Legal

Court Rules State Biotech Food Labeling Mandates Preempted By Federal Law

by Greg Conko on May 1, 2012 · 0 comments

in Agriculture, Environment, Features, Legal, Nano & Biotech, Personal Liberty, Precaution & Risk, Regulation

Post image for Court Rules State Biotech Food Labeling Mandates Preempted By Federal Law

It’s been a few years since biotech foods have been regular front page news. The anti-technology activists cried wolf a few too many times, and none of the scare stories have come true. Still, the activists have re-grouped and are making an all out, well-financed assault on state and federal governments this year, agitating for mandatory labeling of biotech foods.

Stonyfield Farm Chairman Gary Hirshberg even gave up his position as president and CEO of one of the world’s largest organic food purveyors to lead what’s being billed as the “Just Label It” campaign, organized by a veritable who’s who of the organic and “natural” foods industry. And they’ve been busy – petitioning FDA and the White House, and lobbying Congress and state legislatures to mandate warning labels on biotech foods. But arguably the crown jewel in this year’s campaign is an initiative that will likely appear on California ballots this coming November.

I’ve written before about why mandatory labeling is a bad idea and why consumers don’t need mandatory labeling to exercise their choice to purchase non-biotech foods. But the simple fact is that labeling mandates of this type are also unconstitutional. In a case called International Dairy Foods Assoc. v. Amestoy, the U.S. Second Circuit Court of Appeals held that a Vermont statute requiring dairy products from cows given the biotech growth hormone rbST violated the First Amendment, and that food labeling cannot be mandated simply because some people would like to have the information. The Vermont law was unconstitutional because it forced producers to make involuntary statements contrary to their views even though there was no substantial governmental interest in requiring the label statement.

“We are aware of no case in which consumer interest alone was sufficient to justify requiring a product’s manufacturers to publish the functional equivalent of a warning about a production method that has no discernable impact on a final product. … Absent some indication that this information bears on a reasonable concern for human health or safety or some other sufficiently substantial governmental concern, the manufacturers cannot be compelled to disclose it. Instead, those consumers interested in such information should exercise the power of their purses by buying products from manufacturers who voluntarily reveal it.”

That should mean that the California ballot initiative would also be invalidated. Although the Second Circuit’s decision is only binding on courts in Vermont, New York, and Connecticut, other courts would view the decision as persuasive precedent. But I’ve just now been alerted to a recent California federal court decision providing a different legal theory for invalidating state labeling mandates.

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Student Loans Drive Up Tuition, Create Demographic Time Bomb and Higher-Education Bubble

by Hans Bader on April 30, 2012 · 0 comments

in Deregulate to Stimulate, Economy, Employment, Legal

Professor Glenn Harlan Reynolds writes in the New York Post about how student loan programs have contributed to skyrocketing debt and rising defaults:

The student-debt problem is that too many students are borrowing too much money to finance educations that won’t earn them enough to repay the loans. This leads to misery. A recent Wall Street Journal story noted that many students are postponing marriage, children and home-buying because of the difficulty — in some cases, the impossibility — of keeping up student-loan payments. This is bad for them and the economy, because they won’t be available to soak up the excess houses built during the housing bubble, which also was fueled by cheap government loans. If they postpone having kids, fewer taxpayers will exist to fund Social Security and other programs in a few decades.

If these younger people had gone into debt flipping houses in 2005, they’d be able to declare bankruptcy and get a fresh start — but the law doesn’t allow that. Student-loan debt is treated like child support, meaning that it’s almost impossible to get out of. People who paid six-figure sums to universities that happily pocketed the money in exchange for gender-studies degrees that would never produce a job are now debt slaves, like the coal miners in Tennessee Ernie Ford’s “Sixteen Tons.” Although 37 million adults owe student loans, only 39 percent are actually paying down balances. Some 5.4 million have at least one loan past due; loans totaling $270 billion are at least 30 days delinquent. These numbers are likely to climb in coming months and years as US job-creation remains stagnant.

. . . another Obama policy is adding to the woes. Back when Democrats ran Congress, the president engineered a federal takeover of student-loan processing. Now the Chronicle of Higher Education reports that this is producing huge paperwork screwups that have thrown thousands of borrowers into default, more than doubling the number of defaulters since December.

In the Boston Globe, Jeff Jacoby notes that tuition has risen in response to rising financial aid: “government outlays intended to hold down the price of a college degree have ballooned, in inflation-adjusted dollars, from $29.6 billion in 1985 to $139.7 billion in 2010, an increase of 372 percent since Ronald Reagan’s day.” “Year in, year out, Washington bestows tuition aid on students and their families. Year in, year out, the cost of tuition surges, galloping well ahead of inflation. And year in, year out politicians vie to outdo each other in promising still more public subsidies that will keep higher education within reach of all. Does it never occur to them that there might be a cause-and-effect relationship between the skyrocketing aid and the skyrocketing price of a college education? That all those grants and loans and tax credits aren’t containing the fire, but fanning it?”

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Diversity Training Doesn’t Work, But It Persists Anyway, Due to Compulsion

by Hans Bader on April 27, 2012 · 4 comments

in Labor, Legal, Regulation

Diversity training doesn’t work, according to an article in Psychology Today. In it, Peter Bregman notes, “Diversity training doesn’t extinguish prejudice. It promotes it.”

But don’t expect it to stop. Government regulations often require that a school be accredited, a condition that accreditors like the American Bar Association use to force law schools to run costly diversity and sensitivity-training programs or use racial preferences in admissions (despite the dubious legality of some such diversity programs and admissions preferences). Such mandates have contributed to the growth of a vast and costly “diversity machine” in college administrations. (And as a condition of practicing law in California, I had to take continuing legal education on the topic of “elimination of bias in the legal profession.”)

Time magazine had a story on April 26, 2007, entitled “Employee Diversity Training Doesn’t Work.” Employers pay millions every year for diversity training, but often the training backfires and blows up in the face of the employer that paid for it. In Hartman v. Pena (1995), the Federal Aviation Administration got sued for sexual harassment after it subjected employees to three days of diversity training that scapegoated white males. After a federal judge refused to dismiss the lawsuit against it, the agency had to pay out a settlement to the white male employee who sued.

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Violence Against Women Act Reauthorization: Don’t Let that Pesky Constitution Stand in the Way of a Law With a Nice-Sounding Title

by Hans Bader on April 25, 2012 · 1 comment

in Legal, Personal Liberty, Politics as Usual, Sanctimony, Zeitgeist

Senators “will let legislation on domestic violence” known as the Violence Against Women Reauthorization Act “pass the upper chamber despite having concerns about its constitutionality,” reports The Hill newspaper. That includes a provision backed by Democrats “empowering American-Indian tribal authorities to prosecute” non-Indians.

Sen. Jeff Sessions (R-Ala.), a member of the Judiciary Committee, said he was “really taken back by some of the changes in laws dealing with Indian reservations,” calling it “unacceptable and very bad policy.”

A Republican aide cited a Congressional Research Service report that warned expanding the prosecutorial power of tribal authorities could violate constitutional guarantees on due process and double jeopardy.

UCLA law professor Eugene Volokh yesterday raised additional civil liberties problems with the Violence Against Women Act reauthorization, arguing that the changes made to the existing VAWA statute by Senate Democrats violate First Amendment free speech guarantees [first, second posts]. Volokh is one of the law professors most frequently cited by federal judges and America’s law reviews, and the author of two First Amendment textbooks, The First Amendment and Related Statutes (4th ed. 2011), and The Religion Clauses and Related Statutes (2005).

William Creeley of FIRE, and former ACLU Board member Wendy Kaminer, say that the Senate reauthorization bill drafted by Senator Pat Leahy (D-Vt.) would undermine due process on college campuses. Lawyer John Hinderaker raised additional civil-liberties objections to the bill’s expansion of tribal court jurisdiction. I earlier discussed some pitfalls of the bill here at this link.

Even the original 1994 version of the Violence Against Women Act had flaws. It contained a provision later struck down by the Supreme Court in United States v. Morrison (2000), and declared unconstitutional, because it exceeded Congress’s powers under the Fourteenth Amendment and the Interstate Commerce Clause. That invalid provision created a tort remedy for gender-motivated domestic violence that largely duplicated state laws (all states ban domestic violence, and take such crimes seriously). The statute’s crowd-pleasing title (no one wants to be accused of being in favor of “violence against women”) diverted attention away from its constitutional flaws. Lawyers and judges who raised valid federalism objections to this provision were ridiculed by people like Joe Biden, who falsely depicted them as ignorant. VAWA’s title continues to prevent dispassionate analysis of its provisions, and potentially opens the door to new constitutional violations being added to it.

Republican senators like Charles Grassley of Iowa have also objected to the lack of safeguards against fraud in the law and the misuse of millions of dollars in taxpayer money that should have been used to help victims of domestic violence. (Even if the Senate reauthorization does not pass the House, programs set up by the 1994 VAWA law will continue to operate.)

Gag Rule for Hedge Funds Challenged in Supreme Court on First Amendment Grounds in Bulldog Investors v. Galvin

by Hans Bader on April 24, 2012 · 0 comments

in Deregulate to Stimulate, Economy, Features, Legal

Post image for Gag Rule for Hedge Funds Challenged in Supreme Court on First Amendment Grounds in <i>Bulldog Investors v. Galvin</i>

Usually, you can advertise and discuss a product, even if not everyone is allowed to buy it. Thanks to the First Amendment, you can advertise a prescription drug even though most people don’t have a prescription for it, as the Supreme Court ruled in 1976. You can advertise liquor and guns, even if minors can’t buy them, and gambling. The First Amendment has been held by the courts to protect advertising of all these things. But Massachusetts securities regulators think you shouldn’t be allowed to advertise your hedge fund on a website, if it is accessible to Massachusetts residents, even though hedge funds are perfectly legal.

Massachusetts fined Bulldog Investors, an out-of-state hedge fund, $25,000 because it had a website promoting the hedge fund, and emailed information about the hedge fund to a Massachusetts resident, even though neither he nor the hedge fund intended to enter into a securities transaction, and Massachusetts admits the hedge fund was not trying to sell him anything. Massachusetts argues in essence that the hedge fund needs to shut up to avoid “conditioning the market” for its product, an investment that only “sophisticated” investors with lots of money are legally allowed to buy. Massachusetts’ ban is based on the paternalistic desire to keep people in the dark about hedge funds for their own good. (The practical effect of such bans is that even journalists like Deirdre Brennan of FINalternatives have had difficulty reporting on hedge funds and accessing basic information about them, since hedge fund managers are scared to even talk to journalists.)

Keeping people in the dark for their own supposed good obviously doesn’t measure up under the Supreme Court’s First Amendment commercial-speech jurisprudence, so Massachusetts disingenuously justified the ban in court as a roundabout way of forcing hedge funds to register with government agencies and provide specified disclosures in the course of doing so (a rather ineffectual way of promoting such disclosures, judging from the fact that Bulldog blocked public access to its website, rather than registering, after Massachusetts fined it; Massachusetts relied on the conclusory assertions of a hired expert, Professor Franco, who admitted he had no empirical evidence, and could not even quantify how effective the ban is in forcing hedge funds to register). Amazingly, the Massachusetts Supreme Judicial Court bought this argument hook, line, and sinker, upholding a trial court ruling in which the judge herself admitted that “Professor Franco does not purport to quantify the effectiveness of the regulatory scheme, and the Court is not in a position to do so.” Apparently, speech restrictions do not need to achieve anything useful to pass muster in Massachusetts. They just need to be based on a dubious rationale that is invented in response to a First Amendment challenge.

As CEI explained in an amicus brief I submitted on behalf of journalists, academics, and think tanks, that pretextual rationale, invented after-the-fact in litigation, cannot survive the “intermediate scrutiny” that applies to commercial advertising restrictions, which forbids “hypothesized justifications” and post hoc rationales for a regulation that did not actually motivate the challenged regulation. See, e.g., Thompson v. Western States Medical Ctr., 535 U.S. 357, 373 (2002); United States v. Virginia, 518 U.S. 515, 533, 535-36 (1996).

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An America of Inequalities

by Hans Bader on April 20, 2012 · 3 comments

in Legal, Politics as Usual, Zeitgeist

Increasingly, ordinary people get prosecuted for trifles, while politically connected people get a pass for the exact same crime, or far worse behavior.

A whale-watcher is being criminally prosecuted merely for lying about whistling at a whale.  But former New Jersey Governor Jon Corzine, a big Obama booster who “stole” $1.2 billion, is not being prosecuted, despite his investment firm’s massive diversion of funds from client trust accounts, a crime that Corzine “personally” ordered.

Meanwhile, a dairy-farming family in Maryland is getting prosecuted by the federal government for “structuring” — breaking up bank deposits into deposits of less than $10,000 at a time to avoid scrutiny.  But former New York Governor Eliot Spitzer got a free pass for the very same offense, even though he (unlike the hapless dairy farmers) used the practice in order to hide criminal activity, making his actions much worse. As Walter Olson notes, “structuring” is “the federal criminal offense of splitting up bank deposits so as to keep them under a threshold such as $10,000 above which banks have to report transactions to the government. Structuring is unlawful whether or not it occurs in conjunction with any other legal offense . . . Nor is there any requirement that the person be aware that there is a law banning structuring; someone who gets wind that transactions over $10,000 are reportable, and decides ‘What’s up with that? I’ll just make $9,000 deposits’, has broken the Bank Secrecy Act.”

Increasingly, the federal government persecutes the innocent and punishes whistleblowers, while turning a blind eye to the guilty.

In the auto bailouts, non-union retirees, pension funds, and bondholders got ripped off, while the powerful UAW union, which endorsed Obama, got special, preferential treatment and a big chunk of the automakers’ stock.

No, Paranoid Progressives, the Koch Brothers Had Nothing to Do With Florida’s “Stand Your Ground” Law

by Hans Bader on April 20, 2012 · 4 comments

in Legal, Personal Liberty, Politics as Usual, Sanctimony, Zeitgeist

In primitive societies, people blame their misfortunes on witchcraft and other imaginary phenomena. The American Left blames the Koch brothers for everything, with equally little basis in reality. (One of my uncles, who once volunteered for Obama, told me that to him, the Koch brothers are like “the devil.”) The Kochs are routinely blamed by progressives for pushing all sorts of legislation that the Kochs have absolutely no interest in, and that would not financially benefit them or Koch Industries one bit. To be responsible for all the activity attributed to them by leftists, the Kochs would have to have supernatural energy and powers, much like the witches of primitive mythology.

A recent example of legislation falsely attributed to the Koch brothers is Florida’s Stand Your Ground law, which the Koch brothers had nothing to do with at all. The Stand Your Ground laws that exist in two dozen states were not invented by or advocated by the Koch brothers, nor did these laws radically change when people are allowed to use firearms in self-defense, as I explained earlier. (As the San Francisco Chronicle’s Bob Egelko and others have noted, Stand Your Ground laws took the definition of self-defense that had long been used in court rulings in states like California for up to 150 years, and formally codified them into state law, slightly broadening the definition of self-defense in those states that previously imposed more of a duty to retreat before using force in self-defense.)

Karen Finney, guest hosting for MSNBC’s Martin Bashir, blamed Charles and David Koch for the Trayvon Martin shooting, which she sought to link to Florida’s Stand Your Ground law (despite the fact that the Stand Your Ground law did not change Florida self-defense law very much, and the fact that homicide and crime went down in Florida after the state’s Stand Your Ground law was enacted):

Who was the Typhoid Mary for this horrible outbreak? It’s the usual suspects the Koch brothers…the same people who stymied gun regulation at every point who funded and ghost write these laws.

Finney, a Democratic operative, had absolutely no basis for this claim about the Koch brothers, and simply made it up, as a Minnesota lawyer pointed out. In response to demands for a correction, MSNBC has not cited any evidence for this baseless claim, because there just isn’t any.  It’s completely baseless. In fact, the only lobbying on firearms issues the Koch brothers ever engaged in “in Florida was in opposition to the National Rifle Association’s support for a bill that mandated employers must allow employees to bring firearms onto company property.”

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ALEC Unfairly Demonized Over “Stand Your Ground” Laws

by Hans Bader on April 19, 2012 · 1 comment

in Features, Legal, Politics as Usual, Sanctimony, Zeitgeist

Post image for ALEC Unfairly Demonized Over “Stand Your Ground” Laws

The pro-free-market American Legislative Exchange Council (ALEC) is under fire for its support of self-defense laws, known as “Stand Your Ground” laws. It began after George Zimmerman, a 28-year-old Hispanic, shot and killed Trayvon Martin, an African-American teenager, and claimed to have done so in self-defense. Zimmerman has now been charged with second-degree murder by a Florida prosecutor.

Since Zimmerman has claimed self-defense, the media has used the shooting as an excuse to attack “Stand Your Ground” Laws, the laws in two dozen states that formally recognize the right of people threatened with death or serious bodily injury to defend themselves with a firearm rather than retreating. But attacks against Stand Your Ground are rooted in widespread misconceptions about how the laws work.  In George Zimmerman’s trial, Florida’s Stand Your Ground Law will probably “make no difference,” and not affect Zimmerman’s odds of being convicted, notes legal commentator Walter Olson. (The media, especially NBC and the New York Times, have also made many false, misleading, and racially inflammatory claims about Zimmerman and the town in which the shooting occurred, as I discuss at this link.)

The New York Times’ Paul Krugman and the left-wing American Constitution Society have depicted Stand Your Ground laws as being an appeal to “ignorant yahoos.” That reflects their own ignorance. The concept behind the law — that you can defend yourself rather than retreating in the face of grave physical threats – originated in many state judiciaries in California and elsewhere. Indeed, Robert Leider points out in The Wall Street Journal, “California became a Stand Your Ground state more than 150 years before Florida.” The concept was then adopted legislatively in various other states.  In some of these states, the Stand Your Ground legislation effectively changed state law to make it more congenial to self-defense claims.  In others, it largely codified existing judicial interpretations of the defense. As law professor Michael Mannheimer has noted, “the law in America has always been ambivalent about the duty to retreat, with about half the States at any given time recognizing the duty to retreat and about half abrogating it. This is not a new development.”

Moreover, Stand Your Ground laws did not make huge changes in existing law, since they did not eliminate the requirement that a use of force be “reasonable” to justify a claim of self-defense — and since even the duty to retreat before using force that previously existed in some states was not absolute. Professor Mannheimer writes:

[E]ven where there is no duty to retreat, it is still a requirement that the defendant reasonably believed that deadly force was necessary to prevent the imminent use of deadly physical force. And even in a retreat jurisdiction, the prosecution generally must prove beyond a reasonable doubt that the defendant knew he could retreat with complete safety. So, in practice, there is not a whole lot of daylight between retreat and no-retreat jurisdictions.

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Ambulance Chasers Feast on Americans with Disabilities Act Claims

by Hans Bader on April 17, 2012 · 1 comment

in Legal, Politics as Usual, Zeitgeist

Thanks to generous attorney-fee provisions contained in federal civil-rights law, trial lawyers are feasting on Americans with Disabilities Act claims at the expense of small businesses, consumers, and indirectly the public.  As I noted earlier, a trial lawyer can collect thousands of dollars in attorney fees for “winning” a discrimination or ADA lawsuit, even if his client collects only $1.

These fees are one-way: under the so-called Christiansburg Garment  rule, the business has to pay the plaintiff’s lawyer if the plaintiff wins the lawsuit; but if the plaintiff loses the lawsuit, the plaintiff does not have to pay the business anything.  This one-way fee-shifting is an incentive to bring some discrimination claims that are based on rather weak evidence or dubious interpretations of the law. Moreover, attorney fees are based not on the actual cost of representation, but on so-called prevailing rates that allow a lawyer for a “non-profit” law firm to collect more than any client would ever pay him: for example, non-profit lawyers are allowed to collect attorney fees based on the higher amount that a well-paid lawyer at a for-profit law firm would have charged clients.

As a story in today’s New York Times illustrates, ambulance-chasing ADA lawsuits are especially common in New York City, where high density and sharply-limited space makes it particularly difficult and costly for small businesses to comply with ADA requirements (alternative link here):

New York City’s aging architecture is providing attorneys — some from out of state — with fodder for lawsuits citing violations of the Americans With Disabilities Act.

In many cases, the lawyers identify local businesses, such as bagel shops and delis, that are not in compliance with the law, and then aggressively recruit plaintiffs from advocacy groups that cater to disabled people, the newspaper reported.

The plaintiffs typically collect $500 for each lawsuit, and each plaintiff can be used several times over. The lawyers make several thousands of dollars, because the civil rights law entitles them to legal fees from the noncompliant businesses.

The New York Times said the practice has prompted debate about whether the lawsuits are justified because they bring about change – or “simply a form of ambulance-chasing, with no one actually having been injured.” . . .

Lawmakers and federal judges have questioned the practice, contending that the lawyers are interested only in generating legal fees; they say the lawyers typically do not give the businesses a chance to remedy the problem before filing suit. . . .

In Florida, editorial boards, lawmakers and federal judges have long argued against the practice. In 2004, Judge Gregory A. Presnell of Federal District Court in Orlando said in a written opinion in favor of a business owner: “Plaintiff’s testimony left the distinct impression that he is merely a professional pawn in an ongoing scheme to bilk attorney’s fees from defendant.” . . .

Carr Massi, who uses a wheelchair, sued five businesses in Manhattan. . . .Asked if she ever patronized the businesses she sued after they made improvements, Ms. Massi said, “Unfortunately, no.” . .

Local business owners, who say they are often sued without warning, call the suits shakedowns. . .“All they want is money; they get the money, and they move on to the next target,” said Ming Hai, a Queens lawyer who has defended businesses from the suits.

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Big Push for Costly “Comparable Worth” Legislation Coming? Lilly Ledbetter Returns to the Stage

by Hans Bader on April 12, 2012

in Economy, Employment, Legal

Lilly Ledbetter, who made false claims about her pay discrimination lawsuit, has returned to the political arena, as you can see at this link. This may set the stage for another Congressional push for passage of the costly and misleadingly-named “Paycheck Fairness Act,” which Ms. Ledbetter backed in the past, or for “comparable worth” legislation, or other trial-lawyer backed legislation that would require pay to be set based on factors other than merit.

The Lilly Ledbetter Fair Pay Act, which extended the deadline for suing over pay discrimination under one federal law, was enacted in 2009 based partly on false claims that the Supreme Court’s Ledbetter v. Goodyear decision, which barred untimely pay-discrimination claims, had made it impossible to bring equal-pay claims over discrimination unless employees learn of the discrimination quickly. That false perception was cultivated by President Obama himself, who ignored the existence of the legal doctrines of equitable tolling and estoppel, and the existence of another law banning pay discrimination, the Equal Pay Act.  The Equal Pay Act allowed people to sue even if their claims were untimely under the law interpreted in the Supreme Court’s Ledbetter v. Goodyear decision, a different law known as Title VII. In reality, the Supreme Court’s Ledbetter decision prevented women from suing over pay discrimination only if they had incompetent lawyers who were unaware of the Equal Pay Act (admittedly, the Equal Pay Act does provide for different damage awards in some cases than Title VII, so employers were mildly happy about the Ledbetter decision).

Various lawyers, like Paul Mirengoff, an attorney at Akin Gump, have concluded that Ms. Ledbetter deceived Congress and the public about when she became aware of the pay disparities she sued over in her lawsuit, in order to try and make her discrimination claim appear more timely. She clearly has made false claims, claiming she was not aware of what she previously admitted knowing in a sworn deposition. (The liberal former EEOC lawyer David Copus and the moderate Stuart Taylor of the National Journal and Brookings Institution have also cited the existence of this inconvenient deposition testimony, which contradicts claims made by Ms. Ledbetter.) I earlier discussed a false claim made by Ms. Ledbetter that contradicted her deposition testimony at this link.

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