In Nebraska next week

I’ll be speaking at the University of Nebraska College of Law on Monday and Creighton University School of Law on Tuesday, both lunchtime addresses sponsored by the Federalist Society. More of my speaking schedule for this fall:

Sept. 17, Washington, D.C., panel moderator, Cato Institute annual Constitution Day.

Sept. 19, Baltimore, Md., Baltimore Lawyers Chapter, Federalist Society.

Sept. 25, Ann Arbor, Mich. University of Michigan Law School, Federalist Society.

Sept. 27, South Royalton, Vt. Vermont Law School conference, “The Disclosure Debates: The Regulatory Power of an Informed Public.”

Oct. 15, Frederick, Md.

Oct. 30, Buffalo, N.Y., Canisius College.

Nov. 7, Baltimore, Md., University of Baltimore School of Law, guest lecture.

Nov. 11, Chicago, Ill. University of Chicago Law School, Federalist Society.

If you’d like me to visit your campus or group, drop me a line. (& welcome Joe Patrice, Above the Law readers)

“Can not go to a gym til lawsuit over…”

Careful about Facebooking during your injury suit, okay? Another costly bit of blab during the same case was to announce on the social media site that the couple hadn’t gone through with a divorce yet because of the case; the wife had won $2 million on a loss-of-consortium claim, which the judge proceeded to toss after the Facebook posts were revealed, ordering a new trial on damages. (The original damage award had been $5.4 million.) In the suit against a subsidiary of Quest Diagnostics, the husband claimed he sustained an ongoing “catastrophic,” “debilitating” injury to an arm nerve during a botched blood test. [Fulton County Daily Report, Georgia] More on litigants’ social media bloopers: Ed Gerecki and Dave Walz, Drug and Device Law (court levies sanctions after lawyer instructs client to “clean up” various embarrassing postings from Facebook including “I [heart] hot moms” t-shirt.)

IsTumblrDown.com

Users have been known to complain that Tumblr, the immensely popular microblogging site, is not always as communicative as it might be about the periodic outages it has suffered. Zach Inglis put up a site called IsTumblrDown.com which gave users a clue whether an inability to connect was just them, or the whole system being down. There was little likelihood that it would be confused with an official site, especially since it took a bit of a mocking tone toward the platform giant (and had no revenue). Lawyers representing Tumblr nonetheless fired off a nastygram demanding the site’s removal.

The story has a rare happy ending, though. Tumblr sent a second letter saying that the cease and desist letter had been sent by mistake [Daily Dot]:

We deeply apologize for our mistake. Our legal department very recently started using a third party vendor to assist us in pursuing trademark infringers and, due to an error in our new process, your domain was mistakenly caught in the cross-fire.

To paraphrase Eric Turkewitz, when you outsource your trademark enforcement, you might just find yourself outsourcing a chunk of your customer goodwill at the same time.

Boston Globe tackles attractiveness discrimination

The article, by Ruth Graham in the Boston Globe “Ideas” section, takes more or less for granted that private parties’ liberties of free association and contract must be curtailed in order to right the “galloping injustice of ‘lookism'”:

Tentatively, experts are beginning to float possible solutions. Some have proposed legal remedies including designating unattractive people as a protected class, creating affirmative action programs for the homely, or compensating disfigured but otherwise healthy people in personal-injury courts. Others have suggested using technology to help fight the bias, through methods like blind interviews that take attraction out of job selection.

Well, if experts favor these measures — though there is nothing even remotely new or unusual about allowing damage recovery for disfigurement in a personal injury action — well, okay, then. I was critical of the “looksism” crusade some years back in my book on employment law, The Excuse Factory, but clearly to not enough effect, since more such laws have been passed since then:

The Constitution forbids employment discrimination on the basis of things like race, sex, and religion [no, it doesn’t — it’s federal statutes that do that — W.O.], but only a few jurisdictions have tried to add appearance to the list, starting with the parts of appearance you can measure. The state of Michigan banned height and weight discrimination in 1977, and six municipalities, including Washington, D.C., and San Francisco, have followed suit with similar statutes. These laws haven’t led to a flood of frivolous suits, as libertarians might fear — in fact, they haven’t led to many suits at all, which suggests they aren’t doing much more than tackling the most egregious cases. ([Stanford lawprof Deborah] Rhode’s book reports that in Michigan, an average of just one case a year makes it to court.)

Notice that the paucity of cases filed directly under these statutes (although one would find more if one looked at suits invoking the ADA) is somehow supposed to be a reproach to libertarians for objecting. One might equally well interpret it as an indicator that such laws are mostly a waste of time even from their proponents’ standpoint, since so few persons are willing to swear out a public document in front of the world alleging that they have lost job opportunities due to personal unattractiveness. (& welcome Instapundit readers)

Ronald Coase, 1910-2013

The immensely influential scholar and winner of the 1991 Nobel Prize for Economics was 102 years of age and a productive scholar to the end. An excellent short introduction to Coase’s work is found in the Concise Encyclopedia of Economics, edited by David Henderson.

Coase’s famous, seminal article The Problem of Social Cost, while the most widely cited in the law and economics canon, is also persistently misunderstood and misrepresented by both friends and foes, as Robert Ellickson shows devastatingly in this essay (h/t Jonathan Adler). Many, even most popular attempts to formulate the “Coase Theorem” veer far from what Coase intended and sometimes into the reverse, above all when they idealize the power of negotiation to overcome the problems of externalities in a highly fictional world that assumes away transactions costs.

As Coase himself pointed out: “The world of zero transactions costs has often been described as a Coasian world. Nothing could be further from the truth. It is the world of modern economic theory, one which I was hoping to persuade economists to leave.” Precisely because across a wide range of circumstances the transactions costs of negotiation are too high to permit reallocations of rights between parties, some initial assignments of liability or property rights do impair real output compared with others.

The University of Chicago’s well-meaning notice, I fear, is among those that misstate the Coase Theorem. “Coase believed the incentives of private parties to resolve disputes in their own best interests, even if there needs to be adjudication by courts, should result in an efficient, mutually beneficial solution that is always preferable to government intervention.” (No, that’s not at all what he wrote, even if one succeeds in disentangling the court adjudication from the “government intervention.”) Likewise Bloomberg: “Holding the [polluting] company liable and ordering it to pay money to an affected property holder is less likely to yield an optimal result than having the parties negotiate, he wrote.” (No, that’s not it at all either. At most, his theory implies that the optimal liability rule is fact-contingent and should not invariably be assumed to be the one that makes the smokestack owner pay)

I also have a notion that Coase’s other greatest paper, “The Nature of the Firm” made a huge difference in the real business world in ways that have not been fully reckoned. In that era and on until some time after World War Two, it was widely imagined that the telos of a firm was just to grow and grow without limit, which meant one saw elaborate attempts at vertical integration such as Henry Ford trying to grow rubber trees for tire supply, and antitrust authorities could imagine themselves the only obstacle to the eventual agglomeration of the whole economy into a small number of firms. By the time Coase’s insights had been absorbed, executives had come to see the logic of outsourcing, no one expected the hundred largest firms to account for a higher share of employment or sales or profits each year than last, and antitrust mania went into remission, at least temporarily.

More from Stephen Bainbridge, Lynne Kiesling, Don Boudreaux, David Henderson (a Coase contra Friedman anecdote), Kevin Bryan, David Friedman, Coase interview with Tom Hazlett excerpt via Geoffrey Manne, and Jonathan Adler with much more on what Coase actually thought about the correction of putative externalities. Don’t miss Richard Epstein’s reminiscences, either. [and cross-posted with some additional links at Cato at Liberty]

WSJ on Buckyballs: “the government wants to ruin the CEO who fought back.”

A couple of weeks ago I wrote about the very disturbing legal war being waged by the Consumer Product Safety Commission against Craig Zucker, CEO of a company that made Buckyballs, the adult magnetic-balls desk toy. After the CPSC decided to ban his product, Zucker fought back in the arena of public opinion, aiming satirical barbs at the commission and individual commissioners. CPSC then proceeded to pull him into the action personally as a party, seeking (on the basis of legal theories rarely if ever used in the past) to tag him with recall liability that the agency estimated at $57 million.

This weekend the Wall Street Journal came out with a big feature on the case, including an interview with Zucker by the Journal’s Sohrab Ahmari. Some highlights:

* At a time when sale of Buckyballs was still quite lawful pending adjudication, “and before Maxfield & Oberton [Zucker’s firm] had a chance to tell its side of the story,” the agency sent letters to major retailers asking that Buckyballs be pulled from shelves; most did, wishing to avoid trouble.

* The “responsible corporate officer” doctrine, which the CPSC cites as grounds for holding Zucker personally liable, has been very seldom invoked in the past, and the circumstances here (including the lack of reference to officer liability in the CPSC’s enabling statute) suggest that the Buckyballs case doesn’t fit. [More on that poor fit in this recent paper, previously linked in this space.]

* As for motives to go after Mr. Zucker, he provided a lot of them. During his attempt to fight the ban, his online “ads pointed out how, under the commission’s reasoning, everything from coconuts (‘tasty fruit or deadly sky ballistic?’) to stairways (‘are they really worth the risk?’) to hot dogs (‘delicious but deadly’) could be banned. Commission staff were challenged to debate Mr. Zucker, and consumers were invited to call Commissioner Inez Tenenbaum’s ‘psychic hotline’ to find out how it was that ‘the vote to sue our company was presented to the Commissioners on July 23rd, a day before our Corrective Action Plan was to be submitted.'” The thing is, you’d think, or hope, that the First Amendment to the Constitution would protect the right of a regulated party to talk back in this way, even disrespectfully.

Michigan-based commentator Bob Dorigo Jones, who has previously commented on the Buckyballs affair, wrote this on Facebook:

Buckyballs were a Godsend to our son, Johnny, last summer as he laid in a hospital bed recovering from a serious brain injury. He couldn’t watch TV or look at any type of screen because it hurt his eyes too much. He couldn’t read because it gave him headaches. But he could play with the Buckyballs that we purchased at the HOSPITAL gift store. They made a long stay in the ICU much more tolerable. Ironically, the same week he was in the hospital, an overreaching government agency banned the sales of Buckyballs — even to adults. Read this interview to get the full story on the Buckyballs saga. This is what happens when personal injury lawyers and their allies make the rules. We slowly lose our freedoms.

Read the WSJ piece here. More: Clark at Popehat, Gus Hurwitz at Truth on the Market, Alexander Cohen/Daily Caller.

September 3 roundup

  • The bureaucracy in India brings Gilbert & Sullivan to life: “He has been corresponding with himself for the last 26 days as an officer wearing different hats.” [Deccan Chronicle via @tylercowen]
  • “Certificate of Need” laws: “You Shouldn’t Have to Ask Your Competitors for Permission to Start a Business” [Ilya Shapiro]
  • No massive shift to arbitration clauses in franchise world since SCOTUS rulings [Peter Rutledge and Christopher Drahozal via Alison Frankel; Andrew Trask]
  • Evergreen headline in slightly varying forms: “Anti-abuse group’s director quits after arrest in assault” [Sacramento Bee; related here, here, etc.]
  • Economic liberalization increases growth [Alex Tabarrok]
  • “With Auto Amber Alerts, We’re Opted In By Default To A ‘Little Brother’ Surveillance Society” [Kashmir Hill]
  • How Florida trial lawyers plan to crack the tobacco-verdict vault [Daniel Fisher]

NYT: government has access to phone records back to 1987

In a blockbuster new report, the New York Times reveals that for years AT&T has willingly enlisted as a partner with the Drug Enforcement Administration (DEA) to hand over on request data on all calls that go through AT&T switches (which includes some calls not placed by or to its own customers). Included is data on the location of cellphone users, which goes beyond what the government has been known to have at its fingertips through routine-access, unresisted “administrative subpoenas” not disclosed to the surveillance target. More: Guardian, Daily Dot, Business Insider; James Joyner on warrant-dodging “administrative subpoenas”.

Buried at the end of the Times story is that although this extraordinarily intrusive snooping apparatus is rationalized as a Drug War measure, they use it against ordinary crime too:

The PowerPoint slides outline several “success stories” highlighting the program’s achievements and showing that it is used in investigating a range of crimes, not just drug violations. The slides emphasize the program’s value in tracing suspects who use replacement phones, sometimes called “burner” phones, who switch phone numbers or who are otherwise difficult to locate or identify.

In March 2013, for instance, Hemisphere found the new phone number and location of a man who impersonated a general at a San Diego Navy base and then ran over a Navy intelligence agent. A month earlier the program helped catch a South Carolina woman who had made a series of bomb threats.

Not really unrelatedly, it develops that analysts’ practice of using NSA surveillance to spy on their romantic interests — a practice common enough to have its own nickname, “LOVEINT” — comes to light mostly when voluntarily self-disclosed, not because some other safeguards are succeeding in catching it [Business Insider]

P.S. A couple of reactions on Twitter: “Old AT&T slogan was ‘Your world. Delivered’. More accurate to have said ‘Your world. Delivered straight to the DEA.'” [Catherine Crump] “I can’t seem to find the bit in AT&T’s privacy policy where they reveal they have been sharing 26 years worth of call data with the DEA.” [Christopher Sogloian] More: Matt Welch, Scott Greenfield.

Appalling: “New Study Finds That State Crime Labs Are Paid Per Conviction”

I just posted a few days ago about the many scandals of state police forensic labs that have been found to employ corner-cutting or shoddy methods in the course of obtaining positive identifications and convictions. What I didn’t realize is that — according to a new paper by Roger Koppl and Meghan Sacks in the journal Criminal Justice Ethics — many crime labs actually are paid by the conviction. That practice goes on in states that include Alabama, Florida, Illinois, Kentucky, Louisiana, Mississippi, New Jersey, New Mexico, North Carolina, and Virginia. If we incentivize false-positive identification, should we really be surprised when it happens? [Radley Balko]

Not just for viral Russian videos

The price of dashboard cameras has dropped to the point of an impulse purchase, but they still haven’t become common in the United States among motorists, those in law enforcement aside. They hold promise as a way of improving the allocation of fault in collisions, and especially in curbing varieties of insurance fraud such as the “swoop-and-squat,” but Popular Mechanics surely hasn’t thought matters through when it asserts, “In the real world, it means you win and the other guy loses in a dispute.” At least if the other guy was in the wrong and the camera was pointed in the right direction…