and Google are now forces more for harm than good and whether their size and scale demand government action to curtail them or potentially break them up.
US regulators have not yet shown all their cards, but they should pause before arguing that too big equals anticompetitive, or seeking to break up or substantially restructure the tech giants. Instead, they might want to look to Europe.
The US and EU have long differed in their approaches to Big Tech. US regulators and legislators have focused more on the size of these companies, while the EU has focused on issues related to control of data. Most recently, the EU sued Amazon for taking undue advantage of its customer and vendor data to gain a competitive edge over the thousands of independent businesses who sell through the platform. Earlier, the EU chipped away at Apple’s questionable tax practices and Google’s management of its ad platform. It has also attempted to give individuals more control over their data through rules such as the General Data Protection Regulation, which allows individuals to opt out of cookies and data-tracking on websites they visit.
In the US, by contrast, powerful voices, from Senator Elizabeth Warren to advocates such as the Open Markets Institute, call for antitrust enforcement to break up these companies. Tuesday, Senator Richard Blumenthal (D–Connecticut) urged “a break-up of tech giants. Because they've misused their bigness and power.” In the executive branch, Justice Department antitrust chief Makan Delrahim, also has spoken of dismantling the big companies.
As appealing as the big stick of antitrust enforcement is to a US government with memories of breaking up Standard Oil and AT&T in the 20th century, it may be the Europeans who are getting to the real issue: the companies’ use, and abuse, of data to erect empires. As European Commission executive vice president Margrethe Vestager wrote in announcing the action against Amazon, “We do not take issue with the success of Amazon or its size. Our concern is a very specific business conduct”—Amazon’s use of its data to privilege its own products over those of other sellers.
By emphasizing that data, rather than market size, gives Amazon an unfair advantage, the EU authorities are addressing the core challenge of Big Tech: It’s not their market value or their aggressive acquisitions that undermine competition, it’s the access to mountains of data. Reducing their scale through forced divestitures or curtailing their ability to acquire will satisfy bloodlust and may marginally restore competition, but unless the data market is restructured, it may all be for naught.
In the US, the Justice Department’s recent antitrust suit against Google addresses Google’s privileged use of data it collects to gain a competitive advantage. But the language of the suit, explicitly donning the mantle of the 1890 Sherman Act, echoes the outdated mantras of size and market concentration in a way that suggests a still-encumbered grasp of the real issue.
Over time, US law has come to view antitrust through a single lens: harm to the consumer. That’s a problem for critics of Big Tech, because the companies give away many of their products for free and can argue that in other cases they lower prices. The US antitrust framework simply isn’t well-suited to the unique structure and scope of these 21st-century behemoths.
In the words of Lina Khan, an attorney who served on the staff of the House antitrust subcommittee that issued a highly critical report of the tech giants in October, “the current framework in antitrust—specifically its pegging competition to consumer welfare, defined as short-term price effects—is unequipped to capture the architecture of market power in the modern economy.” The report says tech’s Big Four have gone from being “scrappy, underdog startups” to the “kinds of monopolies we last saw in the era of oil barons and railroad tycoons” and that have acquired too much power that they have then exploited. Khan favors changing the law to look more broadly at the ill effects of monopolies.
The blunt approach favored by some antitrust advocates in the US contrasts with the surgical tactics of the EU. Breakups are rhetorically appealing; they cut through the media noise and say, “We are doing something!” For that reason, they’re likely to gather continued bipartisan steam. Moreover, the EU’s focus on who owns what data and how it can be used has done little to slow Big Tech’s ascent.
But if the issue isn’t size per se but rather privileged access to and use of data, the EU approach is more tailored to these companies, rather than the 20th-century antecedents they resemble. They are not simply digital variants of Standard Oil or AT&T. They are new entities with distinct business models built on data. Unless their use of data is altered meaningfully, it won’t matter if they are broken up or even if firewalls are erected inside them. They will retain powerful sway over data marketplaces and exert anti-competitive pressure on smaller companies without the same access to data.
The EU’s actions, along with the earlier efforts to give individuals more control over their data, recognize that new world better than US actions based on antitrust regulations designed for industrial monopolies of an earlier time. Here as in so much else, the US could meaningfully learn from approaches in other countries rather than falling back on its own history and frameworks.
It’s often said that data is the new oil; as a resource, that may be. But as for containing excesses, data and tech companies are more like nuclear energy: potent, immensely powerful, but requiring complicated and unique tools to harness them for good and contain them.
Credit: Wired
https://www.wired.com/story/what-eu-gets-right-us-wrong-antitrust/?
European regulators focus on how Amazon, Apple, Facebook, and Google use—and abuse–their vast stores of data to maintain advantages over rivals.THERE’S A GROWING bipartisan consensus in the US to rein in the massive power accumulated by dominant tech firms. From state capitals to Congress, officials have launched multiple investigations of whether the big four of Amazon, Apple, Facebook, and Google are now forces more for harm than good and whether their size and scale demand government action to curtail them or potentially break them up.
US regulators have not yet shown all their cards, but they should pause before arguing that too big equals anticompetitive, or seeking to break up or substantially restructure the tech giants. Instead, they might want to look to Europe.
The US and EU have long differed in their approaches to Big Tech. US regulators and legislators have focused more on the size of these companies, while the EU has focused on issues related to control of data. Most recently, the EU sued Amazon for taking undue advantage of its customer and vendor data to gain a competitive edge over the thousands of independent businesses who sell through the platform. Earlier, the EU chipped away at Apple’s questionable tax practices and Google’s management of its ad platform. It has also attempted to give individuals more control over their data through rules such as the General Data Protection Regulation, which allows individuals to opt out of cookies and data-tracking on websites they visit.
In the US, by contrast, powerful voices, from Senator Elizabeth Warren to advocates such as the Open Markets Institute, call for antitrust enforcement to break up these companies. Tuesday, Senator Richard Blumenthal (D–Connecticut) urged “a break-up of tech giants. Because they've misused their bigness and power.” In the executive branch, Justice Department antitrust chief Makan Delrahim, also has spoken of dismantling the big companies.
As appealing as the big stick of antitrust enforcement is to a US government with memories of breaking up Standard Oil and AT&T in the 20th century, it may be the Europeans who are getting to the real issue: the companies’ use, and abuse, of data to erect empires. As European Commission executive vice president Margrethe Vestager wrote in announcing the action against Amazon, “We do not take issue with the success of Amazon or its size. Our concern is a very specific business conduct”—Amazon’s use of its data to privilege its own products over those of other sellers.
By emphasizing that data, rather than market size, gives Amazon an unfair advantage, the EU authorities are addressing the core challenge of Big Tech: It’s not their market value or their aggressive acquisitions that undermine competition, it’s the access to mountains of data. Reducing their scale through forced divestitures or curtailing their ability to acquire will satisfy bloodlust and may marginally restore competition, but unless the data market is restructured, it may all be for naught.
In the US, the Justice Department’s recent antitrust suit against Google addresses Google’s privileged use of data it collects to gain a competitive advantage. But the language of the suit, explicitly donning the mantle of the 1890 Sherman Act, echoes the outdated mantras of size and market concentration in a way that suggests a still-encumbered grasp of the real issue.
Over time, US law has come to view antitrust through a single lens: harm to the consumer. That’s a problem for critics of Big Tech, because the companies give away many of their products for free and can argue that in other cases they lower prices. The US antitrust framework simply isn’t well-suited to the unique structure and scope of these 21st-century behemoths.
In the words of Lina Khan, an attorney who served on the staff of the House antitrust subcommittee that issued a highly critical report of the tech giants in October, “the current framework in antitrust—specifically its pegging competition to consumer welfare, defined as short-term price effects—is unequipped to capture the architecture of market power in the modern economy.” The report says tech’s Big Four have gone from being “scrappy, underdog startups” to the “kinds of monopolies we last saw in the era of oil barons and railroad tycoons” and that have acquired too much power that they have then exploited. Khan favors changing the law to look more broadly at the ill effects of monopolies.
The blunt approach favored by some antitrust advocates in the US contrasts with the surgical tactics of the EU. Breakups are rhetorically appealing; they cut through the media noise and say, “We are doing something!” For that reason, they’re likely to gather continued bipartisan steam. Moreover, the EU’s focus on who owns what data and how it can be used has done little to slow Big Tech’s ascent.
But if the issue isn’t size per se but rather privileged access to and use of data, the EU approach is more tailored to these companies, rather than the 20th-century antecedents they resemble. They are not simply digital variants of Standard Oil or AT&T. They are new entities with distinct business models built on data. Unless their use of data is altered meaningfully, it won’t matter if they are broken up or even if firewalls are erected inside them. They will retain powerful sway over data marketplaces and exert anti-competitive pressure on smaller companies without the same access to data.
The EU’s actions, along with the earlier efforts to give individuals more control over their data, recognize that new world better than US actions based on antitrust regulations designed for industrial monopolies of an earlier time. Here as in so much else, the US could meaningfully learn from approaches in other countries rather than falling back on its own history and frameworks.
It’s often said that data is the new oil; as a resource, that may be. But as for containing excesses, data and tech companies are more like nuclear energy: potent, immensely powerful, but requiring complicated and unique tools to harness them for good and contain them.
Credit: Wired
https://www.wired.com/story/what-eu-gets-right-us-wrong-antitrust/?
Irving Azoff has offered a decidedly blunt take on the music payments (or the relative lack thereof) made by social networks including Facebook, Snapchat, and TikTok, indicating that they “resist paying for music until you go beat the f—k out of them.”
The 72-year-old management mainstay, who hasn’t hesitated to voice his opinion of big-name content platforms in the past, disclosed his firmly worded stance on social networks in a recent interview with the Los Angeles Times. This piece was published late last week, just before the Full Stop Management exec and chairman was inducted into the Rock and Roll Hall of Fame as a non-performer, receiving the Ahmet Ertegun Award. Irving Azoff nonchalantly noted in the article that Travis Scott is “unmanageable” and opined: “I don’t think there’s that many smart people in our business.”
And after emphasizing that he continues to manage musicians as part of a larger effort to pursue artist-rights causes – not solely due to the far-reaching financial benefits delivered by his star-studded client roster – the Music Artists Coalition co-founder turned his attention to social platforms’ unwillingness to “pay fair market value” for music.
“These people, when they start out – whether it’s Facebook, Snapchat, TikTok, whatever – they resist paying for music until you go beat the f—k out of them,” stated the longtime Eagles manager. “And then of course, none of them pay fair market value and they get away with it. Your company’s worth $30 billion and you can’t spend 20 grand for a song that becomes a phenomenon on your channel? Even when they pay, artists don’t get enough.
“Music, as a commodity, is more important than it’s ever been, and more unfairly monetized for the creators. And that’s what creates an opportunity for people like me,” finished the former Live Nation executive chairman and Ticketmaster CEO.
https://www.digitalmusicnews.com/2020/11/09/irving-azoff-social-platform-comments/
The 72-year-old management mainstay, who hasn’t hesitated to voice his opinion of big-name content platforms in the past, disclosed his firmly worded stance on social networks in a recent interview with the Los Angeles Times. This piece was published late last week, just before the Full Stop Management exec and chairman was inducted into the Rock and Roll Hall of Fame as a non-performer, receiving the Ahmet Ertegun Award. Irving Azoff nonchalantly noted in the article that Travis Scott is “unmanageable” and opined: “I don’t think there’s that many smart people in our business.”
And after emphasizing that he continues to manage musicians as part of a larger effort to pursue artist-rights causes – not solely due to the far-reaching financial benefits delivered by his star-studded client roster – the Music Artists Coalition co-founder turned his attention to social platforms’ unwillingness to “pay fair market value” for music.
“These people, when they start out – whether it’s Facebook, Snapchat, TikTok, whatever – they resist paying for music until you go beat the f—k out of them,” stated the longtime Eagles manager. “And then of course, none of them pay fair market value and they get away with it. Your company’s worth $30 billion and you can’t spend 20 grand for a song that becomes a phenomenon on your channel? Even when they pay, artists don’t get enough.
“Music, as a commodity, is more important than it’s ever been, and more unfairly monetized for the creators. And that’s what creates an opportunity for people like me,” finished the former Live Nation executive chairman and Ticketmaster CEO.
https://www.digitalmusicnews.com/2020/11/09/irving-azoff-social-platform-comments/
DC Court restrains Trump administration actions and protects First Amendment Free Speech Rights of Voice of America Journalists
Recently U.S. District Court Judge Beryl Howell entered a preliminary injunction order protecting free speech rights of VOA journalists. She ordered a Trump Administration appointee, U.S. Agency for Global Media CEO Michael Pack, to stop interfering in the news service's news coverage and editorial personnel matters. She limited Pack's authority to force the news agency to cover President Trump more favorably. She said that the acts of Pack and his aides likely "violated and continue to violate First Amendment rights because, among other unconstitutional effects, they result in self-censorship and the chilling of First Amendment expression. . . .,"
The opinion is here:
https://www.gibsondunn.com/wp-content/uploads/2020/11/PI-Decision-11-20-2020.pdf
Recently U.S. District Court Judge Beryl Howell entered a preliminary injunction order protecting free speech rights of VOA journalists. She ordered a Trump Administration appointee, U.S. Agency for Global Media CEO Michael Pack, to stop interfering in the news service's news coverage and editorial personnel matters. She limited Pack's authority to force the news agency to cover President Trump more favorably. She said that the acts of Pack and his aides likely "violated and continue to violate First Amendment rights because, among other unconstitutional effects, they result in self-censorship and the chilling of First Amendment expression. . . .,"
The opinion is here:
https://www.gibsondunn.com/wp-content/uploads/2020/11/PI-Decision-11-20-2020.pdf
New York adopts strong anti-SLAPP statute
Posted: 17 Nov 2020 09:16 AM PST
by Paul Alan Levy
With a signature last week from Governor Cuomo, New York has become the latest state to enact a strong anti-SLAPP law. Addressing flaws that came to the fore in our recent defense of Richard Robbins, the new statute considerably broadens the scope of speech covered by anti-SLAPP protections, and, requires a stay of discovery upon the filing of an anti-SLAPP motion, provides for the consideration of affidavits as well as pleadings in assessing whether there is “a substantial basis in law” for actions directed at protected speech, and requires, rather than simply permitting, awards of attorney fees when an anti-SLAPP motion is granted.
Unlike the anti-SLAPP laws in most states with such broad coverage, the New York statute does not contain exceptions for lawsuits aimed at commercial speech, suits filed in the public interest, or suits filed on behalf of state or local governments. It remains to be seen whether such amendments prove to be needed to prevent the application to the statute to cases far removed some the sort of oppressive lawsuits at which the sponsors were aiming, as enactment of such exceptions proved necessary in California after its pioneering anti-SLAPP law was enacted without those safeguards.
Posted: 17 Nov 2020 09:16 AM PST
by Paul Alan Levy
With a signature last week from Governor Cuomo, New York has become the latest state to enact a strong anti-SLAPP law. Addressing flaws that came to the fore in our recent defense of Richard Robbins, the new statute considerably broadens the scope of speech covered by anti-SLAPP protections, and, requires a stay of discovery upon the filing of an anti-SLAPP motion, provides for the consideration of affidavits as well as pleadings in assessing whether there is “a substantial basis in law” for actions directed at protected speech, and requires, rather than simply permitting, awards of attorney fees when an anti-SLAPP motion is granted.
Unlike the anti-SLAPP laws in most states with such broad coverage, the New York statute does not contain exceptions for lawsuits aimed at commercial speech, suits filed in the public interest, or suits filed on behalf of state or local governments. It remains to be seen whether such amendments prove to be needed to prevent the application to the statute to cases far removed some the sort of oppressive lawsuits at which the sponsors were aiming, as enactment of such exceptions proved necessary in California after its pioneering anti-SLAPP law was enacted without those safeguards.
Apple will pay $113 million to settle states’ investigation into battery throttling.
Nov. 18, 2020, 6:49 p.m. ETNov. 18, 2020
Nov. 18, 2020By Jack Nicas
Apple agreed on Wednesday to pay $113 million to settle an investigation by more than 30 states into its past practice of secretly slowing down older iPhones to preserve their battery life.
Apple’s practice of throttling phones was a black eye for the company when it was revealed in 2017, seeming to confirm some customers’ suspicions that their devices got slower when Apple released new phones. Apple said at the time that its software had slowed down phones with older batteries to prevent them from shutting off unexpectedly. Apple offered some customers free battery replacements in response to the controversy.
As part of its settlement with the states, Apple must be more transparent about how it manages battery life on its devices. Apple previously agreed to pay up to $500 million to affected customers to settle a separate class-action suit.
An Apple spokeswoman declined to comment but pointed to language in the settlement that said the agreement did not mean Apple has admitted any wrongdoing
https://www.nytimes.com/2020/11/18/business/apple-will-pay-113-million-to-settle-states-investigation-into-battery-throttling.html
Nov. 18, 2020, 6:49 p.m. ETNov. 18, 2020
Nov. 18, 2020By Jack Nicas
Apple agreed on Wednesday to pay $113 million to settle an investigation by more than 30 states into its past practice of secretly slowing down older iPhones to preserve their battery life.
Apple’s practice of throttling phones was a black eye for the company when it was revealed in 2017, seeming to confirm some customers’ suspicions that their devices got slower when Apple released new phones. Apple said at the time that its software had slowed down phones with older batteries to prevent them from shutting off unexpectedly. Apple offered some customers free battery replacements in response to the controversy.
As part of its settlement with the states, Apple must be more transparent about how it manages battery life on its devices. Apple previously agreed to pay up to $500 million to affected customers to settle a separate class-action suit.
An Apple spokeswoman declined to comment but pointed to language in the settlement that said the agreement did not mean Apple has admitted any wrongdoing
https://www.nytimes.com/2020/11/18/business/apple-will-pay-113-million-to-settle-states-investigation-into-battery-throttling.html
WSJ: Apple Inc. AAPL -1.10% is halving the commission it charges smaller developers that sell software through its App Store,
a partial concession in its battle with critics over how it wields power in its digital ecosystem.
The iPhone maker said that starting next year it will collect 15% rather than 30% of App Store sales from companies that generate no more than $1 million in revenue through the software platform, including in-app purchases. The fee will remain 30% for developers whose sales through the App Store, excluding commission payments, exceed $1 million—meaning the reduction won’t affect such vocal Apple opponents as videogame company Epic Games Inc.
Apple’s 30% take has been at the heart of complaints this year from other tech companies and some users over how it manages the vast digital world of people who use iPhones, iPads and other Apple devices. The policy is also central to a major legal battle with Epic, and to government examinations in the U.S. and Europe of Apple’s competitive behavior as a gatekeeper between software makers and the hundreds of millions of people who use Apple’s gadgets.
From: https://www.wsj.com/articles/apple-under-antitrust-scrutiny-halves-app-store-fee-for-smaller-developers-11605697203?mod=tech_lead_pos4
DAR Comment: Epic's litigation against Apple has been criticized for legal weaknesses, but it may be a cog in Epic's seemingly successful machine to pressure Apple for better rates.
a partial concession in its battle with critics over how it wields power in its digital ecosystem.
The iPhone maker said that starting next year it will collect 15% rather than 30% of App Store sales from companies that generate no more than $1 million in revenue through the software platform, including in-app purchases. The fee will remain 30% for developers whose sales through the App Store, excluding commission payments, exceed $1 million—meaning the reduction won’t affect such vocal Apple opponents as videogame company Epic Games Inc.
Apple’s 30% take has been at the heart of complaints this year from other tech companies and some users over how it manages the vast digital world of people who use iPhones, iPads and other Apple devices. The policy is also central to a major legal battle with Epic, and to government examinations in the U.S. and Europe of Apple’s competitive behavior as a gatekeeper between software makers and the hundreds of millions of people who use Apple’s gadgets.
From: https://www.wsj.com/articles/apple-under-antitrust-scrutiny-halves-app-store-fee-for-smaller-developers-11605697203?mod=tech_lead_pos4
DAR Comment: Epic's litigation against Apple has been criticized for legal weaknesses, but it may be a cog in Epic's seemingly successful machine to pressure Apple for better rates.
Airbnb Claims Google Pushes Competing Travel Listings Down
-
November 17, 2020
Airbnb, in its S-1 filing, wrote that it believes its search results have been adversely affected by the launch of Google Travel and Google Vacation Rental Ads, reported CNBC. [https://www.cnbc.com/2020/11/16/airbnb-s1-google-travel-sites-hurt-airbnb-in-search-results.html]
Airbnb says Google’s search business has prevented the home-sharing company from reaping internet traffic, according to documents the company filed as it prepares to sell shares to the public.
Airbnb allows users to book short-term rentals and experiences while traveling. Under the “Risk Factors” in Airbnb’s S-1 filing, the company said Google has favored its own products over the company’s, resulting in fewer online visitors to its website. In the last year, the Alphabet company has added more search features akin to travel websites, including for vacation rentals.
“We believe that our SEO results have been adversely affected by the launch of Google Travel and Google Vacation Rental Ads, which reduce the prominence of our platform in organic search results for travel-related terms and placement on Google,” the prospectus states.
DAR Comment: At recent Congressional hearings, many stories like Airbnb's were looked at, and had a prominent role in the Report issued by the Democratic majority.
-
November 17, 2020
Airbnb, in its S-1 filing, wrote that it believes its search results have been adversely affected by the launch of Google Travel and Google Vacation Rental Ads, reported CNBC. [https://www.cnbc.com/2020/11/16/airbnb-s1-google-travel-sites-hurt-airbnb-in-search-results.html]
Airbnb says Google’s search business has prevented the home-sharing company from reaping internet traffic, according to documents the company filed as it prepares to sell shares to the public.
Airbnb allows users to book short-term rentals and experiences while traveling. Under the “Risk Factors” in Airbnb’s S-1 filing, the company said Google has favored its own products over the company’s, resulting in fewer online visitors to its website. In the last year, the Alphabet company has added more search features akin to travel websites, including for vacation rentals.
“We believe that our SEO results have been adversely affected by the launch of Google Travel and Google Vacation Rental Ads, which reduce the prominence of our platform in organic search results for travel-related terms and placement on Google,” the prospectus states.
DAR Comment: At recent Congressional hearings, many stories like Airbnb's were looked at, and had a prominent role in the Report issued by the Democratic majority.
How Biosimilar Disparagement Violates Antitrust Law
by Michael Carrier
Nov. 16, 2020,
Biosimilar adoption has lagged in the U.S. due, in part, to their high cost and disparagement by manufacturers of biologics. Rutgers Law professor Michael A. Carrier says biologic manufacturers are violating antitrust law because they have a monopoly and engage in exclusionary conduct by issuing disparaging statements with foreboding safety warnings.
Biologics, the next wave of pharmaceutical products, offer pathbreaking advances in treating cancer, arthritis, chronic diseases, and other conditions. Their promise, however, is matched by their high price. More complex than brand-name small-molecule drugs, biologics could cost patients hundreds of thousands of dollars a year.
The hope, then, is that just as with generic drugs, competition from follow-on products known as biosimilars will lower prices. In fact, a recent report from the Association for Affordable Medicines found that biosimilars could “save America tens of billions of dollars over the next decade.” But it warned that these savings would materialize “only if patients can access” the biosimilars. One main reason they might not is disparagement.
Biologic companies have raised ominous warnings that biosimilars are not the same, with differences posing grave safety consequences. This can violate antitrust law.
Biosimilars are nearly the same as biologics. In fact, they are required to be “highly similar” to and have “no clinically meaningful differences” from biologics. To show that it is highly similar, a biosimilar manufacturer “extensively analyz[es]…the structure and function of both the reference product and the proposed biosimilar,” using “[s]tate-of-the-art technology…to compare characteristics…such as purity, chemical identity, and bioactivity.”
The manufacturer also conducts studies to show that there are no clinically meaningful differences in “safety, purity, and potency.”
Biologic Companies Are Violating Antitrust Law
How is antitrust law being violated? First, biologic manufacturers are likely to have monopoly power. There has been limited entry of biosimilars in the U.S. Biologics make up eight of the top 10 highest-selling drugs in the country. And manufacturers charge astronomical prices, as much as hundreds of thousands of dollars a year.
Second, biologic manufacturers’ statements and omissions could constitute exclusionary conduct. There are several types of deception: Manufacturers make foreboding safety threats. They warn that biosimilars act differently from, or are not identical to, reference products. And they fret that biosimilars do not satisfy interchangeability standards.
Each of these types of statements, even though they may be nuanced, deceives. A product that is “highly similar” to and has “no clinically meaningful differences” from the reference product cannot act differently in the body. Similarly, claiming that the biosimilar is not identical is irrelevant; in fact, it is “normal and expected within the manufacturing process” for even batches of biologic products themselves to reveal “[s]light differences.”
Nor does a biosimilar’s failure to attain interchangeability mean that it is less safe. This status only makes sense for biosimilars that would be dispensed at the pharmacy counter, where substitution takes place. But each of the biosimilars that has entered the U.S. market so far has been dispensed not in this setting, but through injection or infusion in the hospital.
Deceptive StatementsThe Federal Trade Commission has explained that companies can engage in deception not just by issuing false statements but also by making misleading statements and omitting information. Similarly, in February, the FDA explained in draft guidance that “representations or suggestions that create an impression that a biosimilar is not highly similar to its reference product are likely to be false or misleading.”
In evaluating antitrust liability for deception, some courts analyze an array of factors to ensure that the conduct affects competition. A plaintiff challenging biosimilar disparagement would be likely to satisfy these factors. Because the statements warn of health concerns, they would be material. As representations about safety, they would be likely to induce reasonable reliance. And a biosimilar manufacturer would not be likely to readily neutralize the disparaging statements.
Other courts apply a more holistic approach. Such a flexible framework makes it even more likely that an antitrust claim would be successful. It would recognize the irreversible effects of locking new patients into biologics because they do not trust biosimilars. And it would consider disparagement’s effects in fortifying entry barriers cementing biologics’ power.
In short, biologic manufacturers are likely to have monopoly power and engage in exclusionary conduct, thereby violating antitrust law.
In warning consumers about safety harms, biologic manufacturers make statements that sound reasonable on their face. But they seek to sow fear, not informing patients that there are no clinically meaningful differences between biologics and biosimilars.
Antitrust liability would prevent biologic manufacturers from stifling more affordable biosimilars in their cradle by ominously implying false safety concerns. In the process, antitrust promises to help U.S. consumers afford lifesaving medicines.
https://news.bloomberglaw.com/health-law-and-business/how-biosimilar-disparagement-violates-antitrust-lawThis column does not necessarily reflect the opinion of The Bureau of National Affairs, Inc. or its owners.
Author Information
Michael A. Carrier is Distinguished Professor of Law at Rutgers Law School
District officials will now send out another $100 million in grants to businesses hit hardest by the coronavirus pandemic
This is the city’s largest effort to prop up struggling retailers and restaurants since an initial round of cash assistance this spring.
Mayor Muriel Bowser announced this new “Bridge Fund” Wednesday, with plans to let businesses start applying for the grants on a rolling basis over the course of the next few weeks. The money will largely be targeted to the hospitality sector, considering that the pandemic has pummeled those industries particularly acutely, closely mirroring (but still distinct from) a program the D.C. Council created this summer.
The grants will be split among four categories: restaurants, hotels, retail and entertainment. Restaurants will be eligible to earn the largest portion of the funds, with $35 million set aside for the industry, while hotels are close behind with $30 million up for grabs. Entertainment venues and related businesses will be eligible for $20 million, while retailers can earn a total of $15 million.
https://www.bizjournals.com/washington/news/2020/11/18/dc-business-relief-grants-new-coronavirus.html?
This is the city’s largest effort to prop up struggling retailers and restaurants since an initial round of cash assistance this spring.
Mayor Muriel Bowser announced this new “Bridge Fund” Wednesday, with plans to let businesses start applying for the grants on a rolling basis over the course of the next few weeks. The money will largely be targeted to the hospitality sector, considering that the pandemic has pummeled those industries particularly acutely, closely mirroring (but still distinct from) a program the D.C. Council created this summer.
The grants will be split among four categories: restaurants, hotels, retail and entertainment. Restaurants will be eligible to earn the largest portion of the funds, with $35 million set aside for the industry, while hotels are close behind with $30 million up for grabs. Entertainment venues and related businesses will be eligible for $20 million, while retailers can earn a total of $15 million.
https://www.bizjournals.com/washington/news/2020/11/18/dc-business-relief-grants-new-coronavirus.html?
The view from Moscow -- Sputnik News
US Health Dept. Says Will Not Work With Biden Until Official Announcement of His Victory
MOSCOW (Sputnik) – The US Department of Health and Human Services will not work with projected President-elect Joe Biden until the General Services Administration (GSA) confirms his victory in the presidential election, Secretary Alex Azar said.
“We've made it very clear that when GSA makes a determination, we will ensure complete, cooperative professional transitions and planning,” Azar said at a press briefing on Wednesday, as quoted by the CNN broadcaster.
He stressed that the department was just following the existing guidance.
“We're about getting vaccines and therapeutics invented and get the clinical trial data and saving lives here. That's where our focus is as we go forward with our efforts,” Azar added.
GSA head Emily Murphy has reportedly yet to sign the required paperwork formalizing the start of the transition period. Until this move, Biden's team has no access to the government finances as well as cannot cooperate with federal bodies.
Incumbent President Donald Trump has not yet conceded defeat in the election despite prominent US media outlets, such as the Fox News broadcaster, declaring Biden's victory. Trump has made multiple claims of electoral fraud since polls closed.
US Health Dept. Says Will Not Work With Biden Until Official Announcement of His Victory
MOSCOW (Sputnik) – The US Department of Health and Human Services will not work with projected President-elect Joe Biden until the General Services Administration (GSA) confirms his victory in the presidential election, Secretary Alex Azar said.
“We've made it very clear that when GSA makes a determination, we will ensure complete, cooperative professional transitions and planning,” Azar said at a press briefing on Wednesday, as quoted by the CNN broadcaster.
He stressed that the department was just following the existing guidance.
“We're about getting vaccines and therapeutics invented and get the clinical trial data and saving lives here. That's where our focus is as we go forward with our efforts,” Azar added.
GSA head Emily Murphy has reportedly yet to sign the required paperwork formalizing the start of the transition period. Until this move, Biden's team has no access to the government finances as well as cannot cooperate with federal bodies.
Incumbent President Donald Trump has not yet conceded defeat in the election despite prominent US media outlets, such as the Fox News broadcaster, declaring Biden's victory. Trump has made multiple claims of electoral fraud since polls closed.
Businesses Trying to Rebound After Unrest Face a Challenge: Not Enough Insurance - The New York Times
A below-the-fold article in the NYT focuses on small businesses owned by largely uninsured minority people that were destroyed by vandals while racial justice protest riots were going on in Kenosha.
The author, Nellie Bowles, observes that some activists have downplayed the damage to businesses from looting and arson occurring while racial justice protests were going on around the country. But some affected small entrepreneurs, such as those interviewed by Bowles, have little or no insurance, and are struggling.
https://www.nytimes.com/2020/11/09/business/small-business-insurance-unrest-kenosha.html?searchResultPosition=1
A below-the-fold article in the NYT focuses on small businesses owned by largely uninsured minority people that were destroyed by vandals while racial justice protest riots were going on in Kenosha.
The author, Nellie Bowles, observes that some activists have downplayed the damage to businesses from looting and arson occurring while racial justice protests were going on around the country. But some affected small entrepreneurs, such as those interviewed by Bowles, have little or no insurance, and are struggling.
https://www.nytimes.com/2020/11/09/business/small-business-insurance-unrest-kenosha.html?searchResultPosition=1
In this action, the Trump Campaign and the Individual Plaintiffs (collectively, the “Plaintiffs”) seek to discard millions of votes legally cast by Pennsylvanians . . . .
Excerpt from opinion at
www.courtlistener.com/recap/gov.uscourts.pamd.127057/gov.uscourts.pamd.127057.202.0_1.pdf
In this action, the Trump Campaign and the Individual Plaintiffs (collectively, the “Plaintiffs”) seek to discard millions of votes legally cast by Pennsylvanians from all corners – from Greene County to Pike County, and everywhere in between. In other words, Plaintiffs ask this Court to disenfranchise almost seven million voters.
This Court has been unable to find any case in which a plaintiff has sought such a drastic remedy in the contest of an election, in terms of the sheer volume of votes asked to be invalidated. One might expect that when seeking such a startling outcome, a plaintiff would come formidably armed with compelling legal arguments and factual proof of rampant corruption, such that this Court would have no option but to regrettably grant the proposed injunctive relief despite the impact it would have on such a large group of citizens.
That has not happened. Instead, this Court has been presented with strained legal arguments without merit and speculative accusations, unpled in the operative complaint and unsupported by evidence. In the United States of America, this cannot justify the disenfranchisement of a single voter, let alone all the voters of its sixth most populated state. Our people, laws, and institutions demand more. At bottom, Plaintiffs have failed to meet their burden to state a claim upon which relief may be granted.
Therefore, I grant Defendants’ motions and dismiss Plaintiffs’ action with prejudice.
Excerpt from opinion at
www.courtlistener.com/recap/gov.uscourts.pamd.127057/gov.uscourts.pamd.127057.202.0_1.pdf
In this action, the Trump Campaign and the Individual Plaintiffs (collectively, the “Plaintiffs”) seek to discard millions of votes legally cast by Pennsylvanians from all corners – from Greene County to Pike County, and everywhere in between. In other words, Plaintiffs ask this Court to disenfranchise almost seven million voters.
This Court has been unable to find any case in which a plaintiff has sought such a drastic remedy in the contest of an election, in terms of the sheer volume of votes asked to be invalidated. One might expect that when seeking such a startling outcome, a plaintiff would come formidably armed with compelling legal arguments and factual proof of rampant corruption, such that this Court would have no option but to regrettably grant the proposed injunctive relief despite the impact it would have on such a large group of citizens.
That has not happened. Instead, this Court has been presented with strained legal arguments without merit and speculative accusations, unpled in the operative complaint and unsupported by evidence. In the United States of America, this cannot justify the disenfranchisement of a single voter, let alone all the voters of its sixth most populated state. Our people, laws, and institutions demand more. At bottom, Plaintiffs have failed to meet their burden to state a claim upon which relief may be granted.
Therefore, I grant Defendants’ motions and dismiss Plaintiffs’ action with prejudice.
Landlord-Tenant Court Diversion programs in various jurisdictions
by Don Allen Resnikoff
Diversion programs typically provide landlords and tenants with an alternative to court actions against tenants by providing emergency funds for rent, and mediation. Landlords generally are called upon to voluntarily cooperate, which they will be inclined to do because emergency funds mean that the rent will be paid.Here is a description from the Connecticut Eviction and Foreclosure Prevention Program (EFPP):
The EFPP is designed to prevent evictions and foreclosures through mediation and a Rent Bank. Five community-based agencies operate the program. A trained mediator acts as a third party facilitator to help develop mutually agreed upon solutions to identified problems which may include back rent or mortgage payments, repairs, housing code violations and communication problems. The Rent Bank provides funds to eligible families to help pay rent or mortgage arrears. A family may consist of a single individual, roommates, an extended family, or a one or two parent family.
Following is information about other similar programs:
In Grand Rapids: the Eviction Prevention Program pilot in the 61st District Court
In Massachusetts, the HomeStart Eviction Prevention program
In Phoenix: the Arizona Department of Housing’s Eviction Prevention Assistance, along with an article about its roll-out
In Philadelphia: the Philadelphia Eviction Prevention Project, which also includes other services like a helpline for tenants, training workshops, a legal help website, and connections to legal services.
In Connecticut: the Eviction and Foreclosure Prevention Program
In Jacksonville, FL: the Emergency Assistance Program from the city’s Social Service Division These programs seem to me to be a model worth considering for DC.
See https://evictioninnovation.org/innovations/
by Don Allen Resnikoff
Diversion programs typically provide landlords and tenants with an alternative to court actions against tenants by providing emergency funds for rent, and mediation. Landlords generally are called upon to voluntarily cooperate, which they will be inclined to do because emergency funds mean that the rent will be paid.Here is a description from the Connecticut Eviction and Foreclosure Prevention Program (EFPP):
The EFPP is designed to prevent evictions and foreclosures through mediation and a Rent Bank. Five community-based agencies operate the program. A trained mediator acts as a third party facilitator to help develop mutually agreed upon solutions to identified problems which may include back rent or mortgage payments, repairs, housing code violations and communication problems. The Rent Bank provides funds to eligible families to help pay rent or mortgage arrears. A family may consist of a single individual, roommates, an extended family, or a one or two parent family.
Following is information about other similar programs:
In Grand Rapids: the Eviction Prevention Program pilot in the 61st District Court
In Massachusetts, the HomeStart Eviction Prevention program
In Phoenix: the Arizona Department of Housing’s Eviction Prevention Assistance, along with an article about its roll-out
In Philadelphia: the Philadelphia Eviction Prevention Project, which also includes other services like a helpline for tenants, training workshops, a legal help website, and connections to legal services.
In Connecticut: the Eviction and Foreclosure Prevention Program
In Jacksonville, FL: the Emergency Assistance Program from the city’s Social Service Division These programs seem to me to be a model worth considering for DC.
See https://evictioninnovation.org/innovations/
https://www.msn.com/en-us/news/politics/punxsutawney-phil-will-do-groundhog-day-virtually-next-year/vi-BB1bcwXl
FROM WTOP: Major DC gas wholesaler/retailer accused of overcharging customers
A local gas retailer is accused of price gouging, according to a lawsuit filed in D.C.
The Office of the Attorney General for the District of Columbia said that Capitol Petroleum Group and its affiliate companies gouged prices during the District’s COVID-19 emergency.
“Even as wholesale gas prices dropped when the economy slowed in March and April 2020, CPG unlawfully doubled its profits on each gallon of gas sold to consumers at 54 gas stations in the District,” a news release said. [https://oag.dc.gov/release/ag-racine-sues-major-gasoline-seller-price-gouging]
D.C. Attorney General Karl Racine said the company “took advantage” of consumers instead of “passing the cost savings along to District consumers as required by law.”
The allegations state that before March 2020, Capitol Petroleum Group earned an average of $0.44 in profits per gallon of regular gas and $0.80 per gallon of premium. However, following the emergency declaration on March 11, the company earned an average profit of $0.88 per gallon of regular gas and $1.23 per gallon of premium gas that it sold.
The original emergency declaration that has been extended prohibited price gouging during the coronavirus public health emergency.
The D.C. Attorney General’s Office also accused the company of applying a markup of 149.85% to prices it charged other retailers per gallon of gas during the week of March 22-28, whereas from December 2019 to March 9, 2020, its average markup per gallon was 41.6%.
The District is seeking a court order to stop the company from violating D.C.’s price gouging and consumer protection laws, relief for consumers who were charged unfairly high prices and civil penalties.
Capitol Petroleum Group affiliates named in the lawsuit include Anacostia Realty LLC and DAG Petroleum Suppliers LLC. Capitol Petroleum group is based in Virginia.
This is the second lawsuit Racine’s office has filed against a D.C. business for price gouging during the pandemic. The first was against Helen Mart, a store in Ward 7.
“Price gouging is illegal in the District, and companies may not unlawfully increase their profit margins at the expense of District residents during an emergency,” Racine said.
The penalty for price gouging in D.C. is $5,000 per violation.
- Abigail Constantino
A local gas retailer is accused of price gouging, according to a lawsuit filed in D.C.
The Office of the Attorney General for the District of Columbia said that Capitol Petroleum Group and its affiliate companies gouged prices during the District’s COVID-19 emergency.
“Even as wholesale gas prices dropped when the economy slowed in March and April 2020, CPG unlawfully doubled its profits on each gallon of gas sold to consumers at 54 gas stations in the District,” a news release said. [https://oag.dc.gov/release/ag-racine-sues-major-gasoline-seller-price-gouging]
D.C. Attorney General Karl Racine said the company “took advantage” of consumers instead of “passing the cost savings along to District consumers as required by law.”
The allegations state that before March 2020, Capitol Petroleum Group earned an average of $0.44 in profits per gallon of regular gas and $0.80 per gallon of premium. However, following the emergency declaration on March 11, the company earned an average profit of $0.88 per gallon of regular gas and $1.23 per gallon of premium gas that it sold.
The original emergency declaration that has been extended prohibited price gouging during the coronavirus public health emergency.
The D.C. Attorney General’s Office also accused the company of applying a markup of 149.85% to prices it charged other retailers per gallon of gas during the week of March 22-28, whereas from December 2019 to March 9, 2020, its average markup per gallon was 41.6%.
The District is seeking a court order to stop the company from violating D.C.’s price gouging and consumer protection laws, relief for consumers who were charged unfairly high prices and civil penalties.
Capitol Petroleum Group affiliates named in the lawsuit include Anacostia Realty LLC and DAG Petroleum Suppliers LLC. Capitol Petroleum group is based in Virginia.
This is the second lawsuit Racine’s office has filed against a D.C. business for price gouging during the pandemic. The first was against Helen Mart, a store in Ward 7.
“Price gouging is illegal in the District, and companies may not unlawfully increase their profit margins at the expense of District residents during an emergency,” Racine said.
The penalty for price gouging in D.C. is $5,000 per violation.
Google Breakup Should ‘Be on the Table' Says Sen. Klobuchar, Who Is a Possible Biden Pick for Attorney General
By Lauren Feiner, CNBC • Published November 12, 2020 • Updated on November 12, 2020 at 7:42 pm
Sen. Amy Klobuchar
During a virtual keynote speech for the American Bar Association's Fall Forum, Klobuchar praised the Justice Department for leaving open the option of so-called structural remedies in its recent antitrust lawsuit against Google.
By Lauren Feiner, CNBC • Published November 12, 2020 • Updated on November 12, 2020 at 7:42 pm
Sen. Amy Klobuchar
- During a virtual keynote speech for the American Bar Association's Fall Forum, Sen. Amy Klobuchar, D-Minn., praised the Justice Department for leaving open the option of so-called structural remedies in its recent antitrust lawsuit against Google.
- Klobuchar's name has been floated as a possible attorney general under President-elect Joe Biden, CNBC reported on Tuesday.
- Even if she remains in the Senate, Klobuchar will be a force for tech companies to reckon with, especially if Democrats win the majority in the chamber.
During a virtual keynote speech for the American Bar Association's Fall Forum, Klobuchar praised the Justice Department for leaving open the option of so-called structural remedies in its recent antitrust lawsuit against Google.
European Commission - Press release on Amazon Actions
DAR Comment: At a moment where there is political pressure for reform of antitrust in the U.S., the EU model of "abuse of dominant position" suggests one path for reform. For that reason, it is worth noticing real-world operation of that EU model, and evaluating whether it is an improvement over current U.S. practice.
Antitrust: Commission sends Statement of Objections to Amazon for the use of non-public independent seller data and opens second investigation into its e-commerce business practices
Brussels, 10 November 2020
The European Commission has informed Amazon of its preliminary view that it has breached EU antitrust rules by distorting competition in online retail markets. The Commission takes issue with Amazon systematically relying on non-public business data of independent sellers who sell on its marketplace, to the benefit of Amazon's own retail business, which directly competes with those third party sellers.
The Commission also opened a second formal antitrust investigation into the possible preferential treatment of Amazon's own retail offers and those of marketplace sellers that use Amazon's logistics and delivery services.
Executive Vice-President Margrethe Vestager, in charge of competition policy, said: “We must ensure that dual role platforms with market power, such as Amazon, do not distort competition. Data on the activity of third party sellers should not be used to the benefit of Amazon when it acts as a competitor to these sellers. The conditions of competition on the Amazon platform must also be fair. Its rules should not artificially favour Amazon's own retail offers or advantage the offers of retailers using Amazon's logistics and delivery services. With e-commerce booming, and Amazon being the leading e-commerce platform, a fair and undistorted access to consumers online is important for all sellers.”
Statement of Objections on Amazon's use of marketplace seller data
Amazon has a dual role as a platform: (i) it provides a marketplace where independent sellers can sell products directly to consumers; and (ii) it sells products as a retailer on the same marketplace, in competition with those sellers.
As a marketplace service provider, Amazon has access to non-public business data of third party sellers such as the number of ordered and shipped units of products, the sellers' revenues on the marketplace, the number of visits to sellers' offers, data relating to shipping, to sellers' past performance, and other consumer claims on products, including the activated guarantees.
The Commission's preliminary findings show that very large quantities of non-public seller data are available to employees of Amazon's retail business and flow directly into the automated systems of that business, which aggregate these data and use them to calibrate Amazon's retail offers and strategic business decisions to the detriment of the other marketplace sellers. For example, it allows Amazon to focus its offers in the best-selling products across product categories and to adjust its offers in view of non-public data of competing sellers.
The Commission's preliminary view, outlined in its Statement of Objections, is that the use of non-public marketplace seller data allows Amazon to avoid the normal risks of retail competition and to leverage its dominance in the market for the provision of marketplace services in France and Germany- the biggest markets for Amazon in the EU. If confirmed, this would infringe Article 102 of the Treaty on the Functioning of the European Union (TFEU) that prohibits the abuse of a dominant market position.
The sending of a Statement of Objections does not prejudge the outcome of an investigation.
Investigation into Amazon practices regarding its “Buy Box” and Prime label
In addition, the Commission opened a second antitrust investigation into Amazon's business practices that might artificially favour its own retail offers and offers of marketplace sellers that use Amazon's logistics and delivery services (the so-called “fulfilment by Amazon or FBA sellers”).
In particular, the Commission will investigate whether the criteria that Amazon sets to select the winner of the “Buy Box” and to enable sellers to offer products to Prime users, under Amazon's Prime loyalty programme, lead to preferential treatment of Amazon's retail business or of the sellers that use Amazon's logistics and delivery services.
The “Buy Box” is displayed prominently on Amazon's websites and allows customers to add items from a specific retailer directly into their shopping carts. Winning the “Buy Box” (i.e. being chosen as the offer that features in this box) is crucial to marketplace sellers as the Buy Box prominently shows the offer of one single seller for a chosen product on Amazon's marketplaces, and generates the vast majority of all sales. The other aspect of the investigation focusses on the possibility for marketplace sellers to effectively reach Prime users. Reaching these consumers is important to sellers because the number of Prime users is continuously growing and because they tend to generate more sales on Amazon's marketplaces than non-Prime users.
If proven, the practice under investigation may breach Article 102 of the Treaty on the Functioning of the European Union (TFEU) that prohibits the abuse of a dominant market position.
The Commission will now carry out its in-depth investigation as a matter of priority. The opening of a formal investigation does not prejudge its outcome.
Background and procedure
Article 102 of the TFEU prohibits the abuse of a dominant position. The implementation of these provisions is defined in the Antitrust Regulation (Council Regulation No 1/2003), which can also be applied by the national competition authorities.
The Commission opened the in-depth investigation into Amazon's use of marketplace seller data on 17 July 2019.
A Statement of Objections is a formal step in Commission investigations into suspected violations of EU antitrust rules. The Commission informs the parties concerned in writing of the objections raised against them. The addressees can examine the documents in the Commission's investigation file, reply in writing and request an oral hearing to present their comments on the case before representatives of the Commission and national competition authorities. Sending a Statement of Objections and opening of a formal antitrust investigation does not prejudge the outcome of the investigations.
More information on the investigation is available on the Commission's competition website, in the public case register under case number AT.40462.
The Commission has informed Amazon and the competition authorities of the Member States that it has opened a second in-depth investigation into Amazon's business practices.
This investigation will cover the European Economic Area, with the exception of Italy. The Italian Competition Authority started to investigate partially similar concerns last year, with a particular focus on the Italian market. The Commission will continue the close cooperation with the Italian Competition Authority throughout the investigation.
More information on the investigation will be available on the Commission's competition website, in the public case register under case number AT.40703.
There is no legal deadlines for bringing an antitrust investigation to an end. The duration of an antitrust investigation depends on a number of factors, including the complexity of the case, the extent to which the undertakings concerned cooperate with the Commission and the exercise of the rights of defence.
IP/20/2077
Press contacts:
Arianna PODESTA (+32 2 298 70 24)
Maria TSONI (+32 2 299 05 26)
General public inquiries: Europe Direct by ph
DAR Comment: At a moment where there is political pressure for reform of antitrust in the U.S., the EU model of "abuse of dominant position" suggests one path for reform. For that reason, it is worth noticing real-world operation of that EU model, and evaluating whether it is an improvement over current U.S. practice.
Antitrust: Commission sends Statement of Objections to Amazon for the use of non-public independent seller data and opens second investigation into its e-commerce business practices
Brussels, 10 November 2020
The European Commission has informed Amazon of its preliminary view that it has breached EU antitrust rules by distorting competition in online retail markets. The Commission takes issue with Amazon systematically relying on non-public business data of independent sellers who sell on its marketplace, to the benefit of Amazon's own retail business, which directly competes with those third party sellers.
The Commission also opened a second formal antitrust investigation into the possible preferential treatment of Amazon's own retail offers and those of marketplace sellers that use Amazon's logistics and delivery services.
Executive Vice-President Margrethe Vestager, in charge of competition policy, said: “We must ensure that dual role platforms with market power, such as Amazon, do not distort competition. Data on the activity of third party sellers should not be used to the benefit of Amazon when it acts as a competitor to these sellers. The conditions of competition on the Amazon platform must also be fair. Its rules should not artificially favour Amazon's own retail offers or advantage the offers of retailers using Amazon's logistics and delivery services. With e-commerce booming, and Amazon being the leading e-commerce platform, a fair and undistorted access to consumers online is important for all sellers.”
Statement of Objections on Amazon's use of marketplace seller data
Amazon has a dual role as a platform: (i) it provides a marketplace where independent sellers can sell products directly to consumers; and (ii) it sells products as a retailer on the same marketplace, in competition with those sellers.
As a marketplace service provider, Amazon has access to non-public business data of third party sellers such as the number of ordered and shipped units of products, the sellers' revenues on the marketplace, the number of visits to sellers' offers, data relating to shipping, to sellers' past performance, and other consumer claims on products, including the activated guarantees.
The Commission's preliminary findings show that very large quantities of non-public seller data are available to employees of Amazon's retail business and flow directly into the automated systems of that business, which aggregate these data and use them to calibrate Amazon's retail offers and strategic business decisions to the detriment of the other marketplace sellers. For example, it allows Amazon to focus its offers in the best-selling products across product categories and to adjust its offers in view of non-public data of competing sellers.
The Commission's preliminary view, outlined in its Statement of Objections, is that the use of non-public marketplace seller data allows Amazon to avoid the normal risks of retail competition and to leverage its dominance in the market for the provision of marketplace services in France and Germany- the biggest markets for Amazon in the EU. If confirmed, this would infringe Article 102 of the Treaty on the Functioning of the European Union (TFEU) that prohibits the abuse of a dominant market position.
The sending of a Statement of Objections does not prejudge the outcome of an investigation.
Investigation into Amazon practices regarding its “Buy Box” and Prime label
In addition, the Commission opened a second antitrust investigation into Amazon's business practices that might artificially favour its own retail offers and offers of marketplace sellers that use Amazon's logistics and delivery services (the so-called “fulfilment by Amazon or FBA sellers”).
In particular, the Commission will investigate whether the criteria that Amazon sets to select the winner of the “Buy Box” and to enable sellers to offer products to Prime users, under Amazon's Prime loyalty programme, lead to preferential treatment of Amazon's retail business or of the sellers that use Amazon's logistics and delivery services.
The “Buy Box” is displayed prominently on Amazon's websites and allows customers to add items from a specific retailer directly into their shopping carts. Winning the “Buy Box” (i.e. being chosen as the offer that features in this box) is crucial to marketplace sellers as the Buy Box prominently shows the offer of one single seller for a chosen product on Amazon's marketplaces, and generates the vast majority of all sales. The other aspect of the investigation focusses on the possibility for marketplace sellers to effectively reach Prime users. Reaching these consumers is important to sellers because the number of Prime users is continuously growing and because they tend to generate more sales on Amazon's marketplaces than non-Prime users.
If proven, the practice under investigation may breach Article 102 of the Treaty on the Functioning of the European Union (TFEU) that prohibits the abuse of a dominant market position.
The Commission will now carry out its in-depth investigation as a matter of priority. The opening of a formal investigation does not prejudge its outcome.
Background and procedure
Article 102 of the TFEU prohibits the abuse of a dominant position. The implementation of these provisions is defined in the Antitrust Regulation (Council Regulation No 1/2003), which can also be applied by the national competition authorities.
The Commission opened the in-depth investigation into Amazon's use of marketplace seller data on 17 July 2019.
A Statement of Objections is a formal step in Commission investigations into suspected violations of EU antitrust rules. The Commission informs the parties concerned in writing of the objections raised against them. The addressees can examine the documents in the Commission's investigation file, reply in writing and request an oral hearing to present their comments on the case before representatives of the Commission and national competition authorities. Sending a Statement of Objections and opening of a formal antitrust investigation does not prejudge the outcome of the investigations.
More information on the investigation is available on the Commission's competition website, in the public case register under case number AT.40462.
The Commission has informed Amazon and the competition authorities of the Member States that it has opened a second in-depth investigation into Amazon's business practices.
This investigation will cover the European Economic Area, with the exception of Italy. The Italian Competition Authority started to investigate partially similar concerns last year, with a particular focus on the Italian market. The Commission will continue the close cooperation with the Italian Competition Authority throughout the investigation.
More information on the investigation will be available on the Commission's competition website, in the public case register under case number AT.40703.
There is no legal deadlines for bringing an antitrust investigation to an end. The duration of an antitrust investigation depends on a number of factors, including the complexity of the case, the extent to which the undertakings concerned cooperate with the Commission and the exercise of the rights of defence.
IP/20/2077
Press contacts:
Arianna PODESTA (+32 2 298 70 24)
Maria TSONI (+32 2 299 05 26)
General public inquiries: Europe Direct by ph
Europe’s top antitrust enforcer Margrethe Vestager has warned against pushing for the structural break up of tech companies
Vestager, who has aggressively pursued antitrust investigations against the likes of Google, Amazon and Apple in recent years, said it would be “doable” to force the breakup of the tech giants under current EU law. But she warned of unintended consequences and potentially lengthy court battles between European regulators and the tech giants.
“I don’t think it is something that should be introduced in this legislation and I think one should be very careful with that type of remedy because one should be very sure how it would actually work,” Vestager said. “It would tie you up in court for a very very long time. I think it’s important we try these routes first with the platforms.”
She is among the top European bureaucrats who are currently drafting the Digital Services Act, aimed at establishing new rules for the tech giants in Europe.
Vestager’s comments also put her at odds with other senior European officials, including Europe’s Internal Market Commissioner Thierry Breton, who have signalled a desire to force the separation of tech companies in some circumstances.
From https://www.theinformation.com/briefings/bc65c0
Vestager, who has aggressively pursued antitrust investigations against the likes of Google, Amazon and Apple in recent years, said it would be “doable” to force the breakup of the tech giants under current EU law. But she warned of unintended consequences and potentially lengthy court battles between European regulators and the tech giants.
“I don’t think it is something that should be introduced in this legislation and I think one should be very careful with that type of remedy because one should be very sure how it would actually work,” Vestager said. “It would tie you up in court for a very very long time. I think it’s important we try these routes first with the platforms.”
She is among the top European bureaucrats who are currently drafting the Digital Services Act, aimed at establishing new rules for the tech giants in Europe.
Vestager’s comments also put her at odds with other senior European officials, including Europe’s Internal Market Commissioner Thierry Breton, who have signalled a desire to force the separation of tech companies in some circumstances.
From https://www.theinformation.com/briefings/bc65c0
Chemerinsky: Free exercise of religion: Fulton v. City of Philadelphia
May people and businesses, based on their religious beliefs, discriminate against gays and lesbians? This was the central issue, but not decided, in 2018 in Masterpiece Cakeshop v. Colorado Civil Rights Commission, which involved whether a bakery could be held liable for refusing to design and bake a cake to celebrate a same-sex marriage. It is a question that the court identified but did not answer in June 2020, when it held in Bostock v. Clayton County, Georgia that Title VII of the 1964 Civil Rights Act prohibits employment discrimination based on sexual orientation or gender identity. The court left open the issue of whether an employer could discriminate based on religious beliefs.
The city of Philadelphia contracts with private social service agencies to place children in foster homes. The city insists that the agencies not discriminate, including on the basis of sexual orientation. Catholic Social Services challenges this and says that it could not certify a same-sex married couple as foster parents because its religion does not recognize same-sex marriage as marriage. It claims that the requirement of nondiscrimination violates its free exercise of religion and its freedom of speech.
One issue, upon which certiorari has been granted, is whether the court should “revisit” Employment Division Department of Human Resources of Oregon v. Smith. In that 1990 decision, the court, in an opinion by Justice Antonin Scalia, held that the free exercise clause of the First Amendment does not provide a basis for a religious exemption from a general law. Now, though, conservatives favor such exemptions, and there well may be five votes to overrule Employment Division. In 2019’s Kennedy v. Bremerton School District, Justice Samuel A. Alito wrote an opinion respecting the denial of certiorari, joined by Justices Clarence Thomas, Neil M. Gorsuch and Brett M. Kavanaugh, and suggested that they might be open to overruling Employment Division.
If Barrett has been confirmed by the time the case is heard on Nov. 4, there could be five votes to do so and to dramatically expand the protection of free exercise of religion, including as a basis for an exemption from anti-discrimination laws.
From: https://www.abajournal.com/columns/article/chemerinsky-the-supreme-court-returns-to-a-term-like-no-other
May people and businesses, based on their religious beliefs, discriminate against gays and lesbians? This was the central issue, but not decided, in 2018 in Masterpiece Cakeshop v. Colorado Civil Rights Commission, which involved whether a bakery could be held liable for refusing to design and bake a cake to celebrate a same-sex marriage. It is a question that the court identified but did not answer in June 2020, when it held in Bostock v. Clayton County, Georgia that Title VII of the 1964 Civil Rights Act prohibits employment discrimination based on sexual orientation or gender identity. The court left open the issue of whether an employer could discriminate based on religious beliefs.
The city of Philadelphia contracts with private social service agencies to place children in foster homes. The city insists that the agencies not discriminate, including on the basis of sexual orientation. Catholic Social Services challenges this and says that it could not certify a same-sex married couple as foster parents because its religion does not recognize same-sex marriage as marriage. It claims that the requirement of nondiscrimination violates its free exercise of religion and its freedom of speech.
One issue, upon which certiorari has been granted, is whether the court should “revisit” Employment Division Department of Human Resources of Oregon v. Smith. In that 1990 decision, the court, in an opinion by Justice Antonin Scalia, held that the free exercise clause of the First Amendment does not provide a basis for a religious exemption from a general law. Now, though, conservatives favor such exemptions, and there well may be five votes to overrule Employment Division. In 2019’s Kennedy v. Bremerton School District, Justice Samuel A. Alito wrote an opinion respecting the denial of certiorari, joined by Justices Clarence Thomas, Neil M. Gorsuch and Brett M. Kavanaugh, and suggested that they might be open to overruling Employment Division.
If Barrett has been confirmed by the time the case is heard on Nov. 4, there could be five votes to do so and to dramatically expand the protection of free exercise of religion, including as a basis for an exemption from anti-discrimination laws.
From: https://www.abajournal.com/columns/article/chemerinsky-the-supreme-court-returns-to-a-term-like-no-other
Justice Alito: Pandemic Has Brought 'Unimaginable Restrictions' On Freedoms
Supreme Court Justice Samuel Alito says the COVID-19 pandemic has brought "previously unimaginable restrictions on individual liberty," warning of an important shift in the views of essential rights on several fronts, from religious freedom to free speech.Alito's remarks came Thursday in a keynote speech at the Federalist Society's annual National Lawyers Convention, which is being held virtually this week. The event's theme is to examine how the coronavirus is affecting the rule of law.The COVID-19 crisis has "highlighted constitutional fault lines," Alito said.
He cautioned that his statements shouldn't be taken as a judgment on whether numerous coronavirus restrictions reflect good public policy."All that I'm saying is this, and I think it is an indisputable statement of fact," the justice said. "We have never before seen restrictions as severe, extensive and prolonged as those experienced for most of 2020."
"Think of all the live events that would otherwise be protected by the right to freedom of speech," from lectures and meetings to religious services, Alito said. He also noted that the pandemic has affected access to the courts and the constitutional right to a speedy trial.
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"The COVID crisis has served as a sort of constitutional stress test," Alito said. "And in doing so, it has highlighted disturbing trends that were already present before the virus struck."
Shifting attitudes
The Supreme Court justice then ran down a list of examples that, in his view, reflect shifting attitudes toward long-held rights in the United States.
First on the list was what Alito called "the dominance of lawmaking by executive fiat rather than legislation" – actions that he said range from agencies' broad use of regulatory power to the use of executive discretion to impose sweeping restrictions in the name of fighting a pandemic.
Alito later cited a legal case in Nevada, saying the governor's emergency orders in that state have given leeway and support to casinos hosting gamblers at up to 50% capacity while forcing houses of worship to cap their attendance at 50 people.
"Take a quick look at the Constitution," Alito said. "You will see the free exercise clause of the First Amendment, which protects religious liberty. You will not find a craps clause or a blackjack clause or a slot machine clause."
"It pains me to say this, but in certain quarters, religious liberty is fast becoming a disfavored right," Alito said. He ran through several religion-related Supreme Court rulings, including the Little Sisters of the Poor (over providing birth control to employees) to Masterpiece Cakeshop in Colorado (over the refusal to make a wedding cake for a gay couple).
Alito made a direct connection between America's ongoing "culture wars" and the pandemic crisis, citing a 2016 blog entry by Harvard Law School professor Mark Tushnet.
"He candidly wrote, quote, The culture wars are over; they lost, we won," Alito said.
He went on to quote from Tushnet's much-discussed stance that "[m]y own judgment is that taking a hard line ('You lost, live with it') is better than trying to accommodate the losers. ... And taking a hard line seemed to work reasonably well in Germany and Japan after 1945."
Alito went on to quote Bob Dylan: "Is our country going to follow that course? To quote a popular Nobel laureate, 'It's not dark yet, but it's getting there.' "
'Hostility to ... unfashionable views'
The justice described what he called a "growing hostility to the expression of unfashionable views." As an example, he cited the Supreme Court's landmark shift on same-sex marriage.
"You can't say that marriage is a union between one man and one woman," Alito said. "Until very recently, that's what the vast majority of Americans thought. Now it's considered bigotry."
Protecting freedom of speech will be one of the Supreme Court's greatest challenges, Alito said.
"Although that freedom is falling out of favor in some circles, we need to do whatever we can to prevent it from becoming a second-tier constitutional right."
Alito also called out a group of Democratic senators who weighed in on a gun-rights case in New York, saying they had attempted to bully the Supreme Court. The group filed an amicus brief calling the court "a sick institution" that might need to be restructured. Alito said he viewed it as "an affront to the Constitution and the rule of law."
The article: https://www.npr.org/2020/11/13/934666499/justice-alito-pandemic-has-brought-unimaginable-restrictions-on-freedoms
Alito speech URL: https://youtu.be/tYLZL4GZVbA
The Huffington Post's take on the speech:
https://www.youtube.com/watch?v=k0sqj1iTUB8
- November 13, 20203:56 PM ET Bill Chappell
- DAR Comment: I am struck by Alito's comments on "culture war," and what he refers to as "growing hostility to the expression of unfashionable views." There may be a connection between Alito's comments on "culture war" and Alito's decisions as a Supreme Court Justice. The implication of his comments may be that judges on one side of the culture war will decide differently from judges on the other side of the culture war on questions such as whether a commercial baker can refuse to make a wedding cake for a gay couple. I'd prefer to think that is not so, and that decisions are based on some combination of Constitutional scholarship and common sense.
"We have never before seen restrictions as severe, extensive and prolonged as those experienced for most of 2020," Alito said in a speech this week to the Federalist Society's National Lawyers Convention.
Supreme Court Justice Samuel Alito says the COVID-19 pandemic has brought "previously unimaginable restrictions on individual liberty," warning of an important shift in the views of essential rights on several fronts, from religious freedom to free speech.Alito's remarks came Thursday in a keynote speech at the Federalist Society's annual National Lawyers Convention, which is being held virtually this week. The event's theme is to examine how the coronavirus is affecting the rule of law.The COVID-19 crisis has "highlighted constitutional fault lines," Alito said.
He cautioned that his statements shouldn't be taken as a judgment on whether numerous coronavirus restrictions reflect good public policy."All that I'm saying is this, and I think it is an indisputable statement of fact," the justice said. "We have never before seen restrictions as severe, extensive and prolonged as those experienced for most of 2020."
"Think of all the live events that would otherwise be protected by the right to freedom of speech," from lectures and meetings to religious services, Alito said. He also noted that the pandemic has affected access to the courts and the constitutional right to a speedy trial.
Article continues after sponsor message
"The COVID crisis has served as a sort of constitutional stress test," Alito said. "And in doing so, it has highlighted disturbing trends that were already present before the virus struck."
Shifting attitudes
The Supreme Court justice then ran down a list of examples that, in his view, reflect shifting attitudes toward long-held rights in the United States.
First on the list was what Alito called "the dominance of lawmaking by executive fiat rather than legislation" – actions that he said range from agencies' broad use of regulatory power to the use of executive discretion to impose sweeping restrictions in the name of fighting a pandemic.
Alito later cited a legal case in Nevada, saying the governor's emergency orders in that state have given leeway and support to casinos hosting gamblers at up to 50% capacity while forcing houses of worship to cap their attendance at 50 people.
"Take a quick look at the Constitution," Alito said. "You will see the free exercise clause of the First Amendment, which protects religious liberty. You will not find a craps clause or a blackjack clause or a slot machine clause."
"It pains me to say this, but in certain quarters, religious liberty is fast becoming a disfavored right," Alito said. He ran through several religion-related Supreme Court rulings, including the Little Sisters of the Poor (over providing birth control to employees) to Masterpiece Cakeshop in Colorado (over the refusal to make a wedding cake for a gay couple).
Alito made a direct connection between America's ongoing "culture wars" and the pandemic crisis, citing a 2016 blog entry by Harvard Law School professor Mark Tushnet.
"He candidly wrote, quote, The culture wars are over; they lost, we won," Alito said.
He went on to quote from Tushnet's much-discussed stance that "[m]y own judgment is that taking a hard line ('You lost, live with it') is better than trying to accommodate the losers. ... And taking a hard line seemed to work reasonably well in Germany and Japan after 1945."
Alito went on to quote Bob Dylan: "Is our country going to follow that course? To quote a popular Nobel laureate, 'It's not dark yet, but it's getting there.' "
'Hostility to ... unfashionable views'
The justice described what he called a "growing hostility to the expression of unfashionable views." As an example, he cited the Supreme Court's landmark shift on same-sex marriage.
"You can't say that marriage is a union between one man and one woman," Alito said. "Until very recently, that's what the vast majority of Americans thought. Now it's considered bigotry."
Protecting freedom of speech will be one of the Supreme Court's greatest challenges, Alito said.
"Although that freedom is falling out of favor in some circles, we need to do whatever we can to prevent it from becoming a second-tier constitutional right."
Alito also called out a group of Democratic senators who weighed in on a gun-rights case in New York, saying they had attempted to bully the Supreme Court. The group filed an amicus brief calling the court "a sick institution" that might need to be restructured. Alito said he viewed it as "an affront to the Constitution and the rule of law."
The article: https://www.npr.org/2020/11/13/934666499/justice-alito-pandemic-has-brought-unimaginable-restrictions-on-freedoms
Alito speech URL: https://youtu.be/tYLZL4GZVbA
The Huffington Post's take on the speech:
https://www.youtube.com/watch?v=k0sqj1iTUB8
NYT catalog of Trump Era Financial Regulation Rollbacks
Here’s a look at some of the changes under President Trump.
Skimping on consumer protections
Payday lending: In late 2017, the Consumer Financial Protection Bureau finalized tough new restrictions on payday lending that would have prevented most customers from repeatedly re-borrowing, a pattern that can trap borrowers in a cycle of debt. But a director appointed by Mr. Trump, Kathleen Kraninger, took over the bureau in 2018 and delayed the new restrictions from taking effect. This year, she rescinded them. A coalition of consumer advocates filed a lawsuit last week challenging the legality of Ms. Kraninger’s actions.
Rent-a-bank rules: Many states have caps on the interest rate that lenders can charge on loans. But there’s a catch: Lenders can skirt the rule by partnering with a bank in another state — one without rate caps — and having that bank issue its loans. The bank then sells the loan to the lender. The tactic, often used by online lenders, is known as “rent-a-bank,” and the Office of the Comptroller of the Currency — under Brian P. Brooks, the acting head of the office — finalized two rules this year, one in May and one last week, affirming that the maneuver is legal. The Federal Deposit Insurance Corporation also issued a rule in June giving the arrangement a green light. (Both the F.D.I.C. action and the O.C.C.’s May rule have been challenged by state attorneys general in lawsuits that are pending.)
Fiduciary rule rollback: The Obama-era Labor Department imposed a rule that would have forced financial advisers and brokers handling retirement and 401(k) accounts to act as “fiduciaries,” a legal standard that requires putting customers’ interests first. But in 2018, a federal appeals court ruled that the agency had overstepped its authority, and the Trump administration didn’t challenge the decision, which killed the rule. One silver lining for consumers: Some economic research has found signs that the high-profile fight over the rule, and the increased attention it brought to how brokers are compensated, led the financial-services industry to alter its behavior and reduce brokers’ incentives to push costly retirement products.
Debt collection rules: The C.F.P.B. finalized new debt-collection rules last week that will, for the first time, let collectors contact borrowers through text messages, emails and social media direct messages. Electronic messages will be required to include an opt-out option. Collectors say the long-sought change will make it easier for them to reach borrowers; consumer advocates fear it will unleash a fresh barrage of intrusive communications. The new rules added one new protection for consumers: Collectors, who are notorious for their deluge of phone calls, will be limited to seven calls per week to a borrower.
Reversing anti-discrimination policiesTracking bias in home loans: This spring, citing the “operational challenges” banks and other mortgage lenders were facing as a result of the coronavirus pandemic, the C.F.P.B. announced that it would stop collecting detailed data on new mortgages, including information about the borrower’s race and location, which researchers and community groups say is crucial to ferreting out discrimination in home lending. Democratic lawmakers have asked the agency to start collecting the data again, but so far it has not done so.
The Community Reinvestment Act: In May, the O.C.C., which regulates banks, revised its requirements for those institutions to do business in low-income and minority communities, despite objections from Fed officials and a refusal by another bank regulator, the F.D.I.C., to sign on to the new rules. It was a rare regulatory split caused chiefly by a concern that the new methods did not make sense and could allow banks to win credit for activities that had little meaningful impact on the communities they are required to serve.
locking discrimination claims: The Department of Housing and Urban Development makes the rules for identifying and stopping discrimination by landlords and mortgage providers. One such rule governs the concept of “disparate impact,” where the policies of a landlord or a bank may unintentionally disadvantage a Black or Latino person seeking a home loan or trying to rent an apartment. In August, H.U.D. finalized a rewrite of the requirements for bringing “disparate impact” claims that critics said would immediately invalidate almost all potential claims. The change, although meant to benefit financial firms, was so drastic that banks, insurance companies and other big firms took the unprecedented step of asking the department not to go through with it.
Increasing room for risky business
Volcker Rule: The Volcker Rule was created as part of the Dodd-Frank law to prevent banks from taking risky bets in the financial markets for the sake of profit. It stipulated that banks could trade only on behalf of their customers and required them to start keeping records to prove their compliance. This year, the Fed and its fellow regulatory agencies changed the rule to allow banks to invest heavily in venture capital funds — which make bets on start-ups or high-growth businesses that are risky by nature — and credit funds, which invest in corporate debt. Critics said the change represented the first step toward letting banks make their own risky bets again, even if no customers were asking them to do so.
Capital requirements: Banks are required under Dodd-Frank to hold a certain amount of capital in reserve as a buffer against crisis. Bank executives dislike high capital requirements, which force them to limit stock buybacks and dividend payments, both of which can help lift share prices. Mr. Quarles, the Fed vice chair for supervision and a Trump appointee, has favored regulatory tweaks that give banks more certainty about their future capital requirements. Critics say that over time, having that certainty could allow banks to reduce the amount of capital they actually hold, since many had held extra capital to avoid big swings from year to year.
Last year, Mr. Quarles, a former private equity investor, instituted greater transparency around bank stress tests, which assess how their capital would hold up against a shock. More recently, the Fed streamlined the process for setting capital requirements, including tweaks that Governor Lael Brainard said might allow some banks to lower their buffers.
https://www.nytimes.com/2020/11/06/business/trump-administration-financial-regulations.html
Professor Andy Gavil, Congress, and antitrust reform
By Don Allen Resnikoff
A major and well publicized recent antitrust development is investigation by States and the U.S. against perceived platform monopolies Google, Facebook, Apple, Amazon, and filing of a Complaint against Google by USDOJ and eleven Republican States. The Google case and other investigation of platform companies seem likely to go forward.
Another important recent antitrust development is consideration of legislative reform, which may also go forward even in the absence of an election day "Blue wave." The recent Congressional report on competition in digital markets, issued by a House of Representatives committee, discusses the possibility of legislation that would change the antitrust laws. See https://judiciary.house.gov/uploadedfiles/competition_in_digital_markets.pdf
The Democratic majority’s portion of the House Report alone is 450 pages. It offers detailed discussion of the structure and conduct of the big platform companies. The Congressional report’s perception is that traditional antitrust law may not be able to meet the challenges posed by the platform monopolies.
The Democratic majority report offers an array of recommendations for reform, including structural and conduct proposals. It is interesting and important reading, but the complexity of the Report seems not helpful in the effort to secure reform from sometimes reluctant legislators in a divided Congress.
Professor Andy Gavil recently wrote a brief article on antitrust reform focused on monopolization law (https://equitablegrowth.org/competitive-edge-crafting-a-monopolization-law-for-our-time/) that was certainly not intended as a comment on the Congressional Report, but I find that it has that effect.
Gavil’s suggestions have the virtue of simplicity. That simplicity would seem to increase the possibility that his particular focused suggestions might be acted on. Here is an excerpt from the Gavil article:
Fortunately, our understanding of “exclusionary” conduct has advanced, as has our understanding of market power. Exclusionary conduct cases such as Microsoft have provided a structured, burden-shifting framework for evaluating claims of exclusionary conduct within the reasonableness framework first identified by Standard Oil. In addition, the federal government’s Horizontal Merger Guidelines aptly identify the focus of most of modern competition law when they state that their “unifying theme” is that “mergers should not be permitted to create, enhance, or entrench market power or to facilitate its exercise.”
A modern approach to unilateral conduct could draw upon these advances. It might start by revisiting and refreshing the meaning of the common law terminology of Section 2. Such a modern framework could:
Such an approach would prohibit exclusionary conduct (unilateral or concerted) that significantly contributes to the creation, entrenchment, or enhancement of market power, allowing for methods of proving power through alternatives to defining markets and calculating market shares.
This more contemporary approach would be more consonant with trends in most other modern antitrust law. It would untether the law of exclusionary conduct from blind and formalistic reliance on market-share benchmarks, while also allowing for cognizable and verifiable efficiency justifications. In theory, Section 2’s common law origins should allow for this kind of evolution in the courts, but it might instead require legislative reform. In the end, under either approach, change would open up needed space for Section 2 to begin to evolve once again, as has Section 1, so it could adapt to the needs of our time.
By Don Allen Resnikoff
A major and well publicized recent antitrust development is investigation by States and the U.S. against perceived platform monopolies Google, Facebook, Apple, Amazon, and filing of a Complaint against Google by USDOJ and eleven Republican States. The Google case and other investigation of platform companies seem likely to go forward.
Another important recent antitrust development is consideration of legislative reform, which may also go forward even in the absence of an election day "Blue wave." The recent Congressional report on competition in digital markets, issued by a House of Representatives committee, discusses the possibility of legislation that would change the antitrust laws. See https://judiciary.house.gov/uploadedfiles/competition_in_digital_markets.pdf
The Democratic majority’s portion of the House Report alone is 450 pages. It offers detailed discussion of the structure and conduct of the big platform companies. The Congressional report’s perception is that traditional antitrust law may not be able to meet the challenges posed by the platform monopolies.
The Democratic majority report offers an array of recommendations for reform, including structural and conduct proposals. It is interesting and important reading, but the complexity of the Report seems not helpful in the effort to secure reform from sometimes reluctant legislators in a divided Congress.
Professor Andy Gavil recently wrote a brief article on antitrust reform focused on monopolization law (https://equitablegrowth.org/competitive-edge-crafting-a-monopolization-law-for-our-time/) that was certainly not intended as a comment on the Congressional Report, but I find that it has that effect.
Gavil’s suggestions have the virtue of simplicity. That simplicity would seem to increase the possibility that his particular focused suggestions might be acted on. Here is an excerpt from the Gavil article:
Fortunately, our understanding of “exclusionary” conduct has advanced, as has our understanding of market power. Exclusionary conduct cases such as Microsoft have provided a structured, burden-shifting framework for evaluating claims of exclusionary conduct within the reasonableness framework first identified by Standard Oil. In addition, the federal government’s Horizontal Merger Guidelines aptly identify the focus of most of modern competition law when they state that their “unifying theme” is that “mergers should not be permitted to create, enhance, or entrench market power or to facilitate its exercise.”
A modern approach to unilateral conduct could draw upon these advances. It might start by revisiting and refreshing the meaning of the common law terminology of Section 2. Such a modern framework could:
- Embrace today’s structured approach to the rule of reason, as did the Court in Microsoft
- Fully integrate a more sophisticated understanding of exclusionary conduct, market power, and anti-competitive effects.
Such an approach would prohibit exclusionary conduct (unilateral or concerted) that significantly contributes to the creation, entrenchment, or enhancement of market power, allowing for methods of proving power through alternatives to defining markets and calculating market shares.
This more contemporary approach would be more consonant with trends in most other modern antitrust law. It would untether the law of exclusionary conduct from blind and formalistic reliance on market-share benchmarks, while also allowing for cognizable and verifiable efficiency justifications. In theory, Section 2’s common law origins should allow for this kind of evolution in the courts, but it might instead require legislative reform. In the end, under either approach, change would open up needed space for Section 2 to begin to evolve once again, as has Section 1, so it could adapt to the needs of our time.
Excerpt of Article on Epic-Apple by Jonathan Rubin: Apple Allowed to Continue to Ban Epic’s Fortnite From Store, But May Not Retaliate Against Epic Affiliates
October 19, 2020
By Jonathan Rubin (from MoginRubin firm blog)
Excerpt:
The case involves questions “on the frontier edges” of U.S. antitrust law, according to the judge overseeing it. It is a legal battle between a $4 billion company (Epic Games, Inc.) and a $260 billion company (Apple, Inc.) in a market that’s valued at $160 billion globally. At the center of the legal battle is the distribution of a digital one: a mobile application played by hundreds of millions of gamers on billions of devices around the word.
It’s no small matter, and Apple has scored a temporary victory in the suit, which raises Sherman Antitrust Section 1 and Section 2 claims.
On Oct. 9, 2020, U.S. Judge Yvonne Gonzalez Rogers of California’s Northern District held that Apple may continue to ban from its store Epic’s wildly popular Fortnite app. The judge conceded that Epic had some “strong arguments” regarding the exclusivity of the store, but determined they weren’t enough to support a preliminary injunction. The judge rejected as seemingly “retaliatory,” however, Apple’s effort to also block the products of companies affiliated with Epic. Those companies operate independently and have separate agreements with Apple.
In other words, the court held that Epic had not yet shown sufficient likelihood of success of prevailing on its legal claim that Apple has abused its market power, then went on to block Apple from conduct that is potentially just that with regard to Epic’s affiliates.
From Venturebeat: Epic v. Apple
from https://venturebeat.com/2020/09/11/the-deanbeat-apple-v-epic-a-briefing-on-the-antitrust-arguments-and-interesting-facts/
Epic markets programming is available on Apple and Android (Google) platforms. The charge from Apple to Epic customers is 30% of what Epic charges the customer (Google is similar). Epic started charging customers 30% outside of the Apple app, which led Apple to drop Epic from its platform. Epic then brought suit against Apple.
Epic argues that Apple is a monopolist in two respects: its control of app distribution on the App Store and its requirement that users pay through its payment processing system.
Epic also argues that because Apple has monopoly power, antitrust laws say Apple can’t use that power to shut competition out of the market for either the app store or the payment system. Epic does, however, acknowledge that Apple created value with the App Store.
“To be clear, Epic does not seek to force Apple to provide distribution and processing services for free, nor does Epic seek to enjoy Apple’s services without paying for them. What Epic wants is the freedom not to use Apple’s App Store or IAP (in-app purchase), and instead to use and offer competing service,” Epic said.
Apple has asserted its store isn’t a separate product, but Epic argues app distribution is an “aftermarket” derived from the primary market of the smartphone platform. Epic says the courts should view the relevant antitrust market as the aftermarket, which has a unique brand and a unique market and is not part of a larger single product. Epic isn’t challenging Apple’s rights on the smartphone platform, only in the aftermarket, where Epic alleges Apple is behaving in a monopolistic manner. It argues that Apple cuts off choices (such as downloading apps from websites) that are available to consumers in other markets. The U.S. Supreme Court examines this issue of the aftermarket in a the case Apple vs. Pepper.
While Apple doesn’t have a monopoly in the presence of Google’s Android, Epic argues that the duopoly has negative effects on the market and that Apple, rather than Google, has the most valuable users. Epic noted that two-thirds of the profits are on Apple’s platform and that Apple has a virtual lock on a billion highly desirable users who spend more than those on Android.
In his testimony, economist David Evans argued on Epic’s behalf that the cost of switching is very high for anyone thinking about moving from iOS to Android. It’s basically like starting over.
Pleadings:
August 13 Epic Complaint: https://www.courtlistener.com/docket/17442392/1/epic-games-inc-v-apple-inc/
August 17 Motion for TRO: https://www.courtlistener.com/docket/17442392/17/epic-games-inc-v-apple-inc/
August 21 Opposition to Motion: https://www.courtlistener.com/docket/17442392/36/epic-games-inc-v-apple-inc/
August 23 Reply to Opposition: https://www.courtlistener.com/docket/17442392/43/epic-games-inc-v-apple-inc/
August 24 Court Order, TRO: https://www.courtlistener.com/docket/17442392/48/epic-games-inc-v-apple-inc/
Sept 4 Motion for PI: https://www.courtlistener.com/docket/17442392/61/epic-games-inc-v-apple-inc/
Sept 8 Answer of Apple to Complaint, Counterclaim: https://www.courtlistener.com/docket/17442392/66/epic-games-inc-v-apple-inc/
Sept 15 Opposition to PI Motion: https://www.courtlistener.com/docket/17442392/73/epic-games-inc-v-apple-inc/
Sept 18 Epic Reply on PI Motion: https://www.courtlistener.com/docket/17442392/90/epic-games-inc-v-apple-inc/
Oct 9, 2020 ORDER GRANTING IN PART AND DENYING IN PART MOTION FOR PRELIMINARY INJUNCTION https://www.courtlistener.com/docket/17442392/118/epic-games-inc-v-apple-inc/
October 19, 2020
By Jonathan Rubin (from MoginRubin firm blog)
Excerpt:
The case involves questions “on the frontier edges” of U.S. antitrust law, according to the judge overseeing it. It is a legal battle between a $4 billion company (Epic Games, Inc.) and a $260 billion company (Apple, Inc.) in a market that’s valued at $160 billion globally. At the center of the legal battle is the distribution of a digital one: a mobile application played by hundreds of millions of gamers on billions of devices around the word.
It’s no small matter, and Apple has scored a temporary victory in the suit, which raises Sherman Antitrust Section 1 and Section 2 claims.
On Oct. 9, 2020, U.S. Judge Yvonne Gonzalez Rogers of California’s Northern District held that Apple may continue to ban from its store Epic’s wildly popular Fortnite app. The judge conceded that Epic had some “strong arguments” regarding the exclusivity of the store, but determined they weren’t enough to support a preliminary injunction. The judge rejected as seemingly “retaliatory,” however, Apple’s effort to also block the products of companies affiliated with Epic. Those companies operate independently and have separate agreements with Apple.
In other words, the court held that Epic had not yet shown sufficient likelihood of success of prevailing on its legal claim that Apple has abused its market power, then went on to block Apple from conduct that is potentially just that with regard to Epic’s affiliates.
From Venturebeat: Epic v. Apple
from https://venturebeat.com/2020/09/11/the-deanbeat-apple-v-epic-a-briefing-on-the-antitrust-arguments-and-interesting-facts/
Epic markets programming is available on Apple and Android (Google) platforms. The charge from Apple to Epic customers is 30% of what Epic charges the customer (Google is similar). Epic started charging customers 30% outside of the Apple app, which led Apple to drop Epic from its platform. Epic then brought suit against Apple.
Epic argues that Apple is a monopolist in two respects: its control of app distribution on the App Store and its requirement that users pay through its payment processing system.
Epic also argues that because Apple has monopoly power, antitrust laws say Apple can’t use that power to shut competition out of the market for either the app store or the payment system. Epic does, however, acknowledge that Apple created value with the App Store.
“To be clear, Epic does not seek to force Apple to provide distribution and processing services for free, nor does Epic seek to enjoy Apple’s services without paying for them. What Epic wants is the freedom not to use Apple’s App Store or IAP (in-app purchase), and instead to use and offer competing service,” Epic said.
Apple has asserted its store isn’t a separate product, but Epic argues app distribution is an “aftermarket” derived from the primary market of the smartphone platform. Epic says the courts should view the relevant antitrust market as the aftermarket, which has a unique brand and a unique market and is not part of a larger single product. Epic isn’t challenging Apple’s rights on the smartphone platform, only in the aftermarket, where Epic alleges Apple is behaving in a monopolistic manner. It argues that Apple cuts off choices (such as downloading apps from websites) that are available to consumers in other markets. The U.S. Supreme Court examines this issue of the aftermarket in a the case Apple vs. Pepper.
While Apple doesn’t have a monopoly in the presence of Google’s Android, Epic argues that the duopoly has negative effects on the market and that Apple, rather than Google, has the most valuable users. Epic noted that two-thirds of the profits are on Apple’s platform and that Apple has a virtual lock on a billion highly desirable users who spend more than those on Android.
In his testimony, economist David Evans argued on Epic’s behalf that the cost of switching is very high for anyone thinking about moving from iOS to Android. It’s basically like starting over.
Pleadings:
August 13 Epic Complaint: https://www.courtlistener.com/docket/17442392/1/epic-games-inc-v-apple-inc/
August 17 Motion for TRO: https://www.courtlistener.com/docket/17442392/17/epic-games-inc-v-apple-inc/
August 21 Opposition to Motion: https://www.courtlistener.com/docket/17442392/36/epic-games-inc-v-apple-inc/
August 23 Reply to Opposition: https://www.courtlistener.com/docket/17442392/43/epic-games-inc-v-apple-inc/
August 24 Court Order, TRO: https://www.courtlistener.com/docket/17442392/48/epic-games-inc-v-apple-inc/
Sept 4 Motion for PI: https://www.courtlistener.com/docket/17442392/61/epic-games-inc-v-apple-inc/
Sept 8 Answer of Apple to Complaint, Counterclaim: https://www.courtlistener.com/docket/17442392/66/epic-games-inc-v-apple-inc/
Sept 15 Opposition to PI Motion: https://www.courtlistener.com/docket/17442392/73/epic-games-inc-v-apple-inc/
Sept 18 Epic Reply on PI Motion: https://www.courtlistener.com/docket/17442392/90/epic-games-inc-v-apple-inc/
Oct 9, 2020 ORDER GRANTING IN PART AND DENYING IN PART MOTION FOR PRELIMINARY INJUNCTION https://www.courtlistener.com/docket/17442392/118/epic-games-inc-v-apple-inc/
NY TIMES: Uber and Lyft shares surge after California voters affirm how they classify drivers.
By Kevin Granville
Uber shares gained as much as 9 percent, and Lyft rose more than 12 percent.
Both companies help draft the ballot measure, known as Proposition 22, which exempts them from a new state labor law that would have forced them to employ drivers and pay for health care. Uber is expected to pursue federal legislation that would protect it and other gig economy companies from similar employment laws in other states.
The battle over Prop. 22 became hugely expensive, with backers contributing $200 million to a campaign that pitted Uber, Lyft, DoorDash and similar gig economy companies against labor groups and state lawmakers.
READ THE FULL STORY
Uber and Lyft drivers in California will remain independent
https://www.nytimes.com/2020/11/04/technology/california-uber-lyft-prop-22.html?action=click&module=RelatedLinks&pgtype=Article
By Kevin Granville
- Nov. 4, 2020Updated 9:47 a.m. ETShare prices in Uber and Lyft jumped in early trading on Wednesday after California voters approved a measure that will allow the ride-hailing companies to continue treating drivers as independent contractors.
Uber shares gained as much as 9 percent, and Lyft rose more than 12 percent.
Both companies help draft the ballot measure, known as Proposition 22, which exempts them from a new state labor law that would have forced them to employ drivers and pay for health care. Uber is expected to pursue federal legislation that would protect it and other gig economy companies from similar employment laws in other states.
The battle over Prop. 22 became hugely expensive, with backers contributing $200 million to a campaign that pitted Uber, Lyft, DoorDash and similar gig economy companies against labor groups and state lawmakers.
READ THE FULL STORY
Uber and Lyft drivers in California will remain independent
https://www.nytimes.com/2020/11/04/technology/california-uber-lyft-prop-22.html?action=click&module=RelatedLinks&pgtype=Article
How Google Misappropriated Third-Party Content from Yelp
from: https://judiciary.house.gov/uploadedfiles/competition_in_digital_markets.pdf
Comment by DAR: The recently released House Committee majority report on competition in digital markets runs 450 pages. It resembles the kind of industry report economists like Leonard Weiss might have written a generation ago. It is anecdotal in the sense that the industry stories it tells are based in large part on testimony from industry participants and documents that are publicly available. The Committee relied on voluntary cooperation from targets like Amazon. The Report complains that cooperation from companies like Amazon was limited.
The factual issues addressed by the Report deserve attention. Following is a very brief snippet from the Report about Google and Yelp. It illustrates the detail and style of the Report:
In the years following 2005, Google invested in building out its own vertical services. Documents reveal that Google partly did so through lifting content directly from third-party providers to bootstrap Google’s own vertical services. In the process, Google leveraged its search dominance—demanding that third parties permit Google to take their content, or else be removed from Google’s search results entirely. 184
For example, after identifying local search as a “particularly important” vertical to develop, Google built Google Local, which licensed content from local providers, including Yelp. [fn. 1103] In 2010 Google rolled out a service directly competing with Yelp, even as Google continued to license Yelp’s content—prompting Yelp’s CEO to request that Google immediately remove Yelp’s proprietary content from Google’s own service. [fn 1104] At a time when Google Local was failing to gain momentum, Google told Yelp that the only way to have its content removed from Google’s competing product was to be removed from Google’s general results entirely.[fn 1105] Yelp relied so heavily on Google for user traffic that the company could not afford to be delisted—a fact that Google likely knew. [fn1106] In short, Google weaponized its search dominance, demanding that Yelp surrender valuable content to Google’s competing product or else risk heavy losses in traffic and revenue.
from: https://judiciary.house.gov/uploadedfiles/competition_in_digital_markets.pdf
Comment by DAR: The recently released House Committee majority report on competition in digital markets runs 450 pages. It resembles the kind of industry report economists like Leonard Weiss might have written a generation ago. It is anecdotal in the sense that the industry stories it tells are based in large part on testimony from industry participants and documents that are publicly available. The Committee relied on voluntary cooperation from targets like Amazon. The Report complains that cooperation from companies like Amazon was limited.
The factual issues addressed by the Report deserve attention. Following is a very brief snippet from the Report about Google and Yelp. It illustrates the detail and style of the Report:
In the years following 2005, Google invested in building out its own vertical services. Documents reveal that Google partly did so through lifting content directly from third-party providers to bootstrap Google’s own vertical services. In the process, Google leveraged its search dominance—demanding that third parties permit Google to take their content, or else be removed from Google’s search results entirely. 184
For example, after identifying local search as a “particularly important” vertical to develop, Google built Google Local, which licensed content from local providers, including Yelp. [fn. 1103] In 2010 Google rolled out a service directly competing with Yelp, even as Google continued to license Yelp’s content—prompting Yelp’s CEO to request that Google immediately remove Yelp’s proprietary content from Google’s own service. [fn 1104] At a time when Google Local was failing to gain momentum, Google told Yelp that the only way to have its content removed from Google’s competing product was to be removed from Google’s general results entirely.[fn 1105] Yelp relied so heavily on Google for user traffic that the company could not afford to be delisted—a fact that Google likely knew. [fn1106] In short, Google weaponized its search dominance, demanding that Yelp surrender valuable content to Google’s competing product or else risk heavy losses in traffic and revenue.
Supreme Court Laying Out Path to Help Trump Win a Contested Race?
Greg Stohr
Excerpt from Bloomberg article:
(Bloomberg) -- The U.S. Supreme Court’s conservatives started carving a path that could let President Donald Trump win a contested election, issuing a far-reaching set of opinions just as Amy Coney Barrett was getting Senate confirmation to provide what could be a crucial additional vote.
In a 5-3 decision released minutes before the Senate vote Monday night, the court rejected Democratic calls to reinstate a six-day extension for the receipt of mail ballots in Wisconsin, a hotly contested state that is experiencing a surge of Covid-19 cases. The Supreme Court as a whole gave no explanation for the decision.
The outcome was bad enough for Democrats, but an opinion by Trump-appointed Justice Brett Kavanaugh bordered on catastrophic. Kavanaugh suggested sympathy for Trump’s unsubstantiated contentions that votes received after Election Day would be tainted by fraud, warning that “charges of a rigged election could explode” if late-arriving ballots change the perceived outcome.
Most states “want to avoid the chaos and suspicions of impropriety that can ensue if thousands of absentee ballots flow in after election day and potentially flip the results of an election,” Kavanaugh wrote. “And those states also want to be able to definitively announce the results of the election on election night, or as soon as possible thereafter.”
Although Trump is trailing Democrat Joe Biden in national polls, the race is tighter in Wisconsin and other swing states that will determine who wins and are the focus of the two campaigns. Two other pivotal states, Pennsylvania and North Carolina, are awaiting Supreme Court action in cases raising similar issues.
Kavanaugh’s vote -- and those of fellow Trump appointees Barrett and Neil Gorsuch -- could be crucial in any post-election dispute. With Chief Justice John Roberts showing less willingness to second-guess state election decisions, Trump could need the support of all three of his appointed justices to overturn election results that seem to favor Biden.
All three Democratic appointees dissented Monday night. Writing for the group, Justice Elena Kagan blasted Kavanaugh’s word choice, as well as his reasoning.
There are no results to ‘flip’ until all valid votes are counted,” Kagan wrote for herself and Justices Stephen Breyer and Sonia Sotomayor. “And nothing could be more suspicious or improper than refusing to tally votes once the clock strikes 12 on election night.”
The court’s decision Monday means ballots must be received by Election Day to count in Wisconsin. Democrats were seeking to revive an extension that had been ordered by a federal trial judge because of the Covid outbreak and then blocked by an appeals court.
Kagan said the worsening pandemic in Wisconsin means that without without the extension voters would have to “opt between braving the polls, with all the risk that entails, and losing their right to vote.” Kavanaugh countered that the high court order wouldn’t disenfranchise any voter who had adequately planned ahead.
The dueling opinions, however, went well beyond the Wisconsin circumstances. Kavanaugh embraced a legal theory that could let Republican-controlled state legislatures override results certified by Democratic officials. That argument, developed by three conservative justices in the 2000 Bush v. Gore case, says the Supreme Court should intervene in a presidential election dispute even when a state court is interpreting its own laws.
Dueling ElectorsCiting that opinion, Kavanaugh pointed to a constitutional provision that says state legislatures get to determine how electors are appointed to the Electoral College, the body that formally selects the U.S. president.
“The text of the Constitution requires federal courts to ensure that state courts do not rewrite state election laws,” Kavanaugh wrote. He was one of three current justices, including Roberts and Barrett, who worked as lawyers for Republican George W. Bush in the 2000 election fight
From: https://www.msn.com/en-us/news/politics/supreme-court-lays-out-path-to-help-trump-win-a-contested-race/ar-BB1asZSx?ocid=msedgdhp
Greg Stohr
Excerpt from Bloomberg article:
(Bloomberg) -- The U.S. Supreme Court’s conservatives started carving a path that could let President Donald Trump win a contested election, issuing a far-reaching set of opinions just as Amy Coney Barrett was getting Senate confirmation to provide what could be a crucial additional vote.
In a 5-3 decision released minutes before the Senate vote Monday night, the court rejected Democratic calls to reinstate a six-day extension for the receipt of mail ballots in Wisconsin, a hotly contested state that is experiencing a surge of Covid-19 cases. The Supreme Court as a whole gave no explanation for the decision.
The outcome was bad enough for Democrats, but an opinion by Trump-appointed Justice Brett Kavanaugh bordered on catastrophic. Kavanaugh suggested sympathy for Trump’s unsubstantiated contentions that votes received after Election Day would be tainted by fraud, warning that “charges of a rigged election could explode” if late-arriving ballots change the perceived outcome.
Most states “want to avoid the chaos and suspicions of impropriety that can ensue if thousands of absentee ballots flow in after election day and potentially flip the results of an election,” Kavanaugh wrote. “And those states also want to be able to definitively announce the results of the election on election night, or as soon as possible thereafter.”
Although Trump is trailing Democrat Joe Biden in national polls, the race is tighter in Wisconsin and other swing states that will determine who wins and are the focus of the two campaigns. Two other pivotal states, Pennsylvania and North Carolina, are awaiting Supreme Court action in cases raising similar issues.
Kavanaugh’s vote -- and those of fellow Trump appointees Barrett and Neil Gorsuch -- could be crucial in any post-election dispute. With Chief Justice John Roberts showing less willingness to second-guess state election decisions, Trump could need the support of all three of his appointed justices to overturn election results that seem to favor Biden.
All three Democratic appointees dissented Monday night. Writing for the group, Justice Elena Kagan blasted Kavanaugh’s word choice, as well as his reasoning.
There are no results to ‘flip’ until all valid votes are counted,” Kagan wrote for herself and Justices Stephen Breyer and Sonia Sotomayor. “And nothing could be more suspicious or improper than refusing to tally votes once the clock strikes 12 on election night.”
The court’s decision Monday means ballots must be received by Election Day to count in Wisconsin. Democrats were seeking to revive an extension that had been ordered by a federal trial judge because of the Covid outbreak and then blocked by an appeals court.
Kagan said the worsening pandemic in Wisconsin means that without without the extension voters would have to “opt between braving the polls, with all the risk that entails, and losing their right to vote.” Kavanaugh countered that the high court order wouldn’t disenfranchise any voter who had adequately planned ahead.
The dueling opinions, however, went well beyond the Wisconsin circumstances. Kavanaugh embraced a legal theory that could let Republican-controlled state legislatures override results certified by Democratic officials. That argument, developed by three conservative justices in the 2000 Bush v. Gore case, says the Supreme Court should intervene in a presidential election dispute even when a state court is interpreting its own laws.
Dueling ElectorsCiting that opinion, Kavanaugh pointed to a constitutional provision that says state legislatures get to determine how electors are appointed to the Electoral College, the body that formally selects the U.S. president.
“The text of the Constitution requires federal courts to ensure that state courts do not rewrite state election laws,” Kavanaugh wrote. He was one of three current justices, including Roberts and Barrett, who worked as lawyers for Republican George W. Bush in the 2000 election fight
From: https://www.msn.com/en-us/news/politics/supreme-court-lays-out-path-to-help-trump-win-a-contested-race/ar-BB1asZSx?ocid=msedgdhp
Werden and Froeb: Possible Problems in the Google Case
-
October 26, 2020By Gregory J. Werden & Luke M. Froeb1
Google invented neither the search engine nor the Internet browser, but it made them better. Competing on the merits, Google overcame Microsoft’s substantial incumbency advantages and displaced it as the dominant incumbent. At a cost of billions of dollars each year, Google provides and improves services that make it the third most trusted brand in American (behind the United States Postal Service and Amazon). To give up all on-line search and maps, the median American (in 2017) must be paid $21,178 per year.
The complaint filed by the Department of Justice and 11 states echoes the Microsoft case by alleging that Google has monopoly positions in search and search advertising which Google protects with anticompetitive tactics. The complaint has been criticized for not going further, but it states a case that seeks to take advantage of a causation standard for monopoly maintenance so low that the D.C. Circuit’s liability opinion in Microsoft described it as “edentulous.” Even so, Judge Mehta could get hung up on some points.
The complaint stresses the inability of small rivals to compete because they lack scale, and it alleges that Google’s practices block small rivals from achieving scale. But the complaint does not allege that Google’s small rivals had a plausible path to obtaining scale in the absence of all the challenged practices. If every computer and mobile device were preloaded with every search engine and browser, the vast majority of users likely would choose Google’s search engine and browser.
Among other things, the complaint alleges that Google pays makers of mobile devices and mobile service providers to promote usage of Google search. A striking allegation in the complaint is that Apple charges Google $8-12 billion per year to use its search engine. One might wonder whether Apple is the real gatekeeper and Google is just paying the price of admission.
The foundational allegation of the complaint is that “For both mobile and computer search access points, being preset as the default is the most effective way for general search engines to reach users, develop scale or remain competitive.” And the complaint acknowledges that Microsoft takes advantage of its monopoly in PC operating systems to promote its Edge browser and Bing search engine. Yet statcounter reports that Google has an 81.5 percent share in U.S. desktop search engines, while Bing has just a 12.1 percent share. Being preset as a default either does confer a big advantage on Bing, or Google overcomes that advantage through competition on the merits.
The obvious remedy would bar Google from buying distribution. The big loser could be Apple, and the loss of Google’s payments would act like a cost increase throughout the mobile device supply chain, so consumer prices likely would rise. Microsoft stands to benefit significantly, as it has the second most popular search engine and browser. The impact on Google is least clear, but it could come out ahead: Google could save billions of dollars a year in payments yet experience only a modest decline in usage.
The complaint asserts that “Google’s practices are anticompetitive under long-established antitrust law,” but antitrust law has not come to grips with monopolies in free services. An earlier monopoly claim against Google brought by KinderStart.com was dismissed, in part, on the basis that free Internet search could not be a monopoly under antitrust law. But conventional antitrust principles can be applied to free search with careful modification to account for monetization through advertising.
The complaint misapprehends application of the hypothetical monopolist test (“HMT”) to free search. The HMT made market delineation into a market power inquiry. Because market power normally is exercised by raising prices, the HMT asks whether a profit-maximizing monopolist would raise price, or perhaps whether an actual monopolist already did. Although a search monopolist would maximize profits by charging monopoly prices for advertising, the complaint omits the profit maximization and alleges that a hypothetical monopolist “would be able to maintain quality below the level that would prevail in a competitive market.”
A curious aspect of the government’s complaint is the public bemoaning of the fact that Google instructed employees not to use language that the government otherwise would have quoted. Antitrust plaintiffs love to invite the inference of anticompetitive motivation from small snippets taken from memos and emails. But the government cannot be inviting the inference of anticompetitive motivation from the absence of the usual snippets, so what is the point?
It also is unclear what the government hopes to achieve. History suggests that, no matter what is accomplished, the Biden Administration can be accused of selling out the American people in the 2024 election campaign. As President, William Howard Taft presided over the breakups of American Tobacco and Standard Oil in 1911. In the 1912 presidential election campaign, both Wilson and Roosevelt lambasted Taft for selling out the American people, and Taft got just 8 electoral votes (compared to 321 in 1908).
While any remedy is unlikely to satisfy the public, any rationale in the liability ruling is unlikely to satisfy the antitrust bar. In the platform context, legitimate competitive practices can look like illegitimate anticompetitive practices because network expansion lowers cost and improves quality. According to the complaint, Google increases the quality of it services by enlarging its user base and the best way to do that is through the sort of arrangement the government challenges. No one should expect the legal guidance from this case to be either clear or clearly in the consumer’s interest.
https://www.competitionpolicyinternational.com/possible-problems-in-the-google-case/
-
October 26, 2020By Gregory J. Werden & Luke M. Froeb1
Google invented neither the search engine nor the Internet browser, but it made them better. Competing on the merits, Google overcame Microsoft’s substantial incumbency advantages and displaced it as the dominant incumbent. At a cost of billions of dollars each year, Google provides and improves services that make it the third most trusted brand in American (behind the United States Postal Service and Amazon). To give up all on-line search and maps, the median American (in 2017) must be paid $21,178 per year.
The complaint filed by the Department of Justice and 11 states echoes the Microsoft case by alleging that Google has monopoly positions in search and search advertising which Google protects with anticompetitive tactics. The complaint has been criticized for not going further, but it states a case that seeks to take advantage of a causation standard for monopoly maintenance so low that the D.C. Circuit’s liability opinion in Microsoft described it as “edentulous.” Even so, Judge Mehta could get hung up on some points.
The complaint stresses the inability of small rivals to compete because they lack scale, and it alleges that Google’s practices block small rivals from achieving scale. But the complaint does not allege that Google’s small rivals had a plausible path to obtaining scale in the absence of all the challenged practices. If every computer and mobile device were preloaded with every search engine and browser, the vast majority of users likely would choose Google’s search engine and browser.
Among other things, the complaint alleges that Google pays makers of mobile devices and mobile service providers to promote usage of Google search. A striking allegation in the complaint is that Apple charges Google $8-12 billion per year to use its search engine. One might wonder whether Apple is the real gatekeeper and Google is just paying the price of admission.
The foundational allegation of the complaint is that “For both mobile and computer search access points, being preset as the default is the most effective way for general search engines to reach users, develop scale or remain competitive.” And the complaint acknowledges that Microsoft takes advantage of its monopoly in PC operating systems to promote its Edge browser and Bing search engine. Yet statcounter reports that Google has an 81.5 percent share in U.S. desktop search engines, while Bing has just a 12.1 percent share. Being preset as a default either does confer a big advantage on Bing, or Google overcomes that advantage through competition on the merits.
The obvious remedy would bar Google from buying distribution. The big loser could be Apple, and the loss of Google’s payments would act like a cost increase throughout the mobile device supply chain, so consumer prices likely would rise. Microsoft stands to benefit significantly, as it has the second most popular search engine and browser. The impact on Google is least clear, but it could come out ahead: Google could save billions of dollars a year in payments yet experience only a modest decline in usage.
The complaint asserts that “Google’s practices are anticompetitive under long-established antitrust law,” but antitrust law has not come to grips with monopolies in free services. An earlier monopoly claim against Google brought by KinderStart.com was dismissed, in part, on the basis that free Internet search could not be a monopoly under antitrust law. But conventional antitrust principles can be applied to free search with careful modification to account for monetization through advertising.
The complaint misapprehends application of the hypothetical monopolist test (“HMT”) to free search. The HMT made market delineation into a market power inquiry. Because market power normally is exercised by raising prices, the HMT asks whether a profit-maximizing monopolist would raise price, or perhaps whether an actual monopolist already did. Although a search monopolist would maximize profits by charging monopoly prices for advertising, the complaint omits the profit maximization and alleges that a hypothetical monopolist “would be able to maintain quality below the level that would prevail in a competitive market.”
A curious aspect of the government’s complaint is the public bemoaning of the fact that Google instructed employees not to use language that the government otherwise would have quoted. Antitrust plaintiffs love to invite the inference of anticompetitive motivation from small snippets taken from memos and emails. But the government cannot be inviting the inference of anticompetitive motivation from the absence of the usual snippets, so what is the point?
It also is unclear what the government hopes to achieve. History suggests that, no matter what is accomplished, the Biden Administration can be accused of selling out the American people in the 2024 election campaign. As President, William Howard Taft presided over the breakups of American Tobacco and Standard Oil in 1911. In the 1912 presidential election campaign, both Wilson and Roosevelt lambasted Taft for selling out the American people, and Taft got just 8 electoral votes (compared to 321 in 1908).
While any remedy is unlikely to satisfy the public, any rationale in the liability ruling is unlikely to satisfy the antitrust bar. In the platform context, legitimate competitive practices can look like illegitimate anticompetitive practices because network expansion lowers cost and improves quality. According to the complaint, Google increases the quality of it services by enlarging its user base and the best way to do that is through the sort of arrangement the government challenges. No one should expect the legal guidance from this case to be either clear or clearly in the consumer’s interest.
https://www.competitionpolicyinternational.com/possible-problems-in-the-google-case/
From Mother Jones: Payday Lenders Gave Trump Millions. Then He Helped Them Cash In on the Working Poor.
The investment in Trump has continued paying off during the pandemic.
https://www.motherjones.com/politics/2020/10/payday-lenders-gave-trump-millions-then-he-helped-them-cash-in-on-the-working-poor/
The investment in Trump has continued paying off during the pandemic.
https://www.motherjones.com/politics/2020/10/payday-lenders-gave-trump-millions-then-he-helped-them-cash-in-on-the-working-poor/
WSJ- Ant Group to Raise More Than $34 Billion in Record IPO
Excerpts:
HONG KONG—Chinese financial-technology giant Ant Group Co. is set to raise at least $34.4 billion from the world’s biggest-ever initial public offering, fillings showed Monday, in a blockbuster deal that will bypass U.S. stock exchanges.
Ant Group's coming initial public offering is set to be the largest ever IPO of all time.
The price values the Hangzhou-based group at about $313 billion, after including the new capital raised but before any greenshoe. In comparison, Mastercard Inc. was worth about $330 billion as of Friday’s close.
DAR Comment: Ant's vast electronic payment networks in China amd elsewhere have provoked concerns about invasive data collection to which the Chinese government would be privy.
Posted by Don Allen Resnikoff
Excerpts:
HONG KONG—Chinese financial-technology giant Ant Group Co. is set to raise at least $34.4 billion from the world’s biggest-ever initial public offering, fillings showed Monday, in a blockbuster deal that will bypass U.S. stock exchanges.
Ant Group's coming initial public offering is set to be the largest ever IPO of all time.
The price values the Hangzhou-based group at about $313 billion, after including the new capital raised but before any greenshoe. In comparison, Mastercard Inc. was worth about $330 billion as of Friday’s close.
DAR Comment: Ant's vast electronic payment networks in China amd elsewhere have provoked concerns about invasive data collection to which the Chinese government would be privy.
Posted by Don Allen Resnikoff
FTC Vote Pending As Commissioners Weigh Facebook Antitrust Suit
CPI
-
October 23, 2020
While the five commissioners of the Federal Trade Commission (FTC) debate if an antitrust lawsuit against Facebook should be pursued, FTC staffers are in favor of moving forward with the case, according to a Wall Street Journal report (WSJ) on Friday (Oct. 23), citing sources familiar with the matter.
It has been over a year since the FTC started investigating complaints that the social media giant stifled competition. The sources told the WSJ that the commission is expected to vote and hand down a decision in a few weeks.
Even though the investigation has been in progress for more than 12 months, Facebook is still “making its case to the commission.”
The sources told WSJ that FTC commissioners — three Republicans and two Democrats — held a virtual meeting among themselves to determine their next move. Per rules, the commissioners have to announce a formal meeting in order to discuss any enforcement actions as a group.
One part of the FTC investigation focuses on Facebook’s purchases of companies that could be considered possible rivals. Facebook bought Instagram in 2012 for $1 billion and WhatsApp in 2014 for $19 billion.
The FTC meeting comes on the heels of an antitrust filing against Google by the Department of Justice (DOJ). The suit says that Google uses anti-competitive measures to protect its search monopoly.
CPI
-
October 23, 2020
While the five commissioners of the Federal Trade Commission (FTC) debate if an antitrust lawsuit against Facebook should be pursued, FTC staffers are in favor of moving forward with the case, according to a Wall Street Journal report (WSJ) on Friday (Oct. 23), citing sources familiar with the matter.
It has been over a year since the FTC started investigating complaints that the social media giant stifled competition. The sources told the WSJ that the commission is expected to vote and hand down a decision in a few weeks.
Even though the investigation has been in progress for more than 12 months, Facebook is still “making its case to the commission.”
The sources told WSJ that FTC commissioners — three Republicans and two Democrats — held a virtual meeting among themselves to determine their next move. Per rules, the commissioners have to announce a formal meeting in order to discuss any enforcement actions as a group.
One part of the FTC investigation focuses on Facebook’s purchases of companies that could be considered possible rivals. Facebook bought Instagram in 2012 for $1 billion and WhatsApp in 2014 for $19 billion.
The FTC meeting comes on the heels of an antitrust filing against Google by the Department of Justice (DOJ). The suit says that Google uses anti-competitive measures to protect its search monopoly.
Harvard scholars on voter fraud disinformation
Benkler, Yochai, Casey Tilton, Bruce Etling, Hal Roberts, Justin Clark, et al. Mail-In Voter Fraud: Anatomy of a Disinformation Campaign, 2020.
Abstract
The claim that election fraud is a major concern with mail-in ballots has become the central threat to election participation during the Covid-19 pandemic and to the legitimacy of the outcome of the election across the political spectrum. President Trump has repeatedly cited his concerns over voter fraud associated with mail-in ballots as a reason that he may not abide by an adverse electoral outcome. Polling conducted in September 2020 suggests that nearly half of Republicans agree with the president that election fraud is a major concern associated with expanded mail-in voting during the pandemic. Few Democrats share that belief. Despite the consensus among independent academic and journalistic investigations that voter fraud is rare and extremely unlikely to determine a national election, tens of millions of Americans believe the opposite. This is a study of the disinformation campaign that led to widespread acceptance of this apparently false belief and to its partisan distribution pattern. Contrary to the focus of most contemporary work on disinformation, our findings suggest that this highly effective disinformation campaign, with potentially profound effects for both participation in and the legitimacy of the 2020 election, was an elite-driven, mass-media led process. Social media played only a secondary and supportive role.
Our results are based on analyzing over fifty-five thousand online media stories, five million tweets, and seventy-five thousand posts on public Facebook pages garnering millions of engagements. They are consistent with our findings about the American political media ecosystem from 2015-2018, published in Network Propaganda, in which we found that Fox News and Donald Trump’s own campaign were far more influential in spreading false beliefs than Russian trolls or Facebook clickbait artists. This dynamic appears to be even more pronounced in this election cycle, likely because Donald Trump’s position as president and his leadership of the Republican Party allow him to operate directly through political and media elites, rather than relying on online media as he did when he sought to advance his then-still-insurgent positions in 2015 and the first half of 2016.
Our findings here suggest that Donald Trump has perfected the art of harnessing mass media to disseminate and at times reinforce his disinformation campaign by using three core standard practices of professional journalism. These three are: elite institutional focus (if the President says it, it’s news); headline seeking (if it bleeds, it leads); and balance, neutrality, or the avoidance of the appearance of taking a side. He uses the first two in combination to summon coverage at will, and has used them continuously to set the agenda surrounding mail-in voting through a combination of tweets, press conferences, and television interviews on Fox News. He relies on the latter professional practice to keep audiences that are not politically pre-committed and have relatively low political knowledge confused, because it limits the degree to which professional journalists in mass media organizations are willing or able to directly call the voter fraud frame disinformation. The president is, however, not acting alone. Throughout the first six months of the disinformation campaign, the Republican National Committee (RNC) and staff from the Trump campaign appear repeatedly and consistently on message at the same moments, suggesting an institutionalized rather than individual disinformation campaign. The efforts of the president and the Republican Party are supported by the right-wing media ecosystem, primarily Fox News and talk radio functioning in effect as a party press. These reinforce the message, provide the president a platform, and marginalize or attack those Republican leaders or any conservative media personalities who insist that there is no evidence of widespread voter fraud associated with mail-in voting.
The primary cure for the elite-driven, mass media communicated information disorder we observe here is unlikely to be more fact checking on Facebook. Instead, it is likely to require more aggressive policing by traditional professional media, the Associated Press, the television networks, and local TV news editors of whether and how they cover Trump’s propaganda efforts, and how they educate their audiences about the disinformation campaign the president and the Republican Party have waged.
Terms of Use
This article is made available under the terms and conditions applicable to Other Posted Material, as set forth at http://nrs.harvard.edu/urn-3:HUL.InstRepos:dash.current.terms-of-use#LAA
Citable link to this page
https://nrs.harvard.edu/URN-3:HUL.INSTREPOS:37365484
Benkler, Yochai, Casey Tilton, Bruce Etling, Hal Roberts, Justin Clark, et al. Mail-In Voter Fraud: Anatomy of a Disinformation Campaign, 2020.
Abstract
The claim that election fraud is a major concern with mail-in ballots has become the central threat to election participation during the Covid-19 pandemic and to the legitimacy of the outcome of the election across the political spectrum. President Trump has repeatedly cited his concerns over voter fraud associated with mail-in ballots as a reason that he may not abide by an adverse electoral outcome. Polling conducted in September 2020 suggests that nearly half of Republicans agree with the president that election fraud is a major concern associated with expanded mail-in voting during the pandemic. Few Democrats share that belief. Despite the consensus among independent academic and journalistic investigations that voter fraud is rare and extremely unlikely to determine a national election, tens of millions of Americans believe the opposite. This is a study of the disinformation campaign that led to widespread acceptance of this apparently false belief and to its partisan distribution pattern. Contrary to the focus of most contemporary work on disinformation, our findings suggest that this highly effective disinformation campaign, with potentially profound effects for both participation in and the legitimacy of the 2020 election, was an elite-driven, mass-media led process. Social media played only a secondary and supportive role.
Our results are based on analyzing over fifty-five thousand online media stories, five million tweets, and seventy-five thousand posts on public Facebook pages garnering millions of engagements. They are consistent with our findings about the American political media ecosystem from 2015-2018, published in Network Propaganda, in which we found that Fox News and Donald Trump’s own campaign were far more influential in spreading false beliefs than Russian trolls or Facebook clickbait artists. This dynamic appears to be even more pronounced in this election cycle, likely because Donald Trump’s position as president and his leadership of the Republican Party allow him to operate directly through political and media elites, rather than relying on online media as he did when he sought to advance his then-still-insurgent positions in 2015 and the first half of 2016.
Our findings here suggest that Donald Trump has perfected the art of harnessing mass media to disseminate and at times reinforce his disinformation campaign by using three core standard practices of professional journalism. These three are: elite institutional focus (if the President says it, it’s news); headline seeking (if it bleeds, it leads); and balance, neutrality, or the avoidance of the appearance of taking a side. He uses the first two in combination to summon coverage at will, and has used them continuously to set the agenda surrounding mail-in voting through a combination of tweets, press conferences, and television interviews on Fox News. He relies on the latter professional practice to keep audiences that are not politically pre-committed and have relatively low political knowledge confused, because it limits the degree to which professional journalists in mass media organizations are willing or able to directly call the voter fraud frame disinformation. The president is, however, not acting alone. Throughout the first six months of the disinformation campaign, the Republican National Committee (RNC) and staff from the Trump campaign appear repeatedly and consistently on message at the same moments, suggesting an institutionalized rather than individual disinformation campaign. The efforts of the president and the Republican Party are supported by the right-wing media ecosystem, primarily Fox News and talk radio functioning in effect as a party press. These reinforce the message, provide the president a platform, and marginalize or attack those Republican leaders or any conservative media personalities who insist that there is no evidence of widespread voter fraud associated with mail-in voting.
The primary cure for the elite-driven, mass media communicated information disorder we observe here is unlikely to be more fact checking on Facebook. Instead, it is likely to require more aggressive policing by traditional professional media, the Associated Press, the television networks, and local TV news editors of whether and how they cover Trump’s propaganda efforts, and how they educate their audiences about the disinformation campaign the president and the Republican Party have waged.
Terms of Use
This article is made available under the terms and conditions applicable to Other Posted Material, as set forth at http://nrs.harvard.edu/urn-3:HUL.InstRepos:dash.current.terms-of-use#LAA
Citable link to this page
https://nrs.harvard.edu/URN-3:HUL.INSTREPOS:37365484
Apple Allowed to Continue to Ban Epic’s Fortnite From Store, But May Not Retaliate Against Epic Affiliates
October 19, 2020
By Jonathan Rubin (from MoginRubin firm blog)
The case involves questions “on the frontier edges” of U.S. antitrust law, according to the judge overseeing it. It is a legal battle between a $4 billion company (Epic Games, Inc.) and a $260 billion company (Apple, Inc.) in a market that’s valued at $160 billion globally. At the center of the legal battle is the distribution of a digital one: a mobile application played by hundreds of millions of gamers on billions of devices around the word.
It’s no small matter, and Apple has scored a temporary victory in the suit, which raises Sherman Antitrust Section 1 and Section 2 claims.
(See related post, Pistacchio vs. Apple: Gamers Claim Anticompetitive Behavior in Subscription Game Market, a lawsuit filed the day before this ruling was handed down.)
On Oct. 9, 2020, U.S. Judge Yvonne Gonzalez Rogers of California’s Northern District held that Apple may continue to ban from its store Epic’s wildly popular Fortnite app. The judge conceded that Epic had some “strong arguments” regarding the exclusivity of the store, but determined they weren’t enough to support a preliminary injunction. The judge rejected as seemingly “retaliatory,” however, Apple’s effort to also block the products of companies affiliated with Epic. Those companies operate independently and have separate agreements with Apple.
In other words, the court held that Epic had not yet shown sufficient likelihood of success of prevailing on its legal claim that Apple has abused its market power, then went on to block Apple from conduct that is potentially just that with regard to Epic’s affiliates.
(For additional background on the case, please read our previous post.)
After it was barred from Apple’s App Store, Epic asked the court to force Apple to reinstate Fortnite, despite acknowledging that it breached licensing agreements and operating guidelines in which Apple bars developers from circumventing the iPhone and iPad system (IAP) or distributing iOS apps outside the Apple Store. However, Epic launched the Epic Games Store and would like to create an iOS store independent of the Apple store, as well. “Apple maintains the iOS platform as a walled garden or closed platform model, whereby Apple has strict and exclusive control over the hardware, the operating system, the digital distribution, and the IAP system,” Judge Rogers wrote.
Epic also urged the court to stop Apple from terminating its affiliates’ access to developer tools for other applications, including Unreal Engine, while Epic litigates its claims. Epic Games International of Sweden hosts Unreal Engine, a widely used by third-party developers to create graphics for video games, as well as for Epic Inc. and Fortnite. Unreal Engine remains compatible with iOS. But rival graphics engine, Unity, is used by more iOS applications, including Fortnite rival PlayerUnknown’s Battlegrounds.
“Given the novelty and the magnitude of the issues, as well as the debate in both the academic community and society at large,” Judge Rogers wrote, “the Court is unwilling to tilt the playing field in favor of one party or the other with an early ruling of likelihood of success on the merits.”
Judge Rogers also noted the absence of guiding authority on the questions raised. One case cited by the court, however, was the Ninth Circuit’s ruling in FTC v. Qualcomm, which held that “novel business practices — especially in technology markets — should not be ‘conclusively presumed to be unreasonable and therefore illegal without elaborate inquiry as to the precise harm they have caused or the business excuse for their use.'”
Judge Rogers carefully recited some of the basic tenants of antitrust law, explaining that courts will not condemn monopoly power, if it exists, without proof of anticompetitive conduct. And to answer that question, a plaintiff must define the relevant market, something Epic failed to do, the judge held.
“The relevant market must include both a geographic market and a product market,” the court said. Epic maintained that the market is the marketing for distributing apps operating on the iOS platform – which only considers, the judge noted, “how iOS apps are distributed on the iOS platform.” Apple countered that the relevant market is much broader, including all competing platforms that distribute Fortnite, everything from Xbox to PlayStation to all makes of computers and tablets.
“The multiplatform nature of Fortnite suggests that these other platforms and their digital distributions may be economic substitutes that should be considered in any ‘relevant market’ definition because they are ‘reasonably interchangeable’ when used ‘for the same purposes,'” Judge Rogers wrote.
Epic argued that some of console platforms are different from the iOS platform because they are not mobile — players need to plug them in and they require separate screens. The judge dismissed this argument, saying Epic failed to include all the devices, like tablets and Nintendo Switch, which are mobile.
Epic argued, however, that whether these other platforms are economic substitutes has yet to been proven. To that, the judge said Apple’s definition also faces hurdles. “Antitrust law is not concerned with individual consumers or producers, like Epic Games; it is concerned with market aggregates. Substitutes may not deprive a monopolist of market power if they fail to affect enough consumers to make a price increase unprofitable … Alternatively, constraints among some consumers may not render the market as a whole narrow … Here both parties cite factors impacting the elasticity of their proposed markets. A final determination may depend on the magnitude of those effects.” The judge added not enough is known about the iOS market, such as how many iOS users own multiple devices or how many would switch to another device if the price goes up, or how many developers can afford to ignore iOS customers completely.
Turning to the allegations of illegal tying, the court again found the record wanting.
Apple claimed that it does not “tie” IAP to iOS app distribution, because developers may choose other business models. It does not dispute, however, that its App Store Review Guidelines require the IAP system’s use for IAPs as a condition of distribution.
“This requirement manifests the coercion, that is, developers who offer IAP must do so on Apple’s terms,” wrote Judge Rogers. “Apple also does not dispute that it holds market power in the iOS app distribution market and that the alleged tie affects a substantial volume of commerce in in-app payment processing. Accordingly, Epic Games raises serious questions with regard to per se tying, but fails to demonstrate the likelihood of success due to lack of evidence of ‘purchaser demand’ for IAP processing service separate from the ‘integrated service’ of app distribution.”
While competitors could provide equal or better services, Apple has established that its security features — which is a key selling point — is superior to competing platforms, the judge found, but still concluded the record isn’t sufficient to grant a preliminary injunction.
As for Epic’s claim of irreparable harm, the judge said Epic made the decision to breach its agreements with Apple and “self-inflicted wounds are not irreparable injury.” Epic argued the court shouldn’t enforce anticompetitive contracts, to which the court responded that Epic “cannot simply exclaim ‘monopoly’ to rewrite agreements giving itself unilateral benefit.”
With regard to Epic’s affiliated companies, namely Epic Games International, maker of the Unreal Engine, there would be irreparable harm if the Unreal Engine was removed from the Apple Store, the judge determined, noting Apple’s actions are already having a negative impact. While removing affiliates is consistent with Apple’s practice, Judge Rogers said this is an exception. She said Apple made good arguments, including the at-will nature of the agreements. But Epic argued persuasively, the judge found, that it and its affiliates have separate agreements that have not been breached. Further, the judge said Apple’s elimination of Unreal Engine and other affiliate agreements “appears to be retaliatory.”
Apple had also argued that Epic Games could use the Unreal Engine to carry malicious code designed to damage the iOS platform. The judge rejected this concern as exaggerated and not supported by any evidence.
The court entered a ruling against Epic’s request to force Apple to return Fortnite to the Apple Store, and in favor of the preliminary injunction stopping Apple from removing developer tools provided by Epic affiliates, notably Unreal Engine.
October 19, 2020
By Jonathan Rubin (from MoginRubin firm blog)
The case involves questions “on the frontier edges” of U.S. antitrust law, according to the judge overseeing it. It is a legal battle between a $4 billion company (Epic Games, Inc.) and a $260 billion company (Apple, Inc.) in a market that’s valued at $160 billion globally. At the center of the legal battle is the distribution of a digital one: a mobile application played by hundreds of millions of gamers on billions of devices around the word.
It’s no small matter, and Apple has scored a temporary victory in the suit, which raises Sherman Antitrust Section 1 and Section 2 claims.
(See related post, Pistacchio vs. Apple: Gamers Claim Anticompetitive Behavior in Subscription Game Market, a lawsuit filed the day before this ruling was handed down.)
On Oct. 9, 2020, U.S. Judge Yvonne Gonzalez Rogers of California’s Northern District held that Apple may continue to ban from its store Epic’s wildly popular Fortnite app. The judge conceded that Epic had some “strong arguments” regarding the exclusivity of the store, but determined they weren’t enough to support a preliminary injunction. The judge rejected as seemingly “retaliatory,” however, Apple’s effort to also block the products of companies affiliated with Epic. Those companies operate independently and have separate agreements with Apple.
In other words, the court held that Epic had not yet shown sufficient likelihood of success of prevailing on its legal claim that Apple has abused its market power, then went on to block Apple from conduct that is potentially just that with regard to Epic’s affiliates.
(For additional background on the case, please read our previous post.)
After it was barred from Apple’s App Store, Epic asked the court to force Apple to reinstate Fortnite, despite acknowledging that it breached licensing agreements and operating guidelines in which Apple bars developers from circumventing the iPhone and iPad system (IAP) or distributing iOS apps outside the Apple Store. However, Epic launched the Epic Games Store and would like to create an iOS store independent of the Apple store, as well. “Apple maintains the iOS platform as a walled garden or closed platform model, whereby Apple has strict and exclusive control over the hardware, the operating system, the digital distribution, and the IAP system,” Judge Rogers wrote.
Epic also urged the court to stop Apple from terminating its affiliates’ access to developer tools for other applications, including Unreal Engine, while Epic litigates its claims. Epic Games International of Sweden hosts Unreal Engine, a widely used by third-party developers to create graphics for video games, as well as for Epic Inc. and Fortnite. Unreal Engine remains compatible with iOS. But rival graphics engine, Unity, is used by more iOS applications, including Fortnite rival PlayerUnknown’s Battlegrounds.
“Given the novelty and the magnitude of the issues, as well as the debate in both the academic community and society at large,” Judge Rogers wrote, “the Court is unwilling to tilt the playing field in favor of one party or the other with an early ruling of likelihood of success on the merits.”
Judge Rogers also noted the absence of guiding authority on the questions raised. One case cited by the court, however, was the Ninth Circuit’s ruling in FTC v. Qualcomm, which held that “novel business practices — especially in technology markets — should not be ‘conclusively presumed to be unreasonable and therefore illegal without elaborate inquiry as to the precise harm they have caused or the business excuse for their use.'”
Judge Rogers carefully recited some of the basic tenants of antitrust law, explaining that courts will not condemn monopoly power, if it exists, without proof of anticompetitive conduct. And to answer that question, a plaintiff must define the relevant market, something Epic failed to do, the judge held.
“The relevant market must include both a geographic market and a product market,” the court said. Epic maintained that the market is the marketing for distributing apps operating on the iOS platform – which only considers, the judge noted, “how iOS apps are distributed on the iOS platform.” Apple countered that the relevant market is much broader, including all competing platforms that distribute Fortnite, everything from Xbox to PlayStation to all makes of computers and tablets.
“The multiplatform nature of Fortnite suggests that these other platforms and their digital distributions may be economic substitutes that should be considered in any ‘relevant market’ definition because they are ‘reasonably interchangeable’ when used ‘for the same purposes,'” Judge Rogers wrote.
Epic argued that some of console platforms are different from the iOS platform because they are not mobile — players need to plug them in and they require separate screens. The judge dismissed this argument, saying Epic failed to include all the devices, like tablets and Nintendo Switch, which are mobile.
Epic argued, however, that whether these other platforms are economic substitutes has yet to been proven. To that, the judge said Apple’s definition also faces hurdles. “Antitrust law is not concerned with individual consumers or producers, like Epic Games; it is concerned with market aggregates. Substitutes may not deprive a monopolist of market power if they fail to affect enough consumers to make a price increase unprofitable … Alternatively, constraints among some consumers may not render the market as a whole narrow … Here both parties cite factors impacting the elasticity of their proposed markets. A final determination may depend on the magnitude of those effects.” The judge added not enough is known about the iOS market, such as how many iOS users own multiple devices or how many would switch to another device if the price goes up, or how many developers can afford to ignore iOS customers completely.
Turning to the allegations of illegal tying, the court again found the record wanting.
Apple claimed that it does not “tie” IAP to iOS app distribution, because developers may choose other business models. It does not dispute, however, that its App Store Review Guidelines require the IAP system’s use for IAPs as a condition of distribution.
“This requirement manifests the coercion, that is, developers who offer IAP must do so on Apple’s terms,” wrote Judge Rogers. “Apple also does not dispute that it holds market power in the iOS app distribution market and that the alleged tie affects a substantial volume of commerce in in-app payment processing. Accordingly, Epic Games raises serious questions with regard to per se tying, but fails to demonstrate the likelihood of success due to lack of evidence of ‘purchaser demand’ for IAP processing service separate from the ‘integrated service’ of app distribution.”
While competitors could provide equal or better services, Apple has established that its security features — which is a key selling point — is superior to competing platforms, the judge found, but still concluded the record isn’t sufficient to grant a preliminary injunction.
As for Epic’s claim of irreparable harm, the judge said Epic made the decision to breach its agreements with Apple and “self-inflicted wounds are not irreparable injury.” Epic argued the court shouldn’t enforce anticompetitive contracts, to which the court responded that Epic “cannot simply exclaim ‘monopoly’ to rewrite agreements giving itself unilateral benefit.”
With regard to Epic’s affiliated companies, namely Epic Games International, maker of the Unreal Engine, there would be irreparable harm if the Unreal Engine was removed from the Apple Store, the judge determined, noting Apple’s actions are already having a negative impact. While removing affiliates is consistent with Apple’s practice, Judge Rogers said this is an exception. She said Apple made good arguments, including the at-will nature of the agreements. But Epic argued persuasively, the judge found, that it and its affiliates have separate agreements that have not been breached. Further, the judge said Apple’s elimination of Unreal Engine and other affiliate agreements “appears to be retaliatory.”
Apple had also argued that Epic Games could use the Unreal Engine to carry malicious code designed to damage the iOS platform. The judge rejected this concern as exaggerated and not supported by any evidence.
The court entered a ruling against Epic’s request to force Apple to return Fortnite to the Apple Store, and in favor of the preliminary injunction stopping Apple from removing developer tools provided by Epic affiliates, notably Unreal Engine.
Art Wilmarth will be speaking about his recently-published book, Taming the Megabanks: Why We Need a New Glass-Steagall Act, during a virtual program hosted by the Peterson Institute for International Economics on Wednesday, Oct. 28th, at 9 a.m.
Here's the link to PIIE's announcement and registration information: https://lnkd.in/dkUJQy
Here's the link to PIIE's announcement and registration information: https://lnkd.in/dkUJQy
Biotech supports Fauci
Supporting US public health experts
Jeremy Levin
CEO, Ovid Therapeutics
Published Oct 22, 2020
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Share https://bioengineeringcommunity.nature.com/posts/supporting-us-public-health-experts-dd8a3fc2-f5df-437a-aec5-e66df7441516#share
To the editor:
As CEOs of biotechnology companies, we are writing this letter in support of US National Institutes of Allergy and Infectious Disease (NIAID) director Anthony Fauci and the institutions and organizations that are working tirelessly to combat the COVID-19 pandemic.
The biotechnology industry is the world’s greatest innovation engine for creating new medicines and vaccines that improve the human condition. It is a strategic asset to the nation. The past few decades have shown extraordinary progress in our ability to fight disease. This year, our industry has risen to the challenge of overcoming the deadly pandemic that has gripped the world, putting that engine to work at miraculous speed to develop therapies and vaccines.
To do so most effectively requires close collaboration among biopharmaceutical companies, regulatory authorities such as the US Food and Drug Administration (FDA), public health authorities such as the US Centers for Disease Control and Prevention (CDC), federal, state and local government authorities, scientific and medical institutions, such as the US National Institutes of Health (NIH), and world experts in epidemiology and infectious disease, most prominently, Anthony Fauci. As we come ever closer to producing safe, effective therapies for COVID-19, it is critical that all of these institutions and experts work together to ensure the best, most rapid possible outcomes for all Americans and, indeed, for people worldwide.
The institutions of the CDC, the FDA and NIH comprise tens of thousands of men and women who care deeply about society and making the world a better place. These nameless individuals represent our ‘United Armed Forces’ against COVID-19. They fight with brains instead of weapons, displaying the same courage and dedication as our armed forces in times of war, and they deserve our eternal gratitude. We and the associates of our companies consider that we fight alongside these individuals as part of the same cause, wielding science against our common adversary.
However, we are concerned that various parties in this critical coalition have come under politically motivated attacks. Targets have included, among others, the FDA, the CDC and Fauci; in Fauci’s case this has occurred to the point where he now requires a security detail. Not only are these attacks completely unjustified, they risk intimidating and demoralizing the very people we all are relying on to help end the COVID-19 nightmare. As such, they are irresponsible and a pose danger to us all.
Fauci is a giant of epidemiology, one of the world’s most respected scientists in infectious diseases, and an American hero who has served multiple administrations—both Republican and Democratic—for decades. He has recommended measures that have saved likely scores of thousands of lives in our country. Had his counsel been taken more widely, even more lives could have been saved. Unfortunately, the United States today has experienced the largest number of deaths from COVID-19 of any country in the world.
When a public servant of Fauci’s caliber is attacked, it puts our collective efforts, and the safety of the American public, at risk. Senator Lamar Alexander (R-Tennessee) posted on Twitter: “Dr. Fauci is one of our country’s most distinguished public servants,” and “If more Americans paid attention to his advice, we’d have fewer cases of COVID-19, & it would be safer to go back to school & back to work & out to eat.”
This is the sort of responsible, truthful support that is needed from our public officials. Many of our colleagues and friends are working as part of Operation Warp Speed; we stand united with them, with the many good people at FDA, CDC and NIH, and with Dr. Fauci, in upholding the high scientific, medical and ethical principles that will allow us to defeat COVID-19.
Acknowledgments
This letter represents solely the individual and personal views of the authors and signatories, and not those of their company.
Authors
Ron Cohen, President and CEO, Acorda Therapeutics; Cedric Francois, President and CEO, Apellis Pharmaceuticals; John Crowley, Chairman and CEO, Amicus Therapeutics; Paul Hastings, President and CEO, Nkarta Therapeutics; Rachel King, CEO, GlycoMimetics; Ted W. Love, President and CEO, Global Blood Therapeutics; John Maraganore, CEO, Alnylam Pharmaceuticals; Michelle McMurry-Heath, President and CEO, Biotechnology Innovation Organization; Jeremy Levin, Chairman and CEO, Ovid Therapeutics, and Chairman, Biotechnology Innovation Organization
Jeremy Levin
Supporting US public health experts
Jeremy Levin
CEO, Ovid Therapeutics
Published Oct 22, 2020
Like Comment
Share https://bioengineeringcommunity.nature.com/posts/supporting-us-public-health-experts-dd8a3fc2-f5df-437a-aec5-e66df7441516#share
To the editor:
As CEOs of biotechnology companies, we are writing this letter in support of US National Institutes of Allergy and Infectious Disease (NIAID) director Anthony Fauci and the institutions and organizations that are working tirelessly to combat the COVID-19 pandemic.
The biotechnology industry is the world’s greatest innovation engine for creating new medicines and vaccines that improve the human condition. It is a strategic asset to the nation. The past few decades have shown extraordinary progress in our ability to fight disease. This year, our industry has risen to the challenge of overcoming the deadly pandemic that has gripped the world, putting that engine to work at miraculous speed to develop therapies and vaccines.
To do so most effectively requires close collaboration among biopharmaceutical companies, regulatory authorities such as the US Food and Drug Administration (FDA), public health authorities such as the US Centers for Disease Control and Prevention (CDC), federal, state and local government authorities, scientific and medical institutions, such as the US National Institutes of Health (NIH), and world experts in epidemiology and infectious disease, most prominently, Anthony Fauci. As we come ever closer to producing safe, effective therapies for COVID-19, it is critical that all of these institutions and experts work together to ensure the best, most rapid possible outcomes for all Americans and, indeed, for people worldwide.
The institutions of the CDC, the FDA and NIH comprise tens of thousands of men and women who care deeply about society and making the world a better place. These nameless individuals represent our ‘United Armed Forces’ against COVID-19. They fight with brains instead of weapons, displaying the same courage and dedication as our armed forces in times of war, and they deserve our eternal gratitude. We and the associates of our companies consider that we fight alongside these individuals as part of the same cause, wielding science against our common adversary.
However, we are concerned that various parties in this critical coalition have come under politically motivated attacks. Targets have included, among others, the FDA, the CDC and Fauci; in Fauci’s case this has occurred to the point where he now requires a security detail. Not only are these attacks completely unjustified, they risk intimidating and demoralizing the very people we all are relying on to help end the COVID-19 nightmare. As such, they are irresponsible and a pose danger to us all.
Fauci is a giant of epidemiology, one of the world’s most respected scientists in infectious diseases, and an American hero who has served multiple administrations—both Republican and Democratic—for decades. He has recommended measures that have saved likely scores of thousands of lives in our country. Had his counsel been taken more widely, even more lives could have been saved. Unfortunately, the United States today has experienced the largest number of deaths from COVID-19 of any country in the world.
When a public servant of Fauci’s caliber is attacked, it puts our collective efforts, and the safety of the American public, at risk. Senator Lamar Alexander (R-Tennessee) posted on Twitter: “Dr. Fauci is one of our country’s most distinguished public servants,” and “If more Americans paid attention to his advice, we’d have fewer cases of COVID-19, & it would be safer to go back to school & back to work & out to eat.”
This is the sort of responsible, truthful support that is needed from our public officials. Many of our colleagues and friends are working as part of Operation Warp Speed; we stand united with them, with the many good people at FDA, CDC and NIH, and with Dr. Fauci, in upholding the high scientific, medical and ethical principles that will allow us to defeat COVID-19.
Acknowledgments
This letter represents solely the individual and personal views of the authors and signatories, and not those of their company.
Authors
Ron Cohen, President and CEO, Acorda Therapeutics; Cedric Francois, President and CEO, Apellis Pharmaceuticals; John Crowley, Chairman and CEO, Amicus Therapeutics; Paul Hastings, President and CEO, Nkarta Therapeutics; Rachel King, CEO, GlycoMimetics; Ted W. Love, President and CEO, Global Blood Therapeutics; John Maraganore, CEO, Alnylam Pharmaceuticals; Michelle McMurry-Heath, President and CEO, Biotechnology Innovation Organization; Jeremy Levin, Chairman and CEO, Ovid Therapeutics, and Chairman, Biotechnology Innovation Organization
Jeremy Levin
A D.C. State-level case decision puts a surprise crimp in federal designs to control public broadcasting
The Voice of America and Corporation for Public Broadcasting are the entities established to provide federally supported public broadcasting. The VOA focuses overseas, while CPB operates domestically.
Recent successful litigation by the D.C. Attorney General suggests that State law on not-for profit corporations can provide a basis for limiting federal executive power to interfere with the independence of public broadcasting. In a case addressing the authority of Voice of America executives to replace directors of the not-for-profit Open Technology Fund, D.C. Superior Court Judge Matini held that efforts by VOA executives to replace Fund board members were precluded by Fund by-laws, which “contains the only clear mechanism for removal of directors.”
The D.C. State-level case decision is also relevant to local PBS stations, which are set up as not-for-profit corporations. So, the D.C. case comes out of left field to put a crimp in possible future federal designs to control public broadcasting content. That is important in avoiding concerns that, as the Guardian newspaper put it, the U.S. executive branch will try to turm public broadcasting, including domestic public broadcasting "into a loyal state broadcaster of the kind normally found in authoritarian societies.”
An article on the case, and the case opinion, are at https://www.techdirt.com/articles/20201016/00123345515/court-says-trump-appointee-had-no-authority-to-fire-open-technology-fund-board-says-they-remain-place.shtml
I am preparing a longer article on the topic for future publication.
Don Resnikoff
The Voice of America and Corporation for Public Broadcasting are the entities established to provide federally supported public broadcasting. The VOA focuses overseas, while CPB operates domestically.
Recent successful litigation by the D.C. Attorney General suggests that State law on not-for profit corporations can provide a basis for limiting federal executive power to interfere with the independence of public broadcasting. In a case addressing the authority of Voice of America executives to replace directors of the not-for-profit Open Technology Fund, D.C. Superior Court Judge Matini held that efforts by VOA executives to replace Fund board members were precluded by Fund by-laws, which “contains the only clear mechanism for removal of directors.”
The D.C. State-level case decision is also relevant to local PBS stations, which are set up as not-for-profit corporations. So, the D.C. case comes out of left field to put a crimp in possible future federal designs to control public broadcasting content. That is important in avoiding concerns that, as the Guardian newspaper put it, the U.S. executive branch will try to turm public broadcasting, including domestic public broadcasting "into a loyal state broadcaster of the kind normally found in authoritarian societies.”
An article on the case, and the case opinion, are at https://www.techdirt.com/articles/20201016/00123345515/court-says-trump-appointee-had-no-authority-to-fire-open-technology-fund-board-says-they-remain-place.shtml
I am preparing a longer article on the topic for future publication.
Don Resnikoff
Ingram on the Google case
Excerpt:
Recently the House subcommittee on antitrust released a 400-plus page report detailing the anti-competitive practices of the four major digital platforms — Google, Amazon, Apple, and Facebook — and called for the Department of Justice (among others) to take action. And this week, the government did exactly that, filing a landmark antitrust case against Google, one the DoJ has reportedly been working on for some time. Depending on whom you ask, it is either a cravenly political gambit by Attorney General Bill Barr designed to make the Trump administration look tough, a legal quagmire that is significantly weaker than the 1998 Microsoft case and almost certain to fail, or a sign that the government is finally taking strong action to correct some of the blatant antitrust failures of the past two decades. It’s even possible that it may be all three of those things simultaneously.
What it is almost certain to be if it survives the election (and there’s good reason to believe it will continue even if Joe Biden becomes president) is a full-employment program for antitrust lawyers both inside the DoJ and elsewhere. The Microsoft case generated work for thousands of lawyers for the more than five years it took to reach a conclusion. As a number of experts have pointed out since the Google case was filed, it also ended with a negotiated settlement and a series of fairly modest restrictions on Microsoft’s conduct, a deal the Justice Department was forced to reach after its proposed remedy — breaking the company into two parts -- was rejected by the courts. That said, however, some tech veterans believe the case was successful despite its weak conclusion, because it tied Microsoft up in legal knots, and made the company hyper-sensitive to criticism, and therefore leery of being too aggressive. (This actually helped the rise of Google.)
Those who subscribe to the theory that the case was rushed to make Trump look good point to reports before the indictment’s release that suggested Barr was pressuring the DoJ to launch the case before the election, and that some members of the staff had balked, saying it wasn’t ready. Barry Lynn, executive director of the Open Markets Institute, doesn’t buy this theory: he told CJR during a discussion on our Galley platform Wednesday that “it’s actually a very strong case, and a well-written case. So this was anything but a rush job”. Zephyr Teachout, a professor of law at Fordham University and a former Democratic candidate for governor of New York, said in a similar discussion that while she believes Barr “should be impeached, and I don’t trust him for a second”, the case is well-grounded, and should have been brought years ago. Both Lynn and Teachout said that despite the appearance of political divisions in the House report that preceded the Google case, there is more agreement than disagreement about the necessity for regulation.
Google, unsurprisingly, disagrees. In a blog post, the company called the Justice Department’s case “deeply flawed”. Google said the money it pays Apple -- estimated by the DoJ at between $8 billion and $12 billion a year — to make its search engine the default choice is similar to the way cereal makers pay grocery chains for preferred locations on their store shelves. It’s an appealing analogy, but as antitrust expert Gary Reback noted, “It’s not just Google has a better shelf and its competitor is on the next shelf, it’s that Google has all the shelves and its competitor is in a different store in a bad neighborhood 400 miles away”. Analogies aside, Google and its defenders argue that the case is doomed to fail because the company provides its services for free, and people freely choose to use its search engine. Antitrust law for the past 40 years or so has been based around the concept of consumer harm, and it’s difficult to see how Google’s free services harm consumers in any tangible way.
In order to win their case, in other words, the government has to either convince the courts to ignore several decades of judicial precedent, or come up with a novel definition of consumer harm that covers what Google does. The closest it can probably get are the deals that the company makes with phone makers, where it forces them to install all of Google’s apps if they want to use its free Android operating system. But even that makes smartphones significantly cheaper than they otherwise would be, which looks a lot like a win for consumers, and therefore a tough argument for traditional antitrust. That’s a fairly slim branch to be hanging a landmark case on. But if experts are right about the lessons of the Microsoft case, it might be enough to just tie Google up for awhile, and make it less aggressive. And then we might see new competitors emerge in the same way Google itself did 25 years ago.
https://www.cjr.org/the_media_today/the-google-case-is-a-stew-of-technology-law-and-politics.php
Excerpt:
Recently the House subcommittee on antitrust released a 400-plus page report detailing the anti-competitive practices of the four major digital platforms — Google, Amazon, Apple, and Facebook — and called for the Department of Justice (among others) to take action. And this week, the government did exactly that, filing a landmark antitrust case against Google, one the DoJ has reportedly been working on for some time. Depending on whom you ask, it is either a cravenly political gambit by Attorney General Bill Barr designed to make the Trump administration look tough, a legal quagmire that is significantly weaker than the 1998 Microsoft case and almost certain to fail, or a sign that the government is finally taking strong action to correct some of the blatant antitrust failures of the past two decades. It’s even possible that it may be all three of those things simultaneously.
What it is almost certain to be if it survives the election (and there’s good reason to believe it will continue even if Joe Biden becomes president) is a full-employment program for antitrust lawyers both inside the DoJ and elsewhere. The Microsoft case generated work for thousands of lawyers for the more than five years it took to reach a conclusion. As a number of experts have pointed out since the Google case was filed, it also ended with a negotiated settlement and a series of fairly modest restrictions on Microsoft’s conduct, a deal the Justice Department was forced to reach after its proposed remedy — breaking the company into two parts -- was rejected by the courts. That said, however, some tech veterans believe the case was successful despite its weak conclusion, because it tied Microsoft up in legal knots, and made the company hyper-sensitive to criticism, and therefore leery of being too aggressive. (This actually helped the rise of Google.)
Those who subscribe to the theory that the case was rushed to make Trump look good point to reports before the indictment’s release that suggested Barr was pressuring the DoJ to launch the case before the election, and that some members of the staff had balked, saying it wasn’t ready. Barry Lynn, executive director of the Open Markets Institute, doesn’t buy this theory: he told CJR during a discussion on our Galley platform Wednesday that “it’s actually a very strong case, and a well-written case. So this was anything but a rush job”. Zephyr Teachout, a professor of law at Fordham University and a former Democratic candidate for governor of New York, said in a similar discussion that while she believes Barr “should be impeached, and I don’t trust him for a second”, the case is well-grounded, and should have been brought years ago. Both Lynn and Teachout said that despite the appearance of political divisions in the House report that preceded the Google case, there is more agreement than disagreement about the necessity for regulation.
Google, unsurprisingly, disagrees. In a blog post, the company called the Justice Department’s case “deeply flawed”. Google said the money it pays Apple -- estimated by the DoJ at between $8 billion and $12 billion a year — to make its search engine the default choice is similar to the way cereal makers pay grocery chains for preferred locations on their store shelves. It’s an appealing analogy, but as antitrust expert Gary Reback noted, “It’s not just Google has a better shelf and its competitor is on the next shelf, it’s that Google has all the shelves and its competitor is in a different store in a bad neighborhood 400 miles away”. Analogies aside, Google and its defenders argue that the case is doomed to fail because the company provides its services for free, and people freely choose to use its search engine. Antitrust law for the past 40 years or so has been based around the concept of consumer harm, and it’s difficult to see how Google’s free services harm consumers in any tangible way.
In order to win their case, in other words, the government has to either convince the courts to ignore several decades of judicial precedent, or come up with a novel definition of consumer harm that covers what Google does. The closest it can probably get are the deals that the company makes with phone makers, where it forces them to install all of Google’s apps if they want to use its free Android operating system. But even that makes smartphones significantly cheaper than they otherwise would be, which looks a lot like a win for consumers, and therefore a tough argument for traditional antitrust. That’s a fairly slim branch to be hanging a landmark case on. But if experts are right about the lessons of the Microsoft case, it might be enough to just tie Google up for awhile, and make it less aggressive. And then we might see new competitors emerge in the same way Google itself did 25 years ago.
https://www.cjr.org/the_media_today/the-google-case-is-a-stew-of-technology-law-and-politics.php
Antitrust v. Regulation (NYT)
“The mechanism of antitrust is not working to protect competition,” said Fiona Scott Morton, an official in the Justice Department’s antitrust division in the Obama administration, who is an economist at the Yale University School of Management. “So let’s do something else — use a different tool.”
Ms. Scott Morton led an expert panel on antitrust in a report last year on digital platforms by the Stigler Center at the University of Chicago’s Booth School of Business. The report recommended the creation of a regulatory authority. (Ms. Scott Morton has been a forceful critic of Google, but also a consultant to Apple and Amazon.)
Such a regulatory approach carries the risk of government’s meddling in a fast-moving industry that could hobble innovation, some antitrust experts warned. While antitrust law reacts to alleged anticompetitive behavior and can thus be slow, that shortcoming is preferable to prescriptive government rules and regulations, they said.
“I’m very uncomfortable with the regulatory path, especially if it means things like getting government approval for product changes,” said Herbert Hovenkamp, a professor at the University of Pennsylvania Law School. “The history of regulation shows that it is an innovation killer.”
From https://www.nytimes.com/2020/10/22/technology/antitrust-laws-tech-new-regulator.html
“The mechanism of antitrust is not working to protect competition,” said Fiona Scott Morton, an official in the Justice Department’s antitrust division in the Obama administration, who is an economist at the Yale University School of Management. “So let’s do something else — use a different tool.”
Ms. Scott Morton led an expert panel on antitrust in a report last year on digital platforms by the Stigler Center at the University of Chicago’s Booth School of Business. The report recommended the creation of a regulatory authority. (Ms. Scott Morton has been a forceful critic of Google, but also a consultant to Apple and Amazon.)
Such a regulatory approach carries the risk of government’s meddling in a fast-moving industry that could hobble innovation, some antitrust experts warned. While antitrust law reacts to alleged anticompetitive behavior and can thus be slow, that shortcoming is preferable to prescriptive government rules and regulations, they said.
“I’m very uncomfortable with the regulatory path, especially if it means things like getting government approval for product changes,” said Herbert Hovenkamp, a professor at the University of Pennsylvania Law School. “The history of regulation shows that it is an innovation killer.”
From https://www.nytimes.com/2020/10/22/technology/antitrust-laws-tech-new-regulator.html
The Babylon Bee on electronic money security risks
Recently President Trump was widely ridiculed when he retweeted a satirical news article from the conservative-leaning Babylon Bee humor site, which suggested that Twitter shut down its “entire network” to slow the spread of a contested New York Post story about Hunter Biden.
A characteristic of effective satire is often that it has some recognizable if distorted relationship to reality. It’s like a carnival distortion mirror.
The Babylon Bee recently published an extraordinarily long-winded tongue-in-cheek joke article about how elimination of paper money and reliance on electronic money will give the government intrusive access into everyone's finances. The Bee’s joke is to suggest that there is a conspiracy led by Nancy Pelosi to do that. The long-windedness and tedious detail of the article seems to be part of the joke.
The idea of a Pelosi led conspiracy against paper money is obviously a joke. But the idea that there is likely to be greater reliance on electronic money in the future is not a joke, nor is the idea that broad use of electronic money potentially gives government intrusive access into people’s financial affairs. To paraphrase the once-famous words of Molly McGee to husband Fibber McGee, it’s not funny.
On point, the Economist has an article about a Chinese fintech firm, Ant, that suggests something of the potential for government intrusion based on electronic money, although the focus is on China. The idea is that the ubiquity of electronic money gives companies and potentially the government invasive access to everyone's finances.
It may be a little weird that the Bee and the Economist have parallel ideas about potential government intrusion facilitated by electronic money, but the concern about privacy invasion seems real. And, of course, concerns about intrusive behavior by the Chinese government hold out the possibility that a U.S. government could go down the same path.
Here is an excerpt from The Economist article about the fintech firm Ant (emphasis added):
Digitisation also promises to broaden the spread of finance. Reaching customers will be easier and data will make loan underwriting more accurate. Firms like Square and Stripe help small businesses connect to the digital economy. In India and Africa digital finance can free people from dodgy moneylenders and decrepit banks. By creating their own digital currencies, governments may be able to bypass the conventional banking system and tax, take deposits from, and make payments to citizens at the touch of a button. Compare that with the palaver of Uncle Sam posting stimulus cheques this year.
Yet the fintech conquest also brings two risks. The first is that it could destabilise the financial system. Fintech firms swarm to the most profitable parts of the industry, often leaving less profit and most of the risk with traditional lenders. Fully 98% of loans issued through Ant in China ultimately sit on the books of banks, which pay it a fee. Ant is eventually expected to capture a tenth or more of Chinese banking’s profits. Lumbering lenders in the rich world are already crushed by low interest rates, legacy it systems and huge compliance costs. If they are destabilised it could spell trouble, because banks still perform crucial economic functions, including holding people’s deposits and transforming these short-term liabilities into long-term loans for others.
The second danger is that the state and fintech “platform” firms could grab more power from individuals. Network effects are integral to the fintech model—the more people use a platform the more useful it is and likely that others feel drawn to it. So the industry is prone towards monopoly. And if fintech gives even more data to governments and platforms, the potential for surveillance, manipulation and cyber-hacks will rise. In China Ant is a cog in the Communist Party’s apparatus of control—one reason it is often unwelcome abroad. When Facebook, a firm not known for its ethical conduct, launched a digital currency, Libra, last year, it caused a global backlash.
As the fintech surge continues, governments should take a holistic view of financial risk that includes banks and fintech firms—Chinese regulators rightly snuffed out Ant’s booming business in loan securitisation, which had echoes of the subprime fiasco. Governments should also lower barriers to entry so as to boost competition. Singapore and India have cheap, open, bank-to-bank payment systems which America could learn from. Europe has flexible banking that lets customers switch accounts easily. Last, the rise of fintech must be tied to a renewed effort to protect people’s privacy from giant companies and the state. So long as fintech can be made safer, open and respectful of individual rights, then a monetary innovation led by China will once again change the world for the better.
Recently President Trump was widely ridiculed when he retweeted a satirical news article from the conservative-leaning Babylon Bee humor site, which suggested that Twitter shut down its “entire network” to slow the spread of a contested New York Post story about Hunter Biden.
A characteristic of effective satire is often that it has some recognizable if distorted relationship to reality. It’s like a carnival distortion mirror.
The Babylon Bee recently published an extraordinarily long-winded tongue-in-cheek joke article about how elimination of paper money and reliance on electronic money will give the government intrusive access into everyone's finances. The Bee’s joke is to suggest that there is a conspiracy led by Nancy Pelosi to do that. The long-windedness and tedious detail of the article seems to be part of the joke.
The idea of a Pelosi led conspiracy against paper money is obviously a joke. But the idea that there is likely to be greater reliance on electronic money in the future is not a joke, nor is the idea that broad use of electronic money potentially gives government intrusive access into people’s financial affairs. To paraphrase the once-famous words of Molly McGee to husband Fibber McGee, it’s not funny.
On point, the Economist has an article about a Chinese fintech firm, Ant, that suggests something of the potential for government intrusion based on electronic money, although the focus is on China. The idea is that the ubiquity of electronic money gives companies and potentially the government invasive access to everyone's finances.
It may be a little weird that the Bee and the Economist have parallel ideas about potential government intrusion facilitated by electronic money, but the concern about privacy invasion seems real. And, of course, concerns about intrusive behavior by the Chinese government hold out the possibility that a U.S. government could go down the same path.
Here is an excerpt from The Economist article about the fintech firm Ant (emphasis added):
Digitisation also promises to broaden the spread of finance. Reaching customers will be easier and data will make loan underwriting more accurate. Firms like Square and Stripe help small businesses connect to the digital economy. In India and Africa digital finance can free people from dodgy moneylenders and decrepit banks. By creating their own digital currencies, governments may be able to bypass the conventional banking system and tax, take deposits from, and make payments to citizens at the touch of a button. Compare that with the palaver of Uncle Sam posting stimulus cheques this year.
Yet the fintech conquest also brings two risks. The first is that it could destabilise the financial system. Fintech firms swarm to the most profitable parts of the industry, often leaving less profit and most of the risk with traditional lenders. Fully 98% of loans issued through Ant in China ultimately sit on the books of banks, which pay it a fee. Ant is eventually expected to capture a tenth or more of Chinese banking’s profits. Lumbering lenders in the rich world are already crushed by low interest rates, legacy it systems and huge compliance costs. If they are destabilised it could spell trouble, because banks still perform crucial economic functions, including holding people’s deposits and transforming these short-term liabilities into long-term loans for others.
The second danger is that the state and fintech “platform” firms could grab more power from individuals. Network effects are integral to the fintech model—the more people use a platform the more useful it is and likely that others feel drawn to it. So the industry is prone towards monopoly. And if fintech gives even more data to governments and platforms, the potential for surveillance, manipulation and cyber-hacks will rise. In China Ant is a cog in the Communist Party’s apparatus of control—one reason it is often unwelcome abroad. When Facebook, a firm not known for its ethical conduct, launched a digital currency, Libra, last year, it caused a global backlash.
As the fintech surge continues, governments should take a holistic view of financial risk that includes banks and fintech firms—Chinese regulators rightly snuffed out Ant’s booming business in loan securitisation, which had echoes of the subprime fiasco. Governments should also lower barriers to entry so as to boost competition. Singapore and India have cheap, open, bank-to-bank payment systems which America could learn from. Europe has flexible banking that lets customers switch accounts easily. Last, the rise of fintech must be tied to a renewed effort to protect people’s privacy from giant companies and the state. So long as fintech can be made safer, open and respectful of individual rights, then a monetary innovation led by China will once again change the world for the better.
DOJ To File Google Antitrust Suit Without Dem Support
-
October 18, 2020
The US Department of Justice is reportedly likely to file its highly-anticipated antitrust suit against Google early next week without the support of any Democratic state attorneys general.
The first major monopolization case in decades comes as both sides of the aisle have hammered Google and other tech companies like Facebook and Amazon about their influence over the US economy.
According to Politico, the Trump administration had hoped to enlist bipartisan support for its case.
For months, the Justice Department has been negotiating with a group of attorneys general from 48 states, the District of Columbia, and Puerto Rico — who have conducted separate investigations, hoping to form a unified complaint over the world’s largest search engine, Politico reported.
Republican attorneys general have joined both the Justice Department and a coalition of their Democratic colleagues, sources familiar with the suit told Politico.
The bipartisan group — led by Democratic attorneys general in Colorado and Iowa along with Nebraska’s Republican attorney general — expects to file an antitrust complaint challenging Google at a later date.
-
October 18, 2020
The US Department of Justice is reportedly likely to file its highly-anticipated antitrust suit against Google early next week without the support of any Democratic state attorneys general.
The first major monopolization case in decades comes as both sides of the aisle have hammered Google and other tech companies like Facebook and Amazon about their influence over the US economy.
According to Politico, the Trump administration had hoped to enlist bipartisan support for its case.
For months, the Justice Department has been negotiating with a group of attorneys general from 48 states, the District of Columbia, and Puerto Rico — who have conducted separate investigations, hoping to form a unified complaint over the world’s largest search engine, Politico reported.
Republican attorneys general have joined both the Justice Department and a coalition of their Democratic colleagues, sources familiar with the suit told Politico.
The bipartisan group — led by Democratic attorneys general in Colorado and Iowa along with Nebraska’s Republican attorney general — expects to file an antitrust complaint challenging Google at a later date.
DOJ Adds Six New Defendants to Price-Fixing Boiler Chicken Conspiracy
by Michael Volkov · October 13, 2020
The Justice Department announced a major expansion of its ongoing investigation and prosecution of executives and employees in the boiler chicken price-fixing conspiracy. https://www.justice.gov/opa/pr/six-additional-individuals-indicted-antitrust-charges-ongoing-broiler-chicken-investigation
DOJ recently returned a superseding indictment adding six new defendants to the boiler chicken conspiracy indictment, and expanding the scope of the charged conspiracy. (Here for earlier Posting on conspiracy).
The new indictment charges ten (10) executives and employees at boiler chicken producers for their role in a conspiracy to fix prices and rig bids for chicken products. The six additional individuals are Timothy Mulrenin, William Kantola, Jimmie Little, William Lovette, Gary Roberts and Rickie Blake.
The new indictment adds six defendants to the price-fixing conspiracy in the $65 billion poultry industry. In addition, the new indictment expands the period of the charged conspiracy to 2012 to 2019.
The new defendants include Bill Lovette, the former CEO of Pilgrim’s Pride, the second largest US chicken supplier. Jason Penn, Pilgrim’s current CEO, was charged in the original indictment in June. Pilgrim’s Vice President Roger Austin and Claxton’s President Mikell Fries and Scott Brady, a President, were also charged in the original June 2020 indictment.
The new defendants include executives and employees from companies involved in the price-fixing conspiracy: Timothy Mulrenin is a sales executive at Perdue Farms, who previously worked at Tyson; William Kantola is a sales executive at Koch Foods, Inc.; Jimmie Little is former sales director at Pilgrim’s Pride; Gary Brian Roberts is an employee at Case Farms who previously worked at Tyson; and Rickie Blake, a former director and manager at George’s Inc. Jimmie Little is also charged with making false statements to law enforcement agents and obstruction of justice.
The price-fixing conspiracy operated in the chicken industry responsible for supplying billions of pounds of chicken nuggets, breast filets, thighs and wings to US restaurant chains and grocery stores.
The six additional defendants join four senior industry executives from Pilgrim’s Pride and Claxton Poultry Farms who were allegedly engaged in a long-running conspiracy to exchange pricing information and agree on bids submitted for chicken supply deals for major restaurant chains.
Tyson Foods was one of the earliest cooperators in the government investigation and reported the conspiracy after DOJ initiated an investigation in response to a then-pending civil proceeding. Tyson is cooperating under DOJ’s antitrust criminal leniency program.
DOJ’s criminal investigation began in 2019 after it intervened in a price-fixing lawsuit filed in 2016. The class action lawsuit accuses chicken producers, including Pilgrim’s Pride, Perdue Farms, Tyson Foods and Sanderson Farms, of engaging in conspiracy to fix and increase chicken prices.
The new indictment details incidents where the defendants communicated with each other and discussed pricing information and agreed on responses to negotiations with chicken customers.
If convicted, each defendant faces a maximum term of imprisonment of ten (10) years imprisonment and a fine of $1 million.
https://blog.volkovlaw.com/2020/10/doj-adds-six-new-defendants-to-price-fixing-boiler-chicken-conspiracy/
by Michael Volkov · October 13, 2020
The Justice Department announced a major expansion of its ongoing investigation and prosecution of executives and employees in the boiler chicken price-fixing conspiracy. https://www.justice.gov/opa/pr/six-additional-individuals-indicted-antitrust-charges-ongoing-broiler-chicken-investigation
DOJ recently returned a superseding indictment adding six new defendants to the boiler chicken conspiracy indictment, and expanding the scope of the charged conspiracy. (Here for earlier Posting on conspiracy).
The new indictment charges ten (10) executives and employees at boiler chicken producers for their role in a conspiracy to fix prices and rig bids for chicken products. The six additional individuals are Timothy Mulrenin, William Kantola, Jimmie Little, William Lovette, Gary Roberts and Rickie Blake.
The new indictment adds six defendants to the price-fixing conspiracy in the $65 billion poultry industry. In addition, the new indictment expands the period of the charged conspiracy to 2012 to 2019.
The new defendants include Bill Lovette, the former CEO of Pilgrim’s Pride, the second largest US chicken supplier. Jason Penn, Pilgrim’s current CEO, was charged in the original indictment in June. Pilgrim’s Vice President Roger Austin and Claxton’s President Mikell Fries and Scott Brady, a President, were also charged in the original June 2020 indictment.
The new defendants include executives and employees from companies involved in the price-fixing conspiracy: Timothy Mulrenin is a sales executive at Perdue Farms, who previously worked at Tyson; William Kantola is a sales executive at Koch Foods, Inc.; Jimmie Little is former sales director at Pilgrim’s Pride; Gary Brian Roberts is an employee at Case Farms who previously worked at Tyson; and Rickie Blake, a former director and manager at George’s Inc. Jimmie Little is also charged with making false statements to law enforcement agents and obstruction of justice.
The price-fixing conspiracy operated in the chicken industry responsible for supplying billions of pounds of chicken nuggets, breast filets, thighs and wings to US restaurant chains and grocery stores.
The six additional defendants join four senior industry executives from Pilgrim’s Pride and Claxton Poultry Farms who were allegedly engaged in a long-running conspiracy to exchange pricing information and agree on bids submitted for chicken supply deals for major restaurant chains.
Tyson Foods was one of the earliest cooperators in the government investigation and reported the conspiracy after DOJ initiated an investigation in response to a then-pending civil proceeding. Tyson is cooperating under DOJ’s antitrust criminal leniency program.
DOJ’s criminal investigation began in 2019 after it intervened in a price-fixing lawsuit filed in 2016. The class action lawsuit accuses chicken producers, including Pilgrim’s Pride, Perdue Farms, Tyson Foods and Sanderson Farms, of engaging in conspiracy to fix and increase chicken prices.
The new indictment details incidents where the defendants communicated with each other and discussed pricing information and agreed on responses to negotiations with chicken customers.
If convicted, each defendant faces a maximum term of imprisonment of ten (10) years imprisonment and a fine of $1 million.
https://blog.volkovlaw.com/2020/10/doj-adds-six-new-defendants-to-price-fixing-boiler-chicken-conspiracy/
DAR Comment on the news about the antibody treatment that apparently worked well for President Trump:
The therapy is very promising. Availability is sharply limited. Regeneron has applied for emergency FDA authorization for the product. Astrazenica and others will follow.
Regeneron's stock has risen based on the success of its antibody therapy. 80% of the the cost of develop reportedly was carried by the US government.
It is a puzzle why the therapy is not widely and cheaply available.
More detail follows:
The therapy is very promising. Availability is sharply limited. Regeneron has applied for emergency FDA authorization for the product. Astrazenica and others will follow.
Regeneron's stock has risen based on the success of its antibody therapy. 80% of the the cost of develop reportedly was carried by the US government.
It is a puzzle why the therapy is not widely and cheaply available.
More detail follows:
Gottlieb: antibody drugs are good, but not widely available
Dr. Scott Gottlieb told CNBC on Friday that antibody drugs are likely to be important treatments for the coronavirus, but he cautioned against considering them a panacea for the nation’s Covid-19 outbreak.
The former U.S. Food and Drug Administration commissioner said the lack of supply means not every person who becomes diagnosed with the coronavirus will be able to receive an antibody treatment — should the FDA grant emergency use authorization to the two companies that recently applied.
“I think these drugs will make a meaningful difference for people who are the highest risk of having a bad outcome,” Gottlieb said on “Closing Bell.” “But this is not going to end the epidemic. This is not going to be widely available to everyone,” he added.
Priority would probably be given to Covid-19 patients who are over the age of 65, given they are more likely to become severely ill or die, according to Gottlieb.
People who have significant underlying medical conditions also would be higher on the list of patients to receive an antibody treatment, he said.
“We’re not going to have this available in the kind of volumes where you’d want to give it to everyone who is at risk and maybe even as a prophylaxis for people who are at high risk of contracting the infection like people in nursing homes, front-line health-care providers, front-line workers.” he said.
Dr. Scott Gottlieb told CNBC on Friday that antibody drugs are likely to be important treatments for the coronavirus, but he cautioned against considering them a panacea for the nation’s Covid-19 outbreak.
The former U.S. Food and Drug Administration commissioner said the lack of supply means not every person who becomes diagnosed with the coronavirus will be able to receive an antibody treatment — should the FDA grant emergency use authorization to the two companies that recently applied.
“I think these drugs will make a meaningful difference for people who are the highest risk of having a bad outcome,” Gottlieb said on “Closing Bell.” “But this is not going to end the epidemic. This is not going to be widely available to everyone,” he added.
Priority would probably be given to Covid-19 patients who are over the age of 65, given they are more likely to become severely ill or die, according to Gottlieb.
People who have significant underlying medical conditions also would be higher on the list of patients to receive an antibody treatment, he said.
“We’re not going to have this available in the kind of volumes where you’d want to give it to everyone who is at risk and maybe even as a prophylaxis for people who are at high risk of contracting the infection like people in nursing homes, front-line health-care providers, front-line workers.” he said.
The U.S. government has awarded $486 million to AstraZeneca Plc to develop and secure supplies of up to 100,000 doses of Covid-19 antibody treatment
This is similar to the antibody drug that was used in treating President Donald Trump.
The agreement, under the Trump administration’s Operation Warp Speed, is for developing a monoclonal antibody cocktail that can prevent Covid-19, especially in high-risk population like those over 80 years old, the U.S. Department of Health and Human Services said.
The treatment has come under the spotlight after Trump was treated with Regeneron Pharmaceuticals’ antibody drug last week. The president has also released a video on Twitter touting its benefits.
In a call earlier on Friday, a top U.S. health official said the government was expecting to provide more than 1 million free doses of antibody treatments to Covid-19 patients, similar to the one that was administered to Trump.
Regeneron and Eli Lilly have both applied to the U.S. Food and Drug Administration for emergency use authorizations of their antibody treatments.
AstraZeneca said it was planning to supply up to 100,000 doses starting toward the end of 2020 and that the U.S. government could acquire up to an additional one million doses in 2021 under a separate agreement.
Regeneron signed a $450 million deal in July to sell Operation Warp Speed enough doses of its antibody treatment, REGN-COV2, to treat around 300,000 people.
Eli Lilly said on Friday it had not signed an agreement with Operation Warp Speed.
AstraZeneca plans to evaluate the treatment, AZD7442, which is a cocktail of two monoclonal antibodies, in two studies.
One trial will evaluate the safety and efficacy of the experimental treatment to prevent infection for up to 12 months in about 5,000 participants, while the second will evaluate post-exposure preventative and pre-emptive treatment in roughly 1,100 participants.
https://www.cnbc.com/2020/10/12/us-astrazeneca-strike-deal-for-covid-19-antibody-treatment.html
This is similar to the antibody drug that was used in treating President Donald Trump.
The agreement, under the Trump administration’s Operation Warp Speed, is for developing a monoclonal antibody cocktail that can prevent Covid-19, especially in high-risk population like those over 80 years old, the U.S. Department of Health and Human Services said.
The treatment has come under the spotlight after Trump was treated with Regeneron Pharmaceuticals’ antibody drug last week. The president has also released a video on Twitter touting its benefits.
In a call earlier on Friday, a top U.S. health official said the government was expecting to provide more than 1 million free doses of antibody treatments to Covid-19 patients, similar to the one that was administered to Trump.
Regeneron and Eli Lilly have both applied to the U.S. Food and Drug Administration for emergency use authorizations of their antibody treatments.
AstraZeneca said it was planning to supply up to 100,000 doses starting toward the end of 2020 and that the U.S. government could acquire up to an additional one million doses in 2021 under a separate agreement.
Regeneron signed a $450 million deal in July to sell Operation Warp Speed enough doses of its antibody treatment, REGN-COV2, to treat around 300,000 people.
Eli Lilly said on Friday it had not signed an agreement with Operation Warp Speed.
AstraZeneca plans to evaluate the treatment, AZD7442, which is a cocktail of two monoclonal antibodies, in two studies.
One trial will evaluate the safety and efficacy of the experimental treatment to prevent infection for up to 12 months in about 5,000 participants, while the second will evaluate post-exposure preventative and pre-emptive treatment in roughly 1,100 participants.
https://www.cnbc.com/2020/10/12/us-astrazeneca-strike-deal-for-covid-19-antibody-treatment.html
Regeneron’s stock price rose after the company submitted an “emergency use authorization” request to the U.S. Food and Drug Administration for its Covid-19 antibody treatment.
Its REGN-COV2 monoclonal antibody coronavirus therapy is what President Donald Trump took last week after being diagnosed with Covid-19. He has since described it as a “cure” even though there’s no such scientific proof.
The biotech company published a statement Wednesday noting that “if an EUA is granted the government has committed to making these doses available to the American people at no cost and would be responsible for their distribution.”
At this time, there are doses available for approximately 50,000 patients, Regeneron said, “and we expect to have doses available for 300,000 patients in total within the next few months.”
REGN-COV2 is a combination of two monoclonal antibodies and was “designed specifically to block infectivity” of the virus (SARS-CoV-2) that causes Covid-19.
Trump was given an 8 gram dose of the antibody cocktail early in the course of his Covid-19 infection, despite it not being authorized by the FDA.
https://www.cnbc.com/2020/10/08/regeneron-requests-eua-from-the-fda-for-coronavirus-treatment.html
Its REGN-COV2 monoclonal antibody coronavirus therapy is what President Donald Trump took last week after being diagnosed with Covid-19. He has since described it as a “cure” even though there’s no such scientific proof.
The biotech company published a statement Wednesday noting that “if an EUA is granted the government has committed to making these doses available to the American people at no cost and would be responsible for their distribution.”
At this time, there are doses available for approximately 50,000 patients, Regeneron said, “and we expect to have doses available for 300,000 patients in total within the next few months.”
REGN-COV2 is a combination of two monoclonal antibodies and was “designed specifically to block infectivity” of the virus (SARS-CoV-2) that causes Covid-19.
Trump was given an 8 gram dose of the antibody cocktail early in the course of his Covid-19 infection, despite it not being authorized by the FDA.
https://www.cnbc.com/2020/10/08/regeneron-requests-eua-from-the-fda-for-coronavirus-treatment.html
Taxpayers are subsidizing 80 percent of Regeneron’s COVID-19 treatment’s R&D costs
Posted on October 8, 2020 by Kathryn Ardizzone https://www.keionline.org/author/kathryn-ardizzone
See: https://www.keionline.org/34126
Regeneron Pharmaceutical recently applied for Emergency Use Authorization of its investigational COVID-19 treatment, REGN-COV2, after Donald Trump said that it cured him of COVID-19, suggesting that Regeneron expects to cash in on the treatment. Taxpayers, however, are funding 80 percent of the costs of developing REGN-COV2.
Regeneron’s May 5, 2020 SEC filing [https://www.sec.gov/Archives/edgar/data/872589/000180422020000011/regn-033120x10q.htm] states as follows (emphasis added):
We are using our end-to-end antibody technologies to discover and develop brand new therapeutic antibodies for COVID-19. The Company is advancing REGN-COV2, a novel investigational antibody “cocktail” treatment designed to prevent and treat infection from the SARS-CoV-2 virus. In April, the Company moved its leading neutralizing antibodies into pre-clinical and clinical-scale cell production lines and plans to have supply available for clinical studies, which are expected to begin in June 2020.
The Company is also working to rapidly scale-up manufacturing.The Company also announced an expansion of its Other Transaction Agreement (“OTA”) with BARDA, pursuant to which HHS is obligated to fund 80% of our costs incurred for certain research and development activities related to COVID-19 treatments.
Regeneron should open license the IP rights, data, know-how, and cell lines necessary to manufacture the COVID-19 treatment to the World Health Organization COVID-19 Technology Access Pool (C-TAP), a global framework for the voluntary licensing of rights in COVID-19 medical technologies. A deep technology transfer to C-TAP, i.e., one that enables other qualified companies to manufacture the licensed technologies, is the best way to ensure that any treatment or vaccine deemed safe and effective is distributed as widely and quickly as possible.
Posted on October 8, 2020 by Kathryn Ardizzone https://www.keionline.org/author/kathryn-ardizzone
See: https://www.keionline.org/34126
Regeneron Pharmaceutical recently applied for Emergency Use Authorization of its investigational COVID-19 treatment, REGN-COV2, after Donald Trump said that it cured him of COVID-19, suggesting that Regeneron expects to cash in on the treatment. Taxpayers, however, are funding 80 percent of the costs of developing REGN-COV2.
Regeneron’s May 5, 2020 SEC filing [https://www.sec.gov/Archives/edgar/data/872589/000180422020000011/regn-033120x10q.htm] states as follows (emphasis added):
We are using our end-to-end antibody technologies to discover and develop brand new therapeutic antibodies for COVID-19. The Company is advancing REGN-COV2, a novel investigational antibody “cocktail” treatment designed to prevent and treat infection from the SARS-CoV-2 virus. In April, the Company moved its leading neutralizing antibodies into pre-clinical and clinical-scale cell production lines and plans to have supply available for clinical studies, which are expected to begin in June 2020.
The Company is also working to rapidly scale-up manufacturing.The Company also announced an expansion of its Other Transaction Agreement (“OTA”) with BARDA, pursuant to which HHS is obligated to fund 80% of our costs incurred for certain research and development activities related to COVID-19 treatments.
Regeneron should open license the IP rights, data, know-how, and cell lines necessary to manufacture the COVID-19 treatment to the World Health Organization COVID-19 Technology Access Pool (C-TAP), a global framework for the voluntary licensing of rights in COVID-19 medical technologies. A deep technology transfer to C-TAP, i.e., one that enables other qualified companies to manufacture the licensed technologies, is the best way to ensure that any treatment or vaccine deemed safe and effective is distributed as widely and quickly as possible.
Regeneron conference call and press release on its COVID-19 antibody cocktail
Regeneron COVID-19 Conference call
https://edge.media-server.com/mmc/p/bgwc5r8v
Regeneron 9-29-20 press release:
https://investor.regeneron.com/news-releases/news-release-details/regenerons-regn-cov2-antibody-cocktail-reduced-viral-levels-and
FROM THE PRESS RELEASE:
September 29, 2020 at 4:01 PM EDT
REGENERON'S REGN-COV2 ANTIBODY COCKTAIL REDUCED VIRAL LEVELS AND IMPROVED SYMPTOMS IN NON-HOSPITALIZED COVID-19 PATIENTSTARRYTOWN, N.Y., Sept. 29, 2020 /PRNewswire/ --
Greatest improvements in patients who had not mounted their own effective immune response prior to treatment
Plan rapidly to discuss results with regulatory authorities
Regeneron to host investor and media webcast to discuss results at 4:30 pm ET today
Regeneron Pharmaceuticals, Inc. (NASDAQ: REGN) today announced the first data from a descriptive analysis of a seamless Phase 1/2/3 trial of its investigational antibody cocktail REGN-COV2 showing it reduced viral load and the time to alleviate symptoms in non-hospitalized patients with COVID-19. REGN-COV2 also showed positive trends in reducing medical visits. The ongoing, randomized, double-blind trial measures the effect of adding REGN-COV2 to usual standard-of-care, compared to adding placebo to standard-of-care.
This trial is part of a larger program that also includes studies of REGN-COV2 for the treatment of hospitalized patients, and for prevention of infection in people who have been exposed to COVID-19 patients.
"After months of incredibly hard work by our talented team, we are extremely gratified to see that Regeneron's antibody cocktail REGN-COV2 rapidly reduced viral load and associated symptoms in infected COVID-19 patients," said George D. Yancopoulos, M.D., Ph.D., President and Chief Scientific Officer of Regeneron. "The greatest treatment benefit was in patients who had not mounted their own effective immune response, suggesting that REGN-COV2 could provide a therapeutic substitute for the naturally-occurring immune response. These patients were less likely to clear the virus on their own, and were at greater risk for prolonged symptoms. We are highly encouraged by the robust and consistent nature of these initial data, as well as the emerging well-tolerated safety profile, and we have begun discussing our findings with regulatory authorities while continuing our ongoing trials. In addition to having positive implications for REGN-COV2 trials and those of other antibody therapies, these data also support the promise of vaccines targeting the SARS-CoV-2 spike protein."
The descriptive analysis included the first 275 patients enrolled in the trial and was designed to evaluate anti-viral activity with REGN-COV2 and identify patients most likely to benefit from treatment; the next cohort, which could be used to rapidly and prospectively confirm these results, has already been enrolled. Patients in the trial were randomized 1:1:1 to receive a one-time infusion of 8 grams of REGN-COV2 (high dose), 2.4 grams of REGN-COV2 (low dose) or placebo. All patients entering the trial had laboratory-confirmed COVID-19 that was being treated in the outpatient setting. Patients were prospectively characterized prior to treatment by serology tests to see if they had already generated antiviral antibodies on their own and were classified as seronegative (no measurable antiviral antibodies) or seropositive (measurable antiviral antibodies). Approximately 45% of patients were seropositive, 41% were seronegative and 14% were categorized as "other" due to unclear or unknown serology status.
Key data findings include:
Note that since this analysis was considered descriptive, all p-values are nominal.
"Thank you to the global investigators, sites and patients who continue to work with us to conduct REGN-COV2 trials, especially given the unique challenges posed by the pandemic," said David Weinreich, M.D., Senior Vice President and Head of Global Clinical Development at Regeneron. "We plan rapidly to submit detailed results from this analysis for publication in order to share insights with the public health and medical communities. Regeneron continues to enroll patients in this trial and all other ongoing late-stage trials evaluating REGN-COV2."
Additional Trial Background
Among the first 275 patients, approximately 56% were Hispanic, 13% were African American and 64% had one or more underlying risk factors for severe COVID-19, including obesity (more than 40%). On average, patients were 44 years of age. In total, 49% of participants were male and 51% were female.
At least 1,300 patients will be recruited into the Phase 2/3 portion of the outpatient trial overall. Patients will be followed for 29 days, with viral shedding in the upper respiratory tract assessed approximately every 2-3 days in the Phase 2 portion of the trial and clinical endpoints assessed via investigator and patient-reported data throughout.
In addition to this trial in non-hospitalized patients, REGN-COV2 is currently being studied in a Phase 2/3 clinical trial for the treatment of COVID-19 in hospitalized patients, the Phase 3 open-label RECOVERY trial of hospitalized patients in the UK and a Phase 3 trial for the prevention of COVID-19 in household contacts of infected individuals. Recruitment in all 4 trials is ongoing.
Investor and Media Webcast Information
Regeneron will host a conference call and simultaneous webcast to share updates on REGN-COV2 today September 29, 2020 at 4:30 pm ET. To access the call, dial (888) 660-6127 (U.S.) or (973) 890-8355 (International). A link to the webcast may be accessed from the "Investors and Media" page of Regeneron's website at www.regeneron.com. A replay of the conference call and webcast will be archived on the Company's website and will be available for at least 30 days.
About REGN-COV2
REGN-COV2 is a combination of two monoclonal antibodies (REGN10933 and REGN10987) and was designed specifically to block infectivity of SARS-CoV-2, the virus that causes COVID-19.
To develop REGN-COV2, Regeneron scientists evaluated thousands of fully-human antibodies produced by the company's VelocImmune® mice, which have been genetically modified to have a human immune system, as well as antibodies identified from humans who have recovered from COVID-19. The two potent, virus-neutralizing antibodies that form REGN-COV2 bind non-competitively to the critical receptor binding domain of the virus's spike protein, which diminishes the ability of mutant viruses to escape treatment and protects against spike variants that have arisen in the human population, as detailed in Science. Preclinical studies have shown that REGN-COV2 reduced the amount of virus and associated damage in the lungs of non-human primates.
REGN-COV2's development and manufacturing has been funded in part with federal funds from the Biomedical Advanced Research and Development Authority (BARDA), part of the Office of the Assistant Secretary for Preparedness and Response at the U.S. Department of Health and Human Services under OT number: HHSO100201700020C. Regeneron has recently partnered with Roche to increase the global supply of REGN-COV2. If REGN-COV2 proves safe and effective in clinical trials and regulatory approvals are granted, Regeneron will manufacture and distribute it in the U.S. and Roche will develop, manufacture and distribute it outside the U.S.
About Regeneron [omitted]
For additional information about the company, please visit www.regeneron.com or follow @Regeneron on Twitter.
Forward-Looking Statements and Use of Digital Media [omitted]
Contacts:
Media Relations
Alexandra Bowie
Tel: +1 (914) 847-3407
alexandra.bowie@regeneron.com
Investor Relations
Mark Hudson
Tel: +1 (914) 847-3482
mark.hudson@regeneron.com
View original content:http://www.prnewswire.com/news-releases/regenerons-regn-cov2-antibody-cocktail-reduced-viral-levels-and-improved-symptoms-in-non-hospitalized-covid-19-patients-301140336.html
SOURCE Regeneron Pharmaceuticals, Inc.
Investor Relations
914.847.7741
invest@regeneron.com
Media Relations
Regeneron COVID-19 Conference call
https://edge.media-server.com/mmc/p/bgwc5r8v
Regeneron 9-29-20 press release:
https://investor.regeneron.com/news-releases/news-release-details/regenerons-regn-cov2-antibody-cocktail-reduced-viral-levels-and
FROM THE PRESS RELEASE:
September 29, 2020 at 4:01 PM EDT
REGENERON'S REGN-COV2 ANTIBODY COCKTAIL REDUCED VIRAL LEVELS AND IMPROVED SYMPTOMS IN NON-HOSPITALIZED COVID-19 PATIENTSTARRYTOWN, N.Y., Sept. 29, 2020 /PRNewswire/ --
Greatest improvements in patients who had not mounted their own effective immune response prior to treatment
Plan rapidly to discuss results with regulatory authorities
Regeneron to host investor and media webcast to discuss results at 4:30 pm ET today
Regeneron Pharmaceuticals, Inc. (NASDAQ: REGN) today announced the first data from a descriptive analysis of a seamless Phase 1/2/3 trial of its investigational antibody cocktail REGN-COV2 showing it reduced viral load and the time to alleviate symptoms in non-hospitalized patients with COVID-19. REGN-COV2 also showed positive trends in reducing medical visits. The ongoing, randomized, double-blind trial measures the effect of adding REGN-COV2 to usual standard-of-care, compared to adding placebo to standard-of-care.
This trial is part of a larger program that also includes studies of REGN-COV2 for the treatment of hospitalized patients, and for prevention of infection in people who have been exposed to COVID-19 patients.
"After months of incredibly hard work by our talented team, we are extremely gratified to see that Regeneron's antibody cocktail REGN-COV2 rapidly reduced viral load and associated symptoms in infected COVID-19 patients," said George D. Yancopoulos, M.D., Ph.D., President and Chief Scientific Officer of Regeneron. "The greatest treatment benefit was in patients who had not mounted their own effective immune response, suggesting that REGN-COV2 could provide a therapeutic substitute for the naturally-occurring immune response. These patients were less likely to clear the virus on their own, and were at greater risk for prolonged symptoms. We are highly encouraged by the robust and consistent nature of these initial data, as well as the emerging well-tolerated safety profile, and we have begun discussing our findings with regulatory authorities while continuing our ongoing trials. In addition to having positive implications for REGN-COV2 trials and those of other antibody therapies, these data also support the promise of vaccines targeting the SARS-CoV-2 spike protein."
The descriptive analysis included the first 275 patients enrolled in the trial and was designed to evaluate anti-viral activity with REGN-COV2 and identify patients most likely to benefit from treatment; the next cohort, which could be used to rapidly and prospectively confirm these results, has already been enrolled. Patients in the trial were randomized 1:1:1 to receive a one-time infusion of 8 grams of REGN-COV2 (high dose), 2.4 grams of REGN-COV2 (low dose) or placebo. All patients entering the trial had laboratory-confirmed COVID-19 that was being treated in the outpatient setting. Patients were prospectively characterized prior to treatment by serology tests to see if they had already generated antiviral antibodies on their own and were classified as seronegative (no measurable antiviral antibodies) or seropositive (measurable antiviral antibodies). Approximately 45% of patients were seropositive, 41% were seronegative and 14% were categorized as "other" due to unclear or unknown serology status.
Key data findings include:
Note that since this analysis was considered descriptive, all p-values are nominal.
- As hypothesized, patients in the study consisted of two different populations: those who had already mounted an effective immune response, and those whose immune response was not yet adequate. These populations could be identified serologically by the presence (seropositive) or absence (seronegative) of SARS-CoV-2 antibodies, and/or by high viral loads at baseline.
- Serological status highly correlated with baseline viral load (p<0.0001). Seropositive patients had much lower levels of virus at baseline, and rapidly achieved viral loads approaching lowest levels quantifiable (LLQ), even without treatment. In contrast, seronegative patients had substantially higher viral levels at baseline, and cleared virus more slowly in the absence of treatment.
- Serological status at baseline also predicted how rapidly patients had alleviation of their COVID-19 clinical symptoms. In the untreated (placebo) patients, seropositive patients had a median time to alleviation of symptoms of 7 days, compared to seronegative patients who had a median time to alleviation of symptoms of 13 days.
- REGN-COV2 rapidly reduced viral load through Day 7 in seronegative patients (key virologic endpoint). The mean time-weighted-average change from baseline nasopharyngeal (NP) viral load through Day 7 in the seronegative group was a 0.60 log10 copies/mL greater reduction (p=0.03) in patients treated with high dose, and a 0.51 log10 copies/mL greater reduction (p=0.06) in patients treated with low dose, compared to placebo. In the overall population, there was a 0.51 log10 copies/mL greater reduction (p=0.0049) in patients treated with high dose, and a 0.23 log10 copies/mL greater reduction (p= 0.20) in patients treated with low dose, compared to placebo.
- Patients with increasingly higher baseline viral levels had correspondingly greater reductions in viral load at Day 7 with REGN-COV2 treatment. The mean log10 copies/mL reduction in viral load compared to placebo were as follows:
- Viral load higher than 105 copies/mL: high dose (-0.93); low dose (-0.86) (p=0.03 for both); approximately 50-60% reduction compared to placebo
- Viral load higher than 106 copies/mL: high dose (-1.55); low dose (-1.65) (p<0.002 for both); approximately 95% reduction compared to placebo
- Viral load higher than 107 copies/mL: high dose (-1.79); low dose (-2.00) (p<0.0015 for both); approximately 99% reduction compared to placebo - Patients who were seronegative and/or had higher baseline viral levels also had greater benefits in terms of symptom alleviation. Among seronegative patients, median time to symptom alleviation (defined as symptoms becoming mild or absent) was 13 days in placebo, 8 days in high dose (p=0.22), and 6 days in low dose (p=0.09). Patients with increasing viral loads at baseline had correspondingly increasing benefit in time to symptom alleviation.
- There were a small number of medically-attended visits given that most non-hospitalized patients recover well at home. Patients in the seronegative group were at higher risk of medically-attended visits: 10 of the 12 medically-attended visits (defined as hospitalizations, or emergency room, urgent care or telemedicine visits for COVID-19) occurred in patients who were seronegative at baseline. In the seronegative group, 15.2% of placebo-treated patients, 7.7% of patients treated with high dose and 4.9% of patients treated with low dose required additional medical visits.
- Both doses were well-tolerated. Infusion reactions were seen in 4 patients (2 on placebo and 2 on REGN-COV2). Serious adverse events occurred in 2 placebo patients, 1 low dose patient and no high dose patients. There were no deaths in the trial.
"Thank you to the global investigators, sites and patients who continue to work with us to conduct REGN-COV2 trials, especially given the unique challenges posed by the pandemic," said David Weinreich, M.D., Senior Vice President and Head of Global Clinical Development at Regeneron. "We plan rapidly to submit detailed results from this analysis for publication in order to share insights with the public health and medical communities. Regeneron continues to enroll patients in this trial and all other ongoing late-stage trials evaluating REGN-COV2."
Additional Trial Background
Among the first 275 patients, approximately 56% were Hispanic, 13% were African American and 64% had one or more underlying risk factors for severe COVID-19, including obesity (more than 40%). On average, patients were 44 years of age. In total, 49% of participants were male and 51% were female.
At least 1,300 patients will be recruited into the Phase 2/3 portion of the outpatient trial overall. Patients will be followed for 29 days, with viral shedding in the upper respiratory tract assessed approximately every 2-3 days in the Phase 2 portion of the trial and clinical endpoints assessed via investigator and patient-reported data throughout.
In addition to this trial in non-hospitalized patients, REGN-COV2 is currently being studied in a Phase 2/3 clinical trial for the treatment of COVID-19 in hospitalized patients, the Phase 3 open-label RECOVERY trial of hospitalized patients in the UK and a Phase 3 trial for the prevention of COVID-19 in household contacts of infected individuals. Recruitment in all 4 trials is ongoing.
Investor and Media Webcast Information
Regeneron will host a conference call and simultaneous webcast to share updates on REGN-COV2 today September 29, 2020 at 4:30 pm ET. To access the call, dial (888) 660-6127 (U.S.) or (973) 890-8355 (International). A link to the webcast may be accessed from the "Investors and Media" page of Regeneron's website at www.regeneron.com. A replay of the conference call and webcast will be archived on the Company's website and will be available for at least 30 days.
About REGN-COV2
REGN-COV2 is a combination of two monoclonal antibodies (REGN10933 and REGN10987) and was designed specifically to block infectivity of SARS-CoV-2, the virus that causes COVID-19.
To develop REGN-COV2, Regeneron scientists evaluated thousands of fully-human antibodies produced by the company's VelocImmune® mice, which have been genetically modified to have a human immune system, as well as antibodies identified from humans who have recovered from COVID-19. The two potent, virus-neutralizing antibodies that form REGN-COV2 bind non-competitively to the critical receptor binding domain of the virus's spike protein, which diminishes the ability of mutant viruses to escape treatment and protects against spike variants that have arisen in the human population, as detailed in Science. Preclinical studies have shown that REGN-COV2 reduced the amount of virus and associated damage in the lungs of non-human primates.
REGN-COV2's development and manufacturing has been funded in part with federal funds from the Biomedical Advanced Research and Development Authority (BARDA), part of the Office of the Assistant Secretary for Preparedness and Response at the U.S. Department of Health and Human Services under OT number: HHSO100201700020C. Regeneron has recently partnered with Roche to increase the global supply of REGN-COV2. If REGN-COV2 proves safe and effective in clinical trials and regulatory approvals are granted, Regeneron will manufacture and distribute it in the U.S. and Roche will develop, manufacture and distribute it outside the U.S.
About Regeneron [omitted]
For additional information about the company, please visit www.regeneron.com or follow @Regeneron on Twitter.
Forward-Looking Statements and Use of Digital Media [omitted]
Contacts:
Media Relations
Alexandra Bowie
Tel: +1 (914) 847-3407
alexandra.bowie@regeneron.com
Investor Relations
Mark Hudson
Tel: +1 (914) 847-3482
mark.hudson@regeneron.com
View original content:http://www.prnewswire.com/news-releases/regenerons-regn-cov2-antibody-cocktail-reduced-viral-levels-and-improved-symptoms-in-non-hospitalized-covid-19-patients-301140336.html
SOURCE Regeneron Pharmaceuticals, Inc.
Investor Relations
914.847.7741
invest@regeneron.com
Media Relations
Reprise: Tony Picadio on gun rights
and the US Supreme Court
by DAR: Rights of gun owners have become an increasingly fraught issue as incidents of gun violence in the U.S. occur with alarming frequency. The connection between private "militia" activity and gun ownership is of concern.
An article by Anthony Picadio criticizes the U.S. Supreme Court's decision in District of Columbia v.Heller, which expanded gun ownership rights. Picadio points out that the history of the Second Amendment in the lower courts since the Heller decision does in fact support Justice Thomas’ lament [in a case dissent] that the courts have failed to afford the Second Amendment “the respect due an enumerated constitutional right.”
Mr. Picadio suggests that perhaps one of the reasons that expansive treatment of the Second Amendment has been so disfavored by the lower courts is a growing recognition that it was never intended by those who drafted and adopted it to grant any rights to own or use a firearm unconnected to membership in a government connected militia.
Moreover, Justice Scalia’s opinion “is based on an erroneous reading of colonial history and the drafting history of the Second Amendment,’’ Mr. Picadio wrote. “If the Second Amendment had been understood to have the meaning given to it by Justice Scalia, it would not have been ratified by Virginia and the other slave states.”
The amendment began with the phrase “a well regulated Militia’’ because the Virginian founders wanted to be sure guns didn’t get into the hands of enslaved black Virginians or free black Virginians, Mr. Picadio argues. With the state’s all-white militia, this amendment helped do just that.
Mr. Picadio’s article appears in the PENNSYLVANIA BAR ASSOCIATION QUARTERLY | January 2019
A copy of the Picadio article accompanies a newspaper op-ed at https://www.post-gazette.com/opinion/brian-oneill/2019/02/10/Brian-O-Neill-Slavery-root-of-the-Second-Amendment/stories/201902100107
and the US Supreme Court
by DAR: Rights of gun owners have become an increasingly fraught issue as incidents of gun violence in the U.S. occur with alarming frequency. The connection between private "militia" activity and gun ownership is of concern.
An article by Anthony Picadio criticizes the U.S. Supreme Court's decision in District of Columbia v.Heller, which expanded gun ownership rights. Picadio points out that the history of the Second Amendment in the lower courts since the Heller decision does in fact support Justice Thomas’ lament [in a case dissent] that the courts have failed to afford the Second Amendment “the respect due an enumerated constitutional right.”
Mr. Picadio suggests that perhaps one of the reasons that expansive treatment of the Second Amendment has been so disfavored by the lower courts is a growing recognition that it was never intended by those who drafted and adopted it to grant any rights to own or use a firearm unconnected to membership in a government connected militia.
Moreover, Justice Scalia’s opinion “is based on an erroneous reading of colonial history and the drafting history of the Second Amendment,’’ Mr. Picadio wrote. “If the Second Amendment had been understood to have the meaning given to it by Justice Scalia, it would not have been ratified by Virginia and the other slave states.”
The amendment began with the phrase “a well regulated Militia’’ because the Virginian founders wanted to be sure guns didn’t get into the hands of enslaved black Virginians or free black Virginians, Mr. Picadio argues. With the state’s all-white militia, this amendment helped do just that.
Mr. Picadio’s article appears in the PENNSYLVANIA BAR ASSOCIATION QUARTERLY | January 2019
A copy of the Picadio article accompanies a newspaper op-ed at https://www.post-gazette.com/opinion/brian-oneill/2019/02/10/Brian-O-Neill-Slavery-root-of-the-Second-Amendment/stories/201902100107
Douglas Ginsburg explains Constitutional originalism on PBS
By Don Allen Resnikoff
Amy Coney Barrett, the president’s choice for the U.S. Supreme Court, is often described as a disciple of Justice Antonin Scalia and an advocate of an interpretation of the Constitution known as originalism.
For those interested in a popular TV presentation explaining and defending Constitutional originalism, Public Broadcasting Service’s (PBS) fits the bill. “A More or Less Perfect Union, A Personal Exploration,” featuring Judge Douglas Ginsburg, offers an interesting, albeit mostly one-sided presentation.
PBS is admirable because of its independence from direct political control of content, but independence does not mean that particular PBS programs will meet standards of objectivity and balance that are suggested by the Corporation for Public Broadcasting’s enabling statute. The Ginsburg series, particularly the last of the series, called “Our Constitution at Risk,” veers sharply in the direction of supporting the Constitutional originalist ideas of Justice Scalia[i]
The Ginsburg PBS show is excellent in the sense that it is intelligently presented and interesting. But it is also an advocacy piece supporting a political viewpoint that includes a narrow “originalist” view of the Constitution, and strong condemnation of government action (such as action in support of labor unions) that many defend as highly desirable.
An article describing the video program for the American Bar Association Journal accurately explains that “Ginsburg, who is an originalist in his interpretation of the Constitution, points out how the balance of powers has shifted over the years. He contends elected officials have degraded the Constitution, and now there are agencies that do the work of all three governmental branches.” [ii] Ginsburg’s opinion is that regulatory agencies often act inappropriately in taking on the multiple tasks of making law, judging whether law violations occurred, and prescribing punishment.
Judge Ginsburg explains his “originalist” views of Constitutional interpretation in a companion book to the PBS video series called Voices of Our Republic.:[iii] The Constitution has also been “interpreted” by the Supreme Court to make certain clauses meaningless and to give other clauses new meaning. That evolution at the hands of the Court has been celebrated by many as a testament to the needed flexibility of the Constitution to respond to new circumstances, and lamented by others, myself included, as a betrayal of the ideals and principles that animated the Constitution in the first place. It also gave rise to the debate . . . : Should a court read the words of the Constitution as those who wrote and ratified them understood them? Or is a court authorized to give those words a new and different meaning in response to new and different circumstances?
The PBS show on the Constitution focuses at length on examples of government regulatory overreach into the business of very small entrepreneurs, such as easily criticized stringent city rules for licensing of tour guides. The show also refers to the history of the Tennessee Valley Authority as an example of government overreach, a bigger and more politically controversial story. The TVA was part of a regional development authority, famously including building of a huge hydroelectric dam that supplied electricity to a large geographic area. It was a centerpiece of Franklin D. Roosevelt’s New Deal programs, and was later opposed by politicians such as Ronald Reagan and Barry Goldwater.
Judge Ginsburg opposes FDR’s New Deal programs and its successors based on the Constitutional interpretation points explained in the PBS program.
Ginsburg explains in an earlier article that “the Great Depression and the determination of the Roosevelt Administration placed the Supreme Court’s commitment to the Constitution as written under severe stress in the 1930s, and it was then that the wheels began to come off [of correct commitment to the Constitution as written].” [iv]
Judge Ginsburg’s examples of the “wheels coming off” the Court’s interpretation of the Constitution include the New Deal era court decision NLRB v. Jones & Laughlin Steel Corp., [v] upholding the power of the Congress under the Constitution’s Commerce Clause to require companies to recognize labor unions. Ginsburg says that the Supreme Court thereby wrongly “threw open the door to national regulation of employment relations—and much more. Not only interstate commerce but anything that affects interstate commerce came within the reach of the Congress.” [vi]
Judge Ginsburg’s views are politically controversial. Financial and intellectual support for the Ginsburg presentation comes from groups that are themselves controversial. The PBS website for the television program on the Constitution credits production to “Free to Choose Media, in association with Thirteen [the New York PBS station WNET].” The Free to Choose website explains that the Freedom to Choose media efforts evolved from a broadcasting collaboration with economist Milton Friedman.[vii]
Milton Freidman is frequently associated with the political arguments that the Great Depression of the 1930s was a consequence of inept monetary policies of the Federal Reserve, and that the la