Sen. Orrin Hatch wants to know why the Internal Revenue Service has hired Quinn Emanuel to assist in auditing Microsoft, with the power to compel sworn testimony [Sean Hackbarth, Institute for Legal Reform] For a sampling of the complications that can arise when governments hire outside law firms to prosecute tax cases, see our coverage of the Mississippi/MCI case or, in another part of the forest, the IRS’s periodic experiments with using private debt collection lawyers.
- Yikes: Nevada supreme court is nearly broke because it relies on traffic ticket revenue and cops are writing fewer [Las Vegas Review-Journal]
- Forced marriage in immigrant communities happening not just in places like English Midlands, but in U.S. as well; those who assist resistant teenage girls risk “aiding delinquent minor” charges [Washington Post]
- “Posner informs pro se litigant that the queen of England did not absolve him of need to pay taxes” [ABA Journal]
- Panel at Federalist Society on president’s power not to enforce the law [Randy Barnett, background on panel]
- Inside grand jury’s investigation of Pennsylvania Attorney General Kathleen Kane [Philadelphia Inquirer] “Referral fees paid to wife of former Pa. Supreme Court justice questioned” [Harrisburg Patriot-News]
- Have you or a loved one been attacked by a Zebra? [Arkansas Matters] “Louisiana Man on Trial for Murder Says He Thought the Victim Was an Alligator” [People]
- Sneaky Oregon law will divert unclaimed class action dollars to legal aid and not incidentally boost legal fees [Sen. Betsy Johnson, East Oregonian]
- 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]
In Altoona, Pa., a private philanthropic group assisted by local businesses has funneled millions of dollars to local prosecutors to go after illegal drug cases [Pittsburgh Post-Gazette] Leaders of the group, called Operation Our Town, “said they don’t pressure prosecutors, and only publish the annual arrest and prosecution numbers as a way to raise funds.” Still, the practice sheds light on the changing status of privately assisted prosecutions, which were common in the Nineteenth Century but then came under an ethical cloud:
“It’s pretty much disappeared, in part because we want disinterested prosecutors who answer to the public, and not to individuals,” said Bruce A. Green, director of the Stein Center for Law and Ethics at Fordham University in New York.
Decisions by courts in California and Tennessee, among other places, have disapproved of private subsidies to prosecutors in cases where private parties had themselves been victimized by a crime or wanted to see more enforcement of obscenity laws. On the other hand, insurance and banking industry financial participation in efforts to investigate crimes like insurance fraud and bank robbery is widely accepted, although some trial lawyers have raised questions about insurers’ role.
In Key West, Fla., last year, nonprofit groups steered funds to underwrite a local prosecutor assigned to handle drunken driving cases. The arrangement died after defense attorney Jiulio Margalli sued, saying it violated state law.
“Do you want the motivation to be justice,” asked Mr. Margalli, “or do you want the motivation of the prosecutor to be a guilty verdict so that that [office] could continue to receive funding from the organization who paid them?”
- “Judges seemed to be troubled that prosecutors in Manhattan had secretly searched the entire Facebook accounts of about 300 people who were not charged with a crime” [New York Times]
- Goshen, N.Y.: “Dozens of speakers thundered against the proposed asset forfeiture law at two public hearings held Monday by Orange County Executive Steve Neuhaus.” [Goshen Chronicle; Neuhaus vetoes measure] Related, forfeiture at work in Pennsylvania [AP/same]
- Buried lede in breathless story about federal bank fines: “The agency receives a cut of up to 3 percent of its share of the total settlements for its Working Capital Fund, a slush fund common across major government agencies.” [Newsweek]
- From amid the wreckage: Dan and Fran Keller abuse case [Austin American Statesman]
- “Missouri’s attorney general announced lawsuits against 13 [St. Louis] suburbs on Thursday, accusing them of ignoring a law that sets limits on revenue derived from traffic fines.” [NY Times via Tabarrok]
- “It is remarkable enough that an African-American man can be convicted by a jury for breaking into a store that video shows was burglarized by a white female.” [The Open File on Indiana prosecutorial misconduct case via Radley Balko]
- “Lawyers for California Attorney General Kamala Harris argued releasing non-violent inmates early would harm efforts to fight California wildfires. Harris told BuzzFeed News she first heard about this when she read it in the paper.” [BuzzFeed]
The close working relationship between some state attorneys general and private trial lawyers — in which the AGs hire the lawyers to represent their states for a percentage fee of the haul — is not a new topic to us here at Overlawyered, but it’s nice to see it getting aired at length in the Dec. 18 New York Times piece by reporter Eric Lipton. The title gives a good introduction: “Lawyers Create Big Paydays by Coaxing Attorneys General to Sue” and in fact the private lawyers who commonly pitch the suits are themselves sometimes former state attorneys general, such as Michael Moore of Mississippi (of longstanding fame here), Patricia Madrid of New Mexico, Patrick Lynch of Rhode Island, Drew Edmondson of Oklahoma, and Peg Lautenschlager of Wisconsin. A few excerpts:
- Law firm donations to AGs or “party-backed organizations that they run” “often come in large chunks just before or after” inking contracts to represent the state. A sidebar chart, “Political Gifts from Plaintiffs Lawyers,” confirms that most of the money flows to partisan attorney general associations ($3.8 million to Democrats and $1.6 million to Republicans over a decade) or state parties ($1.5 vs. $445,000) as opposed to candidates directly ($2 million vs. $240,000, not counting AGs running for governor).
- When various AGs signed a brief to the Supreme Court supporting the plaintiff’s side in a securities litigation case, it was after being sedulously cultivated to do so by the lawyers.
- “…at least three former attorneys general are pitching painkiller abuse cases to states nationwide, although no state has yet publicly signed up.” More on the Chicago and California-county painkiller cases here.
- Yes: “‘Farming out the police powers of the state to a private firm with a profit incentive is a very, very bad thing,’ said Attorney General John Suthers of Colorado, a Republican and a former United States attorney.”
- Supreme Court agrees to hear case in which feds claim right to ignore deadlines for suit-filing because of Wartime Suspension of Limitations Act (WSLA), passed in 1942 [my new Cato post, earlier]
- As we’ve advised before, don’t run 10K races while your claim of low-speed-crash injury is pending [Philly.com]
- Incentivizing complaint-filing: State Bar of California pushes “urgency legislation” empowering it to collect $2500 per enforcement action from targets of its efforts against unauthorized practice of law; association of non-lawyer preparers of legal documents calls it “a cleverly designed effort by the Bar to seek additional revenue from non-members of the Bar.” [Dan Walters, Sacramento Bee via KafkaEsq]
- Feds get earful on Hawaiian tribalization plan [KHON, Indian Country Today, more, earlier]
- BP: “Legal feeding frenzy continues four years after the spill” [Melissa Landry, The Hayride]
- Danke schön! “Overlawyered ist übrigens ein vorzügliches Blog, das sehr oft sehr gute Postings hat zu den Irrungen und Wirrungen des US-amerikanischen Rechtssystems” [Lawblog.de comment]
- There’ll always be a Berkeley: California city requires medical marijuana dispensaries to set aside some product for free use by indigent and homeless [Reason, KCBS]
A twelve-minute Cato podcast in which I talk to Caleb Brown about how government can roll minor fines over routine offenses into crushing financial burdens and years of entanglement in the criminal justice system. A particular problem: systems that assign fines and payments to the account of actors in the justice system and for-profit private contractors which can operate under a perverse incentive to trip up petty wrongdoers and keep them in the system. The National Public Radio special “Guilty and Charged,” based on a yearlong investigation, is here. Many of my examples are taken from it, including the persons drawn into the system after fishing out of season and making an illegal left turn, and the woman saddled with a $10,000 debt on emerging from prison. Radley Balko discusses. I’ve written earlier on the problems with private probation, on a Shelby County, Alabama judge’s 2012 finding that the town of Harpersville was engaged in a “judicially sanctioned extortion racket,” and more broadly on law enforcement for profit and its forfeiture branch.
Related: Tyler Cowen on a new book about persons living at the margins of the law, Alice Goffman’s On the Run: Fugitive Life in an American City. Earlier: link to writings by Barbara Ehrenreich and David Henderson. Sequel: woman dies in Pennsylvania jail after failing to pay truancy fine.
Law enforcement for profit to take another big leap forward? [Washington Post]:
The Internal Revenue Service would be required to turn over millions of unpaid tax bills to private debt collectors under a measure before the Senate, reviving a program that has previously led to complaints of harassment and has not saved taxpayers money.
The provision was tucked into a larger bill, aimed at renewing an array of expired tax breaks, at the request of Sen. Charles E. Schumer (D-N.Y.), whose state is home to two of the four private collection agencies that stand to benefit from the proposal.
It requires all “inactive tax receivables” to be assigned to private debt collectors if the IRS cannot locate the person who owes the money or if IRS agents are unable to make contact within a year.
The idea has been tried twice before, but was discontinued both times after poor results including net losses on the program. Nina Olson, who holds the position of Taxpayer Advocate in the U.S. government (and is no relation), strongly opposes the program, noting that some of the money would be recouped by the Treasury anyway through means such as future withheld refunds without the need for paying 25 percent contingency fees to the middlemen. Bounty-hunting freelancers are more likely to resort to tactics such as day-and-night harassing calls, and have less flexibility to work out payment plans for those getting back on their feet after reverses or, in the case of estate taxes, heirs who may have not yet received the inheritances from which they need to pay the tax due.
Compare many state governments’ practice of putting out plaintiff’s-side litigation opportunities to private lawyers at contingency fee, which has created a durable lobby for hardball extractive lawsuits of dubious social benefit as well as showering large sums on law firms that already are or soon become influential political players in their states.