Category: Current Events

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The Times’ “Massive” Libel Exposure?

Mickey Kaus, who tells-others-so often, blogs about the Hatfill v. NYT libel suit [For Mickey’s take, go to Wednesday’s column and scroll down]:

The Times now faces massive exposure in the Steven Hatfill libel case against columnist Nicholas ‘I Might Have Gotten it Right’ Kristof.

This feels like a massive overstatement to me. I can’t find any good analysis on the ‘net of the Times’ exposure: because it is a federal case, there was no ad damnum. A quick look around suggests that libel verdicts don’t get to be much more than $50 M (at least, those that stand up don’t). Moreover, Virginia (I believe) caps punitives at $350,000. I suppose such a cap would apply in this diversity case if VA law applied (the extent it does instead of NY law is yet to be resolved.) Putting that aside, and assuming a high damage award, the Times’ expected liability has to be discounted by the probability of its losing at trial in a traditionally pro-defendant jurisdiction. Just a guess, but I’d put the resulting probable exposure at less than $10,000,000. (I may be missing many parts to this analysis. Readers are free to chime in).

If I’m nearly right, in light of the corporation’s $250 million 2005 net income, do you think this case is keeping the CFO up at night? I don’t. I tried without luck to find any mention of a Hatfill reserve in the Times’ recent SEC filings. The only discussion of pending litigation contains “no material adverse impact” language, which is surprisingly general. If you want to know the risks that the Times thinks its shareholders should care about, check out this scary page. Bottom line: litigation isn’t the problem, the web is.

Relative Deprivation, Location, and Lawdenfreude

housingbubb2.jpg

As a recent buyer of a “luxury” (read: habitable) condo in a not-so-fashionable precinct of Jersey City, I obsessively read about the “housing bubble.” It’s about as irresistible as kitschy old TV shows. The latest installment is this interesting piece by Dean Baker, arguing for governmental intervention designed to pop the purported bubble “sooner rather than later:”

If mortgage rates were pushed back to more normal levels (e.g., 7 to 8 percent), it would almost certainly lead to a sharp reduction in housing prices. Deliberately destroying trillions of dollars of wealth may seem like perverse policy, but it is important to recognize the context. If there is in fact an unsustainable run-up in housing prices, then the question is not whether prices will fall, but rather when prices will fall. The wealth is not really there. It is an illusion.

Housing economists can have a field day debating the wisdom of this proposition as a policy matter—I defer to their opinions. What piques me is the notion of “illusory wealth.” The housing bubble story reveals something fundamental about “wealth creation” via certain assets that mainstream economic measurement tends to ignore. For the 68% or so of people who own a house, rising real estate prices bring security and well-being. But for the rest, they can cause real anxieties. In many commodities markets, rising prices can induce more suppliers to meet the demand. But in many urban centers, there is little space left next to public transit or desirable amenities. Supply can’t rise to meet demand. So what we really have is a bidding war for prime space. Does this have any implications for law?

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Boutique Medicine: Tax it, Don’t Ax It

Sick of waiting weeks for a doctor’s appointment? Or hurried visits? Well, “concierge physicians” have got a deal for you. Just pay a retainer to a practice (usually between $2,000 and $5,000 annually), and you’ll get immediate attention, long visits, and personalized preventive care. There’s just one catch—when you and, say, 400 other health care “consumers” sign-up at a given practice, it drops the other 1500 patients it had been serving to concentrate solely on retainer patients.

Is this problematic? Some important Democrats say yes, and have moved to kick “concierge physicians” out of the Medicare program. Tommy Thompson resisted that move when he headed HHS—and now he’s on a leading concierge franchise’s board. But since he’s left, some lower level officials at HHS have been raising concerns about “boutique medicine.”

After thinking about retainer care for a while, I have a few conclusions about these efforts. In a nutshell: I think it’s unwise to try to ban concierge care outright. But I do worry about it. It’s consonant with a larger movement that TNR describes: “to radically transform health insurance altogether, so that risk is gradually transferred away from large groups ( i.e., the government and large employers) and onto individuals (i.e., you).” If health insurance starts to move from a “defined benefit” to a “defined contribution” model, we can count on a diversion of scarce medical resources from a common risk pool to pockets of well-heeled consumers. Here’s why I think so…

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Arrests In Alabama Church Fires

The police arrested three college students today in their ongoing investigation of ten church fires in Alabama. The CNN story is here. Two of the students attend Birmingham Southern College, one of Alabama’s elite liberal arts colleges. (For those readers who dismiss the college because they have never heard of it, and it’s in Alabama, think Kenyon or Haverford. Some of my best students at Alabama Law attended BSC.) The third attended the University of Alabama at Birmingham (known locally as UAB, and in college sports polls as Ala – Birmingham.)

I’m waiting to understand the logic, or even the illogic, of their actions. They torched five predominately white Baptist congregations, and five predominately African-American ones. It’s hard to see this as a mere prank but no easier to understand as a political attack. Somehow I suspect that one or more of these defendants will be blaming alcohol or drugs.

Nobody needed this string of fires, but they resonate specially in Alabama. Lets hope that the good news – the difference between now and then – is that these fires were merely pointless destruction, and not intended as a meaningful message to anyone at all.

UPDATE: The complaint in this case is available here.

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Justice Breyer At Alabama

This afternoon, Justice Breyer gave the Albritton Lecture at the University of Alabama. His talk was uncontroversial, as he staked out all the positions one might expect. Citation of foreign law? If it’s helpful to read materials from other nations, why wouldn’t we? We aren’t bound by them. Kelo? Surprised by all the uproar since this seemed to have been the law since FDR. Being tagged as an activist? You’ve got the wrong Justice! Just take a look at that study by Gewirtz and Golder.

Breyer’s visit was still well worth the candle. We’ve had a string of Justices join us in Tuscaloosa, over the last few years, a happy side benefit to our Hugo Black Fellow Program. (Former Supreme Court clerks come and teach a light load for a year, giving them a chance to test out the job and write in relative peace.) They humanize the Court and make everyone feel a little better about the institution. Justice Thomas was immensely popular among students – as he is, apparently, among clerks. He spent time, lots and lots of it, answering student questions, shmoozing one-on-one. He managed to disarm even those folks who were prepared to loathe him.

Breyer had a different battle on his hands visiting the Heart of Dixie. Many students probably expected a liberal activist. (The opening question, asking him how he believed the Constitution protected property rights, gives you a sense of things. ) With his emphasis on the primacy of legislative decisionmaking – hardly a surprise from the author of Booker’s advisory sentencing guidelines opinion. – I suspect that many students found him remarkably unthreatening. They are correct. Those seeking a left-wing bogeyman on the Supreme Court will have to look elsewhere. To paraphrase Alex Kotlowitz, There Are No Liberals Here.

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An Olympic Conspiracy Theory

The media has been full of stories about the Turin Olympic’s failure to grab hold of the American domestic television market. Explanations seem to range widely, from athletes failing to win sufficient numbers of golds, to the sports being outside of the experience of most American viewers, to dissapointments in ice skating, to the delayed coverage.

I wonder if nervousness among advertisers has changed the bargaining position of the American olympic federation? Today’s Philadelphia Daily News has a story with an interesting theory about the reason that superstar Allen Iverson wasn’t invited to try out for the 2006 world championships.

With USA Basketball and Nike announcing yesterday that they have reached a multiyear agreement to make the footwear company a marketing partner and exclusive apparel outfitter of the national team, it’s beginning to make a bit more sense as to why Allen Iverson will not be one of the 22 players invited to try out for the team that will compete at the 2006 world championships.

I don’t want to claim conspiracy theory, but it’s mighty interesting that as soon as Nike partners with USA Basketball for the first time ever, Iverson – who just happens be the No. 1 endorser for archrival Reebok – is booted out of the U.S. Olympic loop. Nike will provide uniforms, warmups and practice gear for the team.

Pretty wild stuff.

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Becker, Posner and the Purpose of the University

Richard Posner and Gary Becker, over at their eponymous blog, have been blogging about the Summers resignation. They both come out for Summers, and against tenure. The discussion is worth checking out in full.

I wanted to focus in on what seemed to me to be an underlying issue that neither Becker nor Posner really nails down: what good is the university supposed to maximize? Or, clearer put, what is the purpose of a university? Posner argues that faculty and university incentives and capabilities are misaligned:

The faculty are interested primarily in their own careers, and what is good for their careers and what is good for Harvard are only tenuously connected . . . What is more, [a replacement president] might be more inclined to kow-tow to faculty, enhancing their careers at the expense of the long-run health of the institution.

But this does not tell us what success or “long-run health” means. Both eminent economists turn quickly to market measures of value. Posner claims that “our universities are the best in the world” [Ed.: Now is the time to remind the reader that such puffing claims are not to be trusted, and to suggest that they look for this paper on that very topic.] Becker is more explicit:

Still, I believe the only satisfactory way to evaluate how universities (or businesses) are run is by their success or lack of it in the long run. Although there is no simple way, like profitability, to judge universities, there is an effective way to judge a university system. The American college and university system is widely accepted as the strongest in the world. This is why American universities are filled with students from abroad, including those from rich nations with a long history of higher education, like Germany and France.

I conclude from this that the American university system must be doing many things right, at least relative to the other systems. And what is right about this system is rather obvious: several thousand public and private colleges and universities compete hard for faculty, students, and funds. That the American system of higher education is the most competitive anywhere is the crucial ingredient in its success.

This argument confuses me. Is the claim that because our universities attract foreign students at higher rates than foreign graduates attract U.S. students our universities are “successful” and should do more of what they are already doing? That claim would seem tough to swallow given that our universities allow entry into our economy and (through marriage to fellow-students) citizenship, and thus attending Harvard isn’t necessary a proxy for endorsing its governance structure. Or is the claim that our success is a product of competition itself? In that event, who cares what internal governance looks like as long as we have established a market for private education?

More generally, it seems to me that without a good account of what the university should be doing (and not what the market is rewarding it for doing) arguments about proper governance structure are founded on quicksand. After all, there are a significant number of more autocratic colleges than Harvard extant. Almost all such schools are traditionally seen as less successful in many ways. Should we chalk Harvard’s success up to path-dependence? The distorting effects of tenure and labor unions? Does this internal market not matter to our evaluation of Harvard’s success? Because if it does, how can we say that the faculty governance model that Harvard has long followed is inversely related to “long term health” of that institution?

(Hat Tip: Todd Z.)

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Good News from Weare, N.H.

You may remember some time ago after the Supreme Court announced its unsurprising ruling in Kelo v. New London, that a group of protestors, led by Logan Darrow Clements, began a publicity campaign to seize Justice Souter’s home in Weare in retaliation for his vote as a part of the five-justice majority in the case. Law Professor Glenn Reynolds encouraged the effort, although Randy Barnett and others were more circumspect. I took the whole thing pretty seriously, and earned a counter-post from Eugene Volokh, who thought that the Clements campaign was protected by the First Amendment even if he was attempting to retaliate against a Justice for acts in his official capacity.

In any event, the citizens of Weare, N.H., rejected Clements’ campaign over the weekend. By a vote of 94-59, they inserted a “not” in Clements’ proposal, making it a dead-letter. Then, apparently, they passed a ballot measure (to be voted on next month) that will petition the state government to make land seizure more rare.

Clements, of course, isn’t done with his publicity campaign.

Clements says altering the article to essentially negate its purpose is unethical and unconstitutional. He says the selectmen misled the voters at the meeting by saying the article was illegal and could spark a lawsuit . . . Clements said he was considering filing a lawsuit.

And so this terrific use of taxpayer time will continue.

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The Consequences of Misleading the Judiciary Committee

Edward Lazarus’s column on Findlaw this week discusses the constraints Chief Justice Roberts and Judge Alito have placed on their behavior on the Supreme Court by their Judiciary Committee testimony. Specifically, Lazarus argues that should Roberts and Alito turn out to be more doctrinaire than the moderate conservatism displayed in the hearings, the consequences would be “longstanding and grave.” (Lazarus does not elaborate on the nature of those consequences, which could range from possible impeachment, to restrictions on the Court’s power by legislation, to a loss of confidence among members of the public, to demands for even more specific promises from future nominees, etc.)

I am not confident that Lazarus is correct as a general matter, though he may be as to his principal example — voting to overturn what is left of Roe v. Wade. I see little evidence, for example, that Justice Ginsburg is suffering any ill effects from Congress though she has done little on the Court to justify her image in 1993 as a “moderate liberal.” Similarly, though all nominees routinely profess to understand that the law is more than their personal policy preferences, once on the Court they routinely break that promise. (As Justice Scalia said in a related context, campaign promises are, by long democratic tradition, the least binding form of human commitment. See Republican Party v. White, 536 U.S. 765 (2002).)

If I am correct, there could be at least three reasons there are few repurcussions thus far for reneging on Judiciary Committee commitments. First, Republicans may lack the guts to use ideology in the way that Senate Democrats do. We’ll see whether this is true the next time a Democratic President nominates a potential Justice, but the Republicans’ acceptance of Ginsburg indicates it might be true. Second, a determined minority can prevent Congress from taking just about any official action, so even opposition to a Court decision can be expected to result in no action so long as at least one committee in one house supports the Court’s decision. And of course impeachment is practically impossible. Third is the most obvious: Because the statements nominees make are so general, no behavior could constitute breaking that “promise.”

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What’s in a name?

From the Chicago Sun-Times (link via my friend Fook King Steve):

Fuk King Kwok was waiting for his driver’s license to be printed when his name was called and a chuckling Illinois secretary of state employee offered some advice.

“She [said] this is a dangerous name,” the Chinese immigrant recalled. “She [said] the name translated is not so good, maybe I should change [it]. The word I hear is not so good.”

Mr. Kwok successfully changed his name to Andy. One wonders what hurdles he would have faced had he continued to go through life as Fuk King. Would he have been denied employment due to his name? (Can you imagine that name tag on your restaurant waiter?) Prosecuted for obscenity when he filled out a credit card application? Or would the fallout have been limited to snickers behind his back and inexplicable troubles finding a Friday night date?

I guess we’ll never find out. Welcome to a slightly more normal life, Andy.