Open Market

Can You Smell What the Trial Lawyers Are Cooking?

Steve Milloy has a terrifying vision of the future over at FoxNews.com on how trans fats could become the next billion dollar liability bonanza:

However, the Democrat takeover of Congress raises concerns because trial lawyers are historically among the Democrats’ biggest financial supporters – almost 10 times greater than the food industry in 2006 ($65 million vs. $7 million). While Congress has no direct authority over the FDA and its staff, Congress may pressure the FDA and its leadership to change the [generally recognized as safe] status of trans fats in other ways -- such as through its investigative, appropriations and legislative powers.

 

A change in the status of trans fats would clear the way for personal injury lawyers to sue (perhaps on a class action basis) and start collecting big bucks for the alleged 1-in-5 heart attacks that the Harvard cabal blames on trans fats. It could be a multi-billion dollar payday that ranks among the most lucrative personal injury litigation for the lawyers.

 

And people like John Banzhaf are just waiting for the day.

 

--Richard Morrison

When Your Home Is Not Your Castle

Craig Bannister emails this morning with more debate over the Kelo v. New London Supreme Court decision on the power of eminent domain. It seems 11 states have anti-property seizure ballot measures up this election day.

--Richard Morrison

The ADA Meets Cyberspace

BNA is covering the recent district court ruling that Target can be sued if its website is inaccessible to the blind:

In this class action suit—brought by the National Federation of the Blind (NFB)—the Court rejected Target’s argument that only physical stores were covered by anti-discrimination laws, ruling instead that certain aspects of Target’s virtual space—target.com— are subject to the Americans with Disabilities Act (ADA) and California state law.

NFB and University of California Berkeley blind student Bruce Sexton brought the lawsuit, contending that Target’s website violates the ADA as well as California anti-discrimination laws by failing to include, among other things, “alt-text”—which screen readers use to vocalize a description of an image to a blind computer user. The plaintiffs allege that these and other access barriers prevent blind customers from purchasing products online, locating retail stores, refilling prescriptions, or printing coupons to redeem at stores.

Target argued that the plaintiffs’ case should be dismissed, but the Court disagreed, saying that anti-discrimination laws do apply to websites such as target.com.

You can also find Laura Parker’s USA Today story on the lawsuit (re-published on the Arizona  Republic’s website) here.

--Richard Morrison

Taking Tobacco to Court

In case you missed it, the Supremes are tackling a major tobacco/tort reform liability case this week. AP’s Mark Sherman has the story:

The Supreme Court grappled Tuesday with whether to allow a $79.5 million verdict against a cigarette company, a case that business groups are pointing to in asking the justices to clamp down on large damage awards.

 

Mayola Williams was in the crowded courtroom to hear the justices discuss the judgment that an Oregon jury imposed against Altria Group Inc.'s Philip Morris USA in connection with the death of her husband, Jesse.

 

A two-pack-a-day smoker of Marlboros for 45 years, Jesse Williams died of lung cancer nine years ago. Mayola Williams followed through on a promise she said she made to her husband and sued Philip Morris, which makes Marlboros, for fraud. She won.

-- Richard Morrison

Turning Free Speech Upside Down

Thomas Jefferson once wrote that “to compel a man to furnish contributions of money for the propagation of opinions which he disbelieves is sinful and tyrannical.” A similar principle is rooted in the First Amendment, which generally prohibits the government from forcing people to pay for speech with which they disagree.

Federal law nevertheless permits states to impose “agency shop” arrangements under which every employee in a unionized workplace, even though not a union member, must pay to the union, as a condition of employment, a compulsory service charge equal in amount to union dues.

The Supreme Court rejected non-union employees’ challenges to such coerced charges on freedom of association grounds in Railway Employees v. Hanson (1956). But it softened that harsh result by ruling in Abood v. Detroit Board of Education (1977), that such compelled charges cannot be used over an employee’s objection for political causes he opposes, citing the First Amendment freedom from compelled speech.

Now the Washington State Supreme Court has turned upside down the latter ruling protecting First Amendment rights. In Washington v. Washington Education Association, it declared unconstitutional a Washington State law that barred public employee unions from spending a teacher’s service charges on political causes, absent affirmative consent from the teacher. The court ruled that forcing the union to get affirmative consent for such political spending, rather than putting the burden on the teacher to formally make an affirmative objection, burdened the union’s own First Amendment rights.

The U.S. Supreme Court has agreed to hear an appeal of that ruling, and will hear arguments that it be reversed on January 10.

There is something very peculiar about the Washington Supreme Court’s holding that the First Amendment creates not just a floor, but a ceiling, on the First Amendment rights of public employees over the use of their compelled union dues.

In essence, the state supreme court seems to have believed that everything not mandatory under U.S. Supreme Court precedent must be forbidden.

But the U.S. Supreme Court has never said that states cannot give dissenting employees additional safeguards against political use of their coerced dues, such as requiring affirmative consent. Nor has it ever suggested that public employee unions are entitled to have the state give them the maximum amount of union dues they are not forbidden to collect under U.S. Supreme Court precedent.

Indeed, the Supreme Court has made clear that states are free to ban “agency shop” arrangements altogether, as many “right to work” states have done, in protecting non-union employees from having to pay any dues to the union in their workplace. And the federal appeals courts have consistently upheld paycheck protection statutes like Washington’s, which protect a non-union employee from political use of her coerced dues absent her affirmative permission.

The fact that the First Amendment itself does not give non-union employees a blanket right to withhold compelled dues absent an affirmative objection to their use for political causes does not mean that state law cannot give the employees additional protections.

It is well established that a state law can give citizens broader free speech rights than federal law gives them, and states frequently do just that.

For example, under the Washington State Constitution, content-neutral restrictions on speech are subject to tougher scrutiny than under the federal First Amendment.

Under California state law, students have free speech rights in what they say in a school-sponsored newspaper, even the federal First Amendment confers no such rights, under the Supreme Court’s Hazelwood decision.

Similarly, under the Massachusetts courts’ Pyle v. South Hadley decision, students have a state constitutional right to use offensive language to express a political point of view, although such language lacks federal First Amendment protection.

A state is thus free to expand the rights of its citizens, such as students or teachers, even when doing so reduces the power of government officials or the state-conferred privileges of public employee unions.

--Hans Bader

The U.S. Secretary of Shady Land Deals

Judith Burns of Dow Jones’ MarketWatch reports on the latest shareholder activism from our friends Steve Milloy and Tom Borelli over at the Free Enterprise Action Fund:

Goldman [Sachs’] donation of 680,000 acres of remote Chilean forest in 2004 continues to chafe the pro-business Free Enterprise Action Fund, which says the gift hasn't benefited Chile or Goldman shareholders. Fund managers, who raised concerns about the deal at Goldman's 2006 meeting, petitioned the Wall Street investment bank on Friday to have its board review the gift next year as part of a broader study of Goldman's "sustainability" projects.

[…]

Goldman's decision to donate the land to a preservation group appears "inconsistent with its own environmental policy," which calls for creating value for shareholders through market-based approaches, including sustainable forestry, according to the Free Enterprise Fund petition. It also questions the value to shareholders from the deal, saying the tax deduction Goldman received is far less than the $150 million of annual revenues that might have been possible under a "sustainable" forestry plan. Chile itself would be better off with such an approach, which would have brought jobs and industry to a depressed local economy, the petition states.

At the center of this questionable land deal is the former chairman of both Goldman Sachs and The Nature Conservancy, current Treasury Secretary Henry Paulson. We made a point of raising similar concerns about Paulson in May, during his confirmation.

--Richard Morrison

Decoy Files on P2P Sites Become Ad Vehicles

From The Wall Street Journal, via \.

 

The unusual alliance demonstrates a new tack being taken by the music industry to deal with the challenge posed by widespread music piracy. For years, the industry has been suing individual downloaders and file-sharing services, hoping to discourage the practice. In a tactic little known outside the music industry, record labels have also started to hire outside companies to plant "decoy," or fake, files on the sites. (One such company, ArtistDirect Inc.'s MediaDefender, says it has deployed decoys for as many as 30 of the top 100 Billboard songs at any given time.) The decoy files frustrate users because they fail to download even though, thanks to the companies' technical expertise, they often claim the top spot in search results for a tune.

 

But now there's a growing recognition among some record executives and performers that the people who are downloading illegally are frequently huge music fans and that marketing to them may be more desirable in the long run than suing or otherwise harassing them.

 

Oddly enough, that’s what p2p users have been saying since the earliest days of Napster. Of course, it wouldn’t be the first time entertainment executives have been several years behind the curve in cultural developments. More on creative responses to copyright challenges can be found in the Jamie Plummer study we published last year.

--Richard Morrison

Proper Channels

In Terry Gilliam’s spooky, remarkably prescient dystopian sci-fi film, Brazil, the bureaucracy has expanded to completely ridiculous proportions, leading to wonderfully absurd bits of reasoning like this bit from a government torturer attempting to justify his actions: “Information Transit got the wrong man. I got the *right* man. The wrong one was delivered to me as the right man, I accepted him on good faith as the right man. Was I wrong?”

Sure, it sounds absurd. But it’s a lot less absurd when you see stories like what CNet is reporting today. The states that the FBI is apparently pushing for federal legislation requiring ISPs to track and store customer Net usage records for its criminal and terrorist investigations. On the surface, giving government investigators access to Net records seems like it could be a decent idea.  After all, we need to protect the country from a variety of threats, right?  But there are a number of problems with this. First, as the article points out, what the legislation would entail isn’t entirely clear. The default position on expansive, vague legislation—especially one allowing the government to access private records—should always be one of suspicion, and nothing in any of the proposals that promises much more than the possibility of serious government overreach in terms of privacy violations and huge hassles for ISPs that would raise costs on Internet access.

More importantly, such legislation would likely make the majority of users’ data less secure.  Simply requiring ISPs to store such records means they’re more likely to be accessed inappropriately—deleted records, after all, cannot be accessed. Worse, any system implemented would likely give government officials wider, easier access to existing logs than they currently have. The more people and organizations that have access to personal records—especially those who, unlike ISPs whose business depends on protecting the information, have no direct interest in safeguarding it—the more likely it is that such records will be inappropriately accessed. Any law that takes information security and access out of the hands of the users and the companies they’ve directly contracted with is bound to ultimately make personal information less secure.

--Peter Suderman

Race-Based Student Assignments

In a case pending before the Supreme Court, the Seattle School District argues that it should be allowed to use race when assigning students to schools. It argues that its decision to use race should receive deference because it knows better than the courts how to run a school system.

CEI filed an amicus brief with the Supreme Court arguing that the school district shouldn’t get any special deference. Our brief points out that the Seattle Schools have made wacky statements, such as claiming that planning ahead is acting white, that “individualism” is a form of “cultural racism,” and that minorities cannot be racist. These statements undercut the school district’s claim that it has special insight into race-related educational issues to which the courts should defer.

When the government seeks to treat people differently based on their race, it typically has to give a really good reason, like breaking down entrenched patterns of segregation. Since allowing the government to classify people by their race is risky, the government has to have a really compelling reason for doing so, and its arguments typically receive no deference from the courts. Its arguments are subjected by judges to what is called “strict scrutiny.”

For example, although prisons typically get broad deference from the courts as to how they treat prisoners, and can sometimes do things that other government agencies can’t do – like engaging in censorship or discriminating based on disability – they get no deference at all when they use race, according to the Supreme Court’s 2005 decision in Johnson v. California. That decision held that strict scrutiny applies to all racial classifications, and that deference is antithetical to strict scrutiny.

On his excellent web blog Discriminations, John Rosenberg discusses additional arguments made for why the Seattle School District should supposedly be allowed to use race. He explains why those arguments are unpersuasive, and why using race does not enhance student achievement.

--

Hans Bader

Assessing the Content of Google's Character

To continue the Google-YouTube discussion begun by Peter, take a look at what some /. folks are saying about Google's potential exposure to copyright infringement lawsuits. YouTube, of course, has already signed deals with some very large content companies, and more of the same can be expected now that they've got Google's corporate clout (and cash) on their side. It only takes one company with a valid copyright claim, however, to seriously gum up the works. Hopefully the today's content creators will realize (as our own Jamie Plummer had explained) that the best path to protecting their rights lies in new technologies, business practices and cooperative agreements and not in endless negative-PR-generating legal battles.

--Richard Morrison