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Walter Olson

…and the right to volunteer one’s labor (earlier), from frequent Overlawyered commenter Gitarcarver at his blog [Raised on Hoecakes]:

Volunteers serve in National Parks around the country without ever being paid for their labor.

Why does the government encourage people to labor without pay for some activities and not others? …

We think that volunteering is noble, rewarding and educational independent of whether the cause is “for profit” or not.

Our issue is not with volunteering.

The issue is what right does the government have in saying where a free citizen of this country can donate his or her time and efforts to?

If you have a friend who is starting a business and you want to help him succeed, why can’t you volunteer your time, efforts and expertise? If a neighbor wants to build and extension onto their offices and you donate a set of architectural or engineering plans because that is your area of expertise. what right does the government have to say “you can’t do that?” If you design web pages and do some work on a web page for a fellow parishioner at your church, what concern is that of the government? How many small businesses have “friends” who donate time to repair or maintain the business’ computers?

The bottom line is the application of the labor of a person is the individual’s choice – not the government’s.

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Banking and finance roundup

by Walter Olson on September 21, 2014

  • SEC regs suppress small business capital formation and that’s a shame [Commissioner Daniel Gallagher via Bainbridge]
  • Federally sponsored gripe site for financial institutions not likely to end well [Hester Peirce and Vera Soliman, Mercatus via Kevin Funnell]
  • Alleged terror payments “routed through” sued bank also went through major New York banks, which shouldn’t be surprising [Fisher]
  • Did mid-level managers in securitized mortgage finance know they were in a housing bubble but cynically go ahead? Evidence against [Cheng et al., American Economic Review via MR]
  • Shareholder litigation: “New ‘loser pays’ standard could curb abusive lawsuits” [Examiner editorial] Delaware take note: corporate by-law changes that cut off fee-seeking opportunism deserve acclaim [Keith Paul Bishop via Bainbridge]
  • NYT was hot on “Goldman Sachs manipulated aluminum market” allegations but judge wasn’t [Reuters, July 2013 NYT]
  • CFPB might shrug off discrimination and retaliation charges, but many of the firms it regulates could not afford to [Hans Bader]

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Roger Parloff at Fortune reviews the two new Chevron-Ecuador books by Paul Barrett and Michael Goldhaber (earlier here, etc.), and also asks where ubiquitous S.D.N.Y. federal prosecutor Preet Bharara is in a case where he might appropriately take an interest. Meanwhile, Paul Barrett recounts being on the receiving end of a P.R. campaign to tear down his book, and an excerpt from his book recounts the fall of celebrated law firm Patton Boggs after it was tripped up in the dispute; and actress Mia Farrow reveals at least one way in which she might be thought to resemble former education secretary Bill Bennett.

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Canadians should be careful of carrying large sums of currency on their trips south of the border, warns the CBC’s senior Washington correspondent, Neil MacDonald, since “U.S. police are operating a co-ordinated scheme to seize as much of the public’s cash as they can. … if you’re on an American roadway with a full wallet, in the eyes of thousands of cash-hungry cops you’re a rolling ATM.”

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“California has a state law that prohibits for-profit companies from using volunteer labor.” That spelled doom for little Westover Winery in Castro Valley, which cleared around $11,000 in profits a year for its owning couple and used unpaid volunteers, many of them amateurs who wanted to learn the wine business. The state hit the business with $115,000 in fines and wiped it out, to the unhappiness of some of the displaced volunteers. [Scott Shackford, Reason; Rebecca Parr, Daily Review/San Jose Mercury News] More: A Debra Saunders column. And I mention this episode, along with the one linked below about a California law combating off-books contractors, in a new Cato post about how licensed and compliant businesses often support making government more powerful and invasive so as to go after the other kind.

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The Sacramento Bee editorializes against the state’s well-established ADA racket, which has been going for many years now and is not being cleaned up through legislative reform because too many people find financial or ideological advantage in keeping things the way they are:

California law puts a $4,000 fine on each violation and directed the proceeds to “aggrieved” parties, even if they weren’t harmed or inconvenienced by the violation. A business could be sued for faded paint on an open handicapped parking spot, a ramp 2 degrees too steep, incorrect wording on a sign. A practiced eye can spot half a dozen violations most anywhere, and that’s a $24,000 jackpot for a scammer. …

ADA rules change constantly. Two years ago, signs next to handicapped parking spaces had to read “No parking.” Now, signs must warn that the fine is $250. That’s not a barrier to a disabled person, but still could be treated like one when it comes to fines. That’s ridiculous. If a business owner hasn’t put up a new sign, he should be given an opportunity to fix it before having to pay some lawyer $4,000.

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If you hire some consenting but unlicensed neighbor for a not-very-big repair or construction job in California, there’s now a greater chance he or she will be headed for jail, no matter how happy you may be with the quality of the work. Gov. Jerry Brown has signed S.B. 315 (text, progress, promotional fact sheet), described by its sponsor, Sen. Ted Lieu (D-Beverly Hills), as a measure “to help curb California’s underground economy.” The measure would step up penalties and enforcement against persons who advertise for, or perform, repair and construction work with a value of $500 or more, counting parts and material as well as labor. (By its terms, the bill appears to apply to someone who offers to do a $500 job for your office that consists of procuring a $400 item and adding $100 for the labor of installing it.) First offenses are subject to six months in jail and a $5,000 fine, and subsequent offenses are treated yet more harshly.

There’s more. The bill, according to its legislative summary, “would additionally require that the enforcement division, when participating in the activities of the Joint Enforcement Strike Force on the Underground Economy, be granted free access to all places of labor,” at least in business locations. (Yes, “all”; you only thought your property was private.) And although the literature on the bill refers repeatedly to the need to curb “cheating” contractors, the penalties apply no matter how satisfied you may be with the contractor’s work.

That’s because protecting customers isn’t actually the point. Such is the political grip of occupational licensure lobbies that the bill passed unanimously in both houses of the California legislature with support from licensed repair and construction contractors. Lieu: “Groups supporting SB 315 are: Contractors State License Board (sponsor); Air Conditioning and Refrigeration Contractors Association; Air Conditioning Sheet Metal Association; American Subcontractors Association, California Inc.; California Chapters of the National Electrical Contractors Association; California Landscape Contractors Association; California Legislative Conference of the Plumbing, Heating and Piping Industry; California Professional Association of Specialty Contractors; United Contractors.”

In short, this is the sort of thing the California legislature does when it wants to think of itself as pro-business: it extends criminal liability for doing business in any other than the authorized way.

More: I’ve got some further thoughts at Cato at Liberty: “The costs of occupational licensure are many. Not least is that it gives established businesses a stake in making government more powerful and invasive.” And am I the only one who interprets the bill as aimed at Craigslist and at sharing-economy interfaces that match odd jobs with persons willing to do them, even if it is not announced as such?

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Via p.r. agent Karen Hinton, William Langewiesche has now responded in our comments section (as well as elsewhere) to Glenn Garvin’s critical Miami Herald column (linked here) regarding Langewiesche’s 2007 Vanity Fair piece on the Chevron-Ecuador litigation. Garvin has in turn contributed a rejoinder.

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There’s an element of self-interest involved: when foreign states arrange to participate in the seizure of property of alleged wrongdoers even absent proof that can withstand trial, it can redound as a revenue source to U.S.-based law enforcement under various cooperation schemes. But remember the days when the U.S. sought to export the rule of law, property rights and strong constitutional protections to other lands? [Eapen Thampy, Forfeiture Reform]

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“The Justice Department has a suggestion for banks hoping to avoid criminal charges: Rat out your employees.” By agreeing to throw individuals under the bus, the company as a whole will qualify for valuable cooperation credits. [Ben Protess, New York Times "DealBook"] On a similar culture-of-informants theme, Eric Holder is proposing to further boost bounties for Wall Street informants into more massive contingency-fee territory: “Mr. Holder will urge Congress to allow bigger whistleblower rewards under the 1989 Financial Institutions Reform, Recovery and Enforcement Act…. Current law caps any Firrea whistleblower payment at $1.6 million.” [Wall Street Journal, earlier coverage and specifically]

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Labor and employment roundup

by Walter Olson on September 18, 2014

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FOIA findings: “Dozens of Justice Department officials, ranging from FBI special agents and prison wardens to high-level federal prosecutors, have escaped prosecution or firing in recent years despite findings of misconduct by the department’s own internal watchdog. … In at least 27 cases, the inspector general identified evidence of possible criminal wrongdoing but no one was prosecuted.” Many cases ended in oral admonishment of errant employees. While various legitimate reasons can underlie a decision not to prosecute, such as a poor prospect of securing conviction, low stakes, or unclear law, the rate at which public integrity cases have been prosecuted has dropped significantly since the previous administration. [McClatchy] More: AP, Tim Cushing/TechDirt, Scott Greenfield.

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Or so a California Court of Appeals “proudly announced …because it took only 20 years from a developer’s application to build a housing tract under existing zoning, to the court’s EIR [environmental impact review] approval.” [Gideon Kanner, citing Clover Valley Foundation v. City of Rocklin, 197 Cal. App.4th 200 (2011), as well as a September 2014 land use roundtable in California Lawyer]

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Liability roundup

by Walter Olson on September 17, 2014

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Maricopa County (Phoenix) Sheriff and longtime Overlawyered mentionee Joe Arpaio did not keep close track of the military-grade gear the Pentagon gave him — in fact, his office seems to have lost some of it — and now the feds are lowering the boom: “Because of the agency’s continued failure to locate nine missing weapons issued by the Pentagon’s 1033 program, the Sheriff’s Office was terminated from the military-­surplus program, effective immediately. The agency is required to return its cache of issued firearms, helicopters and other gear within 120 days.” Arizona Republic reporter Megan Cassidy quotes me regarding the interesting timing of the announcement, following closely after events in Ferguson, Mo. helped stir a nationwide furor over the 1033 program. It’s not specified (h/t Lauren Galik) whether they’ll have to give back the hot dog machine and $3,500 popcorn machine.

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An outcry has lately arisen over consumer contracts that purport to ban disparagement of the company that proffered the contract or its products, especially since a few such companies, seeking to silence customers vocally dissatisfied with products or services, have proceeded to sue them, threaten them with suit, or report them as credit risks. Although it is doubtful that existing law in fact permits practices of this sort, California proceeded to pass a new law protecting consumers from retaliation by companies they criticize — a law that appears to go much farther than just banning the practices that stirred the furor. [Volokh] Contra: Scott Michelman, CL&P.

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September 16 roundup

by Walter Olson on September 16, 2014

  • “When I asked them why they decided to sell their [toy import] business, they said that they got out because of Proposition 65 and the CPSIA.” [Nancy Nord]
  • State tax regimes are getting more aggressive about grabbing money earned in other states [Steve Malanga, City Journal]
  • “Still can’t get over the fact that all [development] permits are discretionary in San Francisco” [@TonyBiasotti linking Mark Hogan, Boom]
  • How would American politics change if political parties could expel members, as in many countries they can? [Bryan Caplan]
  • Defenders of Wisconsin John Doe prosecutor push back against Stuart Taylor investigation [Daniel Bice, Milwaukee Journal-Sentinel via Althouse, more, related on "blue fist" posters and John Doe investigator, earlier]
  • “In Britain, Child’s Weight Leads to Parents’ Arrest” [New York Times in June, King's Lynn 11-year-old; also, Cadbury agrees to "stop making chocolate bars in Britain with more than 250 calories"]
  • Should there be judicial remedies — what kind, and for which plaintiffs — when federal spending is politicized? [Daniel Epstein, Federalist Society "Engage"]

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“The City of Brotherly Love can’t get enough of its citizens’ property and cash. The city is in a class by itself in the world of civil asset forfeiture, says Institute for Justice attorney Darpana Sheth” in this Cato podcast with interviewer Caleb Brown. More on IJ’s suit challenging Philadelphia’s forfeiture practices: Philadelphia Inquirer, Nick Sibilla/Forbes, Dave Weigel/Slate, and Scott Shackford/Reason.

And by way of balance on the Philadelphia story: one who defends forfeiture law as “good law” that “works” is “CNN legal analyst and consumer attorney, Brian Kabateck,” seen before in this space and elsewhere in his role as a class-action plaintiff’s attorney.

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