Overlawyered: Chronicling The High Cost Of Our Legal System

Finally, reform of structuring forfeiture — and the farm story that helped

This is welcome news from the U.S. Department of Justice, and rather than try to rewrite I’ll just quote at length what my Cato colleague Adam Bates wrote:

[On March 31] Attorney General Eric Holder issued new guidelines to federal prosecutors tightening the rules for seizing assets for so-called “structuring” offenses.

Under the Bank Secrecy Act, structuring occurs when someone is suspected of arranging their financial transactions as to avoid triggering a report to the federal government by the financial institution. Some of civil asset forfeiture’s most egregious abuses are the result of federal prosecutors utilizing this nebulous statute to empty the bank accounts of unwitting citizens and small businesses who are never charged with any crime or even aware that their transactions are considered illegal.

The new rules require:

1. That structuring seizures against people for whom there is no criminal charge be based upon probable cause that the funds were either generated by unlawful activity or intended for use in anticipated unlawful activity. Alternatively, prosecutors must procure a warrant from a court and with the approval of either the U.S. Attorney (for Assistant U.S. Attorneys) or the Chief of the Asset Forfeiture and Money Laundering Section (AFMLS) (for Criminal Division trial attorneys).

2. That when the prosecutor determines subsequent to a structuring seizure that the government lacks the necessary evidence to succeed at either a civil or criminal trial, the seizing agency must return the full amount.

3. That when a prosecutor seizes property pursuant to suspicion of structuring, the prosecutor must file either a criminal indictment or a civil complaint, or receive an exception from either a U.S. Attorney or Chief of AFMLS within 150 days or else return the seized assets.

4. That all settlements must be complete and in writing. Informal settlements are expressly prohibited.

Here’s the Justice Department memo, and Kent Hoover at the Business Journal chain has more coverage.

I’ve been writing about the outrages of these structuring cases for years, especially the feds’ ambush of Randy and Karen Sowers’s successful Middletown, Md. dairy farm and ice cream maker, South Mountain Creamery. In yesterday’s Washington Post, Rachel Weiner tells how the Sowers’ story “gave civil forfeiture reformers a powerful symbol”, especially after the Institute for Justice got involved. I’m quoted:

“The South Mountain case happened to be one of these that captured the imagination,” said Walter Olson, a blogger for the libertarian Cato Institute who has written about the Sowers case. “Once you’ve bought ice cream for your kids from one of their little trucks, the name sticks in your memory.”

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Free speech roundup

  • UK wrongful-speech laws sold to public “with mawkish appeals to the protection of the weak” but typically used by strong, rich and well connected [Charles C.W. Cooke on Galloway episode]
  • “Danish terrorist attack survivor: ‘It’s a fight that we can’t ignore'” [Lena Masri, Poynter]
  • “It gives me no comfort to have my constitutional rights trampled in a bipartisan fashion.” [Eric O’Keefe, quoted in M.D. Kittle, Wisconsin Watchdog profile of John Doe target Kelly Rindfleisch via @andrewmgrossman]
  • “I speak here of the rule of law, not the rule of feels.” [Ken at Popehat on BlockBot listings as non-defamation]
  • Rolling back SCOTUS’s First Amendment-based jurisprudence: “Hillary Clinton says she would support a constitutional amendment on campaign finance reform” [Washington Post]
  • “Court Rules San Diego’s Law Prof’s Blog Post Was Not Defamatory” [TaxProf]
  • “Another Day, Another Dumb New York Times Story on Corporations and Free Speech” [Damon Root, Reason, vs. Times columnist Timothy Egan]
  • Sounds promising: Robert Corn-Revere has a book in the works on free speech [Ronald K.L. Collins, Concurring Opinions]

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Tax arguments you can count on to fail

For our folk-law category, a list of sure-loser arguments on behalf of tax non-compliance, including “Paying federal taxes is optional,” “Wages are not ‘income,'” “I got paid in paper money, which is not taxable,” and “You can only tax U.S. citizens, and I just seceded,” all of which are good for amusing tax professionals but not for keeping you out of jail. [Lowering the Bar]

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Montgomery County authorities impound kids for walking on street, cont’d

I’ve now expanded Monday’s post into a longer Cato post. Among the new material, it links Petula Dvorak’s excellent WaPo column (“Our rapid march toward police-state parenting has got to end”) in which, to show how far we have moved, she quotes a checklist from a 1979 book on knowing whether your six-year-old is ready for first grade: “Can he travel alone in the neighborhood (four to eight blocks) to store, school, playground, or to a friend’s home?”

Megan McArdle notes “the kind of range of movement that those of us over 30 recall as a normal part of childhood” and names some possibilities of what social forces might have brought about such an extreme shift in attitudes, from cable news (magnifying the very-rare-in-fact peril of stranger abductions) to the lack of daytime “eyes on the street” to the ubiquity of mobile phones and report-possible-abuse lines (“It would be surprising if we lowered the price of being an officious busybody and didn’t get a lot more of it.”)

The Meitiv family has now issued a statement about the episode; they have a pro bono lawyer from Wiley Rein. The police account is here (“the victim children”). More from Lenore Skenazy:

Aren’t prisoners allowed one phone call, or is that just on TV? Because the Meitiv kids were not allowed to contact their parents in the six hours they were held by the authorities.

This is probably as good a place as any to share my personal experience: by around age 9 or 10 in the early 1960s I had the run of downtown Detroit and wandered around by myself to all sorts of attractions there, returning to my mother’s place of work at the end of the business day. That was considered a little precocious and my family was proud of me on that account. Once with some extra money in my pocket I even went into a white-tablecloth Italian restaurant by myself and ordered, ate, and paid for a meal with tip, a story told for years afterward.

P.S.: “This is kind of insane — in Illinois it’s illegal to leave a 13-year-old home alone” [Christopher Ingraham, but see comments below (not illegal in Illinois as such, only potentially so depending on a range of factors)]

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Prosecution roundup

  • Florida court blocks drug-related seizure of house as violation of Constitution’s Excessive Fines Clause [Orlando Weekly, opinion in Agresta v. Maitland]
  • Deferred- and non-prosecution agreements (DPAs/NPAs) have ushered in a little-scrutinized “shadow regulatory state” [Jim Copland and Isaac Gorodetski, “Without Law or Limits: The Continued Growth of the Shadow Regulatory State,” Manhattan Institute report]
  • Politicized prosecution: New York Attorney General Eric Schneiderman throws book at bankers for not lending in Buffalo [Conrad Black via Tim Lynch, Cato]
  • Would it improve prosecutors’ incentives if localities rather than state governments paid for incarceration? [Leon Neyfakh, Slate, via David Henderson]
  • Andrew Pincus on the growing danger of enforcement slush funds [U.S. Chamber, more]
  • “The Department of Justice, if it succeeds on its new theory, may have criminalized many instances of dull employee misconduct.” [Matt Kaiser, Above the Law; Peter Henning, N.Y. Times “DealBook”]
  • A Brooklyn mess: new D.A. looking into 70 convictions obtained with evidence from retired detective Louis Scarcella [Radley Balko]

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Indian High Court strikes down speech-throttling law

The law in India still poses a variety of civil and criminal hazards for speech, but Section 66A of the Information Technology Act — which originated as a measure to fight “cyber crimes against women” — was an unconstitutionally vague restraint on speech, according to the nation’s Supreme Court. [Indian Express, Hindustan Times, Times of India and more (police still have other legal provisions available against “offensive” speech on social media)]

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April 14 roundup

  • Please, someone: you can’t just donate money to the Tulsa police and get full deputy powers, can you? [Tulsa World via @RayDowns]
  • Illinois bench-‘n’-bar buzz angrily at Gov. Rauner who broke rule re: not mentioning lawyers’ campaign cash to judges [Chicago Daily Law Bulletin]
  • “New York’s Asbestos Court Mulls Changes After Sheldon Silver Scandal” [Daniel Fisher] “‘Judicial malpractice’ not to probe court tied to Silver: Judge” [New York Post]
  • Let’s all panic about arsenic in wine, or maybe let’s all not [Nick Farr, Abnormal Use (“The highest arsenic levels cited in the lawsuit are less than half of the limits set by other countries such as Canada”), and more on class action lawsuit]
  • “Tennessee Sacrifices Property Rights On The Altar Of ‘Gun Rights'” [Doug Mataconis, Outside the Beltway; earlier here, here, and here]
  • Odd that while we make wedding cake bakers and florists common carriers, the old “cab-rank” (any paying client) rule for lawyers has come to seem almost unthinkable [Adam Liptak, NYT on big law firms’ avoidance of representing clients on the unpopular side of major gay rights cases] Similarly: Paul Karl Lukacs, L.A. Daily Journal. Related: “maelstrom of criticism” directed at Harvard lawprof Laurence Tribe over his Supreme Court representation of coal company against EPA [Orin Kerr]
  • Just for fun: the preamble to the U.S. Constitution, in license plates [my post at Cato at Liberty]

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Garry Trudeau vs. Charlie Hebdo

“Spare me your sanctimony about ‘punching down’ – when someone brings a gun to the fight, punching down is a kindness,” wrote Jason Kuznicki at the time of the Charlie Hebdo massacre. His words well anticipated the spectacle of cartoonist Garry Trudeau (“Doonesbury”) now suggesting that it is “hate speech” to challenge the claims of a major world religion some of whose fanatical adherents regularly menace cartoonists, journalists, scholars, and artists around the world. Eugene Volokh dissects Trudeau here, keeping his temper better than I suspect I would have done. And more from Amanda Kendal in the U.K.; pursuant to points both Volokh and Kendal make, the arbitrary and manipulable nature of the “punching up/down” discourse is an important clue to its intended use as a mechanism of control.

Earlier on Trudeau and Doonesbury here and here. More: David Frum; Jesse Walker (Trudeau inaccurate re: actual editorial posture of Charlie Hebdo); Ken at Popehat (“journalists who confront and defy blasphemy norms are helping to make the point that religious offense is no excuse for murder. If that’s punching down, let’s punch harder.”)

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Montgomery County seizes “free-range” kids again

On Sunday afternoon Montgomery County, Maryland police and Child Protective Services seized the free-range Meitiv children, ages 10 and 6, after their parents had again let them play by themselves at a park. The kids were supposed to return home by 6; the police did not call the by-then-frantic parents until 8 p.m. [WUSA; Lenore Skenazy] Although initial accounts placed the seizure at the park, per tweets Sunday evening by Fox5 journalist Marina Marraco, the kids were walking back from the park and had gotten to within 1/3 mile of home when police intercepted and picked them up pursuant to a 911 call from “a neighbor” who had spotted them walking alone. The Meitiv family had become the center of a national cause célèbre in January when the county charged the parents with child neglect for letting the two kids walk home from a park. In March, CPS found the neglect charge “unsubstantiated” but puzzlingly deemed the parents “responsible” for it anyway.

More from WTTG/Fox5 Washington: parents reunited with kids after agreeing to “sign a temporary safety plan to take them home, which means they are not allowed to leave the children unattended at all. …Police say after a thorough investigation, a decision about whether or not the Meitivs will face charges will be made.” And from Ellen Rowland (“Thoughts on the criminalization of childhood,” earlier this month) and from Petula Dvorak, Washington Post (“Our rapid march toward police-state parenting has got to end,” and don’t miss checklist at the end from a 1979 book on six-year-olds, on first-grade readiness: “Can he travel alone in the neighborhood (four to eight blocks) to store, school, playground, or to a friend’s home?”) (cross-posted at Cato at Liberty in revised and expanded form)

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