In Lehmann's Terms

Defending Jay Angoff

With all due respect to Wally Olson, whose work I've long appreciated and whom I've sometimes called on as a valued source in the past, it's my considered expert opinion as a journalist that the hatchet piece on Jay Angoff that he links to from the Belleville (Ill.) News-Democrat is, well, one steaming turd of a story  I rack my brain, but I just can't quite connect the dots in the trail of innuendo reporter Brian Brueggemann would like us to follow.

He notes that former Missouri Insurance Commissioner Jay Angoff was counsel to a class action suit in which $1.6 million was awarded in attorneys fees. He also mentions that Angoff was counsel to a suit against Allstate (I'm not familiar with the case, but it sounds like a "persistency discount" complaint) that the company settled for $5.57 million.

It's implied, but never actually stated in the story, that these suits are one and the same. And right off the bat, I find the lack of clarity on that point troublesome. When a journalist leaves muddy a point you'd think he'd want to make explicit, it's often a sign he's trying to tell you more than he actually knows.

Presuming they are the same suit, then Angoff and his co-counsel reaped around 29% of the settlement (if it was inclusive of attorneys fees), which would be a relatively large but certainly not unheard of tally. If the $5.57 million was just the damages Allstate settled for, then the $1.6 million in fees is about 22%, which is pretty close to industry standard.

So, thus far, we have a not outrageously large attorney fee paid, along with a pretty small potatoes settlement for an insurance class action. The actual merits of the case in question aren't actually brought up at all, but the subtext is that the fee was, for one reason or another, undeserved.

So...what's the story then?

The story, apparently, is that Mr. Angoff also has testified before various public bodies blaming insurers for raising medical malpractice rates in Illinois.

And?

And apparently, that's it. Several years ago, Jay Angoff represented policyholders who sued Allstate, and last year, Jay Angoff told a state House committee that med-mal insurers were to blame for the med-mal insurance crisis.

That, in and of itself, was information Mr. Brueggemann considered to be "newsworthy."

Now, the case for newsworthiness might be buoyed somewhat if Allstate actually sold medical malpractice insurance. Then, you could at least make some semblance of a conflict of interest charge. But alas, they don't.

Moreover, Mr. Angoff's specialty as a class actions attorney might have greater bearing on his opposition to pain and suffering caps in med-mal suits if the two areas of tort law had a bit more to do with each other. It's exceedingly rare for a medical liability tort to be filed by way of class action. If multiple patients are suffering the same injury at the hands of the same doctor, it's probably a good bet that he SHOULD be sued.

So what, again, is the point of the story? If it's to establish that Jay Angoff isn't a "credible, objective witness," as the story's one source asserts....who, exactly, was taking him to be one? And what event or incident has transpired in recent days to merit this sober inquiry into Mr. Angoff's character?

And then there's the perfunctory note that Angoff "could not be reached for comment." Color me skeptical.  Declined comment, I could maybe buy, especially if he had been pre-warned as to the nature of the piece. But could not be reached? How long did you give him to get back to you...an hour? I've been around the insurance biz long enough to know that Jay Angoff may be many things, but press-shy is not one of them.

To be fair, it could be that Angoff just thought this rinky-dink little paper wasn't worth getting back to right away. Which is why I wouldn't raise that particular quibble were this some piece of breaking news that absolutely had to get to press. But when the headline ("Med-mal 'expert' is also plaintiff attorney") conveys  the same information that one could get by, say, looking in the yellow pages under Jay Angoff -- a Jefferson City, Missouri (MO) Class Actions Lawyer...I think it's safe to say the issue didn't exactly require a quick turnaround.

In fact, I can't help but wonder if Mr. Brueggemann's intent here wasn't partly to waive a red cape before the bull. To so blatantly skirt the line of malicious intent in a story about a friggin' TRIAL LAWYER, for chrissakes, requires either brass balls, an unhealthy appreciation of irony, an unbelievably thick skull, or ulterior motives that I can't pretend to understand.

The Tortious Nature of 'Mom' Haircuts

Joanna links to a lengthy discussion over at a site called Morphing Into Mama that examines the duties spouses ought owe one another to maintain a certain level of physical attractiveness. More specifically, as Ms. Robinson puts it:

if you are cute with long hair and a svelte body and then cut off the hair and gain 40 pounds over the course of your marriage, it’s false advertising and unfair to the Hubbidy Hub Hub.

Personally, I don't see how the claim of fraudulent inducement holds. Even were this a products case, argued under terms of strict liability, where is the evidence that establishes ex ante defect on the part of the manufacturer? With any tangible asset, you have to allow for ordinary wear-and-tear as a matter of course.

But, of course, it's not a products case, but rather, one of contract. Well, look to the habendum clause ("to have and to hold," indicating transfer of property.) The promissor entered into a contractual vow "to love and to cherish" the promissee under conditions that may be "for better or for worse, for richer, for poorer, in sickness and in health."

Certainly, a prima facie reading of that language would cover weight gains and unfortunate haircuts, would it not? (Though, to be fair, it is a MUTUALLY binding promise, so the husband would be equally entitled to bring a claim for breach should his wife renege on her loving/cherishing commitments in response to his growing a mullet or a paunch.)

Now, obviously, compelling specific performance isn't going to be terribly effective in such cases. But there is another clear strategy that either party (both the one who feels unloved and the one who objects to the partner's eating and/or grooming habits) may opt for as a fall-back strategy -- just withhold sex. It's a veritable surety bond right there between your legs.

But please do knock off this "false advertising" nonsense. There's been enough tortification of contract law as it is, and in case you hadn't noticed, claims of marital fraud are already spreading through Hollywood like a SoCal wildfire. First, there was Renee and Kenny. More recently, you had Chad and Sophia. This gross perversion of the basic law of contracts needs no further encouragement.

So, in short, no, this is absolutely not false advertising. This is what's called "not reading the fine print."

My New Favorite Bank

I just may have to switch accounts, after this news:

BB&T Corporation today said it will not lend to commercial developers that plan to build condominiums, shopping malls and other private projects on land taken from private citizens by government entities using eminent domain.

“The idea that a citizen’s property can be taken by the government solely for private use is extremely misguided, in fact it’s just plain wrong,” said BB&T Chairman and Chief Executive Officer John Allison.

“One of the most basic rights of every citizen is to keep what they own. As an institution dedicated to helping our clients achieve economic success and financial security, we won’t help any entity or company that would undermine that mission and threaten the hard-earned American dream of property ownership.”

Now THIS is the kind of "socially responsible investing" I can get behind!

5 Questions with Bob Higgs

Nearly two decades after the publication of his landmark Crisis and Leviathan, economic historian Robert Higgs' chief thesis in the book -- that, to quote Randolph Bourne, "War is the health of the state" -- seems more relevant than ever. Thus it's only fitting that he should revisit some of those same themes in the excellent new volume, Resurgence of the Warfare State: The Crisis Since 9/11, a collection of essays on the myriad ways we have seen, once again, government exploiting public fear in the wake of crisis to engage in shameless ratcheting up of state power.

I caught up with Higgs, a senior fellow in political economy with the Independent Institute and editor of The Independent Review, for a little round of five questions.

In Lehmann's Terms: The subtitle for Crisis and Leviathan was "Critical Episodes in the Growth of American Government." How does the episode we've been living through since 9/11 differ from those of the past?
 
HIGGS: The current episode is smaller, but its basic structure is the same as that of the preceding ones: public fright and insecurity; reliance on government to "do something" to save the day; rush of all sorts of opportunists--political, economic, ideological, even religious--to seize the day, especially to grab the keys to the Treasury; massive government propaganda to grease the skids, leverage the crisis and, in this case, make it permanent.
 
ILT: I credit you with inventing the slogan "God save us from great presidents." In light of the past five years, should that prayer be amended to include doltish, incompetent ones, as well?
 
HIGGS: God save us from all presidents (with the possible exception of Grover Cleveland).
 
ILT: Libertarians typically oppose campaign finance reform as an unjustified infringement upon free speech. But given that there has developed a symbiotic relationship between a permanent class of government contractors -- particularly with the DoD -- and the lawmakers who feed them, what about a rule banning any company (or trade union) that has donated to a campaign or a political action committee from receiving any contract from the federal government for, say, five years?
 
HIGGS: This might help, but where there's a will, there's a way. So long as government has the power to convey massive benefits or to impose massive costs, people are going to do whatever it takes to gain some control or influence over the people who hold the control levers of that terrifying machine.

ILT: You live in the Bayou state. What sorts of ratcheting up in government power have you seen in the wake of Hurricane Katrina?

HIGGS: Besides various seizures of control (most of them temporary, thank God) over everything from garbage dumps to motel accommodations, this area is now awash in federal money. Naturally, we wily Cajuns, good old boys, and canny black race hustlers who rule the roost hereabouts are having a field day pocketing said loot, utilizing all our usual corrupt devices (which to us are just politics as usual). The outcome of this activity will be not only massive waste and stupid actions of all sorts, but residual of government control--over such things as urban and regional development--that did not exist before. Mainly, though, Katrina has been turned into a serviceable excuse to loot the U.S. Treasury big time.
 
ILT: Other than the Independent Review -- where, clearly, you have a bias -- what other academic journals do you read regularly and which do regard as the best?

HIGGS: I read some professional literature in economics, such as the Journal of Economic Literature and the Journal of Economic History, to see what the profession is doing, but truth be known, I don't read any academic journals regularly any more. I go to particular articles when they pertain to projects I'm working on. Otherwise, the academic journals are not worth my time.

Thanks again, Bob!

AnCapistan or Wal-Martathon

Over at EconLog, Bryan Caplan indulges in one of my own personal favorite pastimes -- trying to work out the bugs in anarcho-capitalist theory:

Thousands of years ago, demand for defense services was very small relative to scale economies. In any locality, the market only had room for one defense firm. The result was just what the skeptics would predict: Private monopolies quickly turned into governments.

As economic growth progressed, of course, the market for defense services got bigger, making room for more and more firms. The problem, however, is that if you've got government in an area, it has the power and the incentive to prevent new entry by competing defense firms. Thus, if market conditions initially favor monopoly, monopoly can easily endure due to "lock-in," or "path-dependence." 

This remains true even if current conditions are totally different from the initial conditions. Initially, there was room for one firm; now, for 10,000 firms. But the one firm that got on top isn't going to let the market respond to changing conditions. It's going to use its advantageous starting point to terrify potential entrants away.

Thus, my answer to the student's challenge is that scale economies are weak now, but things used to be very different. States emerged at a time when markets were too small to sustain more firms. Over time, the economic rationale for monopoly has grown weaker and weaker. Competition could work now, if you gave it a chance. But the state doesn't care about economic rationales. As long as it can credibly threaten to put new entrants in jail, its monopoly endures.

Much as I'd like to be convinced, I have my doubts about this picture. Bryan seems to imply that the advantages of scale diminish as the market for a particular category of goods and services expands. I'm not the doctor of economics he is, so perhaps there's something in the theory that I'm neglecting, but I don't instinctively see any reason why this should be so.

Indeed, drawing from another -- admittedly quite different -- market, it would seem we have a rather powerful empirical counter-example: Wal-Mart.  No, it's not a perfect comparison. Wal-Mart is far from a monopoly, and there are relatively few markets it participates in that could rightly be termed oligopolies. But the advantages of scale that it brings to the table nonetheless prevail in large and small markets alike. And, indeed, the rise of Wal-Mart has accompanied the maturation of many small markets that nonetheless moved in the opposite direction -- rising demand for retail services was diverted from a plurality of small players toward dominance by one large one.

Now, perhaps there exists some tipping point higher up on the scale, such that when a market expands beyond some given size, scale once again recedes as a significant advantage. Or perhaps scale simply does not confer the same sorts of advantages upon defense organizations that it does upon Wal-Mart. There are certainly reasons to believe it may not -- defense services, after all, are not widgets whose production hinges directly upon being able to maximize efficiencies of labor or overhead -- but I think there are equally plausible reasons to suggest the advantages might be even greater.

Take the hypothetical that there is some AnCap society where 10,000 discrete firms offer defense and basic civil justice services for profit. Asking the most obvious question of such a market, how would a dispute between clients of competing firms be adjudicated fairly?

The usual AnCap response is that, because the costs of conflict are high, cooperative mechanisms would naturally evolve between defense firms to agree to common standards for dispute resolution. Because these standards would need to be both binding and acceptable to both parties, a natural equilibrium would arise, as arbitrators that showed themselves the most even-handed would draw the most business.

Tyler Cowen has argued, in effect, that this is letting the devil in the back door. If cooperation provides advantages in earning market share, then the anti-competitive genie is out of the bottle, and it's very difficult to get him back in again. Defense firms that may collude to SERVE the public may also collude against the public, by locking out new competitors from their cooperative venture. And since the boundaries between firms are ultimately just a measure of their transactions costs, the lower those costs, the more likely it is that you are witnessing the reemergence of the monopoly state.

I think that's a powerful argument, though Bryan has already authored a fairly compelling response to it. But there's an altogether different argument that has always given me the most fits.

What I've always felt was the weakest link in the AnCap chain lies in the assumption that defense firms are likely to cooperate to resolve inter-agency disputes in the first place. Why would any consumer of defense services -- who has paid good money to have a firm serve as his ultimate fiduciary, securing his life and person -- tolerate such a thing?  I could imagine a defense firm -- at most -- advising that it is in the client's best interest to cooperate, much like a defense attorney might persuade a client to cop a plea.

But in the case that the client was unwilling, how could a defense firm agree to turn over their client without completely violating the terms of their relationship? Who would actually patronize a firm that conceded it would give you up at precisely the moment you need them most? Yes, it would be expensive to fend off attacks from all sides -- but isn't that precisely why you're paying the agency, because they are presumably better able to do so than you are?

In this case, it would seem that scale is terribly crucial, because the firm that is best able to defend its clients against all comers is the one that can best provide the service in question. The corollary of that, of course, is that scale is just as crucial to the other side of the equation -- the firm that is best able to overcome others' defenses such that they can secure restitution for an aggrieved party is likely going to be the one most in demand.

And, contrary to Bryan's initial assertion, it would strike me that the larger the market and the greater the demand for defense services, the more important it would become that your personal defense agency possess the scale both to fight for you, and defend you against others looking to fight for themselves.

Obviously, the problem with this system is that it is inherently unstable. It would require a perpetual ramping up of forces until you were ultimately left with a Leviathan state.

But, then, isn't that exactly what has already happened?

A 'super-lefty' shrugged

The state – government – politicians and their henchmen and toadies – strangers specializing in duping the masses into believing that these same duplicitous strangers are capable of superhuman feats of beneficence – are ruled by a U.S. court of appeals to have a "legitimate" reason to interfere with parents’ decisions about how to expose children to "sexual matters."

That's Cafe Hayek's Don Boudreaux again, this time responding to an appellate decision in Fields, et al. v. Palmdale School District, a case brought by a group of elementary school parents who were deeply offended when their children were asked questions -- such as how often they thought about sex -- as part of a study of psychological barriers to learning. In particular, Boudreaux asks readers to note these closing sentences:

We agree, and hold that there is no fundamental right of parents to be the exclusive provider of information regarding sexual matters to their children, either independent of their right to direct the upbringing and education of their children or encompassed by it. We also hold that parents have no due process or privacy right to override the determinations of public schools as to the information to which their children will be exposed while enrolled as students. Finally, we hold that the defendants’ actions were rationally related to a legitimate state purpose.

Much as I do love to get my anti-state dander up, I have to give the big shrug to this one. I can't say I see how Boudreaux's reaction follows from what seems to me some fairly unremarkable verbiage.

The final sentence provides Boudreaux the title of his post, so presumably, he is taking umbrage with the notion that the actions in question could be considered a "legitimate state purpose." Since the purpose being asserted is the statutory reponsibility of districts to provide a "thorough and efficient public education" (or whatever equivalent bullshit phraseology California's Constitution uses to justify erection of human sausage factories) then, sure, I'm all with ya, Don. But that you or I may not think public education a "legitimate state purpose" doesn't magically render the question a matter of controversy in the courts. Sorry to say, this is pretty well-established law at this point.

The second-to-last sentence would appear even less noteworthy. It just restates similarly well-established immunity provisions for school districts. Boards of education have standing to dictate public school curricula. Individual parents do not. Parents who wish to protest board decisions can run for office, lobby the board, or exercise the right of exit provided by home-schooling and private schools.

School districts, therefore, cannot be named tort feasors simply for implementing and carrying out a board-approved educational program that some parents within the district may not like. Reverse this doctrine, and you'd see a few hundred thousand frivolous lawsuits filed against school boards across the country faster than you can say the words "Discovery Institute."

Which leaves only one sentence, and one really big question: Could Boudreaux really believe that parents actually DO have a "fundamental right...to be the exclusive provider of information regarding sexual matters to their children"?!?

If so, then my parents really ought serve notice to Hugh Hefner, the makers of the movie Bachelor Party, and one particularly bold prepubescent vixen called Bridgette, because they each provided me in my youth with FAR more "information regarding sexual matters" than my parents ever did. If they hurry, they just might get in under the statute of limitations.

So, finally, to answer Professor Boudreaux's rhetorical question:

Is this ruling not deeply offensive to all who love liberty?

Ummm, well, hmmm.....deeply? I gotta go with a "no" on that one. I guess, just like Judge Rheinhardt, I must be a "super-lefty" as well. Who woulda thunk it?

Samalito, jump a little lighter!

While on the subject of SCOTUS nominees, I’ve frankly been a bit surprised, given so much focus on the newest nom’s nickname (“Scalito”) that more political hay hasn’t been made of his 20-year friendship with another Jersey boy, Homeland Security Chief Michael Chertoff.

Back in 1987, the same year that Trenton native Scalia was appointed associate justice of the Supreme Court, President Reagan named fellow Trenton native Sam Alito – then Ed Meese’s deputy assistant – to be U.S. Attorney for the District of New Jersey. Among his first acts on the job was to recruit as his First Assistant an up-and-coming young prosecutor (and Elizabeth native) by the name of Michael Chertoff away from the position he held across the Hudson River, in the office of the then-U.S. Attorney for the Southern District of New York -- Rudolph Giuliani.

Three years later, President George H.W. Bush gave a boost to both Alito’s and Chertoff’s careers, naming Alito to the Third Circuit, where he has served to this day, and Chertoff to be his successor as U.S. Attorney for New Jersey.

Chertoff would later be tapped by the younger President Bush to serve under John Ashcroft, before he was once again reunited with Alito in 2003 by being named, himself, to the Third Circuit. Over the proceeding two years, until Chertoff was named to the Homeland Security post, the two seem to have served on the same panels an unusually large number of times (I’ve never been entirely clear on how panels are selected, but in searching the decisions, their names are on the same cases at a frequency far above what pure chance would seem to predict.)

They nearly always ruled together, which perhaps isn’t so remarkable as one of the notable cases where they disagreed. In 2004’s Doe v. Groody, Chertoff wrote the majority opinion that held the strip search of a 10-year-old and her mother, in a drug case where police had a warrant only to search a man and his home, constituted a violation of the Fourth Amendment. Alito's dissent held that, since the girl and her mom were “in” the house to be searched, any part of their persons was also fair game.

Now, obviously, if having a personal history with members of the nominating administration were sufficient grounds for exclusion, there isn’t a judge out there who would pass the test. But as cases reach the high court – as they almost certainly will, eventually – challenging the Patriot Act, which Chertoff wrote, or the government’s handling of Hurricane Katrina, which he had a big hand in bungling, is Sam Alito really the guy I want deciding those matters?

As we say in the Garden State – foogeddabowdit.

Television! Teacher, mother, secret lover

Making the rounds of Cato staffers' sites, Brooke Oberwetter finds a way to make a silk purse from Geena Davis' ear:

The dialogue on Commander in Chief is really some of the worst ever written. Even for me, connoisseur of network crap, it can be hard to take sometimes.  But there is the occasional important lesson to be gleaned from this particular steaming pile.

Last night, for example, that lesson was "How to Gracefully Depart the Situation When an Adivsor Tells You About a National Emergency While You Happen to Be Reading to Adorable Children."  Take note: President Mac said to the kids, "Now, who wants to finish reading this story for me?" after her chief-of-staff whispers something in her ear. The children all raise their adorable little hands, President Mac hands it to one of them, and she exits quickly and with minimal disturbance so that she can go about the business of dealing with the disaster at hand.

Also, we learned that when it comes to hurricanes and damaged oil tankers approaching the coast of Florida, it helps a lot if your FEMA director knows his head from his ass.

Certainly presidential hopefuls should learn these lessons on the off chance that real world events ever imitate this admittedly crappy art.

Commander in Chief airs opposite My Name Is Earl -- of late, the funniest and, I would argue, most moral show on television -- so I haven't yet caught any episodes of liberal Hollywood's latest escapist fantasy about life with one of their own safely ensconsed in the West Wing.

But turning to an earlier show that looked to do the same thing, I hazily recall, somewhere around Season Five of TWW -- long before most people were familiar with the names Roberts, Miers, or Alito -- a plot thread involving the death of the Chief Justice and retirement of an associate justice (or perhaps it was the other way around), leaving President Bartlett with two appointments to make at once. 

Knowing that incessant political squabbling meant that only the blandest and least distinguished of candidates would ever get through the Senate's confirmation ringer, he struck upon the Solomon-like strategy of splitting the nomination baby in half -- appointing two eminently qualified, respected, and opinionated justices, one ultra-liberal and one ultra-conservative (portrayed, respectively, by Glenn Close and that dude who played the creepy Amway-hawking cop in the movie Go.)

The Senate fell for the gambit, overwhelmingly confirmed the nominees, and there was much rejoicing. (Yay!)

So, the moral of the story is -- even when life does imitate television, its lessons are rarely applied.

The dialogue on Commander in Chief is really some of the worst ever written. Even for me, connoisseur of network crap, it can be hard to take sometimes.  But there is the occasional important lesson to be gleaned from this particular steaming pile.

Last night, for example, that lesson was "How to Gracefully Depart the Situation When an Adivsor Tells You About a National Emergency While You Happen to Be Reading to Adorable Children."  Take note: President Mac said to the kids, "Now, who wants to finish reading this story for me?" after her chief-of-staff whispers something in her ear. The children all raise their adorable little hands, President Mac hands it to one of them, and she exits quickly and with minimal disturbance so that she can go about the business of dealing with the disaster at hand.

Also, we learned that when it comes to hurricanes and damaged oil tankers approaching the coast of Florida, it helps a lot if your FEMA director knows his head from his ass.

Certainly presidential hopefuls should learn these lessons on the off chance that real world events ever imitate this admittedly crappy art.

Commander in Chief airs opposite My Name Is Earl -- of late, the funniest and, I would argue, most moral show on television -- so I haven't yet caught any episodes of liberal Hollywood's latest escapist fantasy about life with one of their own safely ensconsed in the West Wing.

But turning to an earlier show that looked to do the same thing, I hazily recall, somewhere around Season Five of TWW -- long before most people were familiar with the names Roberts, Miers, or Alito -- a plot thread involving the death of the Chief Justice and retirement of an associate justice (or perhaps it was the other way around), leaving President Bartlett with two appointments to make at once. 

Knowing that incessant political squabbling meant that only the blandest and least distinguished of candidates would ever get through the Senate's confirmation ringer, he struck upon the Solomon-like strategy of splitting the nomination baby in half -- appointing two eminently qualified, respected, and opinionated justices, one ultra-liberal and one ultra-conservative (portrayed, respectively, by Glenn Close and that dude who played the creepy Amway-hawking cop in the movie Go.)

The Senate fell for the gambit, overwhelmingly confirmed the nominees, and there was much rejoicing. (Yay!)

So, the moral of the story is -- even when life does imitate television, its lessons are rarely applied.

NOLA policyholders find solution to wind v. flood debate

And that solution is....matches.

Roberts the Jokester

So the latest imbroglio on SCOTUS nominee John Roberts concerns his apparent lack of sensitivity to women's rights issues while working in President Reagan's Office of Legal Counsel. As evidence for the charge, the WaPo and numerous other publications are drawing on this quote from a memo to then-director of public liaison Linda Chavez about her deputy, Linda Arey, and her efforts to encourage housewives to go to law school. Roberts says in a personal aside:

Some might question whether encouraging homemakers to become lawyers contributes to the common good, but I suppose that is for the judges to decide.

That quote is being read as patronizing or chauvinistic...but strangely, it is NOT being read as what it plainly (plain to me, at least) was meant to be:  a tongue-in-cheek swipe at lawyers!