Consumer Law & Policy Blog

The randy rabbi is rebuffed — again

by Paul Alan Levy

I reported last spring that Mordechai Tendler, having lost his effort to identify four anonymous bloggers so that he could sue for defamation over their comments on reports that he had abused his religious authority to have sexual relations with congregants, had issued new subpoenas seeking to identify them.  The new subpoenas were for the purported purpose of supporting his claim for damages from the congregation for having fired him.  The appellate courts in New York had previously held that his discharge did not follow the procedures required by his employment contract, and the case had gone back to the trial court to decide the amount of damages. 

Justice Victor Alfieri of New York’s Supreme Court has now quashed the subpoena, and the ground for his ruling is particularly significant.  Our motion to quash had raised a number of procedural grounds as well as arguing that the nexus between Tendler’s damages claims and the bloggers’ identities was too tenuous to justify taking away their right to speak anonymously.  But Justice Alfieri chose a broader ground for his ruling. 

Unlike subpoenas sought to identify defendants so that an action can proceed against them, which only require the plaintiff to show that he has a legal and factual basis for his claims against the Does so that that need can be weighed against the right to speak anonymously (the so-called Dendrite test), when a litigant seeks to identify non-party anonymous speakers to develop evidence for use against his litigation adversary, a greater showing is needed.  Under the 2theMart test, the evidence has to relate to a core claim or defense in the case, or, as the cases sometimes say, the discovery has to “go to the heart of the case.”  When the evidence is needed only to affect the amount of damages obtainable from the defendants, we had argued, that is not a sufficiently compelling reason for depriving a blogger of the right to criticize anonymously. Justice Alfieri accepted this argument, thus providing broad protection of anonymous speech.

Progress at the EEOC

This story from the National Law Journal explains that in FY 2011 the federal Equal Employment Opportunity Commission (EEOC) -- the federal government's anti-employment-discrimination agency -- recovered a record amount of money ($365 million) for victims of discrimination in cases that it brought against employers. (The EEOC brings relatively few cases. Most cases are brought privately by the alleged victims themselves after the EEOC declines to take on the case.) Moreover, despite receiving more claims of discrmination than ever before in FY 2011, the EEOC worked down its large backlog of cases by about 10%. FY 2011 was the first time since 2002 that the agency had pared down its backlog.

Associated Press's Worldwide Study Finds that Half the Countries with Open Government Laws Don't Follow Them

Read about this amazing study here. The AP's Facebook page associated with the study contains links to all sorts of information, including this story about why Tony Blair regrets his support for Great Britain's open government law. Here is the AP's FOIA home page, which contains more open government information.

Will the Supreme Court Do Away with the Disparate Impact Test in Lending Discrimination?

The Court has granted cert in Magner v. Gallagher, where the issues are described as "(1) Whether disparate impact claims are cognizable under the Fair Housing Act; and, if so (2) what test should be used to analyze them."  The SCOTUS blog, from which the issue statement just quoted is taken, has helpful links, while the American Banker has coverage here (paid subscription may be required).  If the Court rules that disparate impact is not usable under the FHA, it may lead to a similar rule for the Equal Credit Opportunity Act, which would obviously make it harder to bring such cases, especially in the Seventh Circuit, which has rejected the other main test for ECOA cases, disparate treatment.

More Cuts in Civil Legal Services for Poor People

Under a FY 2012 budget deal reached between Democrats and Republicans, the Legal Services Corporation (LSC) will receive $348 million to support all 136 federally-funded civil legal services programs for poor people around the nation. Among many other things, these legal services programs help poor people with consumer law issues, such as foreclosure, bankruptcy, and debt collection abuse.

This budget deal is around $50 million less than the LSC budget approved by the Senate a couple weeks ago, $22 million less than LSC's FY 2010 budget, and far less than the $517 million that LSC had requested. LSC funded programs have been cutting staff because of decreasing budgets, and John Levi, chair of LSC's Board, says that the FY 2012 budget deal will result in further staff cuts.

LSC budget cuts are nothing new: The FY 1981 LSC budget, in actual 1981 dollars, was $321 million. Since 1981, according to the Bureau of Labor Statistics, the cost of living has increased 249%. To stay even in real terms with the FY 1981 budget of $321 million, today's LSC budget would have to be $799 million.

Newt Gingrich and the Mortgage Meltdown

I admit it: I did not warn the country about the coming crash in the housing market because millions of people were in houses that they could not afford via mortgages that they could not afford. Did you? According to Michael Lewis's great little book "The Big Short", pretty much the only people who predicted the subprime mortgage meltdown were a few Wall Street insiders who saw it coming, kept quiet, and bet against the market.

But, wait! Newt Gingrich says he knew all about it. The other night in a candidates' debate, Gingrich says that, as a private consultant in 2006, he told Freddie Mac about the coming apocalypse and that its lending policies were "insane." But this Washington Post story, based on interviews with unnamed former Freddie Mac executives, disputes Gingrich's account: "None of the former Freddie Mac officials who spoke on condition of anonymity said Gingrich raised the issue of the housing bubble or was critical of Freddie Mac’s business model." Wouldn't this be easy enough to clear up? You'd think that Gingrich, prodigious writer that he is, would have some written account warning of the subprime mortgage meltdown well before it occurred.

One other thing: Gingrich said at the debate that he was paid $300,000 for his Freddie Mac consulting. According to the story in the Post, his total consulting fees from the mortgage giant were no less than $1.6 million to $1.8 million.

CFPB announces new chief of staff, other senior leadership

Legal Times reports that the CFPB announced today its picks for several senior leadership jobs, including the promotion of principal deputy general counsel Meredith Fuchs to the agency's chief of staff. The agency also announced a new principal deputy general counsel to fill Fuch's old position (former deputy general counsel Roberto Gonzalez), assistant director for legislative affairs (Lisa Konwinski), and assistant director for intergovernmental and international affairs (Nicholas Rathod). The only thing it's missing now is a director.

U.S. Social Mobility (or not)

This opinion piece by Fareed Zakaria says that the large increases in income and wealth inequality in the U.S. in recent years have been accompanied by a downward trend in social mobility. Zakaria explains:

Rep. Paul Ryan (R-Wis.) declared [recently that] “Class is not a fixed designation in this country. We are an upwardly mobile society with a lot of movement between income groups.” Ryan contrasted social mobility in the United States with that in Europe, where “top-heavy welfare states have replaced the traditional aristocracies, and masses of the long-term unemployed are locked into the new lower class.” In fact, over the past decade, growing evidence shows pretty conclusively that social mobility has stalled in this country. ...The most comprehensive comparative study, done last year by the Organization for Economic Cooperation and Development, found that “upward mobility from the bottom” ... was significantly lower in the United States than in most major European countries, including Germany, Sweden, the Netherlands and Denmark. Another study, by the Institute for the Study of Labor in Germany in 2006, uses other metrics and concludes that “the U.S. appears to be exceptional in having less rather than more upward mobility.” A 2010 Economic Mobility Project study found that in almost every respect, the United States has a more rigid socioeconomic class structure than Canada. More than a quarter of U.S. sons of top-earning fathers remain in the top tenth of earners as adults, compared to 18 percent of similarly situated Canadian sons. U.S. sons of fathers in the bottom tenth of earners are more likely to remain in the bottom tenth of earners as adults than are Canadian sons (22 percent vs. 16 percent). And U.S. sons of fathers in the bottom third of earnings distribution are less likely to make it into the top half as adults than are sons of low-earning Canadian fathers.

Why? Zakaria says it's because the U.S. spends very little on poor people and childhood health and nutrition compared to other wealthy countries. And, he maintains, other countries have better public schools.

HT to Leah Nicholls.

60 Minutes Piece on Insider Stock Trading by Members of Congress (who are apparently exempt from insider trading prohibitions)

Watch this devastating piece by clicking on the video here and then vote on who looks more nervous: Rep. John Boehner or Rep. Nancy Pelosi.

 

Supreme Court Decides to Hear Challenges to Affordable Care Act!

The Supreme Court today said that it would consider several challenges to last year's health care reform law.

The Court says it wants to hear about three questions:

(1) Did Congress have authority under the Commerce Clause to pass the Affordable Care Act's so-called individual mandate? So far, two courts of appeals have held that the mandate is constitutional, and one has gone the other way. The Court will have two hours of argument on this issue.

(2) Is the mandate severable from the Act as a whole? Members of Congress who voted for the law justified the mandate, at least in part, on the ground that the Act's other provisions would not work (or work well) without the mandate. So, if the mandate is unconstitutional, does the whole Act fall, or does the rest of it stand (meaning, the mandate is severable), leaving it to the Executive Branch and perhaps Congress to make a mandate-less Affordable Care Act work? Recall that when the Eleventh Circuit overturned the mandate, it chucked the rest of the law too. [Correction: The Eleventh Circuit found the mandate severable; the district court in that case had chucked the whole law.]  The Court will have 90 minutes of argument on this issue. If the Court rules that the mandate is constitutional, it will not, of course, reach the severability question.

(3) Does the (tax) Anti-Injunction Act, 26 U.S.C. § 7421(a), prevent the courts from addressing a challenge to the Affordable Care Act until it is challenged by someone whose taxes have been assessed or collected under the Act (which cannot happen until 2014)? In other words, is it too early to bring a challenge to the constitutionality of the mandate? The Court will have an hour of argument on this issue. If the Court rules that the challenges were impermissible under section 7421(a), it will not, of course, reach either of the two questions above. [Prediction: The Court will reach the merits of the case now.]

UPDATE: Lyle Deniston at scotusblog points out that the Court has scheduled another hour of argument on whether the Act's provisions expanding Medicaid are constitutional. So, that's 5 and 1/2 hours of argument. Wow!