Category Archives: financial crisis

Judges figure in this, too

The Government Wins – Redux Edition

Business as usual in the SCOTUS.  There have been changes in personnel in the five years since our last post with this title.

But the results are the same.

The burning issue in this case? Whether a dismissal of a Federal Tort Claims Act (“FTCA”) case brought against the federal government bars any other litigation based on the same facts and circumstances.

Well, let me get a little lawyerly, in the sense of simply employing the rudimentary rules they taught us in law school. Under the usual doctrines of res judicata and claim preclusion and issue preclusion, sure, there’s a “bar” to duplicative litigation. You don’t get another bite at the apple, so to speak.

But there’s a hitch. You don’t generally get barred from suing again in a different venue unless there was an adjudication “on the merits” of your claim. So, to take the most obvious example, if you sued in the wrong court and that court had no jurisdiction to consider your claim, you can go over to the right court after that screw up and bring the claim there.

This is simple, horn-book law stuff.

So what happened with the case we linked to, known as Brownback v. King? Well, there was an FTCA claim and the District Court dismissed it for lack of jurisdiction.  The 6th circuit says, well, that’s not a bar to subsequent litigation because the District Court didn’t have jurisdiction to consider the FTCA claim to begin with, so there was no adjudication on the merits.

Bad move, 6th circuit.  You decided the government should lose.

The government then appeals – that is, brings a cert petition to the SCOTUS and guess what? The SCOTUS takes it up, it falls into that tiny pool of cases that the SCOTUS is going to hear and decide on the merits.

What’s the argument that the SCOTUS should, that Brownback presents some issue of general importance that is likely to recur enough to affect the beloved “system”?  From the government’s brief:

Under the court of appeals’ reasoning, any decision in favor of the government on an FTCA claim based on a failure to show liability under state law can be characterized as “jurisdictional,” with the result that a very large number of FTCA judgments rejecting the liability of the United States would be deprived of the judgment bar’s preclusive effect.

Where does the government come up with “very large number”? They don’t say. Because it’s not only not true, it can’t possibly be true, and we talked about that years ago, after the SCOTUS decision in Connick v. Thompson:

We have millions of felony convictions and imprisonments.  We have even more millions of misdemeanor convictions.  I have cited the statistics before here, right out of the US Bureau of Justice Department.

How many annual successful civil rights actions arise out of all this domestic “kinetic” activity?  At most 3,000, based on this and other BJS statistics.

It is axiomatic that violations of constitutional rights are likely in the course of a criminal prosecution, including simple arrests, because so many constitutional provisions apply.  Yet – and this is prior to Connick, the latest installment – the number of recognized and allowed annual section 1983 claims is running at less than one-half of one percent of the annual felony convictions, and an infinitesimally small percentage of annual arrests.

As I said before in another post, this is effectively zero.  42 U.S.C. 1983 was killed by the SCOTUS.  And that was before Connick.

The real reason SCOTUS is taking up the case, then, is because….the government is the Petitioner and the government wins. That’s the lesson. It’s been the lesson for decades now.  And you don’t have to take our word for it:

The justices gave just one of last week’s relists the nod, and unsurprisingly, it was the one in which the government is the petitionerBrownback v. King19-546.

From John Elwood’s “Relist Watch” yesterday.  Emphasis supplied.

SCOTUS killed federal habeas corpus, too.  We hope we don’t have to review that history again.

The SCOTUS bias in favor of well heeled and institutional litigants and their law firms is completely reflexive and unselfconscious at this point. You’re either in the 1%, meaning your claims are assiduously observed and carefully considered; or you’re the rabble, too trivial to be bothered with.  It’s an axiom at the SCOTUS, and all the lower courts, state and federal, are just following suit.

It’s official. We’re better off without the courts. They exist to ratify and rationalize the prerogatives of the powerful over the powerless, while providing an illusion that redress of grievances can occur.

They are a lie.

 

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Eight Years Ago…

…the term “liquidity trap” was popular and being discussed around here.  It’s still an issue requiring discussion.  Beyond that, we could still use a jubilee and a return to the gold standard.  There is still no other permanent solution.  Presidential candidates like Bernie Sanders are discussing the former; nobody in media land is discussing the latter.  That’s a disservice to the public, but only one among many at this point.

In any event, if people want to understand our monetary system in a nutshell, they could do worse than reading what we wrote back then:

Keynes and MMT are the ones who fundamentally misunderstand the government’s relation to money. The proper role of government wrt to money is to define a monetary unit of account and adminstrate it through bureaus of weights and measures.

The liquidity trap occurs when all that has been disregarded, the unit of account becomes fiat, and the bulk of a nation’s money is created through lending to individuals and businesses. Without a reference point at the bottom of it all, new money issuance is deemed satisfactory so long as loans are being repaid on schedule. In fact this is the only criterion for monetary balance in such a monetary system. When that changes, and loans are no longer being repaid on schedule, lending constricts, and it cannot be otherwise. It doesn’t matter how much liquidity you supply to lenders, they can’t make loans because the borrowing capacity of the populace has dried up. They are debt saturated.

The only answer for this that Keynsians have come up with is for the government to act as borrower of last resort. But in that case government deficits explode and you wind up with Greece and the EU.

In the system that we have, the fact that new money is loaned into existence is not discretionary. There is no other option. Thus if lending isn’t possible, no new money is possible either, and the money supply will stagnate or contract, which of course makes the repayment of existing outstanding loans more and more difficult.

This is why the “helicopter drop” remarks are intended to be funny. New money cannot be distributed that way. All newly created money must be owed back into the system; that is, someone must borrow it into existence and owe it back. It is the only way in a fiat system to regulate money issuance.

The subprime “crisis” signaled that the lending saturation point had been reached in the US. Since the country had largely run out of qualified borrowers, loans were made to UNqualified borrowers. There is no one to blame for this except the people who instituted the monetary system in the first place, and they’re all long since dead. The system will always wind up in this spot after a few generations.

The WaPo article discusses the common MMT inspired idea that taxes are the method for managing the government deficits that occur as the government becomes the borrower of last resort in a liquidity trap, which is just what is happening now. The idea being that the government takes back more and more of the new money that has been issued to ameliorate the deficit issue.

This is a frighteningly stupid assertion. It seems to contemplate a monetary circle jerk where new money is created through a loan to the government, paid out to whomever as salary or pursuant to a contract, and then the recipient is heavily taxed so as to get most of the money back. At that point, the monetary system is not reflecting or facilitating or serving the real economy, rather it’s the reverse: the real economy is serving the monetary system. To say that this is pointless and perverse is an understatement.

No theory of money and credit is worth a largely hungry and homeless populace, yet this is what is happening all over the globe: the theory is more precious than reality to those who get to make the decisions. We have government by so-called “technocrats” who are devoted to an idea rather than their subjects. And the idea is ridiculous.

The answer to all this is redeemable money that can exist and be newly issued apart from being loaned. But to get there from where we are will require a jubilee, because all the debt that has piled up cannot be paid back.

And it will take a constitutional amendment.

But this is a good thing. People need to recover their sense of self-government.”

 

Following the comments section here would prove interesting for some people, too.

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Incoherence Update

When you “reason” only so as to reach a desired result, there is trouble down the line.  You’ll wind up living with your reasoning, that this time produces the wrong result.

So Cole v. Carson has been kicking around for years now.  Up to the SCOTUS, back to the 5th circuit, to a three judge panel, to an en banc rehearing, and now up to the SCOTUS again.  Where it doesn’t seem to be getting much traction, this time.

We bring this up because there is mischief afoot.  The prosecutor groups have filed an amicus brief (just look how many!), but they are not so much the problem as the Petitioner’s brief, and specifically the second question presented in that brief.

We can’t blame them for presenting that question.  And the SCOTUS shouldn’t either.  Here’s the question:

Does a police officer who inaccurately reports his perceptions of events during a dynamic shooting encounter violate clearly established rights under the Fourteenth Amendment?

Well, that’s not really what is being alleged.  What’s being alleged is not that the police officer was “inaccurate”; rather, it’s that the police officer deliberately lied about the events in order to cover up the fact that his fellow officers unjustifiably fired on the Plaintiff, causing his catastrophic injuries.  Partly causing them, anyway.  Because the Plaintiff was apparently suicidal and also shot himself in the head.

But never mind.

The point is that under the 4th amendment the distinction we just made doesn’t matter.  The officer’s intentions, his “scienter”, doesn’t matter under a 4th amendment analysis.  It would matter under a 14th amendment-due process analysis.

So what’s going on here?

Well, the Petitioners don’t say a lot about it.  There are basically two paragraphs in the petition about this.  They’re loaded paragraphs, though:

Manuel, 137 S. Ct. at 920-21, establishes the claim
against Officer Carson must be assessed under the Fourth
Amendment. As far back as 1994, five Justices in two
opinions remitted to the Fourth Amendment such claims
that a person had been held on unfounded charges by
a policeman. Manuel, 137 S. Ct. at 918 (citing Albright
v. Oliver, 510 U.S. 266, 271-273 (1994). Probable cause
existed to arrest Cole for unlawfully carrying a weapon,
a crime Cole confessed to committing. (App. 141a). The
Fifth Circuit, therefore, appropriately dismissed the
Fourth Amendment claim against Officer Carson in light
of Devenpeck v. Alford, 543 U.S. 146, 153-154, 125 S. Ct.
588 (2004).

Officer Carson could not have known in 2010, the
Fifth Circuit would years later enact a new, Fourteenth
Amendment cause of action exposing him to liability on
mere allegations he misstated the facts of a dynamic event.
(App. 146a, 173a). Manuel and Albright demonstrate the
claim against Officer Carson is not cognizable under the
Fourteenth Amendment, but, even if uncertainty exists,
as Fifth Circuit Judge Jones suggested comparing
Manuel with McDonough v. Smith, 139 S. Ct. 2149 (2019)
(App.29a), with such uncertainty even today, the right
involved is not beyond debate and is not “sufficiently clear
that every reasonable official would have understood what
he was doing violates that right.” See Stanton v. Sims, 134
S. Ct. 3, 7 (2013) (discussing that reviewing Judges could
not even agree on the issue).

Judge Jones’ footnote?  We discussed that a little bit here, not that long ago.

Well, how about this argument that “five Justices in two opinions remitted to the Fourth Amendment such claims that a person had been held on unfounded charges by a policeman”, citing to Albright v. Oliver, one of the sources of all this incoherence?

The argument itself incorporates a faulty proposition and fails to cite the relevant case, which is Marks v. United States.  The relevant inquiry is not simply the number of justices who agree upon a specific proposition in resolving a case by plurality opinion; rather it is whether that proposition disposes of the case on the narrowest grounds:

When a fragmented Court decides a case and no single rationale explaining the result enjoys the assent of five Justices, “the holding of the Court may be viewed as that position taken by those Members who concurred in the judgments on the narrowest grounds…

But the argument is wrong for a reason even more fundamental.  What was the result in Albright?  SCOTUS ruled that he didn’t have a due process claim, not that he had a 4th amendment claim, which he refused to even argue.  So that latter problem didn’t arise until 2017’s Manuel v. City of Joliet – 23 years later – where SCOTUS held that Manuel in fact had a 4th amendment claim.  But as we noted at the time, and elsewhere since, Manuel refused to argue that he had a due process claim, exactly the reverse of Albright’s position.

So now we see the argument, in the latest SCOTUS iteration of Cole v. Carson, that we can’t sue a police officer who deliberately lies and cheats to bring about a criminal prosecution under the 4th amendment because his intentions are irrelevant so long as there is an objective basis to find his actions “reasonable”; and we can’t sue him under the due process clause either – because “qualified immunity” – because it’s not clear that that, in and of itself, is a violation of anyone’s due process rights.

What about Mooney v. Holohan and its progeny? The argument from here will have to be that those cases apply only where there has been a conviction.  In 1994’s Albright, and in 2017’s Manuel, and in 2018’s McDonough there had been no convictions.

What’s wrong with that argument?  A lot.

We can’t really improve upon Justice Stevens’ commentary in that regard:

In my opinion, the formal commencement of a criminal proceeding is quintessentially this type of state action. The initiation of a criminal prosecution, regardless of whether it prompts an arrest, immediately produces “a wrenching disruption of everyday life.” Every prosecution, like every arrest, “is a public act that may seriously interfere with the defendant’s liberty, whether he is free on bail or not, and that may disrupt his employment, drain his financial resources, curtail his associations, subject him to public obloquy, and create anxiety in him, his family and his friends.”

Of course Justice Stevens was writing in dissent.

We would like to see the nation’s police and prosecutors make their argument more forthrightly.  Argue to the SCOTUS that lying and cheating by police and prosecutors do not matter if there is no conviction, that is.

In other words, defend official lying and cheating.

It’s the era of Trump, after all.

Ugh.

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“State Courts Matter”

How has it come to pass, we wonder, that someone feels the need to actually say this in a law review article?

Well, we don’t really wonder. We already know.

The legal profession is fractured from an absurd stratification.  “Trial lawyers” are an endangered species confined, at this point, primarily to criminal defense and prosecuting.  The former being the most important and necessary work and also held in the lowest regard by the rest of the profession.

Let that sink in.

The highest regard is reserved for “lawyers” who have never tried a case or had an actual live human being type client.  Lawyers, in other words, who are not lawyers at all  in the sense the term has been traditionally understood.  They include law professors, solicitors general, federal (not state) prosecutors, and large firm appellate advocates.  As we said, some of the highly regarded – federal prosecutors – have actually tried cases, but among the rest this is regarded as mark of lower status.  We are not making that up.  The prosecutors who have tried cases are considered suitable for trial level federal courts (i.e., District Courts), but not federal appellate courts.  It’s not an exaggeration to say that trying a case to a jury, to these members of the profession, is to have dirtied your hands and sullied your credentials.

Federal prosecutors who have tried cases aside, these highly regarded members of the profession now have a near monopoly in federal appellate courts – that is, all the federal circuit courts of appeal and the SCOTUS.  Which is to say that all of the judges, law clerks and for the most part the advocates in these courts come from the most highly regarded ranks of the profession.  Or at least those ranks are highly regarded by People Who Matter.*  So for the most part when an appeal is heard in a federal appellate court, no one arguing it or hearing it has ever tried a case.

State courts do not follow this pattern at all.  Well, maybe slightly, in some states, but the contrast in what might be called “professional diversity” between state and federal appellate courts is extreme.

For sane people, the professional diversity of the state courts is obviously desirable for the federal appellate courts as well.  But in a professional (and more generally, too) increasingly shallow culture, prestige-obsession governs to the point where prestige reaches an upper limit, and it is virtually all that matters.

And then eventually someone has to remind the audience for which law review articles are intended – that is, the prestige-minded and highly-regarded – that lesser prestige state courts have a far greater impact on the country than federal appellate courts do.

The danger, of course – well, one danger anyway – is that the impact on the rabble country, to the highly regarded, is as much a trifle as the state courts themselves.

In the end, we don’t know whether it’s a Good Thing or a Bad Thing that someone actually came out and said to a law review audience that “state courts matter”.  It’s indirectly revealing, which is always a good thing, we suppose.  But what it reveals is also lamentable:  an entrenched snobbery that increasingly marginalizes the legal profession.

A marginalized legal profession “matters”.  In the genuine sense, not the shallow sense.

Ugh.


* People Who Matter is probably a subject for another post, or lengthy screed as the case may be.

 

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Trade War Counter-Spin

So, farmers are upset and claiming that the “trade war” with China is putting them out of business.

We don’t want to see any productive hard working people put out of business.  Especially farmers.  But we also think there may be foundational and structural adjustments to be made and that it’s not easy to do that without some pain.

The way things have been working, we run enormous trade deficits with China and other cheap labor countries so we can buy trinkets at Walmart for virtually nothing, while China buys up our food from our farmers, which is one of the only things ameliorating our trade deficit with them.  One of the effects of all this is to sustain our relatively primitive agrarian economy while China builds up its relatively more sophisticated manufacturing economy.

There’s a sense in which this arrangement is sort of obviously, you know, unwise.

But there’s a deeper issue.  We have grown very accustomed to cheap food and cheap consumer goods while at the same time we have incredibly expensive housing and health care, and pretty high taxation.  Put another way, we transfer an enormous percentage of our national income to bankers for mortgages, government for taxes, and insurance companies for health care.  This sustains in high fashion a basically parasitic managerial class that draw their income from government, or large institutions that feed off of government directly or indirectly, like banks and insurance companies.  And defense contractors – you know, the MIC.

It’s only our opinion, but we think it’s more economically healthy to pay relatively more for food and necessary manufactured goods, and relatively less for housing and government and weaponry and troops.  So we’d like to see farmers paid more by their own neighbors and countrymen for what would probably wind up being better food, but that won’t happen easily because the parasitic class in New York City and Washington isn’t just going to roll over and take a relative pay cut.

So, you know, it’s a difficult adjustment.  Maybe we can bridge the gap with increased subsidies to farmers.  We’ve been doing a lot of that since the New Deal anyway!

Just a little musing here.

 

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Mutual Admiration Society

The Solicitor General’s Office and the SCOTUS.

Things get a little slow over at the SCOTUS blog in the summer, so we guess they figure it’s time to publish the SCOTUS praising lawyers from the SG’s office, or lawyers from the SG’s office praising each other, or the SCOTUS, or vice versa.  Or whatever.

They’re just a little insulated.  As we have noted before.

 

 

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Double Trouble

Sometimes we think a subject we visited previously deserves another mention or two.  We have wondered about the constitutional principle of “separation of powers” with regard to public prosecutors, who are members of both the executive and judicial branches of government.

How, we have wondered, can that be?

It appears that the question simply isn’t asked.  Or hasn’t been.  Except around here.

In practical terms we note that in the UK, lawyers are not permitted to just do prosecution or just do defense.  They must do both, periodically.  This is very much unlike our own system in the US.  True, there are prosecutors who segue from the prosecutor’s office to the defense side.  But it’s generally never to return.

And here’s a follow on problem:  judges are overwhelmingly selected from among the ones that stay, the ones that never leave the fold of the prosecutor “community”.  So we have chronicled elsewhere.

We were also able to identify, in previous discussions, other aspects of this problem that wind up being deeply troubling.

First, we violate the separation of powers by allowing attorneys who are members of the executive branch represent that same branch in court both as executive branch prosecutors and as one of the officers of the court itself.  Then, aggravating that problem, we overwhelmingly pick judges from among that same group of lawyers, judges who then talk about their job as “protecting the public”, which is flatly and dangerously wrong by any sensible interpretation.

It is a little surprising to us that arguments about this problem have apparently never been raised or addressed in an American court.  Only by our increasingly unread blog.

Then again, our ideas for amending our constitution have not gone over well before.  We see no reason to expect that this idea will catch on, or even generate any interest, either.

But that’s probably too bad.  The fact that something has no popularity doesn’t mean it’s wrong.  Just unpopular.

Ugh.

 

 

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