Posts Tagged ‘Delaware’

Unclaimed property: headed eventually for the Supreme Court?

I’ve got a new post at Cato at Liberty noting that Justices Samuel Alito and Clarence Thomas, in a concurrence this spring, appear to be inviting a constitutional challenge to states’ administration of escheat (unclaimed property) law on due process grounds. [More on Taylor et al. v. Yee from Daniel Fisher at Forbes] While the immediate questions posed would likely be whether states are doing too little to notify owners and using too short a period of idleness (three years is becoming common), the fact patterns might conceivably implicate some of the other problems noted by businesses on the receiving end of these laws, which we discussed back in 2013 (more): creative redefinitions of unclaimed property and outside “auditors” incentivized by contingency fees to overreach in assessments.

The Associated Press took a look at the issue last fall; more background at Maria Koklanaris, Tax Analysts and Odds and Means.

Reflecting widespread business discontent, the U.S. Chamber has addressed the issue in a series of papers and its publications have covered problems in states like Illinois, as well as in California as well as profiling the firms that specialize in these collections, which in some cases have filed qui tam (bounty-hunting) suits for a share of the proceeds.

On Delaware in particular see the Wall Street Journal (more), Forbes, and Delaware State News. And the Wilmington News-Journal has published an extensive investigation of the escheat contractors’ ties to the Delaware political class.

Banking and finance roundup

Discrimination law roundup

  • “Requiring Employees to Return 100% Healed Costs Trucking Firm $300K in EEOC Suit” [Thompson’s HR Compliance Expert]
  • Update: Oregon appeals court upholds $400,000 fine judgment against Portland owner who asked transgender club to stop holding meetings at his nightclub [Oregonian, earlier]
  • Fire Department of New York commissioner: yes, we lowered fitness bar so more women could join the force [Matthew Hennessey/City Journal, my take in The Excuse Factory back when]
  • From May: “Oversight of the Equal Employment Opportunity Commission: Examining EEOC’s Enforcement and Litigation Programs” [Senate HELP committee via Workplace Prof]
  • Lengthy HUD battle: 2nd Circuit notes “no finding, at any point, that Westchester actually engaged in housing discrimination” [WSJ editorial, earlier here and here]
  • In 1992 Delaware settled an employment discrimination lawsuit by agreeing to assign prison guards “without regard to the gender of prisoners….A disaster ensued.” [Scott Greenfield on Cris Barrish, Wilmington News-Journal coverage]
  • NYC council speaker pushing “very bad bill to extend special employment protections to caregivers” [N.Y. Daily News editorial]

Delaware: “Punkin Chunkin canceled for second year”

Punkin Chunkin, a ballistic pumpkin-launching event, had developed into a beloved Delaware event until a 2013 accident where an ATV overturned on a farmer’s field, leading to an injury claim. “On Oct. 8…organizers pulled the plug for a second year, saying liability insurance for the event had proven unobtainable. Even supporters of Punkin Chunkin were left wondering: Is it over for good?” [Wilmington News-Journal, our coverage last year] More: Bob Dorigo Jones.

Banking and finance roundup

  • “Fee-shifting: Delaware’s self-inflicted wound” [Stephen Bainbridge, more] Needed: a new Delaware [Reuters] Fordham lawprof Sean Griffith fights trial bar on shareholder suits [Bainbridge, more]
  • Goodbye, insurance (hugs). I think I’ll miss you most of all. [Bridget Johnson on anti-cinema, anti-stock-trading views of radical Islamist British activist and former lawyer Anjem Choudary]
  • Rare coalition of bankers, housing advocates urges limits on mortgage-related suits [W$J]
  • “The Administrative State v. The Constitution: Dodd-Frank at Five Years” hearing includes testimony from Mark Calabria of Cato (law delegates vast authority to bureaucracy, has failed to generate clear rules for regulated parties) and Neomi Rao of George Mason (unconstitutionality of Consumer Financial Protection Bureau) [Senate Judiciary Committee, related on a CFPB constitutional challenge]
  • Do-it-yourself Operation Choke Point: letter from one Illinois sheriff shut down adult-ad credit card payments [Maggie McNeill, Daniel Fisher]
  • “Obama DOJ Channels Bank Shakedown Money To Private Groups” [Dan Epstein, Investors Business Daily]
  • “The U.S. listing gap” [Doidge, Karolyi, & Stulz NBER paper via Tyler Cowen, MR]

Banking and finance roundup

  • Critics say by naming payment processors in massive enforcement action over debt collection practices, CFPB is implementing its own version of Operation Choke Point [Kent Hoover/Business Journals; Barbara Mishkin, Ballard Spahr; Iain Murray, CEI]
  • Green sprout in Amish country: “Bank of Bird-in-Hand is the only new bank to open in the U.S. since 2010, when the Dodd-Frank law was passed” [WSJ via Tyler Cowen; Kevin Funnell on smothering of new (de novo) bank formation; Ira Stoll (auto-plays ad) on growth of non-bank lenders]
  • “Quicken Loans Sues DOJ; Claims ‘Political Agenda’ Driving Pressure to Settle” [W$J; J.C. Reindl, Detroit Free Press]
  • Shocker: after years of Sen. Warren’s tongue-lashings, some banks consider not giving to Democrats. Is that even legal? [Reuters] “Elizabeth Warren’s Extraordinarily Bad Idea For A Financial Transactions Tax” [Tim Worstall]
  • Still raging on: Delaware debate about fee-shifting corporate bylaws as deterrent to low-value shareholder litigation [Prof. Bainbridge first, second, third posts]
  • “How a Business Owner Becomes Criminally Liable for How Customers Spend ATM Withdrawals” [Elizabeth Nolan Brown, Reason]
  • New York financial regulator pushes to install government monitors at firms where no misconduct has been legally established [Robert Anello, Forbes]

Banking and finance roundup

  • Administration has abused the law in mortgage lender settlements [House Judiciary hearing: Paul Larkin, Ted Frank testimony]
  • Department of Justice official says banks may need to go much farther in informing authorities of customers who may be up to no good than just sending Suspicious Activity Reports (SARs) [Kevin Funnell] Interpol Red Notices, which among other effects cut off banking access, are open to geopolitical manipulation [Ted Bromund, Weekly Standard]
  • No, Operation Choke Point hasn’t gone away, not in the slightest [Funnell, Jared Meyer/Economics21]
  • What Elizabeth Warren has done to Michael Greve’s mortgage refinance application isn’t pretty [Liberty and Law]
  • Battle over loser-pays clauses in corporate governance rages on in Delaware [Reuters]
  • “The U.S. government’s stupid tax war on expatriates” [Brett Arends, earlier on FATCA]
  • Dodd-Frank: “Wall St. attacked, Main St. wounded” [Iain Murray]

Banking and finance roundup

For real liability reform, try freedom of contract

Six months ago the Delaware Supreme Court upheld the right of an enterprise to include a loser-pays provision in its bylaws, specifying that losing shareholder-litigants would have to contribute reasonable legal fees to compensate what would otherwise be loss to other owners. Since then there’s been a concerted campaign to overturn the ruling, either in the Delaware legislature or if necessary elsewhere. But as I argue in a new Cato post, allowing scope for freedom of contract of this sort is one of the best and most promising ways to avert an ever-rising toll of litigation. Contractually specified alternatives to courtroom wrangling have played a vital role, and are under attack for that very reason, in curbing litigation areas like workplace and consumer arbitration, shrinkwrap and click-through disclaimers of liability, and risk disclaimers at ballparks and elsewhere. (& Stephen Bainbridge).

To the extent America has made progress in recent years in rolling back the extreme litigiousness of earlier years, one main reason has been the courts’ increased willingness to respect the libertarian and classical liberal principle of freedom of contract. Most legal disputes arise between parties with prior dealings, and if they have been left free in those dealings to specify who bears the risks when things go wrong, the result will often be to cut off the need for expensive and open-ended litigation afterward.

More on the Delaware bylaw controversy: D & O Diary (scroll), Andrew Trask on state of the merger class action, WSJ Law Blog first and second, Daniel Fisher, and ABA Journal in June, Alison Frankel/Reuters (forum selection bylaws).

Dr. White Coat on the pink-panties case

The Emergency Physicians Monthly columnist, often linked in this space, on a case noted in our open thread last week:

From comments at Overlawyered.com …

Employee of a surgicenter goes to facility for a colonoscopy. When he wakes up, he was wearing pink underwear. As a result, he suffered extreme emotional distress, humiliation, loss of wages and loss of earning capacity. He is now suing.

While I probably would have laughed off a prank like this, I can understand why some people would have been upset. But suffering a loss of earning capacity from being dressed in pink panties as a prank? I’d like to see how that happened.