26 September 2016

Debate One Over, When Will The Insanity End?

Please, please, please will some of the hundred million plus people who supported Trump wake up from the insanity soon before they cast their ballots?

Why do so many people just not get it?

Even many Republican elites and Fortune 100 CEOs get it. Almost every other country in the world gets it. The media gets it.

Sure, I understand that there are some people who can't be won over, white supremacist leaders, hard core conspiracy theorists, survivalists, people who listen to nothing but talk radio.

But, lots of Trump supporters are seemingly reliable, sensible business owners and honest workers, who go to church every week, who pay their mortgages and their taxes, who graduated from high school, and raised children who weren't totally screwed up.  How can people like that support a guy like Trump?

It truly blows my mind.

Today At The Colorado Supreme Court

The Colorado Supreme Court made several notable rulings today.

Jurisdiction Over Parent Companies Narrowed

Two of them (here and here) ratified recent U.S. Supreme Court jurisprudence that makes it harder for a court to secure jurisdiction over a parent company solely on the basis of contract of the subsidiary with the forum.  Basically, this is now allowed only when there is a basis to pierce the corporate veil of the subsidiary company to hold the parent company liable and there would otherwise be a basis upon which to assert jurisdiction.

Interestingly, only the last of the several controlling recent U.S. Supreme Court cases on point that compel its conclusion are cited by the Colorado Supreme Court in its ruling.

Speeding Ticket Burden of Proof

A Mesa County man convicted of speeding in county court fought his fight over who had the burden of proof of showing that he was nonetheless reasonable and prudent after it is established that he was driving over speed limit went all of the way to the Colorado Supreme Court.  The speeder lost as the Colorado Supreme Court held that the burden of proof to show that he was within this exception to the general rule of strict liability for driving over the speed limit was on the speeder and not the People.

Equitable Defenses Allowed To Child Support Collection Cases

Another provides a new barrier to collection of interest on child support judgments. In 1960, the Colorado Supreme Court held that the defense of "laches" (undue delay causing prejudice where a statute of limitations does not bar a claim) was not available in child support collection actions because this is not an "equitable claim." But, in a landmark case in 2014, the Colorado Supreme Court held that based upon the merger of "law" and "equity" jurisprudence in the state in 1877, that equitable defenses could be raised to oppose claims brought in "law".  Today, it extended its 2014 ruling to allow defendants in child support cases to assert the defense of laches even though those are "legal" claims.

Basically, the distinction between "law" and "equity" involves a determination of whether the common law courts of England or the chancery courts of England had jurisdiction over those claims before the parallel court systems were merged. It is most prominent in cases involving the right to a jury trial in civil cases, where juries are allowed in cases arising at law, but not in equity, under the United States Constitution under the 7th Amendment.  Despite the fact that the 7th Amendment does not apply to the states, most states, including Colorado, apply that the federal rule regarding the right to a jury trial.

Generally speaking, claims at law involve straight forward claims for money damages for a breach of contract, injury to property, or personal injury, although it also includes claims for the return of particular items of personal property. Equity usually involves injunctive relief in the form of a free form court order enforceable by the contempt of court power, a very complex set of facts, or certain kinds of subject matter usually involving corporate or family law (although not necessarily mere collection of amounts previously awarded and reduced to judgment in a family law case).

In this particular case, a support order was entered in 1983 and the youngest child turned nineteen in July of 1995, which the Court determined was when the child support obligation ceased. Wife brought suit in September of 2012.  But, most of the $893,285.32 that would otherwise be due was barred by the 20 year statute of limitations on enforcing money judgments, so only defaults on the amounts due in the time period after September 1992 were considered. The father did fail to pay $400 a month of child support from July 1994 when his child turned eighteen to July 1995 when the child support obligation ended upon the child attaining the age of nineteen, and interest accrued at the statutory child support arrears interest rate of 12% per annum, compounded monthly, on the unpaid installments.  When judgment entered that interest amount was $46,399.62.

Based upon the Colorado Supreme Court's ruling, the father will be permitted to challenge that interest award on the grounds that he was prejudiced by undue delay on the part of the wife in suing to enforce her child support judgment, and the trial court will have to rule based upon the facts presented to it on that issue.

"A laches defense comprises three elements: (1) full knowledge of the facts by the party against whom the defense is asserted, (2) unreasonable delay by the party against whom the defense is asserted in pursuing an available remedy, and (3) intervening reliance by and prejudice to the party asserting the defense."

It isn't clear how that applies in this case's circumstances.

Other Less Notable Cases

Two other cases decided today dealt with the technical issue of when a developer's land becomes subject to homeowner's association dues in quite fact laden circumstances (in these cases it was not because the court found that the land wasn't annexed to the association at the time the dues were assessed).

Another dealt with whether drugs and a confession obtained from someone stopped for a traffic violation should be suppressed for a violation of the 4th Amendment (it was not based upon the finding that the search and confession were consensual).

Consumer Debt Collection In State Courts

Lawsuits collecting small debts from consumer debtors, evicting residential tenants who fail to pay rent, establishing tax liens for individual taxpayers who don't pay what they owe, and foreclosing upon unpaid residential mortgage debts are the predominant share of the court docket on the civil side of every state court system. But, despite this fact, surprisingly little is known about how these cases are handled in the courts. We do know, however, that few of these cases are litigated on the merits and that when defendants do appear in court, they often do so without counsel.  
Virginia, with a population of about seven million, has averaged more than a million civil filings a year since the late 1980s. The overwhelming majority of these filings seek to collect debts from consumers, and most judgments go unpaid
Despite this apparent insolvency, civil litigation appears to be only tenuously related to consumer bankruptcy whether one looks at Virginia or at the nation as a whole. Nationally, the non-business bankruptcy filing rate rose by more than 350% between 1980 and 2002, while the civil filing rate rose by about 12%. Prior research suggests that relatively few bankrupt debtors have been sued by their creditors in state court, that most bankrupt debtors are drawn from the middle class, and that bankrupt debtors own homes at nearly the same rate as the general population. 
This Article finds that few civil defendants file for bankruptcy, that civil litigation is concentrated in cities and counties with lower socioeconomic characteristics, and that civil defendants in Virginia have a significantly lower rate of homeownership than the general population. In other words, the bankruptcy statistics exclude many defaulting and insolvent consumers, and these consumers may be disproportionately drawn from the more disadvantaged segments of society.
Richard M. Hynes, "Broke But Not Bankrupt: Consumer Debt Collection In State Courts" 60 Florida L. Review 1 (2008) (emphasis added).

It is commonly assumed that the typical person who files for bankruptcy does so because they are overwhelmed with state court judgments that they can't pay.  But, by and large, this is not the case. Bankruptcy is largely the province of the insolvent middle class. State court judgments are largely the province of the uncollectible poor and the solvent middle class.  The two worlds barely intersect.

There is not an empirical consensus on how these cases are processed, although it is clear  that few are ever tried on the merits, let alone before a jury as many state court rules allow. One low end estimate is that just 40% of limited jurisdiction court debt collection cases default, although many are dismissed voluntarily or involuntarily without prejudice, sometimes for lack of service of process, and sometimes due to a deal with the debtor to make payments which are often reached after a debtor appears in court with or without filing a responsive pleading.  An industry source estimates that 80% of such cases default and a Federal Trade Commission estimate that 90% of such cases default which would be closer to my estimation.

Institutional creditors such as credit card companies and payday lenders file collections lawsuits in a surprisingly low percentage of their bad debt cases, and it is surprisingly rare for multiple suits to be filed against the same debtor by different creditors in state courts.  But, the fact that such a large share of judgments go unsatisfied helps explain this reluctance.

Also about 80% of post-judgment litigation involves the filing of garnishments. Interrogatories addressed to debtors, enforcement of judgment liens in real property, and seizures of tangible personal property from debtors are far less common.

In the case of judgment liens in real property, many debtors sued in state court don't have any real property that is not fully protected by a homestead exemption, and even when they do, there is usually a first mortgage that must be assumed if the judgment lien is enforced, so it is easier to simply wait until the home is sold voluntarily to collect the debt.

Screening Candidates

Every previous President of the United States has been a Governor, U.S. Senator, Presidential cabinet member, Vice President (who is also a U.S. Senator and Cabinet member ex officio) or the highest ranking officer in the United States military.

Political parties and the voting public have made these the informal qualifications to serve as President of the United States.  Should similar qualifications, adding perhaps the post of Speaker of the United States House of Representatives (which is high up in the line of succession), be formally added to the list in order to spare our nation candidates with no political experience like Donald Trump?

After all, no one who actually won the Presidency under its current constitution (which took effect in 1789) has lacked these qualifications, so it would not have been a huge practical burden on the public. But, it would in a quite straight forward manner remove all sorts of dubious candidates who either have little chance or winning or should have little chance of winning, for consideration.

Essentially, the list would require every candidate for President to be someone whom voters still like after that person won a major statewide office, won the confidence of someone who was previously elected President for a high office, or in the case of a former Speaker of the House, previously won the confidence of the people in a major office for less than an entire state and won the confidence of a majority of representatives from every state?

This sets a serious floor of qualifications on someone leading the nation which greatly reduces the risk that someone unqualified running our nation.

In contrast, several past Presidents and Hillary Clinton would have been disqualified by an anti-nepotism clause that would prohibit family members of past Presidents from holding that office.

At various times and places, there have also been prohibitions on holding high public office for people who have been convicted of felonies, for people who have filed for bankruptcy, for people who do not own any real property, and for people who have previously been removed from office by impeachment or for misconduct.

Section 23 of the Canadian Constitution, for example states that:
The Qualifications of a Senator shall be as follows: 
(1) He shall be of the full age of Thirty Years;
(2) He shall be either a natural-born Subject of the Queen, or a Subject of the Queen naturalized by an Act of the Parliament of Great Britain, or of the Parliament of the United Kingdom of Great Britain and Ireland, or of the Legislature of One of the Provinces of Upper Canada, Lower Canada, Canada, Nova Scotia, or New Brunswick, before the Union, or of the Parliament of Canada after the Union;
(3) He shall be legally or equitably seised as of Freehold for his own Use and Benefit of Lands or Tenements held in Free and Common Socage, or seised or possessed for his own Use and Benefit of Lands or Tenements held in Franc-alleu or in Roture, within the Province for which he is appointed, of the Value of Four thousand Dollars, over and above all Rents, Dues, Debts, Charges, Mortgages, and Incumbrances due or payable out of or charged on or affecting the same;
(4) His Real and Personal Property shall be together worth Four thousand Dollars over and above his Debts and Liabilities;
(5) He shall be resident in the Province for which he is appointed;
(6) In the Case of Quebec he shall have his Real Property Qualification in the Electoral Division for which he is appointed, or shall be resident in that Division.
Of course, a $4,000 net worth and real property wealth requirement in 1867 when that provision was adopted was a lot more meaningful at the time (probably on the order of $80,000-$100,000 Canadian dollars today), than it is now.  Also, it isn't as if the job of Canadian Senator exposed someone to liability, so why have the requirement?  So that they represented people who had "a stake in society" and an incentive to obey its laws?

A Canadian Senator's office becomes vacant if he dies, "he attains the age of seventy-five years", he resigns in writing, or under Section 31 of the Canadian constitution:
(1) If for Two consecutive Sessions of the Parliament he fails to give his Attendance in the Senate;
(2) If he takes an Oath or makes a Declaration or Acknowledgment of Allegiance, Obedience, or Adherence to a Foreign Power, or does an Act whereby he becomes a Subject or Citizen, or entitled to the Rights or Privileges of a Subject or Citizen, of a Foreign Power;
(3) If he is adjudged Bankrupt or Insolvent, or applies for the Benefit of any Law relating to Insolvent Debtors, or becomes a public Defaulter;
(4) If he is attainted of Treason or convicted of Felony or of any infamous Crime;
(5) If he ceases to be qualified in respect of Property or of Residence; provided, that a Senator shall not be deemed to have ceased to be qualified in respect of Residence by reason only of his residing at the Seat of the Government of Canada while holding an Office under that Government requiring his Presence there.
It isn't clear if someone like Donald Trump who has had six corporate bankruptcies for entities that he has run, but not a personal one and not after he might take office, would fall within Section 31(3) above.

Canada vests the authority to make law on comparable topics in its House of Commons, to the Provinces in which an MP is elected.

Is it relevant that the Canadian Senate is essentially Canada's version of the House of Lords, but comprised only of the equivalent of a British Life Lord?

Did you notice that Canada originally required merely that Canadian Senators be British subjects and not that they be Canadian citizens (although this provision is arguably now be spent since no one alive at the time of Union in 1867 is under 75 years of age, depending upon how that somewhat ambiguous sentence is read)?
Marginal note:
Marginal note: 
Should something like any of these qualifications be added to the list of qualifications in the U.S.?

And, while few people would dispute that the President of the United States should be a U.S. Citizen, does it really make sense to retain the constitutional requirement that the President be a "natural born" citizen as opposed to requiring merely that the President have resided in the United States for a certain number of years?

Is there any meaningful reason for excluding someone who is thirty-five years old (the minimum age to serve as President) if the candidate was naturalized as a citizen at the age of one year and lived in the United States at all times after that, but allowing someone who was born in the United States to non-citizen parents who didn't live in the United States until a year or two before running for office, to serve as President of the United States?

21 September 2016

Eric Goldman Clearly Received An Elite Kindergarten Experience

“The California appeals court said Yelp had no standing to protest an injunction against it,” [Law Professor Eric] Goldman said. “That contradicts basic due process that we learned in kindergarten. Yelp was ordered to do something without ever having a chance to tell the court its side of the story.”
From the San Fransisco Chronicle.

Eric Goldman is the leading scholar of reputation law in the digital age and his blog is in the sidebar at this blog.

Perhaps he gained such an esteemed position because of the excellent education he received in kindergarten.  I, in contrast, was trying and failing to learn how to color between the lines, and learning the alphabet and how to count to ten. But, some people, like the nine year old starting college this year, are more precocious than I was.

Perhaps the federal government can hire him as a witness for the government in its immigration cases where it has argued that young children are capable of representing themselves in immigration court without offending due process considerations. (I believe that a later decision in the case found against the government, although only on a preliminary matter like class action certification.)

The Merits

In all seriousness, the issue presented is whether Yelp has standing to contest a finding that a customer review posted by a user is defamatory in a proceeding to have an injunction put in place to order Yelp to remove it, when a default judgment against the user who posted the review was obtained by a business which claims to have been defamed by the review.

Generally speaking, default judgments cannot be used as proof in another case against anyone other than the person against whom they were entered (and not always then) under the doctrines of collateral estoppel and res judicata. So, Yelp would not even have to prove that the court entering the judgment had jurisdiction to enter the judgment (which mostly boils down to whether there was valid service of process on the user who may or may not have been accurately identified by the business).

UPDATE September 22, 2016: This majority rule of law, however, is apparently not the law in the State of California.  The California Court of Appeals states in a footnote to its opinion that:
A “‘“default judgment conclusively establishes, between the parties so far as subsequent proceedings on a different cause of action are concerned, the truth of all material allegations contained in the complaint in the first action, and every fact necessary to uphold the default judgment.” ’ [Citations.]” (Gottlieb v. Kest (2006) 141 Cal.App.4th 110, 149.)
It isn't entirely clear if this language means that a default judgment as to one theory in one lawsuit against a defendant also applies with respect to a different theory in the same lawsuit against the defendant (a majority rule), or if facts admitted by default in one lawsuit can also be held against that defendant in a second lawsuit (a minority rule). However, it appears that only one lawsuit was filed in this case.

Even on its face, however, this rule of law should only bind the defaulting defendant and not someone who was not joined to that lawsuit and did not default.

END UPDATE.

If Yelp has no legal interest in the reviews posted by its users, on the theory that the users were the sole and exclusive owners of the reviews, it doesn't have standing to fight the decision. 

But, that characterization of the interest that Yelp has in reviews posted and aggregated and evaluated by it at its website is dubious. Indeed, the contractual relationship set forth in the Yelp terms of service, in all likelihood, expressly grants Yelp rights in the reviews that are posted by users. 

So, Yelp ought to be entitled to fight the claim that the review was defamatory on the merits before an injunction taking it down can be ordered, and the California Supreme Court will have to decide if that is the case.

UPDATE September 22, 2016:

Eric Goldman's lengthy post on the case is here.  An update is here.  The California Supreme Court unanimously voted to grant certiorari on September 21, 2016.

Transmission of the record, briefing, and oral arguments are likely to follow an ultimate ruling on the merits a year or more in the future.

It also isn't clear what is going on with defaulting defendant Ava Bird, who is being ruthlessly punished for writing a few short negative Yelp reviews. Should she voluntarily consent to remove the review perhaps in a settlement that reduces the money judgment against her, or is forced to do so under threat of contempt of court, or brings her own successful motion to vacate the judgment on some grounds, Yelp's claim could be mooted.  If this happens, it isn't clear if that would leave the bad precedent of the California Court of Appeals case in place, if that opinion would be vacated, or if the California Supreme Court would continue to render an opinion on the grounds that the issue might otherwise escape review in almost every case.

Finally, it is not at all obvious that the Plaintiff and former attorney of the defaulting defendant has complied with all of her ethical duties as an attorney by pursuing this course of action. If not, a grievance might be filed that might give rise to additional proceedings.

A few aspects are notable:

* The case involved a client complaining about an attorney.

* The complaint was served by "substitute service" rather than by personally delivering it to the defendant.

* Yelp was not named as a party or joined in the action, so it had no notice of the suit at the time that default judgment was entered.

* An ex parte "prove up hearing" was scheduled and held.  It isn't clear if any notice was delivered to the defaulting defendant or received by the defaulting defendant, but the defaulting defendant, at a minimum did not show up at the "prove up" hearing.

* The plaintiff filed court documents filed the court in anticipation of the "prove up" hearing, but not provided to Yelp which also was given no notice of the hearing, there (emphasis added):
In support of its request for injunctive relief, Hassell argued that “once the trier of fact has determined [Bird] made defamatory statements,” the court would have authority to issue an injunction, and that if the same showing could be made at a prove-up hearing, a comparable injunction would be proper. Hassell reasoned that denying injunctive relief after a default prove-up hearing would mean a plaintiff can be forced to suffer defamatory harm so long as the defendant refuses to answer the complaint. Hassell requested that the injunction contain a provision requiring Yelp to remove the defamatory reviews in the event that Bird failed to do so, which was likely in light of her history of “flaunting” California’s court system.
* Yelp received no notice of the "prove up hearing" and did not attend it.

* Following the ex parte "prove up hearing" at which only the plaintiffs attended and of which no transcript is in the appellate record, a default money judgment for "general and special damages and costs" of $557,918.75 was entered, but no punitive damages were entered. This is a pretty stunning award for someone who merely posted a few comments that were allegedly false in a Yelp review online.

* The default judgment also ordered the defaulting party to remove the complaint from Yelp's site.  The third paragraph is the "removal order" directed at Yelp:
“Plaintiffs’ Request for Injunctive Relief is Granted. Defendant AVA BIRD is ordered to remove each and every defamatory review published or caused to be published by her about plaintiffs HASSELL LAW GROUP and DAWN HASSELL from [Y]elp.com and from anywhere else they appear on the internet within 5 business days of the date of the court’s order. 
“Defendant AVA BIRD, her agents, officers, employees or representatives, or anyone acting on her behalf, are further enjoined from publishing or causing to be published any written reviews, commentary, or descriptions of DAWN HASSELL or the HASSELL LAW GROUP on Yelp.com or any other internet location or website. 
“Yelp.com is ordered to remove all reviews posted by AVA BIRD under user names ‘Birdzeye B.’ and ‘J.D.’ attached hereto as Exhibit A and any subsequent comments of these reviewers within 7 business days of the date of the court’s order."
* After judgment was entered, "Hassell served Bird with notice of entry of judgment. Bird did not appeal, and the judgment became final on March 16, 2014." The judgment was delivered to Yelp the same day that the judgment was served upon Bird (the opinion does not reveal the form of the service).

* Roughly two weeks after the judgment was served and before it was final, the Plaintiff served a demand letter upon the registered agent for Yelp.  Yelp responded with a letter to the Plaintiff setting forth its legal position that it was not bound by the order less than a week after receiving the demand letter.

* Yelp allows users to unilaterally remove their own complaints.

* It isn't obvious at first glance that this injunctive relief order was ever served upon the defaulting defendant which is necessary to give the Court authority to sanction the defendant for violating the injunction. The defamation plaintiff could have served the injunction on the defaulting defendant and then held the defaulting defendant in contempt of court if the defaulting defendant did not comply. But, if the defamation plaintiff had tried to compel the defaulting defendant to remove the complaint from the website, the defendant might have made an effort to set aside the default judgment on multiple grounds pursuant to the California equivalent of F.R.C.P. 60 (e.g. bad service of process, excusable neglect, misidentification of party complaining to Yelp).

* There is no indication in the record that the defamation plaintiff to action to compel the defaulting defendant to take action.

* Therefore, after the order was entered and served, Yelp sought to vacate the order, but was not allowed to dispute the merits of the defamation claim, obtained by default.

* The Court of Appeals concludes in the face of case law that arguably says otherwise, that Yelp was bound by the same deadline for attempting to set aside a judgment in the case that applied to the defaulting defendant, even though it was not a party to the case, and that its motion to vacate the order under the court rules (which are statutory in California) was untimely.  But, the Court held that it was still allowed to file a motion of a type not specified in the court rules.

* The California Court of Appeals decision is here.  It basic conclusions are as follows:
(1) Yelp is not “aggrieved” by the defamation judgment entered against Bird, but it is “aggrieved” 1 Generally, we will refer to respondents collectively, using the singular, gender neutral pronoun form where appropriate. 2 by the removal order; 
(2) Yelp’s trial court motion to vacate was not cognizable under Code of Civil Procedure section 6632; 
(3) Yelp has standing to challenge the validity of the removal order as an “aggrieved party,” having brought a nonstatutory motion to vacate that order; 
(4) Yelp’s due process rights were not violated because of its lack of prior notice and a hearing on the removal order request; 
(5) the removal order does not violate Yelp’s First Amendment rights to the extent that it requires Yelp to remove Bird’s defamatory reviews; 
(6) to the extent it purports to cover statements other than Bird’s defamatory reviews, the removal order is an overbroad unconstitutional prior restraint on speech; and 
(7) Yelp’s immunity from suit under the Communications Decency Act of 1996 (the CDA), 47 United States Code section 230, does not extend to the removal order.
* In the big picture, one of the real problems is entering a compulsory final injunction against someone who was not a party to the litigation. Generally, only parties to a lawsuit are bound by its decision. There are a couple of exceptions to that idea, but they involve their own due process protections.

For example, in the case of a garnishment for a money judgment, the garnishee can respond that the money allegedly owed by it to the judgment debtor isn't actually owed, but it can't dispute that the judgment debtor owes money to the judgment creditor.  The garnishee is also generally required to give notice of the garnishment to the judgment debtor, potentially causing the judgment debtor to seek to set aside the default judgment.

Injunctions directed at a party to a lawsuit can also sometimes have a penumbra effect on some people who have notice of it, although this doctrine is relatively narrow.  For example, an officer of a defendant corporation who knows of an injunction entered against a defendant corporation might conceivably be subject to contempt of court for causing the defendant corporation to violate the injunction.  A trial court opinion on this subject stated that: "under California law, an injunction can be “applied to” a nonparty by virtue of its relationship to an enjoined party. (Citing Ross v. Superior Court (1977) 19 Cal.3d 899, 906 (Ross).)"

* The crux of the appellate ruling against it is as follows:
Yelp attempts to characterize the removal order as an injunction against Yelp. We do not accept that characterization. The judgment was entered solely against Bird, and the injunctive order was directed solely at Bird’s defamatory speech. 5 The removal order was limited to statements covered by that injunction, statements attributed to Bird which she had been ordered to remove. Thus, the removal order does not impose any independent restraint on Yelp’s autonomy. Under these circumstances, charactering the removal order as an injunction creates unnecessary confusion about the clear distinction between the removal order and the underlying injunction against Bird. For reasons already discussed, Yelp cannot bootstrap its collateral attack of an allegedly void 5 order into a substantive appeal of the default judgment itself. The question whether the trial court should have granted an injunction against Bird is outside the scope of this appeal.
In other words, the California Court of Appeals concludes that Yelp's attack on the order directed at it cannot attack the merits of the determination reached against the defaulting defendant that the statements were defamatory and that a judgment was proper.

Basically, the California Court of Appeals concludes that Yelp is the kind of non-party who can be bound by an injunction because of its relationship to the defaulting defendant, while Yelp disputes that this is the case.