Environmental lawsuits and the vengeance donors

by on May 26, 2016 at 1:05 am in History, Law | Permalink

There are so, so many environmental lawsuits, often brought by non-profits backed by philanthropists.  These institutions, among other things, target polluting corporations and bring lawsuits against them for purposes of constructing a deterrent against yet more pollution.  The Sierra Club and Greenpeace would be two examples, and of course a big chunk of the funds comes from the relatively wealthy.  How is this for one example of many?:

On 7 October, Greenpeace filed a lawsuit in Superior Court for the District of Columbia against Dow Chemical, Sasol North America (owned by the South African State Oil Company), two public relations firms – Dezenhall Resources and Ketchum – and four individuals.

On top of that, it is easy enough to be an anonymous donor to these groups, and to stay anonymous.  That said, I have heard tales — apocryphal perhaps — of donors who gave to environmental causes because they too earlier in their lives had suffered under the adverse effects of pollution.  In back room whispers they are sometimes called “vengeance donors,” and it is suggested that because of the vengeance donors soon enough all companies will go out of business or at the very least be at the mercy of the whims of the wealthy.

Now, to be sure, many of these environmental lawsuits are excessive, or unfair, or would fail both a rights and cost-benefit test and we should condemn them, as indeed you see happening with equal frequency on the Left and on the Right.  Many companies have gone out of business because of environmental lawsuits or the threat thereof, or perhaps the companies never got started in the first place because they couldn’t afford large enough legal departments.  I can safely say that just about everyone sees the problem here.

But we shouldn’t condemn the good lawsuits, right?  Right?  Or is this whole philanthropic lawsuits business simply out of control and needs to be stopped altogether?

And oh, that Greenpeace lawsuit I linked to above?  It actually wasn’t about environmental pollution at all, at least not directly.  It was because Greenpeace felt it was under secretive and privacy-intruding surveillance.  You should have seen my Twitter feed light up when the vengeance donors let on their role in that one.

1 Mc May 26, 2016 at 1:31 am
2 chip May 26, 2016 at 2:01 am

When will Greenpeace be sued for destroying and spreading misinformation about GMOs, causing the unnecessary deaths of millions of kids.

Same goes for fracking. Perhaps a clever law firm could calculate how many lives are saved when energy prices fall, and hit Greenpeace for their opposition.

Unfortunately, Greenpeace et al fall into the ‘takers’ category, which has a lot of time on their hands for this kind of thing, whereas the ‘makers’ are too busy making stuff.

3 Jan May 26, 2016 at 6:49 am

Somebody should sue them, eh?

4 Daniel Weber May 26, 2016 at 11:33 am

Let’s do a RICO suit.

5 Lord Action May 26, 2016 at 12:53 pm

It’s only practical if Greenpeace had something you could seize. How are they supposed to pay damages? The distributed harm may be large, but there’s no piggy bank to go after.

6 IVV May 26, 2016 at 1:33 pm

Perhaps establish a lien against future donations? The net effect would be the end and dispersal of Greenpeace, not a financial windfall to the plaintiffs, but would that be any less welcome by the plaintiffs?

7 Troll me May 27, 2016 at 12:14 am

They could just do what companies do. Shift some money around, declare bankruptcy to avoid everything, and open back up again doing the same thing, but this time called “Greenpeas”

8 Brian May 26, 2016 at 8:05 am

Ironically, I think one desired outcome for fracking would be to have stronger liability. If fracking is profitable but occasionally causes broad economic harm, can’t we just tell people “go ahead, but if you mess this up, you’re on the hook”? At least that would kind of line up everyone’s incentives.

Of course I know that it’s not clear that the courts won’t over extend, but I can dream.

9 Pshrnk May 26, 2016 at 9:49 am

Well yeah, but its difficult to assign liability for any particular earthquake.

10 anomdebus May 26, 2016 at 10:18 am

And on top of that, it is difficult to counter that the earthquake didn’t preclude a larger one if the stress had been allowed to accumulate. The old seen versus unseen debate.

For example, on the west coast (of the US), what if we could have a thousand 6.0 earthquakes instead of one 9.0 earthquake?

11 echo May 26, 2016 at 2:06 pm

Imagine how much we could learn about earthquake monitoring and even active management from fracking. Could refine the technique to selectively relieve stresses from fault lines?

12 Troll me May 27, 2016 at 12:17 am

Interesting point. I’d never considered it that way before. I’ve always been a little skeptical about the earthquake concerns, in particular because they seem to be small.

But there do seem to be quite a lot of reports about extremely tainted water, soil, etc., from the process. In those cases, it seems liability should be less difficult to establish.

13 Troll me May 26, 2016 at 8:13 am

Which misinformation?

14 Hazel Meade May 26, 2016 at 10:33 am

The whole idea that GMOs are in any way harmful to human health is 100% horseshit.

15 anon May 26, 2016 at 11:48 am

GMO, like CRISPR, is about technique rather than result.

And so while Genetically Modifying organizations have been responsible so far, there is a proper middle line.

Don’t label in the factory, don’t worry in the supermarket, but yes keep reviewing and testing the results of these techniques before they go to market. Because there is nothing inherent in GMO or CRISPR that makes their results always safe for our world. It is perfectly possible for some idiot to do something stupid with GMO or CRISPR, and for other idiots to give them carte blanche.

16 stephan May 26, 2016 at 2:27 pm

Cross pollination occurs naturally between sexually compatible plants. In cross breeding which has been practiced for eons , humans facilitate this. GMOs are just precision cross breeding.

The benefits of GMOs are enormous. There is no evidence of health effects. Same with cell phones and cancer.

http://www.ncbi.nlm.nih.gov/pmc/articles/PMC1539278/pdf/hw0487.pdf

17 anon May 26, 2016 at 2:51 pm

I think what you are missing stephan, is the difference between a claim about current GMOs, and a claim about all future GMOs created by any future technique.

Do you really believe that all possible future modifications of food crop genomes are safe? All possible pest resisting genes are good for humans?

Or do you count on the sort of oversight that I recommend?

18 stephan May 26, 2016 at 3:10 pm

@ anon. Next generation will use GROs ( genetically recoded organisms) . Horizontal gene leakage was pretty unlikely to start with anyway. After >20 years of GMO use there are no problems to report. How many car fatalities have we had during this period ? Is any technology risk free ?

http://blogs.plos.org/dnascience/2015/01/22/gmos-gros-will-life-find-way/

https://www.geneticliteracyproject.org/2015/02/03/harvards-george-church-gene-leakage-research-will-blunt-anti-gmo-activist-scares/

19 anon May 26, 2016 at 4:17 pm

stephen, the middle line you objected to was one of care. “yes keep reviewing and testing the results of these techniques before they go to market.”

20 Hazel Meade May 27, 2016 at 11:57 am

anon,
I think the point is that you can breed unsafe foods through either conventional cross breeding or GMO techniques. There’s really nothing uniquely risky about using gene-splicing to do it.

21 Troll me May 27, 2016 at 12:27 am

Then label it. No one has anything to be worried about.

22 anon May 27, 2016 at 10:24 am

No. Current GMOs are so well understood (safe) and human reaction is so well understood (conservative about what goes in our/kids mouths) that you set up an adverse reaction.

You encourage the population to reject safe food. Not good policy.

23 Hazel Meade May 27, 2016 at 11:59 am

OK, let’s label vaccines because some people believe they cause autism.
Nobody has anything to be worried about.

24 Troll me May 27, 2016 at 6:27 pm

Vaccines are labelled. And people can opt out.

25 fwiw May 26, 2016 at 10:05 am

Oh, chip.

At least some makers like you still have time to post a lot of comments on internet blogs, or we’d all be subject to the evils of nuanced thought.

Keep fighting the labeled fight, buddy.

26 chip May 26, 2016 at 7:51 pm

Yes, I do make things, from ideation to sketch to CAD to real stuff in factories. And I read MR among other things to learn and exchange information. A maker.

But I don’t spend money and time destroying the productive inventions of others, even as that inventiveness creates value for myself and others. A taker.

27 mulp May 26, 2016 at 2:30 pm

“Same goes for fracking. Perhaps a clever law firm could calculate how many lives are saved when energy prices fall, and hit Greenpeace for their opposition.”

You will benefit when robots take your job, all possible jobs, and you have no income to buy what you want, only able to buy what the wealthy decide you should be allowed to buy by their miserly handouts???

And how many lives are saved when fracking related earthquake damage buildings in Oklahoma?

The reason frackers object to recycling frack fluids is that too many people benefit from being employed in the recycling and that costs too much. Apparently you agree that paying people to work is deadly and that making those workers homeless and hungry increases their welfare? Or you see work as a very bad thing that kills people so mass idleness is your goal?

Economies are zero sum. Consumers do not benefit from lower prices if the economy was already efficient. High prices and low wages indicate an inefficient economy from excessive rent seeking from too little labor building capital to eliminate monopoly power, and only by increasing labor costs can an inefficient economy become efficient, with zero economic profit.

Cut prices and labor costs, meaning your wages, must be cut. That wages do not get cut is from the friction that makes economies inefficient.

28 Careless May 26, 2016 at 11:50 pm

Is it me, or are we watching mulp’s mind finally disintegrate completely

29 anonymous May 26, 2016 at 2:08 am

Those brutes!

30 Boris_Badenoff May 26, 2016 at 3:01 am

I’m sorry, but I can’t recall an environmental lawsuit criticized from the Left.

31 Alain May 26, 2016 at 3:16 am

That’s so weird. It’s like the opposition isn’t based upon some principles, but rather on something more tribal. Weird.

32 Troll me May 26, 2016 at 8:17 am

Are there any that should have been criticized, which ended up in payouts?

33 fwiw May 26, 2016 at 10:01 am

It’s funny, most of the posts I’ve seen from people on this website recently have been of the flavor:

“It’s ok if people I support do this type of detestable behavior, because someone I oppose does this kind of detestable behavior!”

I suspect it will only get worse until early November…

34 dbeach May 26, 2016 at 5:01 pm

You haven’t heard about CEQA lawsuits to stop bike lanes in California?

http://www.latimes.com/politics/la-pol-sac-enviro-bike-lanes-20160407-story.html

35 Careless May 26, 2016 at 11:52 pm

Where’s the lawsuit from environmentalists being criticized from the left there?

36 Troll me May 27, 2016 at 12:36 am

Where’s the lawsuit worth criticizing?

37 Noumenon72 May 26, 2016 at 3:24 am

I think this post might be about Hulk Hogan and Peter Thiel.

38 Kevin- May 26, 2016 at 9:37 am

+1

39 Virginia Postrel May 26, 2016 at 7:55 pm

My assumption as well.

40 jk May 26, 2016 at 9:49 am

Well played.

We frequent MRs know Tyler admires Thiel…but Tyler did not necessary support litigation from third parties.

41 prior_test2 May 26, 2016 at 11:59 am

Prof. Cowen is a flexible man, able to accomodate his beliefs to whatever wind is blowing.

Metafilter remains its own master, so to speak, with a lot of opinions as to what is going on – http://www.metafilter.com/159881/If-they-dont-own-the-press-they-will-destroy-it

For example, pointing out that Thiel’s – or wait, is that Hogan’s? – attorney Harder has apparently filed another number of suits against Gawker.

But vindictive presidents may be a cause of concern in Prof. Cowen’s world – vindictive biliionaires not so much.

42 echo May 26, 2016 at 2:09 pm

Leftists, wow…

43 Careless May 26, 2016 at 11:53 pm

It’s not fair tarring leftists with PA’s behavior. He’s just insane

44 jdgalt May 26, 2016 at 12:50 pm

I would like to see more discussion of whether the disappearance of laws against champerty and maintenance was a good thing, or should be reversed.

Certainly if this type of arrangements are going to continue to go on, I’d like to see media unmasking the donors as early in the process as possible.

45 Virginia Postrel May 26, 2016 at 7:56 pm
46 Cee-Jay May 26, 2016 at 1:45 pm

I believe you are correct sir. Might this have been titled “Mood Affiliation – Sarcasm Edition”?

47 Silas Barta May 26, 2016 at 2:17 pm

Yeah I thought it was funny in light of Thiel having done a vengeance donation of legal services for a lawsuit against a media outlet. (Hulk Hogan vs Gawker).

48 Robert May 26, 2016 at 3:26 am

I have also been confused by the seemingly widespread support for Gawker. Do people truly condone outing and celebrity stalking as free speech and journalism worthy of ardent defense? It’s true that the legal system can and does get abused by the wealthy, but shouldn’t pragmatic liberals be able to see the difference and allow that this is an worthwhile exception?

49 Alain May 26, 2016 at 10:43 am

Gawker is under the same umbrella corporation as Jezebel and a couple of other sites which are within the liberal tribe, thus they must fight.

Further, Thiel is rich and must be opposed.

Finally Theil has many interests and some of them are concervative. This type of thought is illegal.

Oh I forgot! Theil does not support all people going to university, or it being paid with OPM, for indoctrination. This ia the highest of crimes and he must be taken the gulags.

50 mulp May 26, 2016 at 2:33 pm

Ditto Soros. Right?

51 mavery May 26, 2016 at 12:40 pm

The criticism I’ve seen has been over method rather than target. It’s possible for Gawker to be detestable and the general approach of third parties throwing frivolous lawsuits (which isn’t to say the Hogan/Gawker suit was frivolous) to be bad.

To me, it sounds like a “slipper slope” argument which poses insufficient risk to say that the Hogan suit was a bad thing. People have pointed to a suit filed against Mother Jones and the possibility of guy who sued (and lost) funding other suits with the intent of “bleeding” MJ to death from legal fees. But no one seems to have taken up this funding offer, so again, I’m unimpressed by slipperiness of this slope.

52 Ricardo May 26, 2016 at 10:27 pm

Any restriction on the ability of certain wealthy third parties to back lawsuits isn’t going to hurt an institution like the Church of Scientology. That alone should be enough to tell us that the problem is with the court system and the way so many civil suits are ultimately wars of attrition where the wealthier party almost always has the upper hand. Reform the system rather than take away the power of people to engage in litigation backed by donors.

53 Andre May 26, 2016 at 3:48 am

“soon enough all companies will go out of business or at the very least be at the mercy of the whims of the wealthy”

When were companies or the legal system not at the mercy of the whims of the wealthy?

54 dax May 26, 2016 at 4:01 am

“I can safely say that just about everyone sees the problem here.”

The only problem I see here is anonymous donations of large amounts of money – whether they be to environmental groups or to PACs. I don’t remember Tyler criticizing anonymous donations of large amounts to PACs, so what is “the” problem which everyone sees?

55 Ray Lopez May 26, 2016 at 4:44 am

Tyler, please. Take it from me, a law school dropout: repeating a defamatory statement is itself defamatory. Quite being such a gossip (joking):

“That said, I have heard tales — apocryphal perhaps — of donors who gave to environmental causes because …”

56 Axa May 26, 2016 at 5:27 am

Among the “so, so many environmental lawsuits” there’s a significant fraction where the target is not the polluting company but some part of the government that should act against the polluting company. This kind of lawsuits generally exposes corruption or incompetence in government people, is that a bad thing?

57 Moreno Klaus May 26, 2016 at 6:08 am

+100 I think this post is ridiculous just like other post about males, not sure what has he been smoking lately…

58 Slocum May 26, 2016 at 6:59 am

It’s claimed that those types of lawsuits are sometimes done in collusion with environmental agencies — or at least treated by them as a welcome opportunity rather than a threat (a process referred to as ‘sue-and-settle’):

https://www.uschamber.com/report/sue-and-settle-regulating-behind-closed-doors

When an agency is sued, it can then settle the lawsuit with regulations that it wanted to impose anyway, but without the usual waiting period, public notice and commentary, etc.

59 Axa May 26, 2016 at 7:46 am

Of course this happens. Also, there are specific cases where going against the polluter has a political cost. With the support of a lawsuit from a 3rd party, the regulator can do his work without compromising his political career.

The lawsuit system can be abused, but where’s the line? Is pulling the plug of donor money the answer?

60 Pshrnk May 26, 2016 at 9:52 am

In my small town the government has no interest in enforcing public safety laws already on the books I doubt anything but a successful lawsuit will change those good ole rednecks.

61 rayward May 26, 2016 at 6:01 am

Is this a thinly-disguised reference to Peter Thiel financing an “environmental” lawsuit against a polluter of a different kind?

62 anon May 26, 2016 at 9:58 am

Probably.

I am pretty sure that lawsuits are the feature and not the bug in the libertarian world. Thus, Tyler has fun above, slyly introducing the idea that wealthy donors might have suffered adverse effects themselves.

If you believe lawsuits redress damage better than regulation, of course that is a feature.

Of course the flaw in the libertarian argument is that if poor people suffer from pollution of the metaphorical or actual kind, they have fewer options. Without a deep pocketed friend of course.

(I was surprised at the Twitter angst that Theil’s lawsuit was a bad precedent for journalism. That ultimately reveals bad things about journalism.)

63 mulp May 26, 2016 at 2:38 pm

Bingo!

Private torts, not government regulation, are libertarian and conservative small government.

The problem is government needs to be bigger than it is in the 3rd branch with ten or maybe a hundred times as many courts, judges, clerks, etc.

64 Jon May 26, 2016 at 6:04 am

Tyler: I’m no friend of Greenpeace, but this sounds like paranoid rantings. Where is your evidence for any of this? Obviously capital markets investors don’t believe this?

The only thing I agree with is that some businesses don’t get started and other close down because they can’t meet environmental laws. What is the problem with that? Would you be upset of Murder Inc, a protection racket, a pawn shop that really was a fence, or a business that destroys other people’s property is stopped from forming or closed? We should want businesses who harm the environment without providing sufficient benefit to close.

65 Jan May 26, 2016 at 6:51 am

He’s heard things.

66 prior_test2 May 26, 2016 at 12:20 pm

From Thiel’s lips to Prof. Cowen’s typing fingers, so to speak.

People in the DC public policy institute world are always attuned to the idea of changing their backers, when it seems beneficial. And who knows? Maybe Thiel is looking to create his own policy institute, instead of hiding behind a cut out when funding what seems to be multiple lawsuits against a media source he despises. It isn’t as if Prof. Cowen is unfamiliar with the idea of disguising what is going on, as the fable concerning founding MRU with two professors, a 4 dollar app, and youtube ever so clearly shows.

67 Moreno Klaus May 26, 2016 at 6:06 am

“Now, to be sure, many of these environmental lawsuits are excessive, or unfair, or would fail both a rights and cost-benefit test and we should condemn them”

Where is the evidence for this? Or is this is just trolling or what? I think the opposite is probably true, especially if you think about outside US/EU.

68 mavery May 26, 2016 at 9:24 am

Because “many” is a vague term, both the assertion you quote and the opposite can simultaneously be true.

69 Moreno Klaus May 26, 2016 at 10:02 am

By many i think he means the majority. Whats the evidence for that?

70 anomdebus May 26, 2016 at 10:29 am

In that case, if “most” is applicable, why use “many”? The word “most” seems like a stronger word to me. That would suggest to me that use of “many” means “more than I’d like, but less than a majority”.

71 Li Zhi May 26, 2016 at 2:30 pm

“many” = because of my confirmation bias, I only recall the ones I agree with (or rather, confirm my bias) but I know there’s some number of others (which I chose to mostly ignore). So while I’d much prefer to use “most”, my intellectual honesty (and fear of being (correctly) called out) requires me to use a word that might pass for it: “many”.

72 Jan May 26, 2016 at 6:56 am

Negative externalities are bad and should be condemned. Unless it is a liberal pushing back against those externalities. Has nothing to do with Thiel’s revenge financing, though I do think Gawker and the like are deplorable, so this doesn’t upset me in the least.

73 chuck martel May 26, 2016 at 7:06 am

Every externality has a negative aspect. My neighbor’s beautiful elm trees not only shade his lawn, they obstruct my view of the mountains and I’m forced to rake up their leaves from my own property. Negative externalities are what life in a society is all about. If you can’t handle them, become a hermit in the desert.

74 Pshrnk May 26, 2016 at 9:58 am

Should your neighbor pay a pigouvian tax for blocking your view? Or, maybe your neighbor should get a tax credit for decreasing energy usage by shading the house in the warm months. I don’t know.

75 Todd K May 26, 2016 at 10:42 am

Pigouvian tax? Tax credit?

Remember the good old days when a bazooka could settle negative externalitiy property disputes like this?

76 Li Zhi May 26, 2016 at 2:32 pm

or a little herbicide.

77 mulp May 26, 2016 at 2:41 pm

Will you have a different view of gawker when it posts video of you having sex on the net for its profit, not yours?

78 BenK May 26, 2016 at 7:29 am
79 Troll me May 26, 2016 at 8:08 am

I would consider it more as trying to make sure that other do not have to suffer from the same than being a “vengeance donor”.

Look, if companies didn’t break the law or act with disregard to public health and safety, then none of these suits would have merit. If the laws are too stringent, let that be the locus of debate. Are we for or against the principle of companies paying the full social costs of their negative externalities? Especially when their adverse effects are at the personal level and not otherwise compensated for through public services (e.g., a small increase in cancer risk, but there is universal health care – in which case we hope the government will not be dumb enough to allow social costs to exceed social benefits associated with the pollution).

80 Pshrnk May 26, 2016 at 10:00 am

Your power plant emissions slightly increase my cancer risk, but the electricity providing cools me in the summer, decreasing my risk of death from heat stroke—is that not paying the social cost of the increased cancer risk?

81 mulp May 26, 2016 at 2:50 pm

But the pollution can be eliminated by paying your kids to build capital that eliminates the pollution, redistributing a bit of wealth from you and your peers plus from your kids and their peers with their own homes using clean non-polluting energy they can afford because of the slightly higher capital costs of clean energy.

Economies are zero sum, and in an efficient economy, all increased costs translate into higher wages across the economy, efficient economy being one with zero economic profit, the reward for restricting capital to create scarcity to reap high rents on the capital you control.

If you want lower prices then you must demand you get paid less.

82 Cliff May 26, 2016 at 12:38 pm

The problem is that the cost of the legal system is so extraordinarily high. It may be time to admit that the common law experiment is a failure and that the Continental model where the judge is also the examiner is the superior method for achieving justice.

83 mulp May 26, 2016 at 4:09 pm

The cost is so high because so many people are involved and the harms so costly to quantify and the remedies so costly to explore and the so costly to implement that arguing for alternative remedies is cheaper.

Businesses complained in the 60s they had no idea who would claim to be adversely impacted by some project, so Nixon laid out the rules for Environmental Impact Statement, which if followed, would cut the costs of any court challenge because the EIS would already detail all the cost-benefits for the court, and the mitigation agreed to beforehand. The EIS was an expansion of the process for eminent domain taking justification of compensation.

To consolidate the government review of EIS, Nixon asked for the creation of the EPA, which did not result in all the consolidation he wanted, eg, the Army Corp of Engineers was not moved in part into the EPA, so it’s engineering division remained separate with its expertise in evaluating the geology aspects of all EIS. And States rights meant the EPA did not have authority over local community impacts.

The EIS by Nixon did address the complaints of black communities that they bore to costs of highways and economic development by these projects being blasted through their communities and polluting industries being built next door but with no jobs for these communitues.

But giving rights to demand mitigation for highways to black communities also gave rights to white middle class communities. Thus Federal courts became venues for nimby. When public review makes it clear that the middle class and wealthy communities should be path of highways, those highways get blocked, if not politically, then by endless court cases.

Note I never see anything by Tyler or Alex about the battle they are waging in their home community to let property owners convert single family homes to multifamily homes so the working poor can move in and benefit from the very good public schools serving Tyler and Alex’s neighborhoods. Any property owner nearby will certainly face lawsuits blocking such conversions, based initially on the zoning laws protecting the property rights of everyone in the neighborhood, and thus providing the economic certainty required for investment. To eliminate zoning laws would create great uncertainty as property owners face the risk of courts ordering them to destroy building and businesses they build on their own land based on the harm caused to everyone else in the community.

84 Troll me May 27, 2016 at 12:41 am

Worth debating. But first let’s consider the risks of an appointed individual being “judge jury and executioner”.

There’s a reason that juries are used for important cases. But maybe there are some good reasons to reduce the number of situations they are relied on for. Or, maybe the opposite.

85 Ricardo May 27, 2016 at 10:11 pm

Interestingly, France still uses juries in serious felony cases. Jurors get to ask witnesses questions and they deliberate along with the judges to render a verdict. The inquisitorial system of justice used in much of Continental Europe is not necessarily incompatible with trial by jury.

86 Troll me May 26, 2016 at 8:10 am

Greenpeace is under secretive and pervasive surveillance. If you don’t believe that, you’re naive as f**k.

The FBI et al always have a special place in their heart for environmentalists and peace activists. Remember COINTELPRO, and how no one even got their wrist slapped for it? (Probably not. Easy to look up.)

What’s the rational expectation of a highly illegal police action that was systemic, but never punished? Should a thinking human being believe that it just disappeared because they said so, despite it’s having been hidden the first time around?

87 Moreno Klaus May 26, 2016 at 9:11 am

Economists are usually naive as f**k 😉

88 prior_test2 May 26, 2016 at 12:36 pm

Nobody who occupies Prof. Cowen’s various positions is naive, ever.

89 Moreno Klaus May 26, 2016 at 3:58 pm

Yes, i know what u mean. Evil or Stupid? Evil of course.

90 Mike May 26, 2016 at 8:11 am

Good post. I was hoping someone would use this example to point out the hypocrisy of those criticizing thiel.

What other examples of meta-level inconsistency on tribal issues are there? One example that springs to mind is the left’s opposition to regulation, but only when it applies to abortion clinics.

91 Troll me May 26, 2016 at 8:22 am

Which regulations should apply to abortion clinics?

92 albatross May 26, 2016 at 8:54 am

It is said that some environmentalists are opposed to any development in a natural area, but since that blanket opposition doesn’t have the support of the law or public sentiment, they instead try to tie up development with dozens of complex rules intended to make it cheaper to just close down your clinic, er, I mean construction project, rather than comply with them. I guess eventually people who need a new home just go across state lines to get one.

93 mulp May 26, 2016 at 4:15 pm

No, they just buy the land next to your and build a multistory low income housing project so families with kids can get the benefits of your good schools.

And you will clearly support their defense against all the lawsuits trying to prevent poor working blacks from moving in with their kids to go to school with your kids, right?

Zoning suburban land for free standing single family dwellings is obviously radical leftist policies designed to promote leftist class segregation?

94 anon May 26, 2016 at 10:13 am

The left also opposed segregation regulations. They opposed draft regulations. They opposed drug regulations. They opposed marriage regulations. They oppose bathroom regulations.

They wanna be free to do what they wanna do .. in the social sphere.

95 Hazel Meade May 26, 2016 at 10:37 am

They opposed drug regulations.

Only if the drugs are recreational and/or marijuana.

96 Cliff May 26, 2016 at 12:40 pm

Revisionism

97 Bill May 26, 2016 at 8:15 am

Evidently no one here has ever read the Federal Register and looked at all the trade association comments, and later challenges, to federal regulations.

They are not vengeances.

Just business. Not philanthropic.

98 mulp May 26, 2016 at 4:21 pm

Yep, just job killing business.

What do you mean I must pay workers to prevent pollution?

What do you mean I must stop production before I order the worker into the running machine to fix a jam, and then pay workers to do nothing while the machine is repaired?

I have yet to see a business lawsuit that is filed to increase consumer spending by paying higher labor costs, thus increasing gdp growth.

99 Dude May 26, 2016 at 8:21 am

I think TC is doing some A/B testing this week.

100 Bill May 26, 2016 at 8:49 am

Re: Clip From the comment above

” That said, I have heard tales — apocryphal perhaps — of donors who gave to…”

Mercatus Center?

101 Bill May 26, 2016 at 9:07 am

I’m reading this post about the “worry” of philanthropists flooding the court with unfounded lawsuits,

And, I wonder, has Donald Trump taken over this website. Naw, just the Kochs.

I mean, does any economist know anything about the judicial and constitutional concept of STANDING that is required for a CASE or CONTROVERSY to be heard by a court.

Evidently not.

Here is a short article on the requirements of standing in environmental lawsuits, just for an example: http://www.americanbar.org/content/dam/aba/images/public_education/06_apr08_standingsueenvironment_martin.pdf
http://scholarship.law.wm.edu/cgi/viewcontent.cgi?article=1368&context=wmelpr

102 Cliff May 26, 2016 at 12:41 pm

What is the relevance of your comment exactly? We all know there would be 100x as much litigation if all litigation were subsidized.

103 Bill May 26, 2016 at 1:53 pm

My point is, Cliff, that you cannot sue if you are not injured. In environmental litigation in particular you as a person down the street can’t sue. You do not have standing. You can read the articles above.

OK, now, unless the statute gives you standing, you have to show a particularized injury….you cannot just wake up some day and say I want to sue the power plant down the road, or I don’t like the color of your hair and want to sue you.

So, STANDING blocks lawsuits. Get it.

Now, let’s say I am a rich person injured in a car accident. I have the money to sue. OK, get that. Now, let’s say you dont have the money to sue, maybe the lawyer will take it on contingency. Get that, OK. Now, let’s say you are a fisherman and the power plant is polluting your area where you catch fish, or you are a hotel owner with a beach which is being polluted by the guy upstream. Some environmental group comes to you and says, we’ll help you. Should it matter whether you are a rich hotel owner (who can pay) or a poor one (who cannot) but who is assisted by the Sierra Club or whatever.

Bottom line: STANDING is a requirement which generally requires particularized injury.

Not everyone can sue, even if they want to.

104 Li Zhi May 26, 2016 at 3:45 pm

Wow, thanks for the references. I know almost nothing about this stuff. I believe you are categorically wrong to claim that I must have standing to file a complaint (ie. to “sue”). All I need to do “to sue” is to file a complaint with both the court and the defendant. (nothing here about jurisdiction or standing). (I’m uncertain who actually delivers the complaint to the defendant, I believe it varies by selected jurisdiction).( I’m also uncertain whether or not the court makes any determination prior to serving the defendant.) My understanding is that generally the defendant must respond or a default ruling will be entered. Venue shopping comes to mind, here. So, it seems to me that even if no factual harm/injury can be shown, there is clearly a cost associated with each complaint filed, no matter its merits. One of your two references stated clearly that standing in environmental cases was quite controversial IN the judicial system, meaning there is no clear litmus test, ie. that who has standing is somewhat arbitrary and inconsistent.

105 mulp May 26, 2016 at 4:31 pm

The defendant in many cases can file countersunk against you and request a judge issue discovery orders against you.

Tho the cheapest option is filing a request for dismissal based on lack of merit.

That’s what happens to most such torts, and even those with merit. As the Supreme Court recently ruled was being done excessively.

106 Bill May 26, 2016 at 5:14 pm

Li, You’d be up for sanctions and costs for filing frivolous suits and waiting for defaults.

107 Bill May 26, 2016 at 5:17 pm

Li, At the federal level look up FRCP Rule 11 dealing with your claims. You’ll get sanctioned real quick.

108 Troll me May 27, 2016 at 12:47 am

Anyone can file, but judges don’t waste their time on frivolous stuff. Usually.

109 consolidated May 26, 2016 at 9:22 am

“non-profits backed by philanthropists”

If only these vermin were mostly backed by philanthropists. Instead, most of theses outfits are funded directly by the government. Kudos to Congress for finally trying to doing something about this abuse of federal funds.

http://azbusinessdaily.com/stories/510739255-franks-backed-bill-would-end-federal-settlement-slush-funds

And really, “non-profit” as a term is pandering to the most ignorant of sentiments. “Non-taxed” would be much more accurate. The lavish salaries paid and extraordinary perquisites enjoyed by the fraudsters behind these scams are what give the term “profit” a bad name.

110 mulp May 26, 2016 at 4:34 pm

HP, yahoo!, et al qualify as a nonprofits, but pay executives even more.

111 GoneWithTheWind May 26, 2016 at 9:41 am

“soon enough all companies will go out of business”

No, they will move to Mexico where lax laws are likely to allow even worse practices. We will lose the jobs, the control and the revenues.

112 Moreno Klaus May 26, 2016 at 10:06 am

… and the pollution of course. 😀

113 mulp May 26, 2016 at 4:46 pm

How will the US unemployed pay for stuff made in Mexico?

Easy credit funded by Mexican savings to deadbeat US consumers?

Economies are zero sum. If you stop paying workers, workers will stop paying for what they consume.

Debt funded consumption is consumption bought by the lender who gets it back only by the debtor being paid for working to produce something that other workers can afford to buy.

With Reagan, government became the borrower that funds lots of consumption based on those with money ironically trusting government to repay the debt while fighting all efforts to fund repayment of the debt but further ironically profiting by selling to the consumers.

Cheney spoke for these interests: “Reagan proved deficits don’t matter.”

Their objections are only over who gets the benefits with Obama being president.

114 Dude May 26, 2016 at 6:27 pm

Nah. Over the last several decades an increasingly small share of overall revenue in the supply chain (across many industries) has gone to the manufacturer(s). Yes, the jobs will go, no the control and revenue won’t.

115 8 May 26, 2016 at 10:00 am

And environmental groups are never financed by competitors who want to stop competitive development. I have seen that first hand in local government.

116 anon May 26, 2016 at 10:27 am

For sure. I wouild be socially conscious for a natural gas company to oppose coal.. (It’s harder to make the case vise versa, but I’m sure they try.)

117 JayT May 26, 2016 at 4:14 pm

I think it would be quite easy to make the case vise versa. It would not surprised me at all to find out the coal industry was backing anti-fracking efforts.

118 mulp May 26, 2016 at 5:11 pm

Well, they should be fighting pipelines so oil and gas can only be shipped by rail….

Except, oil trains paid higher fares than coal blocking shipments of coal. But the rail profits paid lots of workers to double and triple track rail lines and improve roadbeds to speed the trains (the best way to increase capacity).

But coal did not fight pipelines and failed to fight for regulations to force railroads to invest in better infrastructure so railroads do not end up with the constantly declining reputations and status making railroads easy targets.

Consider how you would react if coal trains got priority over road traffic at every job killing grade crossing. Regulations could require well maintained rail beds supporting 50 mph trains which would then mandate all grade crossings be eliminated, especially in cities and towns. But that would require paying tens of millions of manyears in labor costs.

119 Bill May 26, 2016 at 11:57 am

It is one thing to present your views to a public body, it is another thing to have standing to sue.

I am amazed at how little people understand that you cannot just go into court and sue because you have a bad hair day.

You have to have standing. Standing generally requires a particularized injury. Go up to the links above and read about environmental standing to sue.

120 Thomas May 26, 2016 at 12:19 pm

Completely irrelevant to the point he was making, Bill.

121 Bill May 26, 2016 at 2:35 pm

Thomas, Someone has to have legal standing to sue, regardless of who does or does not have assistance. And, by the way, competitors may have standing to sue, such as a competitor who is injured by false advertising, or one who is downstream, etc. Whether or not you are a competitor really doesn’t change anything. Hell, competitors get together in things called trade associations and litigate to bar government rules or enforcement actions, or submit amici briefs.

122 Troll me May 27, 2016 at 12:50 am

Surely the same logic would not apply to oil and coal groups which regularly tar any renewables development?

“Green energy will destroy the economy!!!!” OK, first things first. Who paid the person who said that?

123 Hazel Meade May 26, 2016 at 10:31 am

Are we absolutely sure the “vengence” is for environmental harms?
Isn’t it possible that someone might fund a lawsuit against their business competitors, or against some other executive who was a former or current social rival?

124 prior_test2 May 26, 2016 at 12:30 pm

Well, this being a thinly disguised attempt to deal with an actual legal case – ‘This morning The New York Times reported an interview with Gawker owner Nick Denton in which Denton said he had begun to believe rumors that some extremely wealthy person had been bankrolling Hogan’s suit. Read the Times article for the specifics. But the gist is that Hogan’s lawyers made key decisions which made zero sense if the goal were to maximize the plaintiff’s settlement. Denton said he thought the person was likely someone from Silicon Valley, where you have a strong overlap between people who have virtually unlimited wealth and people who are not accustomed to the intrusive and aggressive coverage Gawker and its sister sites specialize in.’ http://talkingpointsmemo.com/edblog/a-huge-huge-deal

Here is the NYT link – http://www.nytimes.com/2016/05/24/business/dealbook/gawker-founder-suspects-a-common-financer-behind-lawsuits.html?ref=topics&_r=2

125 Cliff May 26, 2016 at 12:43 pm

There is a separate post about that

126 prior_test2 May 26, 2016 at 1:04 pm

You are absolutely right – but then, this post is too.

127 Hazel Meade May 26, 2016 at 1:34 pm

I’m confused as to how Gawker could be an environmental polluter.

128 Hazel Meade May 26, 2016 at 1:36 pm

But if you’ll concede that some tech exec has an axe to grind and is funding the Hogan lawsuiut, then are you agreeing that it’s possible some business exec could use an environmental suit to fuck with their rivals?

129 R Richard Schweitzer May 26, 2016 at 11:40 am

“But we shouldn’t condemn the *good* lawsuits, right? Right? Or is this whole philanthropic lawsuits business simply out of control and needs to be stopped altogether? ”

First – Do we want (let alone “need’) a legal system that is a means to attain ends?

What has happened to the legal system that evolved over something more than the past 500 years, in which a (if not-the) predominant function “our” legal systems has been the identification, delineation, reconciliation (including enforcement) of obligations recognized and accepted within the social orders extant over those periods of time?

130 prior_test2 May 26, 2016 at 12:27 pm

I read through, and not a single mention of champerty, barratry, or maintenance?

Really, that metafilter link is well worth getting some actual information about what Prof. Cowen seems to be ever so coyly referencing, without bothering himself to explain how the actual American legal system is supposed to function when not being used at the whim of a billionaire with an apparent vendetta.

Here is a capsule comment from metafilter, a day before Prof. Cowen’s wonderful attempt to avoid this discussion appeared – ‘Third-party funding of lawsuits has been recognized as potentially corrupting of the legal system since forever–hence, many jurisdictions banned or restricted champerty, barratry, and maintenance. Cases in which someone other than the client is paying are universally recognized as raising serious ethical issues, because the lawyer’s legal and ethical duty is to the client, not to the person paying the bills. I don’t know, in this case, what Hogan perceived his interests to be. It’s not exactly wildly implausible that a financially comfortable person might be more interested in destroying a company that published his sex tape than in recovering maximum damages. But the converse could also easily be true. So, no, this is not just some humdrum, “everyone does it, it’s no big deal” tactic, but one historically recognized as fraught with ethical peril, and that’s only considering the point of view of the actual plaintiff, not the broader social implications. It’s easy to imagine a more personally vulnerable plaintiff who could be pressured by someone like Thiel or effectively sold down the river by counsel paid by someone like Thiel.’

131 coketown May 26, 2016 at 2:20 pm

This seemed like a good, reasoned response to the points you raised, from the invaluable Volokh Conspiracy: https://www.washingtonpost.com/news/volokh-conspiracy/wp/2016/05/26/peter-thiels-funding-of-hulk-hogan-gawker-litigation-should-not-raise-concerns/

Of pertinence: “However, these common law doctrines have long since fallen into desuetude. They were gradually eroded by numerous developments, most saliently public interest litigation and the private provision of legal aid to indigents.”

Thiel’s critics seem trapped in the 19th century. I picture powered wigs and Thiel clamped in stocks while commoners throw vegetables at him and shriek “champerty! barratry!” They seem desperate to prove Thiel did something–anything!–wrong, and appealing to archaic torts is evidence of this.

132 prior_test2 May 26, 2016 at 12:33 pm

For those interested in what those terms mean, a simple link –

‘Champerty and maintenance are doctrines in common law jurisdictions, that aim to preclude frivolous litigation. “Maintenance” is the intermeddling of a disinterested party to encourage a lawsuit. It is “A taking in hand, a bearing up or upholding of quarrels or sides, to the disturbance of the common right.” “Champerty” (from Old French champart, a feudal lord’s share of produce) is the “maintenance” of a person in a lawsuit on condition that the subject matter of the action is to be shared with the maintainer. Among laypersons, this is known as “buying into someone else’s lawsuit.”

In modern idiom maintenance is the support of litigation by a stranger without just cause. Champerty is an aggravated form of maintenance. The distinguishing feature of champerty is the support of litigation by a stranger in return for a share of the proceeds.
— Lord Justice Steyn, Giles v Thompson

At common law, maintenance and champerty were both crimes and torts, as was barratry, the bringing of vexatious litigation. This is generally no longer so as during the nineteenth century, the development of legal ethics tended to obviate the risks to the public, particularly after the scandal of the Swynfen will case (1856–1864). However, the principles are relevant to modern contingent fee agreements between a lawyer and a client and to the assignment by a plaintiff of his rights in a lawsuit to someone with no connection to the case. Champertous contracts can still, depending on jurisdiction, be void for public policy or attract liability for costs.’ https://en.wikipedia.org/wiki/Champerty_and_maintenance

133 Li Zhi May 26, 2016 at 3:58 pm

My bottom line: if Greenpeace’s lawsuit’s basis is frivolous, and they repeatedly file suit, then they should be hit with a RICO violation and slapped down, hard. And any lawyers involved should be disbarred. But in a lot of cases, they have a point, even if the relief they seek is more damaging than the tort suffered. This doesn’t really get at the problem of the rich man ruining the poor man by using the judicial system, and I see no good solution – pro bono civil suit defense? LOL. …but perhaps crowd sourcing?

134 Bill May 26, 2016 at 5:34 pm

Where do you get this stuff? Imagination?

Here is something called Federal Rule 11. Read it carefully.

“b) Representations to the Court. By presenting to the court a pleading, written motion, or other paper—whether by signing, filing, submitting, or later advocating it—an attorney or unrepresented party certifies that to the best of the person’s knowledge, information, and belief, formed after an inquiry reasonable under the circumstances:

(1) it is not being presented for any improper purpose, such as to harass, cause unnecessary delay, or needlessly increase the cost of litigation;

(2) the claims, defenses, and other legal contentions are warranted by existing law or by a nonfrivolous argument for extending, modifying, or reversing existing law or for establishing new law;

(3) the factual contentions have evidentiary support or, if specifically so identified, will likely have evidentiary support after a reasonable opportunity for further investigation or discovery; and

(4) the denials of factual contentions are warranted on the evidence or, if specifically so identified, are reasonably based on belief or a lack of information.

(c) Sanctions.

(1) In General. If, after notice and a reasonable opportunity to respond, the court determines that Rule 11(b) has been violated, the court may impose an appropriate sanction on any attorney, law firm, or party that violated the rule or is responsible for the violation. Absent exceptional circumstances, a law firm must be held jointly responsible for a violation committed by its partner, associate, or employee.”

135 Miguel Madeira May 26, 2016 at 8:51 pm

“That said, I have heard tales — apocryphal perhaps — of donors who gave to environmental causes because they too earlier in their lives had suffered under the adverse effects of pollution.”

And? At first look, seems a noble thing to do, no? You had a problem, and now you want that other people will not suffer with this problem; I suppose it is a very common thing in the realm of donations (like people who give money to discover a cure from a disease that killed a loved one).

136 Troll me May 27, 2016 at 12:56 am

Malala, the Afghan girl who got shot in the head by the Taliban for going to school comes to mind. She’s not rich, but her experience motivates her. Is that vengeance? I don’t think so.

137 Ricardo May 27, 2016 at 12:10 am

The concern that billionaires could “destroy” companies with frivolous lawsuits seems overwrought. Most companies have insurance policies that are designed to protect them from ruinous legal costs or damages as a result of routine business transactions. A company like Gawker would have had an insurance policy and a corporate lawyer telling them what they should and should not publish in order to minimize their risks. They almost certainly ignored that advice, deliberately behaved in a scumbag manner and are now paying the price for that conscious decision.

I see little reason to think that companies that behave responsibly and ethically have anything to fear. Gawker’s troubles are the result of a series of poor decisions combined with its failure to convince a judge and a jury that its actions were lawful or defensible.

138 TMC May 27, 2016 at 7:32 am

Companies can be perfectly good and legal and be a target. Look at Soros’ funding of environmentalist groups to stall off shore drilling in the US, for the sake of the children presumably. He then profits on his own investments off shore drilling in South America. This is a trick he picked up from the Saudis and Russians, who have been funding American environmentalist groups for years.

139 SamChevre May 27, 2016 at 10:01 am

Actually, that was what made people suspect that Hogan had backing. His lawyers deliberately made only claims that were not covered by Gawker’s insurance.

140 Ricardo May 27, 2016 at 12:39 pm

But my point is that any competent corporate lawyer could have and almost certainly did tell Gawker before they published the sex tape that they were running a serious legal risk because it is such an outrageous and deliberate act that it presumably falls outside the scope of standard insurance policies. They aren’t some scrappy start-up — they are a multimillion-dollar enterprise that chose to dive head-first into dangerous waters and now they are paying the price.

141 Millian May 27, 2016 at 6:23 am

The fear really is not that Gawker was right, but that someone who makes a genuine mistake could be destroyed by a billionaire like Peter Thiel. In other words, empowering the billionaires. That might be more worthwhile to address.

142 Ricardo May 27, 2016 at 1:00 pm

But it’s one thing to express general concern about Thiel’s actions and another to be specific about which problem you think should be solved. If you don’t think third parties should help fund lawsuits, you essentially outlaw all public interest litigation and likely shut down class action lawsuits and contingency cases. I don’t see any way of distinguishing what Thiel did from what the ACLU, NAACP, NRA, Institute for Justice, or any number of other organizations do everyday. Banning all of them from providing support to plaintiffs would almost certainly shift power to the wealthy and to local governments that would be able to violate the rights of non-wealthy citizens more or less with impunity.

I think the better problem to address is to make certain kinds of lawsuits cheaper to defend against and to raise the costs to plaintiffs of filing frivolous lawsuits. For instance, many states have anti-SLAPP statutes that impose penalties on plaintiffs who try to stifle public criticism through frivolous defamation lawsuits. If Congress would pass a federal anti-SLAPP law, that would be a big step forward.

143 BFB May 27, 2016 at 6:56 am
144 Daniel Cole May 27, 2016 at 11:44 am

This is among the most assertion-filled-but-fact-free posts I’ve ever seen on this website. This entire paragraph is a perfect example:

“Now, to be sure, many of these environmental lawsuits are excessive, or unfair, or would fail both a rights and cost-benefit test and we should condemn them, as indeed you see happening with equal frequency on the Left and on the Right. Many companies have gone out of business because of environmental lawsuits or the threat thereof, or perhaps the companies never got started in the first place because they couldn’t afford large enough legal departments. I can safely say that just about everyone sees the problem here.”

How many lawsuits are excessive, unfair, and/or fail a cost-benefit test? Who has been condemning them from the left and right? How many companies have gone out of business because of environmental lawsuits or threatened lawsuits? How many companies were deterred from starting in the first place because of environmental lawsuits? How safe is your assertion that “everyone sees the problem here”?

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