The brouhaha that engulfed the final draft of the Restatement of the Law, Liability Insurance (RLLI) at last month’s American Law Institute (ALI) annual meeting drew more publicity and concern than any ALI work product that I can recall. And for good reason. As numerous commentators observed—including Washington Legal Foundation’s Glenn Lammi and Mintz Levin’s Kim Marrkand—several provisions of the Restatement draft presented at the annual meeting deviated from the current legal rule in a majority or plurality of states. Simply put, this “Restatement” does a lot less restating and a lot more revising than ought to be seen in something traveling under this banner. Continue reading
*Michelle Stilwell, the Mary G. Waterman Fellow at WLF, significantly contributed to this post.
In what is poised to become an extremely influential case, the US Court of Appeals for the Federal Circuit is currently deciding what to do after the federal government unlawfully took over the equity and leadership of one of America’s largest private insurance companies, American International Group, Inc. (AIG), during the 2008 financial crisis. The government, in order to prevent AIG from declaring bankruptcy, offered it the customary Federal Reserve Act § 13(3) loan in the extraordinary sum of $85 billion. However, in a virtually unprecedented move, the government conditioned this loan on receiving 80% of AIG’s equity via preferred stock. This was an offer AIG couldn’t refuse, and it effectively diluted AIG’s shares and all but eliminated the voting and equity rights of the existing shareholders. So what did AIG’s shareholders receive in return for the extreme devaluing of their shares? Nothing. Not yet anyway. The lower court below held, in a lawsuit brought by AIG’s largest shareholder at the time, that the government’s action was illegal, but that no damages would be awarded. It is now up to the Federal Circuit to provide justice for AIG’s shareholders—and to make sure that the government has an incentive to obey the law in future financial crises. Continue reading
This Monday the U.S. Supreme Court will conduct its Long Conference, so named for the larger than usual number of certiorari petitions it considers there. With the fate of so many cert petitions hanging in the balance—and the overwhelming majority of them about to be denied—now is an opportune time to look back at the top 10 cases that were wrongly denied cert in the Court’s last term.
As with the previous installments of my “Not Top 10” list (see here and here), no more than half the cases discussed below will be ones in which Washington Legal Foundation filed a brief in support of certiorari. Also, the cases will once again be limited to those that affect economic liberty, including the need for legal certainty around key legal policies and regulatory regimes. From WLF’s free-enterprise perspective, those cases that implicate competition in the marketplace, limited and accountable government, individual and business civil liberties, or rule of law concerns matter the most. Continue reading
Fracking is alive and well in Colorado. This past Monday, the Colorado Supreme Court delivered a unanimous and resounding victory to property-rights owners in two important hydrofracking cases. Joining states like Texas, Oklahoma, and Ohio, the Centennial State determined that local activism must give way to state law when it comes to permitting the fracking of oil and gas wells.
A 2012 vote in Longmont (pop. 90,000+) had banned fracking there by adding Article XVI to the municipality’s home-rule charter, and a 2013 vote in Fort Collins (pop. 156,000+) adopted a city ordinance that imposed a five-year moratorium on fracking or storing fracking waste in city limits. The state’s oil and gas association took both cities to court, prevailing against each in 2014. Longmont and Fort Collins appealed to the Colorado Court of Appeals, which transferred the cases to the state supreme court. Although this maneuver sped the cases to final resolution, the local laws remained in place during the pendency of the appeal, so half of the Fort Collins moratorium already elapsed before the supreme court could overturn it for good. Continue reading
Deferred-prosecution agreements (DPAs) pose thorny questions from an overcriminalization perspective. But DPA skeptics should welcome—at least for now—a decision issued last Tuesday by the U.S. Court of Appeals for the DC Circuit. In a case entitled United States v. Fokker Services B.V., the DC Circuit held that federal district courts may not second-guess the charging decisions of prosecutors under the guise of performing their Speedy Trial Act (STA) duties.
After investigating the defendant company’s self-reporting of potential export control law and federal sanction violations with respect to Iran, Sudan, and Burma, the Department of Justice negotiated an 18-month deferred-prosecution agreement with Fokker. To implement such a DPA the prosecutor formally initiates criminal charges against the defendant based on facts conceded in the agreement. If the defendant meets the preconditions mapped out in the DPA (which generally involve complying with the law and keeping its nose clean), the prosecutor will then dismiss those charges at the conclusion of the deferral period. If, on the other hand, the defendant fails to meet the preconditions at some point along the way, the prosecutor will proceed with its criminal case. Continue reading
Ed. Note: This morning at a press conference (the video on-demand for which can be accessed here), Washington Legal Foundation released the third edition of its Timeline: Federal Erosion of Business Civil Liberties. Joining the author of this post, WLF General Counsel Mark Chenoweth, at the briefing were former Associate Attorney General of the U.S. Jay Stephens and National Association of Criminal Defense Lawyers’ Executive Director Norman Reimer. Over the next six days, the WLF Legal Pulse will be featuring commentary by leading white-collar criminal law voices on each of the six topics covered in the Timeline.
Overcriminalization is a term that came into vogue about ten or so years ago as a catch-all phrase to describe several interrelated legal policy problems. Washington Legal Foundation (WLF) has been at the forefront of the debate on overcriminalization, helping to popularize the term and offering thought leadership to policymakers, judges, and other participants in the criminal justice system. One concrete manifestation of this leadership is the new third edition of WLF’s Overcriminalization Timeline, which tracks the federal erosion of business civil liberties. Continue reading
The usual spate of articles by Supreme Court scribes pronouncing the Roberts Court staunchly pro-business were noticeably sparser as the latest term ended. When journalists are reduced to using the Obamacare and same-sex marriage cases as their main exhibits to prove the Supreme Court’s supposed pro-business tilt, you know it wasn’t a banner year for business.
Of course there were a few notable losses (King v. Burwell itself, Oneok, and Texas Dept. of Housing come to mind). But the fact that free enterprise did not fare well this term had comparatively little to do with the decisions the Supreme Court issued. Rather, business civil liberties suffered more overall from the various state supreme court and federal courts of appeals cases that the high court left on the cutting-room floor.
The tally that follows comprises more than just the cases of a disappointed cert seeker. WLF did not participate in more than half of the examples discussed below. However, the cert petitions mentioned here are all cases where free enterprise, individual and business civil liberties, or rule of law interests were at stake. From the free-market vantage point, it once again appears that the Court did not make enough room on its docket for cases implicating significant liberty interests. By choosing a lighter load, the Court allows legal uncertainty to linger, lower-court disobedience to fester, adventuresome new legal theories to propagate, and injustices implicating millions, if not billions, of dollars to prevail. Continue reading