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Just a “stab at humor”

The ACLU’s Ría Tabacco Mar reviewed a recent SCOTUS decision in the NYT. South Dakota is being allowed to murder a man rather than commit him to a life time of hell in a natural life sentence . Charles Rhines was convicted of murdering a man while robbing a Dunkin Donut store he used to work at and was fired from a couple of weeks earlier.

The jury in deciding Charles Rhines fate in deliberation sent questions to the judge asking;

Would Rhines have a cellmate? Would he be allowed to “create a group of followers or admirers”? Would he be allowed to “have conjugal visits”? They apologized if any of the questions were “inappropriate,” but indicated that they were important to their decision-making.

The judge declined to answer, telling the jurors everything they needed to know was already in the jury instructions they’d received.

Eight hours of deliberation later and the jury sentenced Charles Rhines to death. It was not until 2016, when the newly appointed federal capital defenders found the jury note and restarted the appeals process and they interviewed the jurors learning what can be described as a preconceived bias of the jury towards Charles Rhines because he was gay.

One juror said Rhines was gay “and thought that he should not be able to spend his life with men in prison.” A second recalled another juror making a comment “sentencing Rhines to life in prison would be sending him where he wants to go.” A third said “there was lots of discussion of homosexuality” in the jury room. Another juror said, “There was a lot of expressed disgust. This is a farming community. There were a lot of folks who were like, Ew, I can’t believe that.” All of which is not pertinent to the sentencing. The jury sentenced Charles Rhines to death because he was gay and not because he murdered someone.

To provide for the integrity of the jury and what they discuss in deliberation in the jury room; there is what is known as the no-impeachment rule. It says testimony from jurors during jury deliberations may not be used to impeach a verdict during an appeal. In this case as one of Charles Rhines attorney’s Shawn Nolan argues, “the juror misconduct violated constitutional protections — so the rule should not apply.” The rule was overturned once before when considering racial prejudice in Peña-Rodriguez v. Colorado;

Miguel Angel Peña-Rodriguez was convicted of unlawful sexual conduct and harassment, two jurors came forward to tell his lawyer that another juror had made racially charged statements about Peña-Rodriguez and an alibi witness, commenting about the likelihood that Peña-Rodriguez was guilty and the witness was not credible because both were Hispanic. Peña-Rodriguez sought a new trial based on the jury misconduct, but the courts said no because of the no-impeachment rule. The U.S. Supreme Court disagreed. “A constitutional rule that racial bias in the justice system must be addressed — including, in some instances, after the verdict has been entered — is necessary to prevent a systemic loss of confidence in jury verdicts, a confidence that is a central premise of the Sixth Amendment trial right,” the court wrote. As such, the court concluded that “where a juror makes a clear statement that indicates he or she relied on racial stereotypes or animus to convict a criminal defendant, the Sixth Amendment requires that the no-impeachment rule give way” so that the court can consider whether the misconduct tainted the promise of a fair trial.

The Law is meant to punish “people for what they do and not who they are.”

Jurors Thought a Man Would Enjoy Prison, So They Sentenced Him to Death Jordan Smith, The Intercept, June 13, 2018

A Jury May Have Sentenced a Man to Death Because of What He Is And the Justices Don’t Care. Ría Tabacco Mar, NYT, Jume 19, 2018

author; run75441 @ Angry Bear Blog

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Is the $8.5 billion Foreclose and Fraud Settlement Enough of a Penalty?

by run75411

Update: Besides not prosecuting particulars who promulgated much of 2008, what makes this settlement bad is letting banks off the hook:

“In the settlement announced Monday between the Federal Reserve, the Comptroller of the Currency and ten of the largest banks and other mortgage providers, the government gives up the right to prosecute banks for past wrongful foreclosures. In exchange, the banks part with another $8.5 billion, of which $5.2 billion is for loan modifications and $3.3 billion is for people whose mortgages were wrongfully foreclosed.

It’s a pittance. With 3.8 million homeowners covered by the settlement, that works out to less than $2,000 per homeowner.” http://prospect.org/article/banks-win-againThe Banks Win Again”

$2,000 per homeowner in many cases might be two months of a mortgage payment. The settlement hardly qualifies as major.
Is the $8.5 billion Foreclose and Fraud Settlement Enough of a Penalty?

Are The Federal Reserve and the OCC acting in good faith in letting banks off the hook for their past predatory lending practices? Yves Smith at Naked Capitalism labels it a sellout at the expense of mortgage holders: $8.5 billion Foreclosure Fraud Settlement: Yet Another Loss for Homeowners Touted as a Victory.

When compared to TARP and other programs created to save TBTF and STBB (soon to be banks) plus the trillions pumped into the economy as a result the failures of banks and Wall Street, the $8.5 billion does seem paltry in comparison. Rather than taking the lead and closely auditing the review of wrongfully foreclosed mortgages and past practices, the OCC once again lets banks off the hook by giving them the ability to independently review both issues. Haven’t we come this way before? Banks will not do it or will be selective in what they choose to disclose. Besides the history of banks failing to act in good faith, there is also a history of government agencies and branches failure to provide consumer protection.

It appears the dogs causing much of this debacle are kicking back their hind legs in an attempt to hide the droppings left behind because of their failures. Frankly, it is amazing the OCC is still in that mode of protecting thrifts and national banks, which caused much of the issue in the last decade after they were identified as the culprits who failed to regulate. For those who may not be familiar with the OCC’s lack of supervision, I would offer Columbia’s “The Audit” as a refresher: Let Sleeping Dogs Lie.

To finalize and give strength to the OCC limited supervision (2007) of National banks and thrifts, SCOTUS over ruled states attempting to fill the void in regulating predatory bank lending practices. In a 5-3 ruling, SCOTUS tied the hands of states which attempted to regulate banks supervised by OCC. Michigan was joined by numerous states in an effort to control predatory bank lending.( Banks Win Shield From State Regulation at High Court)

A mixed bag of conservative and liberal justices ruled on Watters vs Wachovia Bank in the same manner as over turning State Usury Laws in Marquette Nat. Bank of Minneapolis v. First of Omaha Service Corp in 1978. SCOTUS cited the National Banking Act to give the OCC the capability to regulate national banks and thrifts over turn state regulations. . The irony is Congress moving quickly to repeal Glass Steagall and change the National Banking Act to allow Citibank to merge with Travelers Insurance; but, Congress saw no need to act to allow states to continue the regulation of national banks. Both actions by SCOTUS and the failure of Congress to pass new legislation have contributed much to the issues we have today. Always look to the money . . .

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SCOTUS Chastises Congress and the Executive Branches

by run 75411


Update:  Beverly Mann adds this note lifted from comments:

The Supreme Court is rarely in session. It’s seasonal, part-time work. They usually hear argument in 10 cases a month, seven months a year. In December, they didn’t hear even that many.
There’s really sooo much that can, and should, be said about the issue of (virtually universal lack of) access to the Supreme Court, and its repercussions. Roberts’ bizarre, cutesy annual report is … oh … I don’t know …characteristically hubristic?



SCOTUS Chastises Congress and the Executive Branches

A pencil and piece of paper was all Clarence Earl Gideon needed to state his case of being denied council in court after being accused of robbery and sentenced to prison. Gideon did get a review of his case under a violation of his 6th Amendment rights to council. Today it is near to impossible for the same to occur and the probability of achieving a review by SCOTUS would be akin to a grain of sand on a Florida beach. The highest court in the nation reviews issues and issues opinions for an ~85 cases/year few of which would be of the same stature as Gideon’s. It is all about who gains access to the court. Filing a petition is no easy task and the cost of which runs ~$3,000 for a dozen or so copies. The days of Gideon are long gone.

Why would I bring this up on an Economics board? Most recently Chief Justice Roberts got into the Congressional/Executive fray and their battle over finding a solution to the hypothetical fiscal cliff.

Our country faces new challenges, including the much-publicized ‘fiscal cliff’ and the longer-term problem of a truly extravagant and burgeoning national debit,” he wrote. “No one seriously doubts that the country’s fiscal ledger has gone awry. The public properly looks to its elected officials to craft a solution.” 

Chief Justice Prods Congress to Resolve Budget Talks and Control National Debt, http://www.nytimes.com/2013/01/01/us/chief-justice-roberts-prods-congress-on-fiscal-matters.html?_r=0
Roberts goes on to add;

The federal judiciary makes do with a budget appropriation of about $7 billion, he wrote, “a mere two-tenths of 1 percent of the United States’ total budget of $3.7 trillion.”
“Yes,” he went on, “for each citizen’s tax dollar, only two-tenths of one penny goes toward funding the entire third branch of government!”




That is notable cost control and Roberts cites how much it costs each citizen to have access to SCOTUS. The Robert’s SCOTUS saw an ~ 64 cases last year which is down from the typical 75-85 cases seen yearly and down even further from the 1963 cases reviewed by SCOTUS. By reviewing fewer cases, the Roberts SCOTUS controls costs and further reduces the probably of another Gideon achieving review. This is not true cost control, his waxing elegantly on how SCOTUS achieves reduced costs is suspect, and comes at the expense of the citizenry. Instead of working 8 hour days (if they were hourly), SCOTUS now works 7 hour days and produces less.

Less throughput and a selective one at best.

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Opponents Into Frenzy

by Barkley Rosser
re-posted from Econospeak with permission from the author

Lack Of Market Reaction To SCOTUS Ruling On Obamacare Sends Opponents Into Frenzy

The day before yesterday, former Obama advisor Austan Goolsbee published a column in the Wall Street Journal entitled “The Supreme Court Rules, The Market Yawns,” noting only a small drop in the stock market (about 26 points on the DJIA) on June 28, 2012, the day the SCOTUS ruled most of the ACA to be constitutional.  A nice link can be found on Economists View for “Links for 07-05-2012” at http://economistsview.typepad.com/ .  Commentary on Mark Thoma’s link was limited and restrained, mostly discussing fine points of mandates versus taxes and how long the new system might last (which I have many criticisms of, for the record, not my first choice for a reform).
 
OTOH, when Tyler Cowen made the same link  almost no commentary at http://marginalrevolution.com/marginalrevolution/2012/07/from-austan-goolsbee.html , many of his commenters simply went bananas.  Besides the name-calling and usual ranting, the substantive point argued was that the market did fall in the immediate aftermath of the announcement (which overturned the strong forecast on intrade, much revered by readers of MR), only to rally later in the day after positive news about European bonds (and to be followed by major gains the following day, supposedly on the bond news as well).  Certainly there were hysterians who think Obamneycare is the end of the world who sold immediately, but it did not take much for others to leap in and start buying and move right on past the decision.  One individual denouncing Goolsbee provided a link, but this one rather sensibly noted that stocks in the healthcare sector went in different directions, with hospital ones generally going up and health insurance ones generally going down.


While Goolsbee perhaps should have noted the initial market drop after the announcement, he was basically right.  There really is no sound basis for thinking that Obamneycare is going to tank the economy.  Many critics say it increases uncertainty, but in fact a negative decision would have increased uncertainty as many would be losing new gains from the law (children under 26 on their health insurance to name one) without knowing what might come next.  That the GOP continues to oppose the law means that there remains uncertainty, although those ranting about uncertainty somehow never notice that their opposition to the law is aggravating this uncertainty “problem.”
 
As it is, the best evidence we have on how the law might work is to look at its predecessor in Massachusetts, RomneyCare implemented in 2006.  According to a January article in Forbes (not  a left wing publication at all), http://www.forbes.com/sites/kerapoza/2012/01/romney-care-massachusetts-healthcare-reform , not only is 99% of the population now with health insurance, but the law is so popular that no Massachusetts Republicans are remotely talking about repealing it.  Small business people were quoted as supporting it, the group supposedly most likely to suffer under Obamacare (aside from those who expect to get free medical care from emergency rooms even if they have never paid a cent for any kind of health insurance or care).  The current issue in MA is that there are efforts to reduce the costs of the program, but no movement at all to repeal it.  It is a clear success, even if its prime author now opposes its nationwide application.
 
I cannot resist posing a point that has bothered me for some time.  Much has been made of the fact that the individual mandate was originally proposed by a Republican think tank in 1989, the Heritage Foundation.  It was supported by numerous GOP pols since then, with the implementation by a Republican in MA, Romney, simply the obvious highwater mark of this.  This support only came to an end the minute Obama came out for it (rather than single payer) in an open attempt to have a bipartisan bill.  Of course, in the end, not a single Republican in Congress voted for it, not one, without a single one professing the slightest embarrassment about jumping from supporting it to denouncing it as “unconstitutional socialism” not to mention even greater idiocies such as opponents shrieking in town hall meetings about “death panels” that went on for some time (where are those anyway?).
 
So, it is my observation that this is the biggest mass shift of the views of a political party on a major issue since the US Communist Party did so regarding Hitler in 1939 and back again the other way in 1941.  I have asked numerous people to name any other shift by any US party on any issue since then that beats or even matches this one by the GOP.  Nobody has come up with one.
 
My final observation on this is that at least back in 1939 there were enough members of the CPUSA who had principles and honor to resign from the party when it made its pro-Hitler shift in the wake of the Mototov-von Ribbentrop Pact.   I have seen not a single member of the recent US Republican Party about whom the same could be said, and the public repudiations of their own views by Stuart Butler of Heritage and Mitt Romney are astoundingly pathetic by comparison.

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The Supreme Court’s Decision in In re Bilski:: does it allow tax patents or not?

by Linda Beale
crossposted with Ataxingmatter


The Supreme Court’s Decision in In re Bilski:: does it allow tax patents or not?

The Supreme Court handed down its decision in Bilski Monday, holding, as almost everyone had predicted, that the hedging process that was the subject of the Bilski claim was unpatentable. Download Bilski at SCOTUS 08-964. The question for those of us following the case, of course, was not whether the Court would consider the claim patentable. The question was on what ground the Court would rest its decision and whether the decision would shed any light on the larger category of business method patents generally and tax strategy patents specifically.

The opinion of the Court was written by Justice Kennedy and joined by the four justices on the right–Alito, Roberts, Thomas and Scalia. The opinion agreed that the Federal Circuit’s “machine-or-transformation” test was a valuable clue to the question of process patents eligibility, but rejected the Federal Circuit’s conclusion that it was the exclusive test for process patents. The statutory analysis in the opinion was the kind of stretched, “ordinary meaning” dictionary and common usage based interpretation that becomes absurd quickly in the context of a highly technical statute such as the Patent Act. Consistent application of that everyday definition of process would allow patenting of almost any novel human activity, including a series of steps to implement a tax planning strategy. Further, the opinion treats a remedies provision (enacted in the wake of the State Street Bank case to protect those who might be accuse of infringing this new cateogry of business method patents approved by the court) as an amendment of the key patentability categories language rather than as the stopgap measure it was clearly intended to be because of the Federal Court’s condoning of business method patents.

The Court concluded that the hedging claim at issue was unpatentable under its exceptions for abstract ideas (not found directly in the statute, but claimed (awkwardly) to be consistent with the statute’s “new and useful” language). This is the place where the Court could have shed considerable light on patentability, since it is very unclear from prior precedent just how far the “abstract idea” exception extends. But instead, this opinion created even more confusion. While hedging in itself is an abstract idea, the application of a hedging algorithm to a particular commodity is not necessarily. So it seems that there is something beyond mere abstract idea operating here, but the Court was either reluctant or unable to put its fingers on what it was.

Interestingly, while it rejected the Federal Circuit’s machine-or-transformation test as the sole basis for deciding process claims, it nonetheless encouraged the court to develop additional definitive criteria that would help narrow down the kinds of process claims that are patentable. There is a good bit of language in the Court’s opinion, in fact, that suggests that process claims should not be interpreted overly broadly, even though the patent law generally has been viewed as having wide scope. The Court makes clear that the remedies provision in section 273 does not istelf suggest a broad reading of business method patentability. The Court indicates as well that process claims require a test with a higher hurdle to prevent inappropriate claims from being treated as patentable, else the Patent Office would be “flooded with claims” that could place a “chill on creative endeavor” and literally stifle competition. It encourages the Federal Circuit to come up with additional ways to define a narrower category of process claims based on the Flook, Benson and Diehr trilogy of cases that outlined the exceptions for “abstract ideas, laws of nature and physical phenomena” and yet approved an application of an algorithm in a rubber curing method. It indicates that nothing in the opinion should be read as an endorsement of the lax State Street Bank test. Nonetheless, it concludes that “the Patent Act leaves open the possibility that there are at least some processes that can fairly be described as business methods” that would be patentable. In sum, that is weak support for business method patents and tax strategy patents in particular, but it certainly leaves the door open for some business method patents, particularly the computer programs that were the subject of several amicus briefs and, by extension, possibly some tax strategies that are dependent on application by computer.

Scalia, however, did not join in two parts of the opinion that acknowledged the extreme rarity of business method patents until the 1990s under well-established principles, but nevertheless accepted the idea that “unforeseen innovations” such as computer programs might need to be treated as patentable in accommodation of “Information Age” technologies. These parts of the opinion are the most supportive of the corporatist position favoring broad scope of business method patentability, but Scalia’s tendency to rely on originalism makes it hard for him to take this step. That may be a good sign for those of us who think that business methods should not be patentable, and in particular that patent claims setting forth tax planning strategies for transactions designed to conform to legal requirements should never be patentable.

Stevens wrote a concurring opinion, in which Ginsburg, Sotomayor and Breyer joined. That opinion relied on statutory analysis and the history of the patent laws to conclude that business methods should not be eligible for patentability as process patents. The opinion notes the inconsistencies in Kennedy’s arguments, and the ultimately conclusory holding that the Bilski claim was an unpatentable abstract idea. It faults the majority opinion for weak statutory analysis, using the history of the British and US patent laws to establish the well-settled principle through the 1980s that business methods were not patentable.

Breyer also wrote a separate concurrence, claiming to set forth the agreed views of all members of the Court that may not be obvious from the multiplicity of opinions, as follows:

Section 101 has broad scope, but it is limited by the three judicially created exceptions (laws of nature, physical phenomena, abstract ideas );
The machine-or-transformation test is a critical clue to patentable processes;
The machine-or-transformation test is not the sole test for process claims, but broadly speaking, process claims must be consistent with the function that the patent laws are designed to protect;
The fact that the machine-or-transformation test is not the exclusive test for patentability does not mean that State Street Bank applies–the test in that case (which approved business method patents generally) led to “truly absurd” patent grants;
Breyer concluded that the Court means neither to “deemphasize” the machine-or-transformation test’s usefulness nor to suggest that many patentable processes lie beyond its reach.

The dissolution of the majority on the question of an expanded view of process patentability in light of “Information Age” technologies suggests that the Court might well reject tax strategy patents except perhaps in the cases where they are clearly interrelated with computer applications that cannot be treated as “mere post-solution activity.” In effect, this leaves the issue even more in limbo than before. The machine-or-transformation test appeared to have loopholes that would allow computerized applications of tax strategies to be patentable, and the opinion of the Court appears to support that possibility. Scalia’s refusal to join the sections on Information Age technologies, however, pushes back against easy acceptance of patents based on legal strategies. And certainly the four justices in the minority would not find tax strategy claims eligible for patentability. This was the last case in which Justice Stevens will participate, so there is also the uncertainty of the new Justice’s approach to these issues and ability to persuade others on the Court to his or her opinion.

The AICPA, which has spearheaded the tax practitioner and accountant community’s lobbying against tax strategy patents, issued a release on Monday that noted the continuing uncertainty about patentability of tax strategies. It called on Congress to enact a clear ban to resolve the issue once and for all. AICPA Renews Call for Congressional Action to Ban Tax Patents, PRNewswire, June 28, 2010.

Congress should act, but one suspects that the health and financial battles make enactment of the major Patent Reform Bill practically untenable for now. That means that the most likely possibility for a ban on tax strategy patents would be through a dedicated bill dealing solely with that issue. But you can bet that the IP bar will fight such a bill tooth and nail, as a toe in the door towards narrowing of patent law (and their turf), under the banner of “innovation” and “public disclosure.” Innovation is not an inherent good in finance or tax, and there is little merit to the public disclosure of tax strategies for helping people avoid even more taxes than they already do. Meantime, we will remain in suspense as the Patent Office and Federal Circuit work through the Supreme Court’s opinion.

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