Texas Court Rules For Eminent-Domain Critic
Good news from Texas, where a state appeals court has handed a major win to investigative journalist Carla Main, whose book Bulldozed: ‘Kelo,’ Eminent Domain, and the American Lust for Land took a critical look at the seizure of private land under eminent domain laws for purposes of urban redevelopment. Dallas developer H. Walker Royall didn’t like what Main wrote about his involvement in a Freeport, Texas marina project and proceeded to sue her, publisher Encounter Books (which I should note is also my own publisher on Schools for Misrule), and even liberty-minded law professor Richard Epstein over a dust jacket blurb Epstein had given for the book. (Earlier coverage of the suit here and here.)
A trial court had declined to dismiss Royall’s claims on summary judgment, but yesterday Judge Elizabeth Lang-Miers reversed in substantial part, ruling that Royall had failed to make the requisite showing that key passages in Bulldozed had in fact defamed him. The case is not yet over, but Institute for Justice senior attorney Dana Berliner, who argued for the defense, is understandably jubilant: “Walker Royall has failed in his attempt to use this frivolous defamation lawsuit as a weapon to silence his critics,” she said. Moreover, outrage at Royall’s suit contributed to Texas’s enactment this summer (joining 26 other states) of strong “anti-SLAPP” legislation aimed at curbing lawsuits intimidating speech. You can read the opinion here, and early coverage at Gideon Kanner’s blog, the Dallas Observer and D Magazine.
Supreme Court Should Uphold Incentives to Sue the Government
Private lawsuits challenging government violation of civil rights are notoriously difficult and expensive to bring and win. To address such impediments to the vindication of civil rights, Congress passed a law that, among other things, awards attorneys’ fees to the prevailing parties in certain cases. As noted by the House Judiciary Committee, this was necessary because “a vast majority of the victims of civil rights violations cannot afford legal counsel, they are unable to present their cases to the courts …. [the law at issue, 42 U.S.C. § 1988] is designed to give such persons effective access to the judicial process.” Congress thus harnessed market principles, creating an economic incentive for citizens to vindicate their civil rights directly rather than relying exclusively on enforcement actions by the federal government itself.
In the case of Fox v. Vice, however, the Fifth Circuit ruled that an unsuccessful result on a threshold or procedural matter relating to part of a lawsuit could justify a court order requiring the plaintiff to pay all of the defendants’ attorney’s fees — even those expended to address other, meritorious claims. Such a rule departs from the market-oriented legal structure Congress designed and, if allowed to stand, would significantly harm the ability of plaintiffs to bring private civil rights claims.
Cato, joining the Liberty Institute, the Independence Law Center, the Institute for Justice, and the James Madison Center for Free Speech, filed a brief supporting a request that the Supreme Court reverse the Fifth Circuit and making three points:
First, by awarding the defendant fees for the entire suit based on the dismissal of one claim, the Fifth Circuit’s decision imposes prohibitive costs on the enforcement of civil rights.
Second, the exceptional timing of the fee award in this case — before resolution of the plaintiff’s related state-law claims — creates a dangerous precedent that threatens to derail civil rights actions. By prematurely deeming a plaintiff’s suit frivolous and ordering the plaintiff to pay the defendant’s fees before the conclusion of the litigation, the Fifth Circuit’s rule imposes financial penalties that would shut down legitimate lawsuits midstream.
Third, the Court should not permit fee awards in situations where a plaintiff dismisses a federal claim in order to secure a remand of related state-law claims to state court. Otherwise, the threat of a fee award will improperly burden the plaintiff’s decision to bring a federal claim in state court at all — contrary to the law’s purpose here.
In addition to reversing the judgment below, the Court should reinforce that a mid-litigation fee award is improper when a plaintiff voluntarily drops a federal claim in order to return to state court. The Court will hear Fox v. Vice on March 22, with a decision expected in June.
Frivolous Lawsuit Aimed at Silencing Critics of Eminent Domain Abuse
In Kelo v. City of New London, the Supreme Court ruled that a locality could use its eminent domain authority to seize private property to sell to private developers. Cato’s amicus brief opposing this abuse of the Takings Clause is available here, and an article on Kelo and other property law rulings of the 2004-2005 term by law professor James W. Ely, Jr. is available here.
One positive outcome of Kelo was the legislative restriction of eminent domain usage in state houses across the country. On the other hand, developers and localities have attempted to muzzle their critics with frivolous lawsuits. The Institute for Justice is currently litigating one of these actions in Texas:
Investigative journalist Carla Main wrote a book about eminent domain abuse in Freeport, Texas. The city is attempting to force out a generations-old family shrimp and marine supply business to make way for a luxury marina development that was to be owned and operated by Royall’s private company. When the victims of this eminent domain abuse complained, Royall sued them for defamation. Main’s book, Bulldozed: “Kelo,” Eminent Domain, and the American Lust for Land, tells the story of the Gore family’s generations-old shrimp business and how Royall and the city tried to take their land. Prominent law professor Richard Epstein (University of Chicago and New York University) contributed a blurb to the back cover of Bulldozed.
Royall sued Main, Epstein and Encounter Books (the publisher) for defamation over the contents of Bulldozed. He also sued two newspapers and a journalist who published reviews of Bulldozed. Royall is attempting to use the power of the courts to silence his critics.
A Dallas trial court ruled last year that the lawsuit was not barred by the First Amendment, even though Royall could not point to any statement in Main’s book that came close to the legal standard for defamation. The Institute for Justice is appealing the trial court’s decision. As Bill McGurn writes in today’s Wall Street Journal, this suit is one of the “high costs of Mr. Kennedy’s concurrence” in Kelo. Here’s hoping that rights protected by both the First and Fifth Amendments can prevail.
Susette Kelo, the owner of the Little Pink House at the center of the Kelo case, spoke at the Cato Institute about her ordeal, and her story is the subject of this Cato Institute video.
The Likelihood of Repealing ObamaCare
The political science blog Rule 22 has a post discussing the likelihood of repealing at least some part of ObamaCare. Author Jordan Ragusa finds:
- If “the Republicans regain only the House in the upcoming election…the estimated likelihood of at [least] some repeal during the 112th Congress is 52 percent.”
- If “Republicans regain both chambers in the upcoming midterm…the estimated likelihood of at [least] some repeal is 59 percent.”
- If “Republicans regain unified control of government in 2012…the estimated likelihood of some repeal in the 113th Congress is 69 percent.”
Ragusa is predicting only that the odds are better than 50-50 that Congress will repeal some part of the law, such as the expanded 1099 reporting, which House Democrats have already moved to eliminate because small businesses find it so onerous. He is not laying odds on whether Congress will repeal the entire law or its most important and unpopular provisions (i.e., ObamaCare’s individual mandate).
His post does shed light on the likelihood of repealing the individual mandate, however. As the below graph shows, the probability of repealing any provision of major legislation rises in each of the next five Congresses (i.e., over the subsequent 10 years). After that point, the probability of repeal begins to fall.
Note that this graph shows the instantaneous probability of repeal. The cumulative probability is the area under the curve, and increases monotonically over time. Thus the probability that Congress will repeal some part of ObamaCare by 2020 is more than 13 percent.
Ragusa therefore concludes:
the newly enacted law will be most “at risk” not in the next Congress, but a decade from now. So sit tight.
Also noteworthy is that Ragusa presents only the probability of legislative repeal. The prospect that the courts may invalidate all or part of the law increases the probability that some day, ObamaCare will no longer be on the books.
Twombly and Iqbal: Reality Check
In Bell Atlantic v. Twombly (2007) and Ashcroft v. Iqbal (2009), the Supreme Court gave trial courts more latitude to dismiss a lawsuit at a very early stage, before the parties have had a chance to engage in discovery (the often lengthy and expensive fact-finding stage of civil litigation), if judges think the suit is not founded on “plausible” allegations of wrongdoing.
There’s a rich, angry debate about the effect the decisions will have on dismissal rates of meritorious suits in lower courts. But the consensus among academics seems to be that both decisions will trigger a sea-change in lower court practice—one deeply unfavorable to plaintiffs.
We won’t know the real effect of these decisions for many years to come. But a 2007 study by the Federal Judicial Center on the effect of a trio of similarly controversial 1986 Supreme Court decisions (known as the “Celotex trilogy”) raises questions about dire claims that Twombly or Iqbal will dramatically change lower court practice.
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