They could drive you to drink — especially if you’re not politically well-connected [Coyote]
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small business
No wonder it had to go:
Her business, while it lasted, consisted of herself, making yogurt on the instructions of her father. Ms Dashtaki was renting space in the kitchen of an Egyptian restaurant where she and her father, “like elves before and after their working hours”, lovingly cultured their yogurt under a blanket, then drained it through a certain kind of cheese cloth, then stirred it for hours, and so forth. For the taste to be divine, everything has to be just so. And, being artisans, they kept the volume tiny, about 20 gallons (76 litres) a week, for sale only at local farmers’ markets.
Homa Dashtaki was eager to demonstrate that her yogurt was safe and healthful, but complying with California regulations turned out to be not so easy. In fact, authorities told her that she would face possible prosecution unless she established a “Grade A dairy facility” employing processes more commonly found in factories. A highlight: she’d have to install a pasteurizer even though she made her yogurt from milk that was already pasteurized. What’s more, California law makes it illegal to pasteurize milk twice, so there went any hope of continuing her straightforward way of obtaining milk, namely bringing it home from a fancy grocery store.
Ms Dashtaki is pondering whether to move to another state, one whose rules allow for artisanal products. She would not be the first entrepreneur to flee the Golden State.
Although a small artisan cheese sector struggles to get by, the California dairy market generally is dominated by mass-market producers selling blandly standardized wares. And you can see how that winds up happening. [The Economist]
More: Coyote. And more on the California regulatory climate from Ted at PoL, including a link to Cal-Peculiarities (PDF), by David Kadue of Seyfarth Shaw, on the state’s distinctively onerous employment laws.
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Rob Beschizza sees clues to the economics of patent litigation in the public pronouncements of Lodsys, a company that has sued small Apple developers based on IP claims covering such common app features as upgrade buttons. [BoingBoing, more, This Is My Next (with copy of a 2007 patent for "Methods and Systems for Gathering Information from Units of a Commodity Across a Network"] Update: Apple intervenes.
It’s not hard for a small chicken farmer to get caught in it, as we find in this Jesse Walker account. The food safety bill passed last year similarly carves out a little exemption for small producers who sell directly to consumers at farmer’s markets and the like, while not exempting those who sell through intermediaries — even though the intermediary in such a case may be simply a neighboring farmer who is headed in to the city market.
Related: India’s ingenious dabbawallah lunch-distribution system, which could probably never get past health codes in this country [37 Signals via Market Urbanism]
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That could be the result of the new institution of elaborate compliance system mandates that could prove to be beyond the capacity of fledgling start-ups, per Marc Hodak:
So, the government decided it had to increase regulations [on] the one part of the financial services sector -– hedge funds –- that had nothing to do with the financial crisis. And because the government felt compelled to spend gobs of taxpayer cash to bail out financial institution[s] that were too big to fail, Congress created a raft of regulations whose main effect will be to crush entrepreneurship and compel waves of consolidation. And the people who pushed for this regulation, who inadvertently insisted that the fixed costs of doing business in America are not yet high enough, will be shocked to find that only the big survive.
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In Oregon “all homemade alcoholic beverages must be consumed where they’re made,” so unless the law changes, beer and wine competitions and taste-offs aren’t going to be legal. [KATU]
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I’ve got a food policy roundup at Cato that tries to answer such questions as:
* Has FDA’s regulatory zeal finally met its match in the foodie zeal of cheese-makers and -fanciers who are beginning to insist on their right to make and enjoy cheeses similar to those in France, even if they pose a nonzero though tiny bacterial risk?
* How annoying is it that Mark Bittman would stop writing a great food column in the NYT in order to start writing an inevitably wrongheaded politics-of-food column?
* Is Wal-Mart secretly smiling after First Lady Michelle Obama publicly twisted its arm to do various things it was probably considering anyway, along with some things it definitely wanted to do, such as opening more stores in poor urban neighborhoods?
Related: Led by past Overlawyered guest-blogger Baylen Linnekin, Keep Food Legal bills itself as “The first and only nationwide membership organization devoted to culinary freedom.” 11 Points has compiled a list of “11 Foods and Drinks Banned in the United States.” And GetReligion.org has more on the “shadowy community of outlaw Amish and Mennonite dairy farmers” portrayed in several recent press reports.
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- Many of the best New Jersey sledding slopes are off limits now: “Litigators ruin pretty much everything” [Bainbridge]
- Granola bar trans-fat lawsuit leaves Russell Jackson unimpressed;
- “Criminal barbering”: license lapse gets 82-year-old Oregon hair-cutter in legal trouble [Perry]
- Tomorrow’s economy won’t thrive if municipal authorities strangle innovative businesses where they incubate [Conor Friedersdorf, City Journal]
- Need to bring property taxes under control? Try litigation reform [NJLRA]
- Convicted at height of 90s child-abuse prosecution fever, Ohio pair seek to reopen case [Briefcase] More: Balko.
- Here’s an idea: “Let the shareholders decide if SOX is worth the costs.” [Ribstein]
- Retired Massachusetts attorney found in possession of stolen art trove [five years ago on Overlawyered] Updates courtesy reader Ronald Stimbert: Legal Blog Watch 2008 (attorney convicted); Cape Cod Times 2010 (paintings returned to owner).
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There’s a curiously contemporary ring in these reports from the early days of federal food safety regulation (Roy Childs via Arnold Kling):
…Regulation in general, far from coming against the wishes of the regulated interests, was openly welcomed by them in nearly every case. As Upton Sinclair said of the meat industry, which he is given credit for having tamed, “the federal inspection of meat was historically established at the packers’ request. … It is maintained and paid for by the people of the United States for the benefit of the packers.”
…In any case, congressional hearings during the administration of Theodore Roosevelt revealed that “the big Chicago packers wanted more meat inspection both to bring the small packers under control and to aid them in their position in the export trade.” Formally representing the large Chicago packers, Thomas E. Wilson publicly announced: “We are now and have always been in favor of the extension of the inspection.”
A New York law provides that new businesses cannot register names that employ words like “library”, “school” or “academy” without the prior approval of the state education department. The department declined to approve the application of a startup East Village confiserie that calls itself The Chocolate Library, so the owner has incorporated as Chocolate 101 while hoping for a change of heart on the registration issue. He called the dispute “ridiculous”: “No one is coming in here confusing us as a library.” [NYT "Diner's Journal"]
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- Adios to Rum and Coke? “FDA, FTC crack down on caffeinated alcoholic drinks” [WaPo]
- Flap over Justice Alito’s attendance at conservative magazine’s dinner may be much ado about nothing [Steele, Legal Ethics Forum]
- “Cops Threaten Mom for Letting [8 Year Old] Son Play Outside” [Free-Range Kids]
- Contrary to some assertions, American courts from early on did recognize that tort liability could run into First Amendment constitutional limits [Eugene Volokh, Iowa Law Review, PDF]
- Woman pleads guilty to insurance fraud after obtaining $300,000 over low-speed auto collision [Seattle P-I]
- Well-known examples to the contrary, regulation doesn’t always favor big business against small [Bryan Caplan]
- Should “professional plaintiffs” have standing? [Brandon Murrill, William & Mary Law Review, PDF]
- Blonds not protected class under federal employment discrimination law, judge declares [six years ago on Overlawyered]
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A new video from the Institute for Justice fingers municipal licensing and regulation.
Author Philip K. Howard’s latest op-ed tells of the “legal quicksand” faced by small business owners, who
face legal challenges at every step. Municipalities requires multiple and often nonsensical forms to do business. Labor laws expose them to legal threats by any disgruntled employee. Mandates to provide costly employment benefits impose high hurdles to hiring new employees. Well-meaning but impossibly complex laws impose requirements to prevent consumer fraud, provide disability access, prevent hiring illegal immigrants, display warnings and notices and prevent scores of other potential evils. The tax code is incomprehensible.
All of this requires legal and other overhead – costing 50% more per employee for small businesses than big businesses.
Fact-checking a Maine Congresswoman: my latest at Cato-at-Liberty.
Surprisingly or otherwise, some big business groups like the Grocery Manufacturers of America have allied with consistent Big Government advocacy groups like the Consumer Federation of America and Center for Science in the Public Interest to push S. 510, the food safety bill pending before the Senate (which might win consideration in the lame-duck session). In a post at Cato at Liberty recently, I cited writer Barry Estabrook, an ardent critic of the food industry (“Politics of the Plate“), writing at The Atlantic, who says the bill could “make things worse”:
You needn’t go along completely with Estabrook’s dim view of industrialized agriculture to realize he’s right in one of his central contentions: “the proposed rules would disproportionately impose costs upon” small producers, including traditional, low-tech and organic farmers and foodmakers selling to neighbors and local markets. Even those with flawless safety records or selling low-risk types of foodstuff could be capsized by new paperwork and regulatory burdens that larger operations will be able to absorb as a cost of doing business.
It’s true that S. 510 includes language not in earlier drafts that nods toward the idea of tiering regulatory burdens. But as the Farm and Ranch Freedom Alliance notes (background), most of the small-producer-friendly changes are left to FDA discretion, so it really depends on how much you trust that process. Note also these comments (background) by Peter Kennedy for the Farm-To-Consumer Legal Defense Fund, which focuses primarily on defending raw milk, and in particular Kennedy’s discussion (as things that may be particularly burdensome to small entities) of HARPC (“hazard analysis and risk-based preventive controls”), traceability, penalties, expansion of federal jurisdiction, and produce standards, as well as the terms of S. 3767, the “Food Safety Accountability Act of 2010,” a new measure introduced by Vermont Senator Patrick Leahy. On the “pro” side, here is an advocacy sheet (anonymous on its face, but attributed in some quarters to Senate staffers) defending the measure as fair to small farmers (& welcome Professor Bainbridge readers).
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Rick Woldenberg reacts to a peculiarly inutile suggestion, in a Baltimore Sun interview, from CPSC chair Inez Tenenbaum (“We think if we had a small-business ombudsman who was out there regularly educating small businesses, we could help them prevent problems in terms of compliance.”):
…The necessary implication is that we small businesses are just too stupid to understand their complicated rules – I guess she thinks only Mattel can read the English language. Of course, the pending testing frequency rule (which I believe will be implemented in the coming weeks, get ready for it) will cause our company to spend $15 million per annum on testing. This sum far exceeds our profits. Perhaps the ombudsman will help us terminate our people to pay for testing, or provide a shoulder to cry on.
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“The Safe Cosmetics Act of 2010 (SCA 2010), now before the House of Representatives, is an inappropriate and seriously flawed attempt to make cosmetics safer.” Disregarding considerations of dose and concentration, the bill would require label disclosure of every substance present in an ingredient “at levels above technically feasible detection limits.” Essential oils and herb extracts typically contain 100 or more such substances, some of which, in isolation and at much larger concentrations, would qualify as toxic. And there’s a CPSIA-like requirement that manufacturers test all ingredients before sale. “Most small personal care product businesses will not survive if SCA 2010 passes.” [fragrance specialist Robert Tisserand] The lead sponsors of the proposed Safe Cosmetics Act of 2010 (H.R. 5786) are Reps. Jan Schakowsky, D-Ill. of CPSIA fame, Ed Markey, D-Mass., and Tammy Baldwin, D-Wisc. [Drug Store News] More: Lela Barker, Cosmetics Design.
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- Oregon 7-year-old gets apology, she can go on running her lemonade stand after all [Skenazy, Josh Blackman]
- “Judicial recusals and politics make a bad mix” [Bainbridge]
- Sypher guilty in extortion trial [Above the Law and followup, earlier]
- “Chevron’s Explosive Filing on Collusion Between Plaintiffs and the Ecuadorian Court-Appointed Expert” [Roger Alford, Opinio Juris and more, Alison Frankel/American Lawyer, Anderson, Volokh, ShopFloor]
- Meet author of “How to Sue Your Doctor … and Win!” [Media Matters via Popehat]
- FBI writes to Wikipedia demanding removal of representation of its official seal [Ron Coleman]
- “Kagan’s Confirmation Could Be High-Water Mark for Big Government” [Shapiro, Cato]
- “Righthaven’s lawsuits are ‘the McDonald’s coffee cases of copyright litigation’” [Las Vegas Sun via Romenesko]
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