CL&P Blog

Thoughts on the Preemption Arguments from Around the Blogosphere

In today's Washington Post, Tomoeh Tse has a report on yesterday's oral arguments in the Watters v. Wachovia predatory lending preemption case.  A snippet:

[Chief Justice] Roberts said it seemed that banks wanted to be viewed as federally governed on regulation issues but state-based to shelter themselves from liability issues. "You are really trying to have your cake and eat it too," he said.

Justice John Paul Stevens questioned whether the OCC had the manpower to handle the increased responsibility it took when it preempted state law in 2001. He asked specifically how many additional investigators the OCC had hired when it took over this responsibility.

"Well, I don't have an empirical answer to that question," said Sri Srinivasan, assistant to the solicitor general of the Justice Department.

James Rosen, reporting for the McClatchy newspapers, boils the whole thing down this way:

Justices Anthony Kennedy, David Souter and Stephen Breyer seemed most receptive to Wachovia's arguments, while Justices Roberts, John Paul Stevens and Ruth Bader Ginsburg appeared to lean toward Michigan's claims. Justice Antonin Scalia grilled both sides relentlessly. Justice Clarence Thomas had recused himself from the case and didn't participate.

While justices' questions don't always predict their eventual rulings, several appeared to tip their hands in the Wachovia case.

"This is just a standard (federal) pre-emption case," Kennedy said in apparent agreement with the bank.

The Wall Street Journal, in an article titled "The Power to Destroy," suggests that the question in the case goes all the way back to McCulloch v. Maryland.  The Bank Lawyer's Blog tries to read the tea leaves based on yesterday's argument.  Ideoblog discusses the possible implications of Watters for securities law.

Via C-SPAN, you can a watch a video of the American Enterprise Institute panel on the case.  The panel featured George Mason University law professor Todd Zywicki, a member of a group of economists, scholars, and law professors who filed an amicus brief; Columbia law professor Thomas W. Merrill, who represents the Center for State Enforcement of Antitrust and Consumer Protection Laws as amicus in this case; attorney Amy Quester, who represents the Center for Responsible Lending as amicus in this case; and O’Melveny & Myers LLP partner Brian Brooks, an attorney who represents banks in class action defenses in court. Ted Frank, director of AEI’s Liability Project, moderated.

Court Blasts FEMA

by Deepak Gupta

In a landmark victory for victims of Hurricanes Katrina and Rita, a federal judge today granted Public Citizen’s request for a preliminary injunction against the Federal Emergency Management Agency (FEMA) to prevent the agency from terminating housing benefits for hurricane survivors without first adequately explaining its decisions.  To read the decision, click here.

Judge Richard J. Leon of the U.S. District Court for the District of Columbia ordered the agency to restore short-term housing assistance to all evacuees whom FEMA found ineligible since Aug. 31, 2006, until they receive adequate explanation for the decision and time to appeal. In a further rebuke, FEMA was also required to pay the short-term housing assistance benefits that evacuees would have received between Sept. 1 and Nov. 30.

“It is unfortunate, if not incredible, that FEMA and its counsel could not devise a sufficient notice system to spare these beleaguered evacuees the added burden of federal litigation to vindicate their constitutional rights,” Judge Leon wrote in the decision.

The judge found that the Katrina evacuees’ “interest in continued housing assistance… could not be more fundamental and overarching than it is here” and that FEMA’s procedures for notifying evacuees of the reasons for denying them assistance fell short of constitutionally minimal standards.  He concluded that FEMA’s notice procedures were “unconstitutionally vague and uninformative,” and even went so far as to describe them as “Kafkaesque” and “cryptic.”

Watters v. Wachovia

Thanks to the Roberts Court's new and improved same-day service, here's the transcript of this morning's oral argument in the Watters v. Wachovia banking preemption case.   I haven't had time to read it yet.  If you do, and you have some thoughts about it, please let us know.

The Precydent Search Engine and the Web of Law

My colleague at USD Tom Smith has a fascinating study on lately legal citation networks. In his paper The Web of Law he researches the structure of citation of nearly four million American legal precedents to shed light on how the legal system evolves, demonstrating that the American case law network has the overall structure that network theory predicts it would, with clusters, node and patterned aging.

Now Tom and his co-author Antonio Tomarchio, a mathematics graduate student at the Polytechnic of Milan and the Ecole Centrale Paris, have launched http://www.precydent.com. Tom desribes it as “a new kind of legal search engine…Unlike the search engines at Westlaw, Lexis and other legal research services, the Precydent search engine is based on the legal citation network and various Web 3.0 technologies.  Like Google's PageRank algorithm, Precydent's algorithm traces its intellectual ancestry to important discoveries about networks made by Cornell computer scientist Jon Kleinberg, who also generously assisted Antonio in his academic research on the legal citation network.  The algorithm and its many innovative features are the creations of the Precydent team. The search engine does use sophisticated techniques to analyze click streams in order to adapt to users' individual and collective preferences.  While I do not think this raises any privacy concerns, I should at least note this feature of the technology.  Analyzing user behavior is an important part of Web 3.0 technology.” When the founders compared the performance of the Precydent search engine to that of the natural language search engines of Westlaw and Lexis, they found that “Precydent does a much better job in returning relevant and authoritative US Supreme Court cases (as judged by human experts) than do the natural language engines of Westlaw and Lexis.”

(cross posted on Prawfsblawg)

Yet More on Today's Watters v. Wachovia Arguments

Tom Goldstein's SCOTUSblog has posted this informative and detailed preview of this morning's argument .

Two Quick Supreme Court Notes

1.  The States and the Feds square off tomorrow morning before the Supreme Court on the extent to which federal agencies can preempt state law by regulation.  The case is Watters v. Wachovia Bank.  For you preemption/predatory lending/banking law/administrative law junkies, here's the recently-filed reply brief for petitioner Michigan.   More briefs at this link.  I participated in a moot court for Michigan's lawyer at Georgetown Law last week, but probably won't make it down to the Court tomorrow.  Either way, we hope to bring you a report on the arguments.  If you attend and want to offer your assessment, please email me.   I'm particularly interested to hear whether the Justices focus on the interaction between regulatory preemption and administrative deference--a subject of warring amicus briefs by professors Thomas Merrill and Richard Pierce (available here).

2.  Yesterday, the Supreme Court denied cert in Price v. Philip Morris, a case in which the Illinois Supreme Court held that Illinois law didn't support a Consumer Fraud Act claim against the tobacco company's marketing of light cigarettes because the company's conduct was purportedly done pursuant to FTC "regulation" concerning tar and nicotine testing--even though the Feds are actually suing Philip Morris over the very same conduct!  Although the Illinois court's decision was outrageously wrong and is arguably part of a larger pattern of the tobacco companies' use of the same FTC order as a shield, the U.S. Supreme Court's decision to deny cert was not a big surprise.  Among the likely obstacles to cert was the question whether the petition truly presented a federal question.   For those who are interested, here's the cert petition and here's the cert opp.

Eighth Circuit: CAFA's Interlocutory Appeal Provision Does Not Apply to Non-CAFA Class Actions

    By Brian Wolfman

    Agreeing with the Fifth Circuit, the Eighth Circuit has recently held that the provision of the Class Action Fairness Act authorizing permissive appeals of decisions granting or denying motions to remand applies only to class actions removed from state court under CAFA, not to class actions removed on some other basis (e.g.., diversity under 28 U.S.C. 1332(a)(1)).  See Saab v. Home Depot, Inc., No. 06-8014 (8th Cir. Nov. 22, 2006).  Saab says that the text of 28 U.S.C. 1453, the removal provision added by CAFA, demands that result.  The Eighth Circuit should have stopped there.  But like many other courts interpreting CAFA, it also relied on the Senate Report on CAFA to buttress its conclusion.  That's really too bad.  Courts should be treating the Senate Report as worthless because it was issued after CAFA was enacted.  One lonely district court has made this point.

More on Important Supreme Court Preemption Case: Watters v. Wachovia Bank

By Brian Wolfman

     Today's Washington Post has this informative article on Watters v. Wachovia Bank, which presents the question whether the National Bank Act preempts states' efforts to regulate the lending activities of state-chartered subsidiaries of national banks.  The case will be argued in the Supreme Court on November 29.  We previously posted many of the Supreme Court briefs here.  On the day before the argument, the American Enterprise Institute is sponsoring a forum featuring speakers who take different views on this important preemption question.

The Digital Millennium Copyright Act—A New Thanksgiving Tradition

by Greg Beck

For some reason, the day after Thanksgiving has become known as a day of shopping.  Retailers, eager to start off the holiday shopping season, tout low-low prices on "Black Friday" to get consumers into the store.

Prior to Thanksgiving, these prices are (in theory) supposed to be a secret, but on the Internet it is common to see sites like BlackFriday.info and FatWallet post Black Friday prices up to a month in advance.  In response, retailers have invented their own holiday tradition: targeting these sites with takedown notices under the Digital Millennium Copyright Act (DMCA), 17 U.S.C. sec. 512.

Best Buy started off the holiday cheer this month by sending a cease-and-desist letter to BlackFriday.info, demanding that it take down Best Buy's upcoming sales prices.  BlackFriday complied under protest, noting in a brief statement:  "While we believe that sale prices are facts and not copyrightable, we do not want to risk having this website shut down due to a DMCA take down notice." 

USDA Turkey Safety Hotline

Today's Washington Post reports that

The Agriculture Department runs a meat hotline -- 888-674-6854 -- to call with questions about food safety . . . This Thanksgiving season, they have fielded thousands of questions about how to prepare turkey and other holiday foods. The exchanges are often practical, sometimes humorous and occasionally moving.

There are questions about deep-fried turkeys, electric-roasted turkeys, oven-cooked turkeys. Callers want to know how long a turkey can safely be kept in a freezer, the safest way to defrost a turkey, whether it's safe to stuff the bird the day before, how long leftovers can be kept in the refrigerator and other Thanksgiving-related ponderables.

Several specialists have worked for the hotline for more than a decade. They undergo a two-week training program and receive a 150-page turkey manual, but their experience comes from their backgrounds as dieticians, food technologists and home economists.