The Underbelly restaurant in Houston offered a “Double Double” burger. When chef Chris Shepherd got a letter from lawyers for the California-based In-N-Out chain, saying it infringed on their similarly named sandwich, he promptly changed the name to “Cease and Desist Burger.” It has sold well, says the restaurant’s marketing manager. [Erica Ho, Time]
Archive for 2013
Court strikes down section 4 of Voting Rights Act
Dylan Matthews at the Washington Post has a relatively calm explainer on yesterday’s Court decision striking down one section of the VRA. While implicitly siding with the liberals, he takes some of the steam out of hyperbolic reactions portraying the latest decision as some horrid onslaught against the VRA, as opposed to an incremental evolution in its application. Other views: Ilya Shapiro, Cato, more, and background here and here; Trevor Burrus; Cato merits brief, PDF. More: Jonathan Adler on the Court’s rationale.
Must-read coverage of Zimmerman trial
Vance v. Ball State: the press miscoverage begins
There’s an awful lot of — well, confusion is one way to put it — in the early commentary on yesterday’s Supreme Court case Vance v. Ball State, on the scope of supervisorial liability in harassment cases. Here’s Jeffrey Toobin writing in The New Yorker:
As in Ledbetter, it was a vote of five-to-four, with the Republican appointees in the majority and the Democratic appointees in dissent. In Vance v. Ball State University, the Court narrowed the definition of “supervisor.” This is important because plaintiffs can win in Title VII cases only if they suffer discrimination from a supervisor, not from a peer in the workforce.
If “discrimination” is read to include “harassment,” as the law does in fact read it, this is simply untrue. Here is the second sentence of the syllabus of Vance (which is word-for-word identical with the third sentence of Justice Alito’s majority opinion):
If the harassing employee is the victim’s co-worker, the employer is liable only if it was negligent in controlling working conditions.
And here is Justice Ruth Bader Ginsburg on page 4 of her dissent stating the same standard, unchanged by the opinion:
if the harassing employee is a co-worker, a negligence standard applies. To satisfy that standard, the complainant must show that the employer knew or should have known of the offensive conduct but failed to take appropriate corrective action.
There are many miles of difference between “you can’t win,” which is how Toobin chooses to summarize the current right to seek damages for co-worker misconduct, and “you can win but you need to show employer negligence,” the more accurate way to summarize it.
Nor is Toobin the only one to make this mistake. An error-strewn U.K. Guardian opinion story reacting to the case asserts (to quote its subheadline) that “the US supreme court has ruled that job harassment only counts if it’s from a ‘supervisor’.” That’s flatly untrue, for the reasons above. Author Jason Farago also swallows whole the sharply disputed contentions of misconduct leveled by the plaintiff in the Ball State case, although no level of the court system appears to have done so; a trial court found Vance’s treatment “neither sufficiently severe nor pervasive to be considered objectively hostile for the purposes of Title VII” and neither the Seventh Circuit nor the Supreme Court elected to reach that issue. Indeed, Justice Ruth Ginsburg in her dissent chooses to illustrate the feared impact of the new rule by reciting details of other cases that could be affected, as opposed to Vance’s.
Admittedly, it’s not easy to stay on top of the details of a law as complex as Title VII, and we all make honest mistakes. But when given the choice between risking dullness by accurately describing the actual state of the law, and embellishing a tale of conservative insensitivity so as to inflame their left-leaning readers, Toobin and Farago appear to have a head start on that old bit of advice, “print the legend.”
“Suing for $2 million, so that the claim is taken seriously”
That’s how a lawyer explains his $2 million damage demand on behalf of a Georgia student whose bikini-clad image was used by a school administrator in a presentation about how the Internet is forever, image-wise. [Chris Matyszczyk, CNet] The classic line about how if you want to send a message, use Western Union, will probably need to be retired given the news that the world’s last telegram is due to be sent in India next month. [Christian Science Monitor]
The Court’s latest on affirmative action
My colleagues Roger Pilon and Ilya Shapiro (and more) analyze the Supreme Court’s unexpectedly narrow 7-1 decision in Fisher v. University of Texas, and Stuart Taylor, Jr. and Richard Sander also write about the case for USA Today. More: Ilya Somin.
Maryland roundup
- “Montgomery County firefighters can earn overtime pay while on vacation, or while taking sick days.” [Washington Post via @radleybalko]
- Will Maryland Court of Appeals overturn contributory negligence in favor of comparative negligence? [Michael Schearer page on pending case of Coleman v. Soccer Association of Columbia]
- “City Council postpones vote on Styrofoam container ban” [Baltimore Sun]
- Extensive political ties of Maryland speed camera vendor [Mark Newgent, WatchdogWire]
- Scheme to extend “Maintenance of Effort” regulations, which forbid counties from cutting budgets, from education to other service areas [Brian Griffiths, WatchdogWire]
- Fiscal sink: “Failed ‘Green’ Boutique Hotel Received Millions in State Loans” [Mark Newgent, WatchdogWire]
- Maryland ranks among states with most onerous occupational licensing burdens [Institute for Justice, “License To Work,” scroll to p. 78]
- Nice Chamber you got here in this state, be a shame if you didn’t sign this letter backing our guy Perez [Sean Higgins, Washington Examiner]
- Old but good: property tax cuts have revitalized other cities, and Baltimore needs one too [Steve Walters]
New Supreme Court decisions: Vance, Nassar, Mutual
I’ve got a new post up at Cato at Liberty on three important decisions for the business community decided today at the Supreme Court, two on employment law and one on pharmaceutical pre-emption: Vance v. Ball State on liability for supervisorial harassment, University of Texas Southwestern v. Nassar on mixed-motive retaliation, and Mutual v. Bartlett (more) on design default preemption for a generic drug. (& welcome Coyote, Point of Law, SCOTUSBlog, Taegan Goddard/WonkWire readers)
AmEx v. Italian Colors: the end of the world?
Much commentary regards last week’s decision on American Express v. Italian Colors Restaurant (see earlier) as a virtual sentence of doom for class actions, which will henceforth be barred by contract in favor of individualized arbitration. From the plaintiff’s side, Paul Bland of Trial Lawyers for Public Justice calls the decision “catastrophic for the antitrust laws… an unmitigated disaster” while from the defense side, Michael Fox expects employers to use the ruling to turn back one of the current litigation trends most menacing to them, class actions over wage-hour infractions under the Fair Labor Standards Act (FLSA) (“a large number of employers who have not implemented arbitration plans will be re-thinking the decision”). Others expect a backlash against the decision; for example, the new Consumer Financial Protection Bureau may ban or greatly restrict arbitration waivers in consumer contexts (cf. Daniel Fisher‘s report) or Congress might legislate with the same intent, presumably after future Democratic Party gains in the House. More: Fed Soc Blog.
There are, however, also reasons to doubt that the decision spells utter rout for the class action bar. To begin with, these lawyers have proven resourceful in finding ways around earlier restrictions, as in the case of securities litigation reform and the Class Action Fairness Act. At Class Action Blawg, Paul Karlsgodt comments: “Concepcion hasn’t [ended class actions], so I doubt Amex III will either.”
Moreover, earlier Supreme Court decisions generally make clear that the arbitration option cannot displace substantive legal entitlements. Many, even most relevant federal statutory causes of action are barbed with incentive provisions intended to ease the assertion of meritorious claims, including attorneys’-fee entitlements, treble damages and statutory damages. The particular situation in Italian Colors, in which unrecoverable expert witness costs were expected to exceed even treble damages for the claimant, is not really typical. Our colleagues at Point of Law, especially Ted Frank, have been active in pointing out some of these considerations. [Manhattan Institute paper, plus reaction from Carter Wood and more from Michael Greve; discussion between Ted and Cardozo lawprof Myriam Gilles; more blog posts here and here]
In particular, even if the Rule 23 class action device is not available as such, it is likely that plaintiffs will have considerable scope for cost-sharing and collaboration, as described in more detail by Gregory Cook in the Michigan Journal of Law Reform. This came up in the AmEx case itself, as Jim Copland notes:
In footnote 4, the majority credits AmEx’s concession that “other forms of cost sharing . . . could provide effective vindication.” As Professor [Myriam] Gilles noted, AmEx expressly conceded this point in footnote 8 of its reply brief on the merits. In essence, Justice Kagan’s dissent refuses to credit AmEx’s concession — thus disagreeing with the majority about the facts of this specific case.
As Cook points out, pattern and coordinated litigation filed on behalf of numerous small claimants against financial institutions, but not using the class action device, has been quite successful in fields ranging from the Fair Debt Collection Practices Act to FACTA to the ATM notice cases. Indeed, defendants will sometimes regret the lack of a class action mechanism since it may be more difficult to obtain closure and settlement of a body of liability without it.
Commentators have counted out the class action bar before now. It’s always been a mistake.
“Bitcoin Foundation Receives Cease And Desist Order From California”
“California’s Department of Financial Institutions [has] decided to issue a cease and desist warning to … Bitcoin Foundation for allegedly engaging in the business of money transmission without a license or proper authorization…. As a nonprofit, [the Foundation’s] mission is to standardize and promote the open source Bitcoin protocol … One activity that the foundation does not engage in is the owning, controlling, or conducting of money transmission business.” [Jon Matonis, Forbes]