ProPublica Named a Finalist for Three Deadline Club Awards

On April 9, 2019 By admin

• Breaking News

by ProPublica

Three ProPublica projects have been named finalists for Deadline Club Awards in the annual contest honoring the best work by journalists in the New York City area.

“The Right to Fail,” a collaboration with PBS Frontline, is a finalist in the Newspaper or Digital Local News Reporting category. Led by ProPublica reporter Joaquin Sapien and filmmaker Tom Jennings, the investigation focused on a New York policy to move people out of institutions and into private apartments, revealing that social workers felt pressured to move individuals even when they were not good candidates for living on their own. Lacking the structure of institutions, it became much easier for individuals to slip through the cracks, with dangerous, dehumanizing and sometimes fatal results.

The day after our report co-published in the New York Times, federal Judge Nicholas Garaufis, who originally approved the 2014 settlement that resulted in the supported-housing policy, ordered an independent report to assess the effectiveness of its incident reporting system. Garaufis also got state officials to commit to examining their service-coordination program and suggested they develop a program to help residents learn basic life skills in supported housing.

Sloan Kettering Cancer Center’s Crisis, a collaboration with the New York Times, is a finalist in the Business Investigative Reporting category. The series of investigations by ProPublica senior editor Charles Ornstein and New York Times reporter Katie Thomas detailed undisclosed relationships between Memorial Sloan Kettering Cancer Center and for-profit health care companies, highlighting conflicts of interest. A story on Dr. José Baselga, MSK’s chief medical officer, detailed his failure to disclose corporate board memberships and payments from companies connected to cancer research in his published research articles, even when he was reporting on the results of studies conducted by those companies. Baselga resigned from his job at MSK within days, after initially insisting his conduct was appropriate and ethical, and he later stepped down as one of the editors-in-chief of Cancer Discovery, a prominent medical journal.

Following the series, MSK’s CEO, Dr. Craig Thompson, also resigned from his seats on the boards of Merck and Charles River Laboratories and made new conflict disclosures, as did other MSK staff. MSK additionally announced that a vice president who oversees hospital ventures with for-profit companies would turn over to the hospital a nearly $1.4 million stake in a biotech company that he received for representing MSK on the company’s board.

“The Billion-Dollar Loophole,” co-published with Fortune, was nominated in the Business Feature category. The investigation by senior reporter Peter Elkind exposed a popular charitable donation tax scheme for the very rich that is being manipulated to make big profits, and how it’s costing the government billions in lost revenue.

See a list of all the 2019 Deadline Club Award finalists here.

Trump has pushed out the Secret Service director

On April 9, 2019 By admin

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A day after the Homeland Security chief resigned, another top official who reported to Kirstjen Nielsen is out.

United States Secret Service Director Randolph “Tex” Alles was pushed out by the president on Monday. A law enforcement source familiar with the discussions told VICE News that Alles had been informed a couple weeks earlier that his time was up.

Alles was told that there would be transitions across the department and his position as director would be affected, according to the source, who spoke anonymously as they were not authorized to speak on the record.

In a press release, Alles pushed back on the notion that he was ousted.

“No doubt you have seen media reports regarding my ‘firing.’ I assure you that is not the case,” Alles wrote, adding the president had directed “an orderly transition in leadership” and that he intends to honor a request to stay in his role until May.

The New York Times reported Monday that two more members of Nielsen’s team are also expected to leave soon: the head of United States Citizenship and Immigration Services, Lee Francis Cissna, and John Mitnick, the DHS’ general counsel. The department is reeling from Trump’s frustration with a surge in immigrant families seeking asylum in the U.S.; last week, he repeatedly threatened to shut down the U.S.-Mexico border entirely.

The timing of Alles’ departure is significant because of the recent breach of Mar-a-Lago, the winter retreat where the president spends many weekends, by a Chinese woman armed with computer malware. The Secret Service allowed her in because they thought she was a relative of a club member. But the law enforcement official said the March 30 Mar-a-Lago breach did not affect Alles tenure, despite increasing concern over the property’s security.

“He [Alles] knew this was happening,” the source said.

Several Secret Service agents who spoke to VICE News learned of Alles’ ouster through news coverage and phone calls from reporters.

The White House issued a statement after the news broke. White House Press Secretary Sarah Sanders said, “United States Secret Service director Randolph ‘Tex’ Alles has done a great job at the agency over the last two years, and the President is thankful for his over 40 years of service to the country. Mr. Alles will be leaving shortly and President Trump has selected James M. Murray, a career member of the USSS, to take over as director beginning in May.”

Cover: In this Feb. 1, 2018 photo, Director of the United States Secret Service, Randolph Alles, speaks at the Atlanta Press Club in Atlanta. (AP Photo/David Goldman).

Argument preview: Justices to consider ability of securities investors to sue for faulty disclosures about tender offers

On April 9, 2019 By admin

• Breaking News

Emulex Corp v. Varjabedian is a case with a simple story and a complicated story. The justices’ approach to this case is likely to turn on which story they prefer.

The case involves Section 14(e) of the Securities Exchange Act, which among other things proscribes “mak[ing] any untrue statement of a material fact … in connection with any tender offer.” Respondent Gary Varjabedian represents a class of investors who claim that petitioner Emulex failed to provide adequate information to allow investors to evaluate the price in a tender offer for the stock of Emulex. The lower courts decided that Emulex could be held liable if the investors could prove that Emulex negligently failed to provide material information in its disclosures to investors. The case raises two questions: whether the investors can sue Emulex for damages under Section 14(e) and, if they can, whether they are required to prove more than that the company acted negligently.

Emulex tells the simple story, which runs something like this. This case is about judicially inferred private rights of action. It is bad when a court infers a private right of action that does not appear on the face of the statute because it usurps Congress’ power to specify the liability regime for the laws it enacts. The Supreme Court has not been in the business of inferring private rights of action for a good 30 years now. It has not previously approved a private right of action under Section 14(e). It therefore should either hold that there is no private right of action or, at a minimum, hold that mere negligence is not enough for liability. If there is going to be a private right of action here, liability should require proof of “scienter,” the most common standard of intent under the securities laws, which requires something quite close to actual intent to violate the securities laws.

The investors tell a considerably more intricate story, along the following lines. They emphasize that Section 14(e) has two distinct clauses. One of them (the clause at issue here) prohibits material misstatements and omissions. The other prohibits fraudulent, deceptive and manipulative acts. It makes good sense to require scienter for the second clause – you shouldn’t condemn somebody for fraud, deception or manipulation if they acted negligently. But it makes much less sense to require intent when the investors already have established that a defendant’s statement omitted information so material as to make the statement misleading. The investors point to an earlier Supreme Court case called Aaron v. SEC, in which the court held that negligence would violate the prohibition on material misstatements in Section 17(a) of the Securities Exchange Act. Because the Supreme Court already had made that ruling when Congress enacted the similar language in Section 14(a), it is only fair to assume that Congress intended Section 14(a), like Section 17(a), to extend to negligent acts. After all, the investors point out, wouldn’t a Congress that was obligating companies to make disclosures about tender offers have wanted investors to be protected from losses that flow from negligently material misstatements?

On the broader question – whether there should be a private right of action under Section 14(a) – the investors point out that none of the lower courts considered this question; Emulex did not contest the point given existing lower-court precedent that recognizes the private right of action. Accordingly, they argue, there is no reason for the court to address the broad question. Moreover, because the private right of action has been recognized without objection for more than 50 years in the lower courts, it would be far too disruptive for the court to reach out to invalidate it at this late date.

As the stark differences between those two narratives suggest, the court’s precedents could support an outcome for either side.  We’ll know much more after the argument about where the justices are leaning. I’ll be watching closely for Justice Stephen Breyer’s reaction. He’s written recently at length (in his dissent in Jam v. International Finance Corp.) about the interpretive problem of how to read a statute that meant one thing when Congress adopted it but would mean quite a different thing today. This case seems to present exactly that problem: The investors are more likely to prevail under the law that existed when Congress wrote the statute, while the company is more likely to prevail under more modern interpretive principles that are employed today.

[Disclosure: Goldstein & Russell, P.C., whose attorneys contribute to this blog in various capacities, is among the counsel on an amicus brief in support of the respondents in this case. The author of this post is not affiliated with the firm.]

The post Argument preview: Justices to consider ability of securities investors to sue for faulty disclosures about tender offers appeared first on SCOTUSblog.

Real

On April 9, 2019 By admin

• Breaking News

In which the studio
grows L-shaped, with an alcove
for the bed, you modest dream, in which the railroad

widens sideways, new door
a sudden wing ought to invade the brownstone
next door, but that brownstone loses nothing in the dream

in which another room
it’s huge, with grand piano and French doors
opening on a view of my private beach, why have I never bothered

going in this room before?
Those years obedient to time is money when
it’s space that’s time, every tenant diligently building out the common night

When the Police Come for Your Driver’s License

On April 9, 2019 By admin

• Breaking News

How would your life change if you permanently lost your driver’s license? How would you get to work? To the store or the doctor? To see your family? For many people, this is not a hypothetical question.

To make it worse, we now know that millions of Americans did not lose their licenses because they drove recklessly or while intoxicated. Instead, they ran afoul in traffic courts of surprisingly draconian rules that many states now have in place.

Take the case of a Durham, North Carolina resident, who said he was only going about three miles an hour above the speed limit when he was pulled over. For that relatively minor offense, he was fined a couple hundred dollars—money he did not have. “I just couldn’t afford it,” he said. “I have four kids.” For non-payment of the fine, he lost his driver’s license—an automatic penalty in North Carolina, as in most states. That, in turn, negatively impacted both his housing and his job. If he didn’t have the money to pay a ticket, then he certainly doesn’t now.

That man is far from alone. In fact, he is one of 1.2 million North Carolinians who have had their licenses suspended for non-driving-related reasons, according to court records. That’s a whopping one in seven adult drivers in the state. In a new report we released last month, co-author Will Crozier and I examined the cases and found patterns in driver’s license suspensions that should concern all of us, and not just in North Carolina.

Until recently, all 50 states and the District of Columbia had laws in place that permitted driver’s licenses to be suspended or withdrawn for non-driving-related reasons. While data has not been made public in most states, there is evidence that many other states have numbers similar to what we found in North Carolina. In Virginia, it is nearly one million people, one in six drivers. In Texas, it is 1.4 million people. In Florida, it is over two million people.

The harm from license suspensions is deeply felt. As the Supreme Court has observed, a person has a substantial interest in maintaining his or her driver’s license because it is “essential in the pursuit of a livelihood” and suspension by the state can result in “inconvenience and economic hardship suffered.” In most communities (particularly outside urban areas), people cannot easily fulfill the myriad obligations of everyday life—such as going to work, school, medical appointments, daycare, and even the grocery store—without driving. Employers may require employees to have valid driver’s licenses. The effects go beyond the personal and are felt in the broader economy as well.

These suspensions are incredibly counterproductive, as they can lead to a downward spiral of debt and poverty. At Duke Law, we recently heard two people describe how they’d experienced suspensions for almost a decade because they could not pay the mounting fees—not just for their initial tickets, but for new fines imposed for driving with suspended licenses. Further, the DMV in North Carolina, as in many other states, charges a hefty fee to have one’s license reinstated.

Furthermore, the penalties and consequences are seriously disproportionate, considering that these traffic offenses are among the most trivial on the books. Indeed, in North Carolina, a serious offense, like driving while intoxicated, can result in a one-year temporary driver’s license suspension. But a failure to pay a traffic ticket: that suspension is indefinite—it doesn’t end until the person pays. That’s not the way to fairly recover traffic fines.  

Our research found troubling but unsurprising correlations between poverty level, race, and driver’s license suspensions across the state. Suspensions are disproportionately imposed on minority residents. Of the total driving age population in North Carolina, 65 percent are white, 21 percent are black, and 8 percent are Latino. But of those who have had their driver’s licenses suspended over non-payment of fines and fees, we found that 47 percent are black, 37 percent are white, and 11 percent are Latino. We also found that there are more suspensions in counties with more people in poverty.

Moreover, many have no idea that their licenses have been suspended, because their notices are sent to outdated addresses. They find out when police stop them for further traffic violations. Then things become far more severe. Bigger fines and jail time can result if a person is charged with driving with a revoked license (DWLR). Again, we found that those harsher charges fall disproportionately on minority residents in North Carolina: 39 percent of DWLRs were given to white residents, while 54 percent were black and 7 percent were Latino.

Driver’s license suspensions also raise real constitutional problems. Constitutional challenges have been successful in some states, including in Tennessee and most recently in Virginia. After all, these suspensions can be imposed automatically, without any meaningful inquiry into whether a person is actually able to pay the fine. That violates the Due Process Clause of the Fourteenth Amendment.  

Moreover, suspensions disproportionately burden the poor and minorities, as we found in our research, which implicates the Equal Protection Clause of the Fourteenth Amendment. They may also be excessive under the Excessive Fines Clause, which the Supreme Court just unanimously held applies to the states in its ruling in Timbs v. Indiana. A case is currently pending in North Carolina, but a federal judge just ruled to dismiss many of its claims, finding inadequate evidence of constitutional violations.

Fortunately, there is a national trend of states moving to end the punitive policy of automatic license suspensions for non-payment of court debt—either through legislative action or by court order—in response to growing awareness of the damage these rules cause.

We can end this problem. Across North Carolina and in other states, prosecutors, cities, and non-profits have been working hard to restore driver’s licenses. One model effort in my community is the Durham Expunction and Restoration (DEAR) program, which aims to help the one out of five Durham residents who have had their licenses suspended. DEAR helped the resident mentioned above get his charges dismissed, his court debt forgiven, and his license restored so he can drive legally. “It means the world,” the man said.

The Durham program is a successful model, but given the hundreds of thousands of residents with suspended licenses and millions across the country saddled with draconian debt and unable to legally drive, legislative solutions are urgently needed. The public and lawmakers should change the laws to end this counterproductive and cruel debt collection practice.

Brandon Garrett is the L. Neil Williams Professor of Law at Duke University School of Law, where he directs the JustScience Lab, which conducts criminal justice research. His most recent book is End of its Rope: How Killing the Death Penalty Can Revive Criminal Justice.