Friday, September 17, 2021

Can 'inclusive capitalism' pull us back from the brink?

1957 U.S. propaganda poster (NARA)
"Welcome to late-stage capitalism!," DeepKarma tweeted @me earlier this month.

The exclamation was a response to my tweeted complaint that Hertz rental car quoted me a higher price when logged in as a "Gold Plus Rewards Member" than when I compared rates in an anonymous browser.  Dynamic pricing is a known feature of online retailing that rubs people the wrong way yet pours through America's dysfunctional consumer protection sieve.  I did not expect it to be a feature of Hertz's so-called "loyalty program."

Pushing the button of my angst over corporatocracy, DeepKarma's term intrigued me. My subconscience might have remembered Annie Lowrey's "Why the Phrase 'Late Capitalism' Is Suddenly Everywhere" in The Atlantic in 2017, subtitle: "An investigation into a term that seems to perfectly capture the indignities and absurdities of the modern economy."

The term dates to early 20th-century German economist Werner Sombart. Twentieth-century socialists mispredicting the demise of capitalism were fond of the term, which in turn made it unwelcome in polite democratic company.  Now our feverish commitment to deregulation, dismantling of social safety net, and bottom-line-driven abuse of human capital, etc., resulting in, inter alia, an enormous wealth gap and aforementioned charade of consumer protection regulation, have brought the term back into fashion.  I'm an economic conservative, by the way, but there is no free market if people are not free to enter into it and make free choices once they're there.

Coincidentally, I recently mentioned the work (and kind support for my work) of Syracuse law professor Robert Ashford.  It happens that Ashford is a leader of a community of scholars who have for decades been advocating, often screaming into the wind, for economic policy solutions to come from economics itself.

More often than not, the field of economics posits only descriptive research or resorts to classical norms such as laissez-faire regulatory policy without critical introspection.  Ashford is the founder of interdisciplinary "socio-economics," which strives for "inclusive capitalism": in my words, to use economic science to actually make life better for everyone, rather than for some at the expense of others.

A short but steep learning curve is required before one digs into the potential of socio-economics, in the vision of Ashford and colleagues.  Here is an introductory kit:

As these titles indicate, the interdisciplinary nature of socio-economics and inclusive capitalism make the sub-field accessible to scholars, for both understanding and participation, in a range of disciplines, both soft and hard sciences, besides law and economics, and also understandable to anyone.  Professor Ashford is always willing to invest time and energy to help potential believers come up to speed, and he is a captivating speaker for conferences and classes.

Wednesday, September 15, 2021

Court affirms widow's $21m verdict vs. Big Tobacco, upholds punitive damages despite '98 settlement

Marlboro Red Open Box by Sarah Johnson (CC BY 2.0)
The Massachusetts Supreme Judicial Court today affirmed a $21m verdict against Philip Morris USA in favor of the widow of a smoker who died of lung cancer in 2016.

Fred R. Laramie started smoking in 1970, at age 13, when a store clerk gave him a free sample pack of Marlboros, the Supreme Judicial Court (SJC) recounted.  He became a pack-a-day smoker and remained loyal to the brand, unable to quit despite trying, until his diagnosis and death in 2016.

Laramie's wife, Pamela, sued under the Massachusetts wrongful death statute.  She alleged that Marlboros were dangerously defective for their engineered addictive properties, an excess of the risk of smoking known to consumers and indicated on cigarette labels since 1969.  The jury in the Superior Court awarded Pamela Laramie $11m in compensatory damages and $10m in punitive damages.

The bulk of the high court's 37-page, unanimous opinion analyzes the inventive defense argument that the large punitive award is precluded by the 1998 Master Settlement Agreement (MSA) of state claims against Big Tobacco.  As the court recalled in a footnote:

The [Big Tobacco] defendants agreed to pay approximately $240 billion to the settling States over twenty-five years, and to pay approximately $9 billion per year thereafter in perpetuity, subject to various adjustments. The agreement allocated approximately four percent of those payments to the Commonwealth. The defendants also agreed to restrict cigarette advertising and lobbying efforts, to permit public access to certain internal documents, and to fund youth education programs.

Punitive damages are not awarded in Massachusetts common law; they must be authorized by statute.  The wrongful death statute authorizes punitive damages when the defendant caused injury "by ... malicious, willful, wanton or reckless conduct ... or by ... gross negligence."

The plaintiff successfully relied on internal documents of Big Tobacco that demonstrate the artificial manipulation of the nicotine content in cigarettes.  In the 1990s, the revelation of such records marked the plaintiff breakthrough that precipitated the collapse of Big Tobacco's long-successful wall of defenses in product liability litigation.  The revelation represented, more or less, the information at issue in the case of whistleblower-scientist Jeffrey Wigand, reported in 1996 by Vanity Fair and 60 Minutes and subject of the 1999 feature film, The Insider.

The SJC rejected the defense argument of claim preclusion.  The court recognized a qualitative difference between the claims of the Attorney General that resulted in the MSA and the claim of Laramie that persuaded a jury.

The "wrong" the plaintiff sought to remedy was the loss she and her daughter sustained due to Laramie's death, caused by Philip Morris's malicious, willful, wanton, reckless, or grossly negligent conduct, see [wrongful death statute,] G. L. c. 229, § 2. The "wrong" the Attorney General sought to remedy, by contrast, was the Commonwealth's increased medical expenditures caused by Philip Morris's commission of unfair or deceptive acts or practices in violation of [consumer protection law,] G. L. c. 93A, § 2.

Product liability, like punitive damages, is not a function of common law in Massachusetts, at least formally.  The commonwealth imposes strict product liability through a wide-ranging consumer protection statute, "chapter 93A."  Product liability is effectuated formally as a warranty obligation by eliminating the requirement of contractual privity between plaintiff and defendant.  But from that point, functionally, the courts breathe life into the system with multistate common law norms.

Probably Philip Morris's best argument for claim preclusion arose in the theory that chapter 93A affords treble damages, which were incorporated, in theory, into the MSA, and therefore overlaps with chapter 229 in wrongful death.  But the court distinguished the two statutes.  While both afford punitive recovery, the tests and purposes differ.  Damages under 93A were predicated on commercial practices that caused injury to state interests, while 229 damages, which are not capped, arise from culpability in inflicting personal injury on a decedent in a wrongful death action, here, Fred Laramie.

The court rejected a range of other asserted errors, whether because not error or harmless error, in relation to evidentiary admissions, jury instructions, and closing arguments.  Philip Morris had prevailed in the trial court on plaintiff claims of negligence and civil conspiracy.

With regard to jury instructions, the SJC distinguished product liability in warning defect, which was not plaintiff's theory of liability, from the design defect the plaintiff did claim.  The jury was properly instructed, the court held, that 

congressionally mandated warnings were adequate as a matter of law to warn Mr. Laramie and other members of the public of the hazards associated with smoking. The law, however, does not permit a cigarette manufacturer through its statements or actions to mislead consumers or make misrepresentations about the risks or hazards associated with smoking.

Philip Morris complained that the jury was thereby misled to test for liability in misrepresentation or warning defect.  The excerpted bit strikes me, too, as problematic.  Nevertheless, the SJC wrote that the jury was correctly instructed on the elements, so the instructions were "clear" when "viewed as a whole."

Interesting for torts pedagogy in product liability is the court's recitation of defense theories that were rejected at trial.

In its defense, Philip Morris introduced evidence that there was no adequate, safer alternative design for Marlboro cigarettes. An expert for Philip Morris testified that all cigarettes are dangerous, and that any proposed alternative design was not safer, not acceptable to consumers, or not technologically feasible. Philip Morris maintained that Marlboro cigarettes were not unreasonably dangerous to Laramie because Laramie understood the risks of smoking.

Reports linking smoking to cancer had been published in the 1950s and 1960s, and people had recognized that tobacco was addictive "going back almost [one hundred] years."  Moreover, there was testimony that every pack of Marlboro cigarettes sold between 1970 and 1984 contained a warning label from the Surgeon General that "cigarette smoking is dangerous to your health," and that every pack sold thereafter contained one of four warning labels that are still in use. Cigarette advertisements also were banned from television and radio beginning in January 1971, when Laramie was thirteen or fourteen years old. In addition, since January 1972, every print advertisement for cigarettes has been required to include a warning label similar to those on cigarette packs.

In sum, based on this evidence, Philip Morris argued that Laramie caused his own death because, despite being adequately informed of the health risks of smoking, Laramie chose to smoke, and then chose not to quit smoking.

(Paragraph breaks added.)  The plaintiff overcame the no-alternative-design defense by hypothesizing that Fred Laramie might not have become addicted to a low-nicotine cigarette.  Defense theories in assumption of risk, personal choice, and sufficiency of warning all fell short against the showing of nicotine manipulation.

The case is Laramie v. Philip Morris USA, Inc., No. SJC-13070 (Mass. Sept. 15, 2021) (oral argument at Suffolk Law).  Justice Dalila Argaez Wendlandt authored the opinion for the unanimous panel of six justices.  Disclosure: As an attorney in private practice, I worked on the Philip Morris defense team on tobacco litigation in the 1990s.

Monday, September 13, 2021

'Don't panic,' lawyers say, as Oz High Court clears way for website liability over defamatory user comments


The High Court of Australia last week greenlit defamation claims against website operators for user comments, the latest evidence of crumbling global immunity doctrine represented in the United States by the ever more controversial section 230.

There is plenty news online about the Aussie case, and I did not intend to comment.  For the academically inclined, social media regulation was the spotlight issue of the premiere Journal of Free Speech Law.

Yet I thought it worthwhile to share commentary from Clayton Utz, in which lawyers Douglas Bishop, Ian Bloemendal, and Kym Fraser evinced a mercifully less alarmist tone when they wrote, "don't panic just yet."

The Australian apex court extended the well known and usual rule of common law defamation, when not statutorily suspended: that the tale bearer is as responsible as the tale maker.  In the tech context, in other words, "[b]y 'facilitating, encouraging and thereby assisting the posting of comments' by the public," the defendants, notwithstanding their actual knowledge or lack thereof, "became the publishers," Bishop, Bloemendal, and Fraser wrote.

But it's a touch more complicated than purely strict liability.  "What is relevant is an intentional participation in the process by which a posted comment may become available to be accessed by other Facebook users," Bishop, et al., opined.  "So does that mean you should take down your corporate social media pages? That would be an over-reaction to this decision."

The lawyers emphasized that this appeal was interlocutory.  On remand in New South Wales, the media defendants may assert defenses, including innocent dissemination, justification, and truth.  Bishop, et al., advise:

In the meantime, if your organisation maintains a social media page which allows comments on your posts, you should review your monitoring of third-party comments and the training of your social media team in flagging and (if necessary) escalating problems to ensure you can have respectful, non-defamatory conversation with stakeholders.

Funny they should say so.  Coincidentally, I gave "feedback" to Google Blogger just Friday that a new option should be added for comment moderation, something like "archive," or "decline to publish for now."  The only options Google offers are spam, trash, and publish.

I have two comments posted to this blog in recent years that I hold in "Awaiting Moderation" purgatory, because they fit none of my three options.  Every time I go to comment moderation, I have to see these two at the top.  The comments express possible defamation: allegations of criminality or otherwise ill character about third parties referenced on the blog.  I don't want to republish these comments, because I do not know whether they are true.  But I don't want to trash them, because they are not necessarily valueless.  Moreover, they might later be evidence in someone else's defamation suit.

I moderate comments for this blog, so I don't think it's too much to ask the same of anyone else who publishes comments, whether individual, small business, or the transnational information empires that peer over my shoulder.  

I do worry, though, about how that works out for the democratizing potential of the internet.  I'm trained to recognize potentially defamatory or privacy invasive content; I've done it for a living.  Are we prepared to punish the blogger who contributes valuably to the information sphere, but lacks the professional training to catch a legal nuance?  Or to pay the democratic price of disallowing dialog on that writer's blog?  As a rule, ignorance of the law is no excuse, in defamation law no less than in any other area.  But understanding media torts asks a lot more of the average netizen than knowing not to jaywalk.

I don't profess answers, at least not today.  But I can tell that the sentiment of my law students, especially those a generation or more younger than I, is unreticent willingness to hold corporations strictly liable for injurious speech on their platforms.  So if I were counsel to Google or Facebook, I would be planning for a radically changed legal future.

Sunday, September 12, 2021

FOIA committee ponders access amid privatization

I had the great privilege last week to speak to the U.S. Freedom of Information Act (FOIA) Advisory Committee, working under the aegis of the Office of Government Information Services (OGIS) in the National Archives and Records Administration (NARA) on the subject of access to the private sector in the public interest.

The OPEN the Government Act of 2007 augmented FOIA to follow public records into the hands of government contractors.  But the federal FOIA's reach into the private sector remains extremely limited relative to other access-to-information (ATI) systems in the United States and the world.  U.S. states vary widely in approach; the vast majority of state open records acts reaches into the private sector upon some test of state delegation, whether public funding, function, or power.  The same approach predominates in Europe.

The lack of such a mechanism at the federal level in the United States has resulted in a marked deficit of accountability in privatization.  The problem is especially pronounced in areas in which civil rights are prone to abuse, such as privatized prison services, over which the FOIA Advisory Committee and Congress have expressed concern.  By executive order, President Biden is ending the federal outsourcing of incarceration.  But access policy questions remain in questions about the past, in waning contracts, and in persistent privatization in some states.

As I have written in recent years, and examined relative to ATI in the United States, Europe, and India, an emerging model of ATI in Africa advances a novel theory of private-sector access in the interest of human-rights accountability.  I was privileged to share this model, and the theory behind it, with the committee.  I thank the committee for its indulgence, especially OGIS Director Alina Semo for her leadership and Villanova Law Professor Tuan Samahon for his interest in my work now and in the past.

Saturday, September 11, 2021

Lawyer-artist offers savory tort slogan

I just discovered this line of products from "LawPhrases: Wearable Law."

Creator and Texas "lawyer-slash-artist" Charles Fincher also possesses the mind and pen behind LawComix.

No official connection to The Savory Tort, but I like his style.

Thursday, September 9, 2021

So now you care about academic mobbing

Angry Mob by Robert Couse-Baker, CC BY 2.0
Princeton politics professor Keith E. Whittington (on the blog) has a wisely worded op-ed, on The Volokh Conspiracy at Reason, on the too often abdicated responsibility of university administrators to push back against viewpoint-based campus mobbing of faculty.

"It is now a familiar pattern," he writes: attack, petition, social media campaign, demand for termination.  Of the university's duty, he writes:

University presidents have a responsibility in such a situation. It should go without saying, but unfortunately it does not, that they have a responsibility to actually live up to their constitutional and contractual responsibilities and refrain from sanctioning the faculty member for saying something that someone finds controversial. They should insist that harassment and threats directed against members of the faculty will not be tolerated. Professors should at least be confident that when the mobs arrive, pitchforks in hand, that university leaders will not flinch and give in to the demands of the mob.

I hope the piece hits the desk of every university president in the land with a thunderclap of j'accuse.

Yet it is fascinating to me to see described today as cliché what was once fringe.  Canadian sociologist Kenneth Westhues, professor emeritus at the University of Waterloo, published his Workplace Mobbing in Academe (2004) seventeen years ago, and that book was built on his earlier Eliminating Professors (1998).

By the time I met Ken in 2009, he was already the world's leading expert on academic mobbing.  He still is.  Westhues's website is still the online clearinghouse on mobbing as a sociological phenomenon. But he's almost never cited, at least in the legal lit.  I find eight references to Westhues on Westlaw's JLR database, and none in the last dozen years.

At a program at the Association of American Law Schools (AALS) in 2010, I accepted the invitation of Westhues and Syracuse University law professor Robert Ashford to speak of my experience.  Ashford perceived a worthwhile connection to his inventive work in socio-economics, and Westhues flattered me with my name as a participle

The splash we made at AALS and in legal academics eleven years ago might be described well as mostly indifferent curiosity.  Mostly modifies indifferent, not curiosity.  

I wrote in the Journal of College and University Law in 2009 about the need for broader academic freedom, beyond published research and into the professorial "penumbra."  I presented at AAUP, besides AALS.  The article was cited once in a 2011 bibliography and once in 2013.  (Thanks, Profs. Benson and Jones.)  And that was that.

Not until cancel culture reached the well known coastal scholars of academia's elite institutions did mobbing hit the mainstream.  Now a lot of important people are wringing their hands over academic freedom and waning tenure.

Too bad they don't seem able to find my article.  Or Westhues's work.  Is there really a wheel until it's invented at a "top" school?

It's nice to see serious people having serious thoughts about academic freedom, at last.  But it's too late to give solace to a generation of victim-scholars.  And it's probably too late to resuscitate intellectual liberty on campus, for at least a generation yet.

Friday, September 3, 2021

With Keaton as Ken Feinberg for 9/11 20th, 'Worth' challenges tort norms with study of victim comp

Worth, a dramatization of Kenneth Feinberg's special mastership of the September 11 Victim Compensation Fund, dropped on Netflix today in select markets.

I frame my 1L Torts class with exploration of tort alternatives, and I periodically infuse our study with comparative law.  Typically, I begin Torts I in August with a study of the New Zealand accident compensation system.

I ask the class whether Americans might similarly embrace social compensation.  Notwithstanding their personal predilections, students readily identify objections based in deterrence dynamics, the American ethos of personal responsibility, and our cultural priority of "day in court" entitlement.

In the spring semester, I round out Torts II with a return to tort alternatives in America's exceptions to the rule, easing our study from worker compensation to compensation funds, such as 9/11 and BP.  Students are then challenged to consider: if Americans find the notion of New Zealand-style social compensation system so repellent, why do we embrace it when the stakes are especially high?

For two years now, I have used the German-made Playing God (2017), a documentary about Brockton, Mass.-native Feinberg, as a springboard for class discussion of the necessary parameters of social compensation systems, including valuations.  Previously, I used recorded lectures by Feinberg.  A good, recent, and more-concise-than-usual item is his talk at Chicago Ideas Week on the theme of his 2005 book, What is Life Worth?—the original title of the movie, Worth, according to IMDb.

Even if a torts professor does not wish to cover alternative compensation systems, these are useful audiovisual catalysts for discussion of the valuation of life and loss, as part of the study of damages.  Other worthy tools, in the podcast vein, include "Worth" on Radiolab (2014) and Feinberg's appearance on Freakonomics Radio (2018).

Starring Michael Keaton as Feinberg, Worth is necessarily a Hollywood conflation of events and issues, focusing on 9/11 upon its upcoming 20th anniversary.  Still, plenty of effort is exerted to remain faithful to history.  Feinberg is pictured enduring the heat of an angry and frustrated assembly of families, after which he has informative if discordant exchanges with individuals.  There are also discrete scenes of victim testimonies that might seem interruptive of flow in an ordinary drama, but can't help but captivate in the haunting context of 9/11.

These interactions and the orbiting characters who emerge in the story are clearly modeled on, or amalgams of, real events and persons, many of whom were recorded in videos from the time, and clips of which can be seen in Playing God.  Exemplifying his skills as a character actor, refined in landmark roles from Beetlejuice to Birdman to Ray Kroc, Keaton offers a compelling portrayal of Feinberg as the peculiar human protagonist whose likeness has become inextricable from American mass compensation systems, for better and for worse.

Worth is a superb ride and offers endless starting points for serious academic discourse on the subject of compensation models, not to mention the role of the legal profession and the complex sociology of death.  The film is a welcome addition to the audiovisual arsenal for classroom teaching to stimulate deep thinking on the wisdom of tort law.


Thursday, September 2, 2021

SDNY rules against Locast, knifes beleaguered free TV

[UPDATE: At 9:47 a.m. today, Thursday, Sept. 2, I received word that Locast is suspending operations, effective immediately.]  

Locast, an online retransmitter of broadcast television, and the American public together suffered a major blow on August 31, as the federal district court in New York handed partial summary judgment to ABC, CBS, Fox, and NBC in the networks' copyright infringement lawsuit.

Locast has irritated me, but only for not expanding fast enough.  Where I live, near Providence, R.I., the service is not available.  It is available in New York to the south and Boston to the north, but access is strictly geo-fenced.  As a result, my family cannot see free broadcast TV without springing for an expensive subscription to a cable service or streaming-channel consolidator.

That's not really Locast's fault.  Broadcasters have reduced their power over the years, making free TV incrementally more difficult to access.  I live just nine miles from the broadcast towers that serve the Rhode Island state capital, but I cannot receive any signal with an interior or window-mounted antenna.

Indeed, the networks seem to want out of the broadcast game altogether.  Kickbacks from online consolidators such as Hulu Live and YouTube TV, and the networks' profits from their own services, such as Paramount+ (and Hulu Live, in part), are more lucrative than broadcasting and come with no FCC regulatory strings attached.  Local affiliates, including vital broadcast news outlets, fall through the cracks, wreaking further havoc in our information market, but that's no matter to the bottom line.  Locast threatened to breathe life back into the corpse of free TV, so the networks pursued the service with a vengeance. 

Locast is a non-profit, and its "business" model is simple.  It sets up a technology hub in a place such as Boston and converts local broadcast signals to online streams.  Home cord-cutters thus have their access to free TV restored through the internet service they already have, no antenna needed.

On the face of it, of course, this business model would constitute copyright infringement for copying and redistributing the broadcast signals.  But Congress, in a rare showing of commitment to the public interest rather than to the profit margins of our corporate overlords, built an exemption into the Copyright Act.  Governmental or nonprofit organizations are permitted to retransmit "without any purpose of direct or indirect commercial advantage, and without charge to the recipients of the secondary transmission other than assessments necessary to defray the actual and reasonable costs of maintaining and operating the secondary transmission service."

Locast is freely available and supported only by voluntary donations.  But streaming is interrupted at 15-minute intervals by 15-second pleas for donations.  Like the ad-free versions of pay-TV services, Locast offers absolution from these interruptions in exchange for a minimum "donation" of $5 per month.  The $5-donation model proved sufficiently successful that Locast was able to cover its operating costs and use the excess to expand to new markets.

And that, expansion, was Locast's sin, in the eyes of the district court.  Judge Louis L. Stanton opined that Congress could have written "maintaining and operating and expanding" into the statutory exemption, but did not.  So Locast's dedication of additional accounts received to expansion was fatal to its claim of copyright exemption.

I find the court's reading of the statute exceedingly cramped.  Locast plainly is spending money to do precisely what Congress intended: making free TV available to people who cannot receive it without hiring a contractor to install an antenna tower.  That the books must balance within each micro-market rather than across live markets, in the utter absence of evidence that a dime has been diverted to any other objective, absurdly splits hairs.

Locast lawyers, joined by the Electronic Frontier Foundation, say they are examining the ruling.  Locast announced yesterday that it is for now ceasing streaming interruptions requesting donations. 

There are ways that Locast can work around its current predicament, I reason. Locast has been supported by some major corporate donors who are not old-school TV insiders, such as AT&T, which contributed $500,000.  Internet service providers such as AT&T benefit from Locast, because retransmissions are streamed into homes, rather than broadcast.  With more careful balancing of the books, it should be possible, if cumbersome, to parse operations between discrete markets and to raise capital to support expansion directly.

It's a shame that such gamesmanship should be required for what is clearly a public service.  And a bigger problem might remain for American information and entertainment consumers in the ongoing, if prolonged, death throes of free TV.  We might hope that Congress would obviate the fray with bold measures that would reinvigorate the landscape of electronic expression by enhancing public-interest limitations on digital intellectual property and guaranteeing access to the internet for all Americans.

We also might hope to see pigs take flight.

The case is American Broadcasting Cos. v. Goodfriend, No. 1:19-cv-07136 (S.D.N.Y. Aug. 31, 2021). I bet Judge Stanton is one of those people who has both cable and Fubo and can't use either one unless someone helps him with the remote.