More on Bork

Paul Levy gave us his perspective on Robert Bork last week. Historian Stanley Kutler, known for his works on Richard Nixon, now gives us his. Kutler thinks little of Bork's judicial philosophy of original intent (finding it at odds with what history tells us about the Founders' intent), but he thinks history has treated Bork unfairly regarding his role in one of Watergate's key events: the Saturday Night Massacre.

Another Concepcion Paper, This Time From Harvard

David Korn and David Rosenberg of Harvard have written Concepcion's Pro-Defendant Biasing of the Arbitration Process: The Class Counsel Solution.  Here's the abstract:

By mandating that numerous plaintiffs litigate their common question claims separately in individual arbitrations rather than jointly in class action arbitrations, the Supreme Court in AT&T Mobility LLC v. Concepcion created a potent structural and systemic bias in favor of defendants. The bias arises from the parties’ divergent stakes in the outcome of the common question litigation in individual arbitrations: each plaintiff will only invest to maximize the value of his or her own claim, but the defendant has an incentive to protect its entire exposure, and thus will have a classwide incentive to invest more in contesting common questions. This investment advantage enables the defendant to wield superior litigation power against each plaintiff, skewing the outcome of individual arbitrations in its favor and frequently rendering claims not worth filing in the first place. Concepcion perpetuates the bias by precluding the use of a class arbitration solution. We propose that courts neutralize the Concepcion bias by appointing class counsel to represent each plaintiff in individual arbitrations. Without offending Concepcion’s prescriptions for maintaining the efficiency of arbitral procedures, in particular the general bar against class arbitration without express contractual authorization, the class counsel solution equalizes the parties’ investment incentives to transform individual arbitrations into a socially useful legal system for promoting the deterrence, compensation, and other public policy objectives of federal and state substantive law.

 

 

 

Foreclosure Crisis Update

The crisis tally so far: about 4.7 million completed foreclosure sales from July 1 2007 through 2012 (extrapolating the 4th quarter), and more than 12 million foreclosure starts.  Adding short sales brings the total home losses to well above 5 million.  If we define the shadow inventory as mortgages presently more than 90 days delinquent or in the foreclosure process already, another 3 to 3.5 million homes are at risk, although the success of modifications will determine how many of those end in home losses.

The trends are all in the right direction, but the rate of recovery is still agonizingly slow. Beware of charts that start on or after January 1, 2007.  To return to normal foreclosure levels, we need to see all these rates return to something like early 2006 levels.  For example, the third quarter 2012 foreclosure numbers are the best since 2008, but still 2.5 to 4 times what they were in 2006.  The foreclosure inventory is still 4% of first lien residential mortgages, down from its 4.6% peak in 2009 but still way above its 1% level in 2006.

For the mortgage bubble to burst (as contrasted with the home value bubble) total mortgage debt needs to come down from its $11 trillion peak, but as of September 30 residential mortgage debt has just dipped below $10 trillion.  

The combined effect of plummeting home prices and downward-inching mortgage debt is pictured in the chart.  Trillions of dollars of home equity wealth were wiped out in the first years of the crisis, and the recent gains, touted by HUD in the chart title, are dwarfed in comparison.  

The bright spot in the third quarter data is the continued upward trend in principal reduction modifications.  OCC reports that a stunning 75% of modifications made by banks on mortgages in their own portfolios included principal reduction.  For Fannie and Freddie mortgages, on the other hand, principal reductions, at 0%, showed no change.

New book about boilerplate contracts

Earlier this month, Professor Margaret Jane Radin put out a new book called Boilerplate: The Fine Print, Vanishing Rights, and the Rule of Law. Publisher Princetion University Press describes Professor's Radin's argument as follows:

Margaret Jane Radin examines attempts to justify the use of boilerplate provisions by claiming either that recipients freely consent to them or that economic efficiency demands them, and she finds these justifications wanting. She argues, moreover, that our courts, legislatures, and regulatory agencies have fallen short in their evaluation and oversight of the use of boilerplate clauses. To improve legal evaluation of boilerplate, Radin offers a new analytical framework, one that takes into account the nature of the rights affected, the quality of the recipient's consent, and the extent of the use of these terms. Radin goes on to offer possibilities for new methods of boilerplate evaluation and control, among them the bold suggestion that tort law rather than contract law provides a preferable analysis for some boilerplate schemes. She concludes by discussing positive steps that NGOs, legislators, regulators, courts, and scholars could take to bring about better practices.

The Wall Street Journal reviewed the book yesterday and discussed some of boilerplate's implications for the legal system.

EPA's Greenhouse Gas Rules Survive En Banc Review Process in D.C. Circuit

We told you last June that a panel of the D.C. Circuit had largely upheld the Environmental Protection Agency's greenhouse gas rules issued after the Supreme Court's decision in Massachusetts v. EPA demanded regulatory action on greenhouse gases. The panel's 82-page opinion, written by Judge Per Curiam (Sentelle, Rogers, and Tatel), was pretty comprehensive. Yesterday (nearly six month later), by a 6-to-2 vote, the full D.C. Circuit denied a request for en banc review that had been sought by various business interests. The court issued 52 pages of opinions, mainly penned by the dissenters (Judges Brown and Kavanaugh), although the original panel judges wrote a short opinion saying why they think the dissenters are wrong.

Jenna Greene has written this story on the en banc denial.

More on Intervention in Class Actions by Non-Class Members

We posted yesterday about a recent decision of the U.S. Court of Appeals for the Third Circuit that authorized non-class members to intervene for the purpose of objecting to a district court's certification and settlement of a class action that might affect their interests. Class action lawyer Rob Bramson has made an interesting comment on the Third Circuit's ruling. He says that

Another context when this might arise is where there are [partially] overlapping classes, with the class representative in one case proposing a settlement while the class representative in the other case thinks that it's a raw deal for that portion of the (proposed) settling class who qualify under both class definitions. The problem for that second class representative is the general rule that only "class members" can object to a proposed settlement. So th[at] person must choose between opting out and continuing on with his/her own class case (while sacrificing the right to object) or to risk losing the ability to act as class representative in the other case by objecting rather than opting out of the settling one.

Rob points out that the Third Circuit's ruling -- allowing "non-party intervention for objection purposes" --  would solve the problem he has identified. If readers know of cases addressing Rob's concern (or related concerns), please pass them along.

New Report on Serious Surgical Errors

Today, the Washington Post reported on a new study quantifying how often surgeons make "never" mistakes, i.e., mistakes that should never happen, such as leaving an object in a patient, performing the wrong procedure, or performing the procedure on the wrong body part. Apparently, between 1990 and 2010, about 500 "never" events were reported to malpractice insurers annually.

The Post article notes that other studies have shown that implementing things like checklists can reduce these types of mistakes.

Post coverage is here (with charts), and the study press release is here.

Industry Opposition to the FTC's Nutrition Facts Privacy Label

by Jeff Sovern

According to an article in Evan Hendricks's Privacy Times from October 24 (I'm behind in my reading), the FTC is working on a standardized privacy label akin to the nutrition facts labeling on food.  The label is to focus on five main items.  Not so readable as a single grade, but it still sounds more readable than what we have now (though I have on my pile of things to get to a study that shows that consumers won't read standardized privacy tables, but maybe this is a different kind of label; as I say, I haven't gotten to that study yet, so I just don't know).  In any event, how does the industry react?  Well, the headline of the Privacy Times story tells it all: "Leibowitz's 'Nutrition Labels' Sparks Pushback from Industry."  And what is the basis of this pushback?  Concern for the consumer.  One big firm lawyer is quoted as saying that she isn't certain that five elements are going to tell consumers any more information than they already have.  Another is concerned that nuances will be lost.  Very thoughtful of them.  But given that it appears that most consumers already don't read privacy policies, could it be that many consumers are not getting any information, much less picking up on nuances?  Could it also be that some businesses benefit when consumers don't read privacy policies because it allows the businesses to do what they want with consumer information--and that businesses that have that freedom don't want to lose it by having consumers understand privacy policies and take them into account in deciding which businesses to patronize?  Might that be a reason for businesses to oppose simpler disclosures--one that businesses dare not acknowledge?

Do Consumers Want a Do-Not-Mail List?

Chris Jay Hoofnagle and Jennifer M. Urban, both of Berkeley Law, and Su Li of Berkely's Center for the Study of Law and Society, have written Privacy and Advertising Mail.  Here's the abstract:

In this paper, we consider why Americans may frame the generation and receipt of unsolicited advertising mail as a privacy violation. We then present data from our nationwide survey showing that a very large majority of Americans, across all ideologies, educational attainment levels, age, and income levels, support the creation of a do-not-mail mechanism similar to the popular Telemarketing Do Not Call Registry. We discuss our results in light of the fact that direct advertising mail now makes up more than half of all mailpieces sent by the United States Postal Service (USPS).

 

 

A Contrarian Historical Perspective on Robert Bork

by Paul Alan Levy

The death of Robert Bork today has revived the old debate about the defeat of his nomination to the Supreme Court, but I am sorry to see many of the ordinarily reliable sources missing the boat in their discussions.  The New York Times, for example, talks about how liberals opposed him because of "their sense that he cared more about abstract legal reasoning than the people affected by it."  Jeffrey Rosen writes in The New Republic about Mr. Bork's "ideological open-mindedness" and how unfairly his record was portrayed by those darn liberals.

I lived through that fight, and although I saw some of those arguments made, the recollection of Mr. Bork that is being perpetuated in such reports is much too kind to him.