The Washington Post splashes an investigative story about the tax lien business, in which outsiders buy up delinquent municipal property tax liens sometimes amounting to mere hundreds of dollars, then roll in lawyers’ fees and costs that can push up the bill into many thousands, eventuating in the foreclosure of family homes. The narrative is less than clear about exactly how the process works, and even leaves the impression that a tax lien purchaser owed, say, $6,000 can walk away with all the proceeds from the foreclosure of a $197,000 house without having to hand any of it over to mortgage holders, let alone the original owner. And some of the solutions offered (let’s not allow lien foreclosures on elderly people!) would have unintended consequences that are also, to be polite, underexplained. Still, enough of the story is there that an important general principle comes through: it’s dangerous for the law to put opportunistic actors in a position to run up $450/hour legal fees pursuing adversarial process that might not actually have been needed to vindicate their interests.
Oklahoma lawmakers roll reform stone uphill
They’ve reconvened, trying to enact a set of litigation reforms the state’s high court won’t just strike down [The Oklahoman, Tulsa World, earlier]
“Small Farmers Revolt Over FDA’s Proposed Food Safety Rules”
When Congress passed the Food Safety Modernization Act in 2011, some (I included) warned that it would lay serious regulatory burdens on small producers and distributors of food, threatening to drive many of them out of markets even when their products posed no actual material risk. Lawmakers gestured toward relief for small producers in an amendment, but apparently “gestured” is the operative word. “Now that those who will be regulated under the Act have had time to review and consider the FDA’s proposed FSMA rules, small farmers …are panicking. And with good reason.” [Baylen Linnekin, Reason, earlier; Daren Bakst, Heritage; “New federal regulations could threaten local farms,” Michael Tabor and Nick Maravell, The Gazette (suburban Maryland)]
Because there’s no legal story so depressing that it can’t get worse
United Nations “human rights expert” suggests that compliance with international human rights norms may require casting about for some way to re-prosecute George Zimmerman since the first prosecution didn’t come out as some hoped. [Volokh] As Hans Bader points out, Article 14, Section 7 of the International Covenant on Civil and Political Rights forbids, as opposed to requiring, the exposure of defendants to double jeopardy.
Will SCOTUS finally rule on “disparate-impact” housing theory?
Under the “disparate impact” theory of housing discrimination, private business decisions or local government policies not motivated by race are deemed unlawful anyway because they have a differential statistical impact on housing transactions by members of a given racial group. A mortgage lender’s policy of lending only to borrowers with high down payments or sterling credit ratings, for example, might be subject to attack on the grounds that it tended to screen out minority borrowers, even if such was not its intention, and was not justified by business necessity. The U.S. Supreme Court has never ruled on this theory; two years ago, in a case called Magner v. Gallagher, it was widely speculated that the Court would disapprove disparate-impact claims, a prospect the Obama administration (which is deeply invested in the theory) managed to dodge only by arranging to moot the case through settlement.
In the new Supreme Court case of Township of Mount Holly v. Mount Holly Gardens Citizens in Action, Inc., plaintiffs claim that it is illegal for a New Jersey township to slate a tract of development land for detached single-family housing because poorer persons are less likely to be able to afford such housing and minority persons are more likely to be poorer. The Obama administration is backing the claim. [earlier] The Cato Institute, along with the Pacific Legal Foundation and several other groups, has filed an amicus brief defending the township. Writes Ilya Shapiro at Cato at Liberty:
The Gardens’ residents can’t afford the new housing not because of their race but because of their poverty. While it’s a harsh truth that a disproportionate number of minorities live in poverty, claiming that making expensive products is racist and that these “racists” have an obligation to compensate the victims of poverty is absurd. The FHA was intended, in the words of Senator Walter Mondale, “to permit people who have the ability to do so to buy any house offered to the public if they can afford to buy it. It would not overcome the economic problem of those who could not afford to purchase the house of their choice.”
For following the law as it was written and attempting to improve a blighted neighborhood without resorting to eminent domain abuse, Mount Holly was rewarded with a decade’s worth of vexatious litigation — which the Supreme Court should now end once and for all.
More: Hans Bader, Examiner.
“S&P: US lawsuit is ‘retaliation’ for ratings downgrade”
“Ratings agency Standard and Poor’s (S&P) has claimed the lawsuit filed against it by the US Justice Department was ‘retaliation’ against its decision to downgrade the US’s credit rating.” [BBC; earlier here, here] My Cato colleague Mark Calabria, a specialist on banking and finance issues, sees a pattern at work in which businesses that make life hard for the government get hit with enforcement actions:
Maybe S&P can compare notes with Craig Zucker of Buckyballs fame.
Patent trolls roundup
- “The Web’s longest nightmare ends: Eolas’ patents are dead on appeal” [Joe Mullin, Ars Technica]
- Another E.D. Tex. jury: “Lawyer Explains How To Bag A Patent Troll At Trial” [Daniel Fisher]
- Practical steps? “Trolling Effects” database modeled on “Chilling Effects”. Prior art clearinghouse [Joel Spolsky] Vermont, Nebraska AGs rattle sabers on behalf of local businesses [WaPo]
- Meanwhile, from the other side: “The Myth of the ‘Patent Troll’ Litigation Explosion” [Adam Mossoff, Truth on the Market] “A Line in the Sand on the Calls for New Patent Legislation” [Wayne Sobon, Center for the Protection of Intellectual Property; CPIP video interviews with retired Federal Circuit Chief Judge Paul Michel and retired Federal Circuit Judge Arthur Gajarsa]
- Grocers, restaurants, retailers enter fray with anti-troll ad campaign [David Balto/U.S. News, Katy Bachman/AdWeek, Food Marketing Institute]
- Manhattan Institute weighs in with “Trial Lawyers Inc.” entry [Point of Law; Jim Copland, Politico]
- When “set up as shell companies without much in assets” trolls might not be likely targets for fee recovery at lawsuit’s end; and what’s this about offshore bank accounts? [Todd Moore]
“Tattoos are a largely uncharted territory in copyright law”
If you pay an athlete or other celebrity for the right to depict them in a poster or videogame, do you have a right to show an accurate rendering of their tattoo without further seeking permission from the original tattoo artist? It’s widely agreed that tattoos enjoy some degree of copyright protection, most obviously so in the case where an infringer has swiped an original design for purposes of tattooing someone else. Damages, at least, would be available in such a case, though it might prove hard to persuade courts to exercise the power accorded them by 17 U.S.C. § 503 to order the “impounding and disposition of infringing articles.” [Ira Boudway, Bloomberg BusinessWeek]
Latest liberty cake wreck
In Gresham, Oregon, it’s anti-discrimination law 1, free association 0 as a family business that cited religious beliefs in declining to make a wedding cake for a lesbian couple, and was hit by an enforcement action as a result, shutters its retail shop in favor of baking from home. Oregon does not recognize same-sex marriage, which (as in the parallel New Mexico wedding photographer case) makes clear that the intrusion on individual liberty here arises from anti-discrimination law as applied to so-called public accommodations, not from marriage law. [Shackford, Reason] Related: “Religious liberty depends on right-of-center gay marriage advocates” [Stephen Richer, Daily Caller]
Banking and finance roundup
- With arbitrary power to order capital levels, FDIC is Death Star to community banking [Kevin Funnell]
- “Oh please. We’re not going too easy on [convicted inside trader] Raj Rajaratnam.” [John Carney]
- “Ronald Coase and the nature of shadow banking” [also John Carney]
- “Say-on-pay” as “lawyer-driven” litigation [Pepper Hamilton via Bainbridge]
- I’m a guest on Jim Puplava’s “Financial Sense” podcast [link]
- Wall Street, housing lobby to get their way again: “I’m afraid that the fix is in on housing finance reform.” [Arnold Kling]
- Channeling Bernie Sanders? Thumbsucker on decline of IBM as employer fingers shareholder value theory promoted by ever-so-wicked Chicago school [Washington Post]
- Wells Fargo gets a lending-discrimination class action tossed, but there’ll be others where it came from [Andrew Trask]