The Target Corporation’s settlement of class action litigation over a major consumer data security breach is not as groundbreaking as all that, and in particular falls far short of the enormous liability payouts that were being talked of for a while [Paul Karlsgodt; Minnesota Public Radio] It does however feature attorney’s fee payouts “not to exceed $6.75 million, which is on the high end of the historical range” [Paul Bond, Lisa Kim, and Christine Czuprynski, Reed Smith] Earlier here.
- Missouri law incentivizes local ticket-writing, Illinois not so much. Guess how municipalities respond? [Jesse Walker] “Ferguson’s Court Fine Scandal Arose Because Of Its Bloated Government” [Scott Beyer; earlier on fines and fees in Ferguson here, here, here, here, here, here, here, etc.] “Nassau’s top cop orders retraining of officers who write fewest tickets” [Newsday via @GoLongIsland]
- Maryland House passes forfeiture reform 81-54, with nearly all GOPers voting against the property rights side [my Free State Notes post, Maryland Reporter and more (Baltimore County Del. and former police officer John Cluster “said he hadn’t seen a single case of abuse in his time”), Jason Boisvert]
- “Quiet change expands ATF power to seize property” [Adam Bates, Cato]
- Meanwhile on the civil side, hedge funds place heavy bets on litigation finance [Paul Barrett, Business Week]
- In news that will surprise few libertarians, debt collection on behalf of government agencies is fraught with problems [CNN project overview links to individual stories]
- Among its numerous other problems, pending “human trafficking” bill would establish a fund to cycle fines back to law enforcement and victim advocates [Elizabeth Nolan Brown, Reason]
- Investigation into forfeiture in Indiana [Indianapolis Star]
“An elderly Pennsylvania husband and wife are being asked to pay their deceased adult son’s medical bills under a law making family members responsible for a loved one’s unpaid bills. The case is a reminder that such ‘filial responsibility’ laws may go both ways – requiring parents to pay the debts of adult children as well as the children to pay for their parents’.” 28 states have laws obliging adult children to pay the nursing home and medical bills of their parents or more rarely, as in this story, vice versa. The filial-responsibility laws have not been much enforced, “but lately states and health care providers have started taking a second look at them to recover medical expenses.” [Elder Law Answers; Paul Muschick, Allentown Morning Call]
“With a crackdown on payday lenders, subprime borrowers are increasingly using auto title loans, whose high interest rates can lead to repossession and financial ruin.” [DealBook/NYT] Todd Zywicki at Volokh finds much lacking in the article’s analysis: “it turns out that those who use these products are not as stupid as the Times’s reporters imply they are.” Reihan Salam: “Remember when people said that cracking down on payday loans would have regrettable consequences?”
“The Social Security Administration, which announced in April that it would stop trying to collect debts from the children of people who were allegedly overpaid benefits decades ago, has continued to demand such payments and now defends that practice in court documents.” Robert Vogel, an attorney for clients whose refunds were seized, charges: “Their intention was to get the press off their backs and then go back to collecting their money. It’s just shocking that they believe that when someone turns 18, they automatically assume a crushing debt that was incurred by someone else.” [Marc Fisher, Washington Post; earlier here and here]
The American Bar Association’s Standing Committee on Ethics and Professional Responsibility moves against a dubious practice. “The demand letters are effective at scaring consumers because they are sent on prosecutor letterhead and contain threats of criminal prosecution — threats that no other debt collector could make.” However, they mobilize the prosecutor’s apparent public authority on behalf of legal threats which typically the prosecutor has not reviewed individually exercising professional judgment, and they can deceive debtors about the legal status of their claimed obligation. [Deepak Gupta, Consumer Law & Policy; earlier]
But what if the alternative for clients is no car at all? [Megan McArdle]
Now this is lovely: the Environmental Protection Agency intends to assert for the first time a power to garnish your wages without a court order to cover fines or other sums it may assess. The new “administrative wage garnishment” power is fueled by a 1996 federal law, the Debt Collection Improvement Act (DCIA), which authorizes more direct means for the seizure of “fines, penalties or fees assessed by federal agencies” and other moneys owed them. The EPA is taking comments through August 1. [Robert Gordon, Daily Signal]
More, a semi-defense of the agency from Brent Fewell: since Congress has pushed these new collection methods on many agencies besides the EPA, the most suitable course for critics would be to press lawmakers to change the debt collection law, the EPA’s underlying statutes, or both.
Time mag asked arch-leftwinger Barbara Ehrenreich about the best single way to reduce income inequality. I’d never have dreamed that David Henderson would agree with the answer she gave — or that I would too. More here on Ehrenreich’s views on the “criminalization of poverty” (which, not surprisingly, head off in directions very different from mine once you’re past the initial area of agreement).
One reader points out that laws against behaviors like driving with broken headlights or lapsed insurance are of universal benefit and improve road safety. But I don’t think Ehrenreich’s point (or Henderson’s or mine) amounts to “let’s legalize driving with broken headlights.” Not so long ago, many petty offenses of traffic and street life were illegal but the consequences of violation were much less harsh. The other day I got a transponder toll in the mail amounting to maybe $10, which would jump to $150+ if I didn’t get in a payment within 20 days; being your basic organized middle-class person, I dashed off a check that same day. Add one complicating factor — say I was a person whose mail was forwarded to me from another address — and it would have been a closer thing.
Why has government chosen to escalate once-petty fines over the past couple of generations? 1) It wants revenue and likes the idea of making agencies self-financing or better; 2) it listens more closely to its own agencies than to the populace; 3) when middle class policymakers (as they nearly always are) consider the issue, they think of what level of fine it would take to deter someone like themselves and worry less about whether fines at that level might capsize the little guy or small business (I hear often about how this framework of punitive small fines is a key deterrent to trying to run a small business with a couple of delivery trucks and maybe an urban commercial building or two to run up inspection and property fines.)
The reformist consumer finance literature, to which Elizabeth Warren was a big contributor as an academic, and with which Ehrenreich is no doubt well acquainted, decries $30 late fees and 20 percent interest rates as a business plan by which credit card companies can turn small debts into big ones at the expense of persons without middle-class money habits and skills. Which raises the question: why spend so much time belaboring the banks if government’s own policy on late fees, bounced checks, etc. is going to be so much less merciful? (& welcome Radley Balko readers)
P.S. An example? South Carolina man says he didn’t realize you needed to pay for a soda refill at VA hospital canteen. Contemplated consequences: $525 fine, federal criminal conviction, unable to return to workplace. (Update: following national publicity, let off with warning).