Archive for 2012

When regulators retaliate

The uproar continues, and quite properly so (earlier here and here), over the threats of Boston Mayor Thomas Menino and Chicago alderman Proco (“Joe”) Moreno to exclude the Chick-Fil-A fast-food chain because they disagree (as do I) with some of the views of its owner. Among the latest commentary, the impeccably liberal Boston Globe has sided with the company in an editorial (“which part of the First Amendment does Menino not understand?…A city in which business owners must pass a political litmus test is the antithesis of what the Freedom Trail represents”), as has my libertarian colleague Tom Palmer at Cato (“Mayor Menino is no friend of human rights.”)

The spectacle of a national business being threatened with denial of local licenses because of its views on a national controversy is bad enough. But “don’t offend well-organized groups” is only Rule #2 for a business that regularly needs licenses, approvals and permissions. Rule #1 is “don’t criticize the officials in charge of granting the permissions.” Can you imagine if Mr. Dan Cathy had been quoted in an interview as saying “Boston has a mediocre if not incompetent Mayor, and the Chicago Board of Aldermen is an ethics scandal in continuous session.” How long do you think it would take for his construction permits to get approved then?

Thus it is that relatively few businesses are willing to criticize the agencies that regulate them in any outspoken way (see, e.g.: FDA and pharmaceutical industry, the), or to side with pro-business groups that seriously antagonize many wielders of political power (see, e.g., the recent exodus of corporate members from the American Legislative Exchange Council).

A few weeks ago I noted the case of Maryland’s South Mountain Creamery, which contends through an attorney (though the U.S. Attorney for Maryland denies it) that it was offered less favorable terms in a plea deal because it had talked to the press in statements that wound up garnering bad publicity for the prosecutors. After that item, reader Robert V. wrote in as follows:

Your recent article about the [U.S. Attorney for Maryland] going after the dairy farmers reminded me a case in New York state where the Health Department closed down a nursing home in Rochester. They claim is was because of poor care, the owner claims it was because he spoke out against the DOH.

The state just lost a lawsuit where the jury found the DOH targeted the nursing home operator because he spoke out against them.

According to Democrat and Chronicle reporters Gary Craig and Steve Orr, the jury found state health officials had engaged in a “vendetta” against the nursing home owner:

Beechwood attorneys maintained that an email and document trail showed that Department of Health officials singled out Chambery for retribution because he had sparred with them in the past over regulatory issues. The lawsuit hinged on a Constitutional argument — namely that the state violated Chambery’s First Amendment rights by targeting him for his challenges to their operation.

The Second Circuit panel opinion in 2006 permitting Chambery/ Beechwood’s retaliation claim to go forward is here. It took an extremely long time for the nursing home operators to get their case to a jury; the state closed them down in 1999 and the facility was sold at public auction in 2002.

Food roundup

  • Chicago city government joins Boston in threatening to use regulation to punish Chick-fil-A for its political views [Josh Barro, Eugene Volokh, earlier, Tim Carney]
  • NYC hearing on Bloomberg soda ban “a pre-scripted event with a foregone conclusion” [ACSH, WLF] despite inclusion of Baylen Linnekin on witness list [Reason, Jacob Sullum] If calories are the point: “Hey, Mayor Mike, why not ban beer?” [Sullum, NYDN]
  • California restaurants serving foie gras “can be fined up to $1,000…or is it a tax?” [Fox via @ReplevinforaCow]
  • When nutrition labeling meets deli salads: the FDA invades Piggly Wiggly [Diane Katz, Heritage]
  • “Raw Milk Advocates Lose the Battle But Win the War” [ABA Journal]
  • “PLoS Medicine is Publishing An Attack On ‘Big Food'” [David Oliver]
  • More signs that Mayor Bloomberg is eyeing liquor as a public health target [NYP, earlier] Oasis in the putative food desert: “In praise of the corner liquor store” [Katherine Mangu-Ward, Reason]

“We’re not going to protect you”

New York City Mayor Michael Bloomberg, on TV the other day answering a question about why the public doesn’t demand the enactment of gun control after the Colorado theater shooting: “Well, I would take it one step further. I don’t understand why the police officers across this country don’t stand up collectively and say, we’re going to go on strike. We’re not going to protect you [unless new restraints are enacted].” James Taranto at the Wall Street Journal‘s “Best of the Web” calls out the Gotham mayor:

A police strike, as Bloomberg figured out a day late, is illegal in itself. Bloomberg’s strike would be for the purpose of curtailing the citizenry’s constitutional rights. The mayor urged an unlawful rebellion by government employees against their employers, the people.

Taranto also notes:

And whether Bloomberg meant to suggest a real strike threat or an empty one, it seems obvious that such a move would be counterproductive. The prospect of police shirking their duty to protect the citizenry strengthens, not weakens, the case for private ownership of firearms and other tools of self-defense.

It’s enough to make you wonder whether Bloomberg is secretly a passionate admirer of the Second Amendment and keeps saying things this outrageous from a covert intent to sabotage the case for gun control. [cross-posted from Cato at Liberty. As usual, Ken White is funnier; & Daily Caller, Mike Riggs, Scott Greenfield, New York Sun (“It is a scandal that this most basic article of the Bill of Rights is not in force now in the leading city in America because the mayor, among others, refuses to bow to the Constitution that he is bound by oath to support.”)]

By reader acclaim: first suit filed in Colorado theater shooting

Attorney Donald Karpel, representing a theatergoer, plans to sue the theater in Aurora, Colo., the doctors who prescribed medications for the killer, and Warner Brothers, for “rampant violence” in its Batman movie. [TMZ] Suits against movie studios, at least, unlikely to prevail, so let’s be thankful for small sanities [Reuters] “That a cinema should prepare to repel a concerted paramilitary attack is only reasonable In Times Like These.” [George Wallace] More: Ken at Popehat.

July 25 roundup

  • Town of Gold Bar, Wash. (pop. 2,100) brought to brink of bankruptcy by multiple lawsuits following political feuds; “We are going broke winning lawsuits,” says mayor [Monroe Monitor via ABA Journal]
  • “No one in Youngstown Ohio has a Swiss bank account…except maybe that big new Swiss employer in town?” [Matt Welch, earlier] William McGurn: FATCA and the IRS’s reach abroad [WSJ via TaxProf, earlier here, here] Politicians and lawyers demand “improvements” to IRS bounty-paid-informant program, but what if anything they improve may depend on your point of view [TaxProf, earlier]
  • A human rights professor endorses a new model of residential facility that comes with names like “Freedom Place.” But what’s that on the door — could it be a lock to prevent escape? [Maggie McNeill] Romney spokesman says he’ll smite smut, Gov. Gary Johnson takes a more libertarian view [Daily Caller]
  • New Mark Herrmann book on in-house lawyering [Victoria Pynchon, Scott Greenfield, Paul Karlsgodt]
  • Mortgage eminent-domain seizure plan raises serious constitutional concerns [Andrew Grossman, earlier here, here]
  • Central casting? Send over one “business basher,” please: Sidney Wolfe says $3 billion Glaxo settlement too lenient [CL&P, earlier]
  • Ted Frank pre-vets the possibilities for Romney VP [PoL] Romney’s law and legal policy team [Brian Baxter, AmLaw Daily]

Cy pres: Ninth Circuit tosses breakfast deal

A three-judge panel of the Ninth Circuit led by Judge Stephen Trott has rejected a settlement between class action lawyers and Kellogg over allegedly misleading promotion of its Frosted Mini-Wheats cereal. The settlement involved a smallish refund offer for the class of consumers, an unrelated food giveaway (so-called cy pres relief, given to beneficiaries other than the class initially wronged), and $2 million to the plaintiff’s lawyers, or roughly $2,100 an hour. [Hans von Spakowsky/PJ Media, Ted Frank/PoL, ABA Journal]

Don’t “possess” it or “sell” it — but do pay $29 million in taxes on it

…there is one item in the collection [of the late New York dealer Ileana Sonnabend], a work by Robert Rauschenberg that cannot be sold. It contains a stuffed bald eagle and under the terms of the 1940 Bald and Golden Eagle Protection Act and the 1918 Migratory Bird Act, it is a felony to “possess, sell, purchase, barter, transport, import or export any bald eagle — alive or dead.” The estate, advised by three experts, including one from Christie’s, therefore, valued the work at zero. The IRS decided it was worth $65 million, and is demanding $29.2 million in taxes and $11 million in penalties because the heirs “inaccurately” stated its value.

[John Steele Gordon, Commentary on NYT reporting; Popehat]

Intellectual property roundup

  • This is getting serious: “Patent troll targets Minecraft” [Rob Beschizza, BoingBoing] Are mainstream tech companies joining the patent-troll brigade? [WSJ Law Blog] Bessen-Meurer have another study of patent trolls out, this one suggests their direct costs to economy $29 billion a year [Joe Mullin, Ars Technica]
  • London Olympics games: you may link to our site only if not in a “derogatory or otherwise objectionable manner” [Popehat]
  • “Fan Fiction vs. Copyright – Q&A with Rebecca Tushnet” [Reason.tv]
  • Are the logos similar? Apparel maker Under Armour sues maker of “Body Armor” sports drink [Baltimore Sun]
  • “U.S. Patent System is Broken, Declares Judge in Android v. Apple Cases” [Posner; DailyTech] Posner “on Why he thinks There Are Too Many Patents in America” [Atlantic]
  • Startups: “Why do investors want founders to spend money and time on bogus patents?” [Cory Doctorow]