Archives for the 'Constitutional & Legal' Category
President Threatens to Veto Bloated Housing Bill
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President Bush has threatened to veto the bloated federal housing bill pushed by House leaders, saying it would reward special interests As John Berlau has noted, the bill could cost middle-class investors billions (such as people whose retirement accounts or mutual funds contain mortgage-backed securities). (The companies that issued risky mortgages typically don’t still possess them). That’s above and beyond the billions of dollars that its bailout of subprime borrowers will likely cost taxpayers.
The architect of the bill, Congressman Barney Frank, calls his own bill the payment of an economic ”ransom,” admitting that it rewards irresponsible people by bailing them out. His excuses for paying this ransom are decidedly lame. Moreover, his bill contains political pork for left-wing special interest groups like La Raza and the National Urban League.
Congress Messes With Insurance
Eli Lehrer has an editorial in today’s Washington Examiner about how ill-considered legislation to create federal “national catastrophe insurance” could lead to American taxpayers shelling out more than $100 billion, on par with Hurricane Katrina. Earlier, he described how the legislation could cause serious financial problems for the country as a whole.
Last month, Congress created a long-run threat to the insurance industry by passing the Genetic Information Non-Discrimination Act (GINA). GINA also regulates employers in ways that I criticized in 2005 in the National Law Journal.
Housing Bill Contains Left-Wing Pork: Subsidies for La Raza
Earlier, we wrote about how the economic “stimulus package” passed by Congress contained pork for left-wing groups like “La Raza” (Spanish for “the race”). Now, House banking committee chairman Barney Frank is including a $10 annual million earmark specifically for La Raza in the federal housing bill. La Raza also gets money from consumer class action settlements, even though its ideological activities — like suing employers over remarks that offend their illegal alien employees — don’t have anything to do with consumers. (Class action money ends up being diverted to political causes irrelevant to most consumers, like lobbying for affirmative action). We wrote earlier about Barney Frank’s terrible mortgage bailout bill and how it would harm the economy and rip off taxpayers.
Abrogating Peter’s Contract to Pay Paul — Mortgage Bailout’s Billion-Dollar Hit to Retirement Savings
Many commentators, such as Open Market’s Hans Bader, have done a diligent job tracking the costs to taxpayers of the mortgage bailout scheduled to be voted on this week. The Congressional Budget Office just came out with an estimate of $2.7 billion for H.R. 5830, the so-called FHA Houshing Stabilization and Homeownership Retention Act of 2008.
But there could be an even greater cost from the bill to millions of middle-class investors saving for their retirement or the education of their children. The bill has the Federal Housing Administration guarantee the refinancing of a mortgage in return from a “haircut” from the owners of the loan. The bill requires loans to be guranteed at no more than 90 percent of the value, meaning a 10 percent loss for investors. But this haircut will “shave” billions of dollars off from funds saved for retirement or education.
This bill not only “robs Peter to Pay Paul,” through taxpayers bailout of bad loans by banks and borrowers. It can also be said to “abrogate Paul’s contract to Peter.” This is because many of the mortgages often aren’t owned by the banks that service them, but frequently by millions of middle class investors through their interests in entitities that have mortgage-backed securities (MBS).
Many middle-class folks who have 401(k) accounts, mutual funds, money market funds or defined-benefit pensions are indirect holders of MBS. In fact, according to investment bank Credit Suisse, 14 percent of MBS are owned by pensions and mutual funds that serve middle-class savers.
So, let’s do some math. The bill authorizes the FHA to guarantee up to $300 billion in mortgages. With the 10 percent haircut, the loans were originally worth $333 billion. So $33 billion represents the potential lost savings by the private sector. Now assume a random 14 percent of the loans in this program represent those owned by pensions and mutual funds. 14 percent of $33 billion is $4.6 billion.
The bottom line is that middle-class savers and investors could be left with almost $5 billion less for retirement and education of their children. Another compelling reason this bailout is not worth the cost.
Suing Over What Your Co-Workers Listen To
Should you be able to sue your employer because your co-workers listen to raunchy radio programs? The Eleventh Circuit Court of Appeals’ decision in Reeves v. C.H. Robinson Worldwide says you should, under the dubious theory that it is “sexual harassment” that’s “based on” your sex. U.C.L.A. Law Professor Eugene Volokh criticizes the decision on First Amendment grounds, while I criticize the decision as being inconsistent with the language of the discrimination laws and the Eleventh Circuit’s own past rulings, and a threat to the media and freedom of the press in the long run.
Courts frequently engage in flagrantly inconsistent legal reasoning in order to first impose liability on employers and then maximize and collect damages in sexual harassment cases, and they often disregard the statutory requirements that harassment plaintiffs seeking compensatory damages show that they were harassed based on their sex, and subjected to intentional discrimination.
I don’t like raunchy radio programs, but that doesn’t mean the government should ban listening to them, much less do so under the weak argument that they constitute sex discrimination.
Court: Don’t Blame the Terrorists for Bombing the World Trade Center
A New York State appellate court has upheld a ludicrous $1.8 billion verdict holding the building operator — not terrorists – chiefly responsible for the 1993 terrorist attack on the World Trade Center. The Port Authority that operated the building was held 68 percent responsible for the terrorist attack. The court said that long-standing tort law principles required it to uphold this ridiculous verdict, since third parties with deep pockets are frequently held more responsible than criminals in civil suits in this country: “the Appellate Division has affirmed unanimously (via) since, after all, such absurdities are central to the modern tort regime.”
Ted Frank has an editorial in the New York Sun on this disturbing court ruling.
This ruling was from an intermediate appellate court in New York (the Appellate Division’s First Department), but don’t expect any help from New York’s highest court (the New York Court of Appeals). That court, as I have noted before, is even worse, with several really rotten judges like Chief Judge Judith Kaye.
Law Limiting Gun Suits Upheld
The Second Circuit Court of Appeals has upheld the federal law (PLCAA) limiting lawsuits against gun manufacturers over acts committed by criminals with guns, overturning a ruling by radical judge Jack Weinstein gutting the law. (I earlier discussed how judicial case assignment procedures are manipulated so that the lion’s share of landmark cases in New York’s Eastern District mysteriously end up being decided by Judge Weinstein rather than his more moderate colleagues).
The Brady Center to Prevent Gun Violence has claimed that the law violates “separation of powers” by changing the outcome of pending court cases (an argument that, if taken to its logical conclusion, would require invalidating the 1964 Civil Rights Act because it legislatively overturned trespass convictions of civil-rights demonstrators who engaged in sit-ins). I earlier commented on the Brady Center’s hypocrisy in claiming that it is “judicial activism” for judges to strike down gun bans based on the Second Amendment, but not judicial activism for judges to strike down the democratically-enacted PLCAA based on unwritten separation-of-powers principles.
Michigan Social Workers Seize Child Who Inadvertently Drank
Michigan CPS workers seized a 7-year-old who drank lemonade that his father purchased for him without knowing that it contained a small amount of alcohol. (As Ted Frank notes, when CPS seized the child, he had no alcohol in his system). They put him in foster care for two days and refused to release him to his aunts. Then they released him to his mother on the condition that his father, an archaeology professor, move out of the house until a full court hearing could be held. After that later hearing, the father, found not guilty of child abuse, was finally allowed to move back into his own house. If the professor “and his wife weren’t upper-middle-class academics with access to the University of Michigan Law School clinic professors, it could have been much worse. ‘Don Duquette, a U-M law professor who directs the university’s Child Advocacy Law Clinic, represented Ratte and his wife. He notes sardonically that the most remarkable thing about the couple’s case may be the relative speed with which they were reunited with Leo.’”
CPS workers have an incentive to seize children, since the federal government gives states incentives for seizing and adopting out children, and CPS workers are more likely to be fired for failing to prevent child abuse than for wrongly seizing children, even if the seizure itself causes the child devastating psychological harm.
I wrote earlier about how temporary seizures of infants based on erroneous accusations later found to be false can become permanent, when courts rule that the infant has become attached to her foster family and thus should not be returned even if the alleged abuse that led to the seizure did not actually occur. I also discussed the violation of due process involved in the mass seizures of children in the strange FLDS religious sect, hundreds of whom were seized based on a single, anonymous, allegation of abuse by a caller pretending to be a teenager in the sect, and who continue to be held without any hearing on whether they individually are endangered (although the removal of some of the children might well be warranted if it occurred after a full judicial hearing).
GMU Law School Should Sue ABA Over Racial-Quota Mandates
The American Bar Association is continually threatening to pull the accreditation of George Mason University Law School for failing to adopt illegal racial quotas in admissions. That’s what San Diego law professor (and member of the U.S. Civil Rights Commission) Gail Heriot notes in the Wall Street Journal. The ABA first forced GMU — one of the few law schools without a marked liberal bias — to use what the ABA itself refers to as “preferential affirmative action admissions program” to radically increase its minority percentage from 6.5 percent to 19 percent. But the ABA still wasn’t happy with the results, which were insufficiently extreme for the ABA’s quota-mongers (never mind that the qualified applicant pool for a law school of GMU’s caliber is lower than 19 percent minority, as is the percentage of non-white lawyers even in heavily-minority states like California, so it’s not as if having 19 percent minorities is a sign of discrimination. Indeed, the ABA conceded that GMU has long had a “very active effort to recruit minorities,” even before adopting racial preferences in admissions). So now the ABA is demanding what are in essence racial quotas.
The ABA’s actions violate 42 U.S.C. 1981 and the Supreme Court’s ruling in Gratz v. Bollinger (2003), which held in footnote 23 that racial quotas violate 42 U.S.C. 1981 (which bans both private and public discrimination) as well as the Fourteenth Amendment (which bans only governmental discrimination). Moreover, the ABA and its accreditors are liable for pressuring GMU to engage in racial discrimination under 42 U.S.C. 1981, which allows not only employers and other institutions to be held liable for racial discrimination, but also individual discriminators. And GMU and its president and law school dean, who were personally summoned to appear before the ABA in order for them to be pressured to maximize GMU’s racial quotas, have standing to sue over those quota mandates under Lutheran Church-Missouri Synod v. FCC, 141 F.3d 344 (D.C. Cir. 1998), which held that the Lutheran Church had standing to sue the FCC to keep the FCC from pressuring it to take race into account in hiring employees for its religious radio stations in order to satisfy a ”diversity” mandate. (Note that GMU is a state university).
Supreme Court Upholds Voter ID Laws
The Supreme Court upheld Indiana’s voter ID law, which is tougher than many other voter ID laws, rejecting claims that it was unconstitutional or akin to a poll tax, and ruling that it was a rational way of preventing vote fraud. I earlier explained why the legal challenges to voter ID laws are based on bogus arguments. The case did not break down along ideological lines: while all the moderate and conservative justices voted to uphold the law, so did liberal Justice John Paul Stevens, who announced the court’s ruling. Law professor Jonathan Adler thinks that Stevens voted to uphold the law based on his knowledge of the rampant vote fraud in Chicago that occurred while he worked there as a lawyer and judge prior to being appointed to the Supreme Court.
Nothing Fair About the “Fair Pay Act”
The proposed “Lilly Ledbetter Fair Pay Act” would get rid of the short 180-day deadline for bringing pay discrimination claims that applies under some federal laws, like Title VII. As I point out in today’s New York Times, that’s unnecessary, since another law, the Equal Pay Act, has a longer 3-year deadline for bringing claims (and other discrimination laws like 42 USC 1981 often have even longer deadlines, like 4 years). My letter disagreeing with the New York Times’ editorial in support of the law also points out that the proposed “Fair Pay Act” would allow not just employees, but certain third parties, to sue over alleged pay discrimination, making it harder to negotiate settlements. (The EEOC can sue even if an employee chooses alternative means to settle the dispute, like arbitration. The bill would change current law to allow even some third parties other than the EEOC to sue).
In the Washington Post, David Drachsler, Vice Chair of the Virginia Council on Human Rights, debunks the Washington Post’s mistaken endorsement of the bill, noting that it would “permit an employee to file a pay discrimination lawsuit years after the pay decision was made, even if the employee was aware of that decision. Indeed, in Lilly Ledbetter’s case, her lower pay, compared with that of men doing similar work, was caused by low performance evaluations of which she was aware years before she filed her charge” of discrimination.
Effectively, the Fair Pay Act would abolish the statute of limitations, by potentially allowing an employee to sue forever as long as she receives a paycheck or pension payment that is supposedly affected by an alleged act of discrimination that occurred decades earlier. That would allow stale claims of discrimination to be brought long after the alleged discriminator has died, leaving the employer unable to defend itself through exculpatory evidence or rebuttal testimony.
I earlier discussed the bill, which has 56 supporters in the Senate, here, and the dishonest and sensationalistic way that reporters and editorial cartoonists are covering the issue here.
Fat Discrimination Bills Lumber Forward
A Chicago Tribune story notes that a few jurisdictions now ban discrimination against fat people (generally as part of general bans on discrimination based on physical appearance), and that Massachusetts is now considering specifically banning discrimination against fat people (as some municipalities do). (The only federal law touching on the subject is the Americans with Disabilities Act, which some courts have said may cover “morbid obesity” (see Cook v. Rhode Island), but which does not cover ordinary fatness; moreover, some courts say that obesity is not a disability because it is a correctable condition, i.e., you can lose the weight if you try).
Quite apart from the fact that such legislation interferes with employers’ freedom of contract (is it really so unreasonable for a movie studio to cast a thin person rather than a fat person in certain roles, or for an airline to want a thin flight attendant who can move easily up and down the aisle and allow passengers to pass by rather than a fat flight attendant who will block the aisle?), it’s also not clear why such legislation should focus on fat people, who can often control their condition, rather than other people disadvantaged by mother nature, like short people. (I became fat in 1993, but then lost the weight by eliminating alcohol, butter, and extremely fatty foods from my diet. But short people cannot change the fact that they are short).
After all, most Americans are overweight, so it’s not as if fat people are a tiny minority. And being fat is not as disadvantageous (at least for men) as being short. For example, fat people of both sexes are more likely to get married than short men, and short people are less likely to get promotions than people of average height like me.
A women’s studies professor quoted in the article supports fat discrimination legislation as a way of destigmatizing fatness. (Some colleges now have “fat studies” programs, whose professors are often drawn from existing women’s studies programs). But even if that were truly possible, destigmatizing fatness might do more harm than good to public health. In my wife’s native France, obesity rates are lower than in the U.S., and lifespans are longer (despite all the cheese, foie gras, and red meat they eat). Part of the reason is that they simply eat less (not healthier). Why do they eat less? Partly due to the shame factor. My French-born wife’s (thin) best friend told me, with disapproval, that in France, “it is a shame to be fat.” Shame is not a pleasant emotion, but maybe it’s better to be shamed into losing weight than to be dead from obesity-related conditions, like diabetes, heart diseases, and weight-related cancers. Those obesity-related conditions are a legitimate cause for concern for the insurers and employers who end up paying for them.
Enforcing Unconstitutional University PC
One of the most tragic manifestations of past racial discrimination has been the creation of a government-enforced racial spoils system in the name of affirmative action. That has given rise to a professional class of racial profiteers, such as the late Ron Brown, who are ever ready to help whites win the financial benefit of regulations originally approved to aid minorities.
The demand on people and institutions to abandon the principle of nondiscrimination has been particularly strong in academia. Although the U.S. Supreme Court has limited the role of race in admissions, the American Bar Association is now pushing to institutionalize de facto quotas. University of San Diego law professor Gail Heriot writes about the plight of George Mason University law school, known for its more conservative political orientation:
If you have ever wondered why colleges and universities seem to march in lockstep on controversial issues like affirmative action, here is one reason: Overly politicized accrediting agencies often demand it.
Given that federal funding hinges on accreditation, schools are not in a position to argue. That is precisely why the U.S. Department of Education, which gives accreditors their authority, must sometimes take corrective action. George Mason University’s law school in northern Virginia is an example of why corrective action is needed now.
Grand Theft Auto: Masterpiece or Abomination?
In less than 36 hours, one of the most anticipated—and most demonized—games in years will hit the shelves. Grand Theft Auto IV, the “true” successor to the groundbreaking Grant Theft Auto III, has been the focus of intense criticism ever since being announced. But while GTA IV will undoubtedly be filled with extreme violence, it may also be a masterpiece of human creativity.
On Friday, IGN reviewed GTA IV, giving it a highly elusive perfect score. Calling it “masterful” and an “American dream,” IGN says GTA IV is the greatest game in nearly a decade. Since the press embargo ended this morning, many other reviewers are reaching similar conclusions.
No real surprises there. What’s surprising, however, is that unlike its somewhat one-dimensional predecessors, GTA IV offers unprecedented character depth along with an “Oscar-caliber” storyline. And it also depicts the ugly downside of crime in the same vein as epic films like Goodfellas and Scarface, retelling the classic story of a struggling immigrant coming to America in search of fortune, haunted by the experiences of a past life.
Naturally, Grand Theft Auto’s release has re-ignited public debate over how games affect kids and whether new laws are needed to protect children from the gratuitous violence found in many video games. GTA has been a favorite target of politicians for the past eight years, and the usual suspects like Jack Thompson and Tim Winter have predictably spoken out against GTA IV. But parental controls are more robust than ever, as Adam has documented, and some have even suggested that kids should be playing Grand Theft Auto. Despite the recent explosion in hyper-realistic violent games, violent crime rates have been dropping across the board. Maybe games like GTA are just another harmless outlet for kids to express violent behavior, much like playing cops and robbers.
As game budgets have swelled and public interest in gaming has expanded, more games than ever transcend the stereotype of gaming as a juvenile pursuit with little artistic merit, reminding us that games can be artistic expressions on par with books, movies, or songs. Critics whose gaming experience consists of having played Pacman in an arcade may belittle gaming as a trivial pastime, but anybody who has played Bioshock or Gears of War or Oblivion knows better. Games can critique the harsh realities of modern society and offer insight into the nature of the human soul in ways that less interactive forms of media cannot. Likewise, games deserve both critical admiration and legal protection.
Of course, GTA IV is no Mona Lisa. But the way things are going, it’s entirely possible that the next timeless masterpiece of artistic expression will be created not with a brush or pen, but with lines of code.
GINA Law Passes, Will Afflict Insurers and Employers
On April 24, the Senate voted 95-to-0 to pass the Genetic Information Non-Discrimination Act (GINA), which bans insurers and employers from taking genetic information into account. The Economist blog suggests it could doom private individual insurance in the future, as people who test negative for genetic risk factors for diseases refuse to buy health insurance policies that are priced the same for them as for riskier people who test positive for those genetic risk factors, effectively forcing those with lower risks to subsidize those with higher risks. Such adverse selection would cause the market for such insurance policies to dry up.
Last year, I criticized the GINA bill in the National Law Journal for lacking a “direct threat” exception that would allow employers not to use people with hazardous conditions (like a genetic tendency to seizures) for jobs where they could unintentionally cause harm to the public (like a person prone to seizures driving a bus). Existing laws such as the Americans with Disabilities Act contain such an exception. Greg Conko, who studies biotech law and policy, pointed out that there was no need for the GINA bill. He noted there is no pattern of insurers or employers misusing genetic information.
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