Archive for the ‘Courts’ Category

SEC accuses ex-execs at Fannie, Freddie with understating subprime exposure by tens of billions of dollars

The role of Fannie Mae and Freddie Mac in the subprime lending crisis will be fleshed out in court thanks to lawsuits filed today against former executives of the quasi-governmental agencies. Bloomberg has the basic facts about the suits:

Daniel Mudd, the former chief executive officer of Fannie Mae, and Richard Syron, ex-CEO of Freddie Mac, were sued by the U.S. Securities and Exchange Commission for understating by hundreds of billions of dollars the subprime loans held by the agencies. …

In the lawsuits, the SEC said Syron, Mudd and others understated the lenders’ exposure to subprime mortgage loans. From 2007 to 2008, Freddie Mac executives said the company’s exposure was between $2 billion and $6 billion when it was actually as high as $244 billion, according to one SEC complaint. From 2006 to 2008, Washington-based Fannie Mae executives said the firm’s exposure to subprime mortgage and reduced documentation loans was about $4.8 billion when it was nearly 10 times …

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An idea to tackle tort reform, defensive medicine in Georgia

It’s been 20 months since the Georgia Supreme Court threw out a key plank of the state’s 2005 tort reform: a $350,000 cap on noneconomic damages for medical malpractice. During that time there’s been some hopeful talk among supporters of the cap, but precious little action by legislators.

Here’s a thought: Why not scrap the medical tort system entirely, saving several billion dollars in the process?

Before every trial lawyer within 200 miles heads for my office, let me explain.

The idea is to replace the current legal system for medical malpractice with an administrative law system that draws heavily on the current arrangement for workers compensation claims.

No more lawsuits, no more juries, no more jackpot justice. Instead, patients injured while undergoing medical treatment would file a no-fault claim. Independent experts then would determine whether there was negligence and, if so, award the patient compensation based on national norms for the type of injury …

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Poll Position: Should Obamacare’s day in court be televised?

This week, the Supreme Court agreed to weigh the constitutional merits of Obamacare. But even if the court decides to throw out the president’s health reform, unless something changes, the revolution will not be televised.

It may come as a surprise to some of you that proceedings at the Supreme Court are not televised already, given that we’re several decades into the TV era. In fact, only last year did the court begin to let the public hear audio of oral arguments — but only afterward.

C-SPAN chief executive Brian Lamb, in a letter this week to Chief Justice John Roberts, asked that the justices allow video just this one time:

The court’s decision to schedule at least five-and-a-half hours of argument indicated the significance of this case. … We believe the public interest is best served by live television coverage of this particular oral argument. It is a case which will affect every American’s life, our economy and will certainly be an issue in the upcoming presidential …

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Perhaps the worst constitutional defense of Obamacare you will ever read

Now that the Supreme Court has officially taken up the question of Obamacare, we are in store for even more legal analyses attempting to predict which way the justices will rule, or argue which way they ought to rule.

A quick prediction of my own: Few, if any, of these analyses will be as worthless as the one Einer Elhauge offers in today’s New York Times.

Elhauge, a law professor at Harvard University and founding director of Harvard’s Petrie-Flom Center in Health Law Policy, makes one point that is patently — inane? specious? vacuous? let’s go with specious — and one point that unintentionally undercuts his own argument. Let’s look at each.

First, the patently specious point:

For decades, Americans have been subject to a mandate to buy a health insurance plan — Medicare. Check your paystub, and you will see where your contributions have been deducted, whether or not you wanted Medicare health insurance.

Many opponents dismiss this argument because Medicare (unlike the new …

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What the Cain story tells us about the cost of litigiousness

With details about Herman Cain’s alleged harassment of female employees still only trickling out, much of the speculation has focused on the amounts of money Cain’s organization, the National Restaurant Association, paid to the women in settlements.

One woman reportedly got $35,000 to settle her complaint, another woman $45,000. In each case, that amount represented a severance approaching one year’s salary. People wonder: What do those (reported) facts tell us about the seriousness of the allegations?

That kind of speculation, at this point, is bound to be inconclusive. What has struck me, on the other hand, is what these facts certainly tell us about the cost of our society’s litigiousness.

At the Power Line blog, John Hinderaker passes along some analysis from a reader he does not name, but whom he describes as “one of the country’s leading experts in this area of the law”:

In my opinion, the reported settlement sums — $35,000 and $45,000 — do not exceed “nuisance value.” …

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Another unintended consequence of the war on drugs?

Here’s an argument for ending, or at least curtailing, the war on drugs that you don’t hear every day. From the Associated Press:

Supreme Court Justice Antonin Scalia says the quality of federal judges has suffered because there are too many of them. Testifying before a Senate committee Wednesday, Scalia blamed Congress for making federal crimes out of too many routine drug cases. In turn, that created a need for more judges.

“Federal judges ain’t what they used to be,” he said during a rare appearance before the Senate Judiciary Committee..

The federal judiciary should be an elite group, said Scalia, who has served on the high court for 25 years. “It’s not as elite as it used to be,” he said.

He was responding to a question about what he sees as the greatest threat to the independence of judges.

The AP story says there are 874 federal judgeships. That means there are three times as many federal judges as there were in 1950 — and twice as many federal judges as there are …

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