Overlawyered: Chronicling The High Cost Of Our Legal System

Posts Tagged ‘law enforcement for profit’

Posner upholds dismissal of online-poker suit

Under an old Illinois law, not only can persons who lose at unlawful gambling sue the winners to claw back their losses, but if they fail to act, literally any other person can sue demanding that money. Citing this law, two women sued online-poker operators seeking to recover gambling losses of men who happened to be their sons (but could as easily under the law have been strangers). A Seventh Circuit panel, Judge Posner writing, has now upheld a lower court’s dismissal of the case (an intended class action) on the grounds that the Illinois law by its terms allows suit only against the other gamblers who won the poker games in question, not the house that collected a fee for presiding. [Courthouse News, Rakebrain; opinion in Sonnenberg v. Amaya Group Holdings via John Ross, Institute for Justice “Short Circuit”]

While on the subject of Judge Posner, Harvard Magazine has a Lincoln Caplan interview with him that is worth a read.

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Forfeiture roundup

  • “Justice Department suspends abusive asset forfeiture program – for now” [Ilya Somin]
  • Tulsa sheriff steers seizures to judge it once employed, invokes unclaimed property law which dodges burden of proof [The Frontier]
  • Op-ed claims that if Maryland cops grab your stuff you must be a “drug dealer,” trial or no [Joseph Cassilly, Baltimore Sun]
  • Quest for revenue-self-sufficient law enforcement can end in “independent, self-funding armed gangs” [Noah Smith, Bloomberg View]
  • “Get rid of policing for profit in Michigan” [Angela Erickson, Detroit News]
  • Congress has twice tried to make it easier for prevailing claimants to recover attorneys’ fees when recovering seized property, but the government finds ways to slip around [Scott Greenfield]
  • Value of assets seized by law enforcement in U.S. in 2014 exceeds value taken by burglars [Armstrong Economics]

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Bounty-hunting lawyer collects Illinois taxes nationwide

Wineries that ship to customers nationwide are among the latest targets of a Chicago attorney who has developed a lucrative freelance enforcement niche. Steven Diamond and his firm of Schad, Diamond and Shedden “have filed hundreds of suits against various companies in industries such as cookware, flowers and motorsports” and more recently beverage makers under “an Illinois law that requires businesses to collect sales taxes for the state, not only on what they sell, but on shipping-and-handling charges. A whistleblower rule allows anyone within the state to sue in the name of Illinois and collect any recovered funds.” [Wine Spectator] While a number of other states also tax shipping charges, Illinois authorities, unable to agree on how to interpret a relevant decision by their state’s high court, have given conflicting guidance on when taxes are owed. [Wines and Vines, Tom Wark, Schiff Hardin, WTAX]

P.S. Related on the practice of tax farming in the Roman Empire and pre-Revolutionary France, and latter-day parallels, here, here, and here.

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Medical roundup

  • Study: doctors who use more resources are less likely to face malpractice claims [British Medical Journal]
  • “Obesity is not in fact a public health problem. It may be a widespread health problem, but you can’t catch obesity from doorknobs or molecules in the air. [David Boaz, Cato]
  • Contingency-fee law enforcement creates bad incentives, part MCXXXVI, health outlay recoupment division [W$J on Medicare auditors]
  • Welcome to Canada, skilled one, unless your spouse is ill. What that says about the welfare state [Bryan Caplan]
  • “Jury awards $16.7 million in swine flu death of pregnant Puyallup mother” [Tacoma News-Tribune]
  • Doc convicted of murder after patient overdoses: “Some experts worried that a conviction would have a chilling effect on worried doctors and keep powerful painkillers from patients who need them.” [L.A. Times via Jacob Sullum]

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Law enforcement for profit roundup

  • “Why Morristown officers seized the cars in the first place is unclear.” Maybe because it enabled an officer to pocket $6,000? [Tennessee: Watchdog] Louisiana town getting 87% of its revenue from traffic tickets has 188 people, 5 cop cars [Marshall Project via Balko] For second time, this time in Chicago case, former CEO of red light camera company cops a federal plea [Cyrus Farivar, Ars Technica]
  • Opposition from law enforcement shoots down asset forfeiture reform in California [Scott Shackford/Reason, more] Despite talk of being friendlier to forfeiture reform, Department of Justice fed talking points to reform opponents in California battle [TechDirt] “Most Americans don’t realize it’s this easy for police to take your cash” [Christopher Ingraham, Washington Post “WonkBlog”]
  • Other side of the ledger: how governments pay for claims against law enforcement [Joanna Schwartz, SSRN via TortsProf]
  • Louisville traffic school allows violators to get cases “dismissed without having to pay court costs… and generates revenue to operate the county attorney’s office” [Insurance Journal]
  • Lawsuit alleges private probation companies in Tennessee abusing power, free-marketers should be as worried as anyone else about misalignment of private, public incentives [Radley Balko, earlier]
  • Odd how feds can prevent someone resisting extradition from contesting asset forfeiture [Trevor Burrus/Cato, Ilya Somin on Kim Dotcom case]
  • Insurers often pool funds to support insurance fraud prosecution efforts, but critics say Travis County, Texas prosecutors are needlessly close to a single company [Texas Tribune]

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Contingency fees + IRS = sound policy?

Yet again — we covered this issue last year — lawmakers on Capitol Hill are considering sending private debt collectors on contingency fee after those who owe money to the Internal Revenue Service. Here’s an issue where I can agree with Washington Post columnist Catherine Rampell: contingency fees and tax collection don’t make for a good mix. Will we ever learn our lesson on law enforcement for profit?

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Law enforcement for profit roundup

  • One Oklahoma official used asset forfeiture to pay back his student loans, another lived rent-free in a confiscated house [Robby Soave, Reason]
  • Per ACLU, Arizona has a one-way legal fee rule in forfeiture cases, with prevailing police allowed to collect from property owner but not vice versa [Jacob Sullum]
  • From Michael Greve, some thoughts on prosecution for profit and where money from public fines should go [Liberty and Law]
  • About the Benjamins: Philadelphia mayor-to-be cites revenue as reason to let parking officers ticket sidewalk users [Ed Krayewski, Reason]
  • Captive market: with wardens’ and sheriffs’ connivance, prison phone companies squeeze hapless families [Eric Markowitz, IB Times]
  • Former red light camera CEO pleads guilty to bribery, fraud in Ohio [Cyrus Farivar, Ars Technica]
  • Taxpayers lose as Maine counties jail indigents over unpaid fines [Portland Press-Herald]
  • “St. Louis County towns continue to treat residents like ATMs” [Radley Balko]

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Law enforcement for profit, one dropped French fry at a time

Way to incentivize pitiless enforcement: Louisiana may double littering fines, with the extra money going toward the pensions of the ticket-writers. What could go wrong? And will we start acting all surprised if officers begin ticketing retirees who throw bread to pigeons in the park, anglers who dump their unused worm supply back on the ground before heading home, or 12-year-olds who spit a cherry pit onto the grass? [New Orleans Times-Picayune] Our law enforcement for profit file is here.

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Why would the IRS be outsourcing tax audits to a private law firm?

Sen. Orrin Hatch wants to know why the Internal Revenue Service has hired Quinn Emanuel to assist in auditing Microsoft, with the power to compel sworn testimony [Sean Hackbarth, Institute for Legal Reform] For a sampling of the complications that can arise when governments hire outside law firms to prosecute tax cases, see our coverage of the Mississippi/MCI case or, in another part of the forest, the IRS’s periodic experiments with using private debt collection lawyers.

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