LegalBlogger

The Unacceptable Results of the Current Directive Law

Daniel Rubin — Wed, 22 Feb 2012 17:50:35 +0000

Basic research with respect to the filing of a directive, where one’s wishes in case of medical emergency would be fulfilled, would lead most individuals to the 3 routes highlighted in my last post. However, the data surrounding these options could dissuade an individual from submitting one.

In examining the health care proxy, it was discovered that affording the full control to proxy only when the patient is incapacitated, could lead to the proxy being unclear as to what exactly the wishes of the patient are. Additionally, the patient may change his mind over time, and discuss these changes with his proxy, yet not reflect these alterations in the form, which delegated the power initially. This could lead to confusion amongst the parties involved and ultimately erroneous care administered to the patient.

The living will presented its own set of problems. It is based only on the assumption that it will reflect the future of one’s self-interest and autonomy. Secondly, while most people have property or financial wills, only 18% have living wills. They are available in almost every state and it has been found that people do not use them due to lack of knowledge and doubts as to whether they will produce a positive effect. Also, drafters of the will have not afforded patients a channel to accurately articulate their preferences. As even an explicit living will could be subject to divergent interpretation, potentially contradicting the patient’s wishes. The living will as it is currently constructed could to have a negative effect on patient autonomy, thus filing one a potential harmful.

Finally, the DNR form has been linked to having the strongest influence upon its filing. Despite the design of the form to strictly focus on resuscitation, its presence alone may affect a physician’s willingness to order a variety of treatments not related to CPR. Based on clinical experience it was believed that physicians use DNR orders as surrogate markers for patient’s goals of care rather than specific treatment preference. Studies have shown that “physicians are less likely to agree to initiate procedures ranging from complex therapies, such as ICU transfer, to simple interventions, such as blood transfusions.” The authors of this study believed additional information from the patient could resolve the shortcomings surrounding a DNR. Thus, there seems to be an avenue for a positive change with the DNR form in the hopes that autonomy can be restored.

Image courtesy of NotionsCapital.wordpress.com

D.C.’s iGaming Craps Out Before Rolling the Dice

Andrew Fleischman — Wed, 22 Feb 2012 17:49:04 +0000

April 15, 2011. Black Friday. A date that will live in infamy. Well, at least in the hearts and minds of online gambling enthusiasts, for that is the day that the FBI shutdown the three leading online poker sites, effectively ending all online gambling operations in the U.S. But then, only several days later, a ray of sunlight pierced the post-shutdown fallout: the District of Columbia had become the first in the nation to legalize online gambling!

Excitement surrounding the D.C. plan, known as iGaming, spread quickly. Officials in D.C. promptly rolled out the infrastructure and regulations to facilitate the nation’s first intrastate online casino. Industry insiders had high hopes that the plan’s success would lead other states to pass similar legislation. While some doubted the plan’s legality, the DOJ reversed its position on the Wire Act in late December 2011, clearing the way for iGaming’s launch. From the outside, all seemed well with the plan. But in February 2012, much to the chagrin of, well, pretty much everyone except for those that made the decision, D.C. pulled the plug on iGaming, killing the initiative.

As the Grateful Dead so sagely advised in the song Truckin’, “the cards ain’t worth a dime if you don’t lay ‘em down.” D.C. CFO Natwar Gandhi projected iGaming to generate $14 million in tax revenue alone for the District in the program’s first two years. So what could possibly halt D.C. from playing its valuable hand?

Good ole fashioned shady politics. While the D.C. council “legalized” online gambling, hardly anyone in the council seemed to realize. See, in December 2010, when the council was voting on a several-hundred-pages-long budget bill, Councilmember Michael Brown slipped in an unnoticed amendment that simply extended the D.C. lottery to also apply to “games offered over the Internet.” Usually when passing groundbreaking legislation, or really anything significant for that matter, there is a public vetting process. I guess Michael Brown didn’t get the memo. Essentially, no one noticed the teeny amendment and when the bill passed under a tight deadline, Vincent Gray signed it into law rather than squabble over a small piece of the gigantic budget.

When word got out that D.C. legalized online gambling without most council members realizing or any public vetting, there was a slight public backlash, but not anything that supporters expected would derail the initiative. But as opponents of the law dug a little deeper, the other shoe dropped as an investigation exposed the shady manner in which the D.C. lottery contract was awarded. It turns out the majority winner of the lottery contract to operate the online casino was a D.C. businessman with absolutely no gambling experience. On top of that, he planned to operate the casino out of his mother’s duplex. While money undoubtedly exchanged hands in some back room meeting in this blatant “pay-to-play” deal, D.C. officials are currently grappling with the idea of referring the investigation to the U.S. Attorney’s office.

Regardless of whether the D.C. officials will be held accountable, the scandal thus marks the death knell of iGaming. What was once viewed as a huge potential momentum builder for the world of online gambling has instead become another black eye for an industry that just can’t seem to catch a break. So long iGaming – looks like you crapped out before you even rolled the dice.

An Unfair Fate: Honduras Prison Fire Kills 357

Stephanie DiFazio — Wed, 22 Feb 2012 13:57:51 +0000

Over 300 people were killed in a Honduras prison fire last week, a fire started by a burning mattress. Survivors have told horrific tales of climbing walls to break the sheet metal roofing and escape, only to see prisoners in other cell blocks being burned alive. Sadly, some people have come across this news only to say, “Well, that’s sad, but they were only prisoners,” as if their status as prisoners made the horror of the fire more bearable. What would they think if they knew that more than half of the 856 inmates were either awaiting trial or awaiting a simple charge?

The Comayagua farm prison was designed to house 500 detainees but was holding more than 800 at the time of the fire. Why the overcrowding?

Pre-trial detention, of course.

With the highest per capita homicide rate in the world, Honduras is infamous for gang related crime. In 2003, the government responded by implementing a law that doubled the maximum penalty for being a gang leader to twelve years incarceration. But guess what clues police officers used to arrest “gang leaders”? Tattoos. Inevitably, the rate of arbitrary arrests increased, leading to severe overcrowding in several prisons.

Recognizing that its country had major pre-trial detention problems, the government developed a new Criminal Code. This Code set out duration periods for pre-trial detention, establishing a two-year maximum where an offense carried a sentence of six years or more. It also prohibited the pre-trial detention of pregnant women, women who were breastfeeding, and those who were terminally ill. The UN’s Committee Against Torture commended Honduras for its efforts, as the rate of pre-trial detention decreased and the conditions of detention centers improved.

However, the fire in Comayagua is evidence that more reform is necessary…quickly. Now that Honduras is home to three deadly prison fires, will government officials react more strongly against the excessive use of pre-trial detention, arbitrary arrests, and tragic prison conditions?

Image courtesy of ABC News and AFP/Getty Images

How a Fake Dutch Explorer Helped Kick Start the Fair Trade Coffee Movement

Mia Levi — Tue, 21 Feb 2012 03:39:23 +0000

The concept of international fair trade certification for coffee started in 1988. Reduced prices in the world coffee market that year presented a serious problem for farmers in developing countries, and many could not generate profits. In my previous post, I discussed the need for commodity agreements such as the International Coffee Agreement (ICA), to regulate the laws and regulations for importing and exporting coffee. The most recent ICA doesn’t focus on a price quota, but instead promotes price awareness, encourages coffee consumption, provides economic counseling and offers research on sustainability. However, the laws and regulations under the ICA are often not enough ensure the livelihood of the coffee farmers in the more impoverished countries. What these farmers need are international trade agreements that make sure that there is a greater economic incentive for producers in developing countries who rely on the trade of their commodities to survive. That is the premise of fair trade.

Fun fact: originally, the organization was called “Max Havelaar”, a character out of a Dutch novel who was against the exploitation of coffee farmers in the East Indies. This organization grew to become the Fairtrade Organization, a world-wide effort to promote social, economic and environmental development in the coffee growing communities. The fair trade movement has even spread to include other commodities, such as sugar, cocoa, apparel, spices, and even spirits and wine.

The fair coffee trade relies on consumers to recognize the need to buy fair trade coffee, since it is more expensive than non-fair trade coffee. This higher price is passed on not only to the growers but to their communities as well, which provides community development and sustainable growth in supplier countries. In exchange for this premium, the consumer gets coffee which has been subjected to standards designed to support the coffee growers. The farmers must follow internationally recognized laws, such as the International Labor Conventions, which prohibit child and forced labor and mandate access to healthcare. Moreover, the farmers are taught to effectively represent themselves in negotiations. Thus, the ability to trade commodities such as coffee internationally improves the livelihoods of farmers and their local communities.

Photo by Mia Levi

What Laws Impact Your (Coffee) Cup?

Who’s Responsible for Player Safety? The NFL’s Million Dollar Question

Michael Wess — Tue, 21 Feb 2012 03:37:48 +0000

If there is a valuable lesson the NFL has learned from past experiences defending against civil tort claims, it is this: a collective bargaining agreement (CBA) giving the League expansive responsibility over player safety may inevitably protect against protracted and expensive civil litigation. As outlined in my previous post, issues covered by the CBA will be preempted by federal law, under the Labor Management Relations Act § 301, and, therefore, are subject to mandatory arbitration. The more express responsibility the League has over player safety in the CBA, the more protection the league receives from civil litigation as a result of mandatory arbitration.

A case involving the death of Korey Stringer, a former player with the Minnesota Vikings, provides an instructive illustration. Stringer’s death resulted from heat stroke he suffered during training camp. The court found that plaintiff’s wrongful death claim was inextricably intertwined the CBA because it covered the NFL’s duty to instruct team trainers, doctors, and coaches about heat-related illnesses, thus rendering it preempted. However, in the same decision, the court found that the plaintiff’s cause of action concerning the inadequacy of on field equipment in preventing heat-related illnesses did not arise out of the CBA and could be challenged directly in court.

Had the league taken a proactive position concerning player equipment in the CBA, establishing guidelines and regulations for teams to follow, this cause of action would have been preempted and it would have ultimately gone to arbitration. Once a state tort claim has been preempted, and forced into arbitration, the plaintiff has permanently lost the right to bring that claim in court and the arbitrator’s decision is given significant deference on review. One question the NFL will have to consider moving forward is: how will it balance its desire to force arbitration over player claims with its interest in not taking the lead on all nuances of player safety? Moreover, how much power is the player’s union willing to give the league in regulating all aspects of player safety during negotiations?

A Legal Look at Loss Causation

Erik Nygaard — Tue, 21 Feb 2012 03:34:17 +0000

Since there is nothing left to be written about Jeremy Lin, I decided to, instead, write about Rule 10b-5 and loss causation.

People generally agree that Section 10(b) of the Securities Exchange Act and its companion Rule 10b-5 are the sexiest securities laws on the books. Corporations, despite being people too, disagree with the rest of people.

Rule 10b-5, in its simplest form, prohibits fraud in the sale of securities. If a shareholder wants to sue a corporation for doing something stupid, he’s probably going to use this Rule. Whether it was designed this way is debatable, but courts have interpreted the Rule to give shareholders a private right of action against corporations, meaning they can recover money directly from the corporation for their damages. This is why the corporate race hates it.

To mount a successful claim under Rule 10b-5, plaintiffs must prove 6 distinct elements. The corporation must have made a statement, (1) which it knew was false. (2) The misstatement must have been material. In other words, people should have reasonably cared. (3) The shareholder must have relied on the misstatement (4) in connection with a purchase or sale. (5) The shareholder must have suffered a loss. Finally, (6) the shareholder must prove that the defendant’s fraud caused the loss. This last element is loss causation.

The Supreme Court made this element explicit in Dura Pharmaceuticals, Inc. v. Broudo. There, a class of shareholders brought suit against the company’s managers, who had publicly lied about pending FDA drug approvals. The plaintiffs claimed that they had paid artificially inflated prices and thereby suffered damages. The Court said this was not enough. The Court reasoned that artificially inflated prices are only a necessary condition of loss causation. If the fraud did not cause the stock to decline, the shareholder could sell the stock back into the market at the same artificially inflated price. Only when revealing the fraud causes the price to drop below the artificially inflated price does the shareholder suffer harm. Sounds simple? It’s not.

Previous post by Erik Nygaard

Foreign Investors Look to Mexico for New Deals

Matt Silverman — Tue, 21 Feb 2012 03:30:41 +0000

Last week, I wrote about a trend in cross border M&A: Mexican companies making strategic purchases in the U.S. to increase their presence in the U.S. market. But Mexico, with the second biggest economy in Latin America and large-scale production and exportation of oil, is also an attractive place for foreigners to buy.

Overall, Mexico has had more deal activity in the past year than any other Latin American country other than Brazil, both in value and in quantity. According to the United Nations Conference on Trade and Development, Mexico ranked 18^th in the world for the amount of Foreign Direct Investment (“FDI”) and ranked 10^th in the amount of new investments.[1] These rankings show the strength of the Mexican M&A market. Even in a year like 2011, when overall FDI was down in the developing world by 8.8% compared to 2010, Mexico still generated many deals, which the U.N. pointed out was a major factor in Mexico remaining in the top 20.

Some of the most active dealmakers in the region in 2011 were from Asia. In the last 3 months of 2011, M&A by Asian companies rose by 43% in Latin America, with 291 businesses bought and sold, or about three per day.

Twenty-seven of these deals occurred in Mexico, the fourth most in the region after Brazil (177), Chile (41) and Argentina (28). This uptick in deals coming from Asia is promising news for the industry, especially since deal activity had dropped off from the U.S. and Europe, as those regions dealt with the European debt crisis.

According to one KPMG analyst, there’s a good chance that we’ll see an increase in Mexican M&A in 2012, with foreign investors looking for opportunities in the telecom and utilities sectors.

[1] These new investments consist of new manufacturing plants, offices and other capital investments.

Occupy Wall Street? How About Occupy IRS?

David Schattner — Tue, 21 Feb 2012 03:27:27 +0000

The IRS is apparently jealous that some banks have profited from the subprime mortgage meltdown, and have gotten into the action- Tax liens are for sale.

If a property owning taxpayer fails to pay his taxes the government will secure a lien on their property. This lien allows local municipalities to secure payment when the property changes ownership, or if the taxes remain delinquent for a specified amount of time, the IRS can foreclose on the property and evict the property owner. (Read: NYC’s Annual Tax Lien Sale)

Another way in which the government can defend itself from bearing the burden of the unpaid taxes is to sell the rights to these liens to investors. Although tax lien foreclosures are one of the least understood methods for investing in real estate, they are certainly one of the safest. These liens give the holder of the “lien certificate” the right to foreclose on the property and evict the occupant if the taxes are not paid back within a specified amount of time. If the property owner decides to pay the taxes before the specified time expires, the lien amount plus interest goes to the investor. (Read: Tax Lien Investing Frequent Q and A’s)

This may sound familiar to many in the “99%.” For those that spent days and nights outside the banks on Wall St. protesting virtually the same behavior, it must be disheartening to hear that the government is actually engaged in similar practices. Although I am not a big fan of the IRS’s handling of many real estate related tax issues (read my blog post How your taxes can make your million dollar property worthless) and despite the similarities to the much disliked banks’ practices, the IRS is correct in maintaining this process. Across the United States, there are hundreds of different counties which hold millions of dollars in unpaid taxes. When taxes go unpaid, the government may be crippled by a lack of cash flow. They will have less money for programs such as food stamps, Medicaid, and welfare, and will be unable to pay our school teachers, policemen, and firemen. Therefore, despite the fact that this practice may result in the expedited eviction of some homeowners, utilizing this practice helps save lives, and enables the city to maintain a manageable cash flow.

ICC Frees War Crimes Suspect: Botched Sexual Violence Prosecution

Kimberly E. Carson — Tue, 21 Feb 2012 03:17:31 +0000

On December 16, 2011, the International Criminal Court (“ICC”) freed war crimes suspect Callixte Mbarushimana. Mbarushimana was the alleged “linchpin” of the Forces Démocratiques pour la Libération du Rwanda (FDLR) campaign of murder, rape, and torture of civilians in the Democratic Republic of the Congo (DRC). His release marks a significant setback for the international prosecution of wartime sexual violence.

In the DRC, as in other armed conflict zones, sexual violence is increasingly perpetrated by combatants against civilians to dominate enemy camps through humiliation, demoralization, and destruction of group solidarity. Thousands of surviving victims have been left socially ostracized with sexually transmitted infections, pregnancy, infertility, and mutilation.

Since ramping up violence in 2009, the FDLR has made the “worst place in the world to be a woman or child” even worse. As a leader of the Hutu militia, Mbarushimana allegedly orchestrated hundreds of attacks involving gang rapes so vicious that victims later bled to death as retribution for the Congolese government’s offensive against the FDLR.

Mbarushimana’s case was celebrated because of its focus on the use of sexual violence as a weapon of war—charged as the crimes against humanity of torture, rape, other inhumane acts, and gender-based persecution and as the war crimes of torture, rape, inhumane treatment, and mutilation. The celebration proved short-lived, however, when Mbarushimana became the first suspect released from ICC custody due to insufficient evidence.

Mbarushimana’s case is indicative of systemic flaws jeopardizing the ICC’s achievement of justice for sexual violence victims in war-torn countries. Despite advancements in recognizing wartime sexual violence as a serious breach of international law, gender-based crimes remain the most vulnerable type addressed by the ICC due to inadequate investigations, charges, and prosecutions.

When Fatou Bensouda steps in as the next Chief Prosecutor of the ICC, she should focus on developing consistent prosecutorial theories of how sexual violence fits into policies of accused criminals in the context of wars. Recognizing the systematic ways in which sexual violence is used as a weapon of war from the outset is necessary to ensure comprehensive investigations, obtain sufficient evidence, prioritize sexual violence charges, and achieve consistent prosecutions.

Photo courtesy of CNN

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Tribler Increases the Incentive for “Copyright Trolling” Lawsuits

Tony Niescier — Fri, 17 Feb 2012 21:48:38 +0000

The federal shutdown of Megaupload and arrest of its owner Kim Dotcom last month has triggered a panic in the filesharing community. Several popular bittorrent communities have abruptly shut down, including Btjunkie, Cheggit, and Fileporn. File-locker service Filesonic disabled file sharing, and Uploaded.to blocked traffic from the U.S. Other vulnerable site owners are surely considering similar measures.

It should come as no surprise then that the filesharing program Tribler, whose lead researcher claims that “The only way to take it down is to take The Internet down,” is suddenly in the spotlight. In fact, it is so popular right now that the Tribler website has been reduced to just its download page with the message, “Sorry: limited website due to high popularity.”

Tribler is perhaps the next generation of filesharing. While it uses the bittorrent protocol in its peer-to-peer distribution of files, unlike traditional bittorrent programs it does not rely on tracker files downloaded from websites. Instead, search results for downloadable material are gathered directly from other users. (See Wikipedia for a more detailed explanation.) There may be no simple way for the government or any other entity to “pull the plug” – shutting down any one Tribler user will deprive other Tribler users of that user’s bandwidth but will not destroy the network.

If Tribler does become widely used – and in the process becomes the new go-to for downloading copyrighted music and videos – there will be ramifications in the controversial war against online copyright infringement.

Paradoxically, Tribler could be a great boon to the so-called “copyright trolls” – copyright holders who obtain the IP addresses of individual downloaders, subpoena their identities from their ISPs, and threaten them with litigation unless they agree to a settlement.

Without central hubs like websites or torrent communities to target, the copyright holders may get added sympathy from judges and more tolerance for their massive lawsuits that have thus far met with resistance and even sanctions. In effect, the copyright holders will be able to make a more plausible argument than they could before that there are no other ways for them to protect their copyrights. (While there is some credence to the idea that it will be harder for governments to shut down Tribler, it will be no harder for plaintiffs to track the IP addresses of individual downloaders.)

Large copyright interests, moreover, might decide that the government is powerless to interfere with Tribler-aided downloads. SOPA and PIPA, for instance, would probably have no effect on Tribler: there are no websites to shut down. In a post-Tribler world, copyright holders might find it more profitable to spend their money on self-help remedies like private litigation rather than on lobbying the government for new legislation or increased enforcement.