Congress to investigate fraudulent expert opinions.

One of the more sordid expert witness and mass tort episodes in recent memory has been the handling of the silicosis mass tort litigation.  Many plaintiffs experts simply read the x-rays in a way that an individual plaintiff could sue, even though the x-rays did not show silicosis. 

After awhile, this was too much for the trial judge, who finally go so disgusted that thousands of cases were thrown out.  The scandal has been covered at Point of Law, and I urge you to read the horrifying background.  Now How Appealing notes that Congress is investigating this “legal” racketeering.

One more reason that courts should carefully examine expert evidence before allowing it into court.

Posted by Joseph R. McFaul on Wednesday, March 08, 2006 at 15:12 Comments Closed

School District suspends sutdents for off campus internet threats

Attached strings sometimes get pulled

The Supreme Court sustained the Solomon Amendment today in a unanimous ruling that I had predicted some time ago.  This is really not a close case, and the arguments advanced by the law schools bordered on the frivolous.

Under the Solomon amendment, universities that accept federal funds must allow military recruiters on campus.  The court has routinely upheld “strings” placed by the federal government when exercising its spending power. 

There are theoretical limits on the government’s ability to place strings on its spending power, but this situation cannot possibly be one of them.  The universities have many alternatives to acceptance of government money so a coercion claim is not plausible.  Furthermore, the “string” relates to a legitimate exercise of the President’s powers as Commander in Chief.  Nobody could plausibly advance the argument that the “don’t ask-don’t tell” policy is unconstitutional.  Whether it is a good idea is another matter.

Since Congress continues to make homosexual behavior a crime under the Uniform Code of Military Justice, the Constitutional objections to the military’s mere presence on campus are feeble.

Posted by Joseph R. McFaul on Monday, March 06, 2006 at 00:00 Comments Closed

The peculiar SUV Tax deduction.

Observing that tax law is “peculiar” is an understatement.

The competing combination of revenue raising devices and social policy devices unavoidably leads to some very peculiar results.  One of the more peculiar instances in recent tax history is a business deduction for owning cars larger than three tons—the so-called "SUV deduction."  If your doctors or dentists drive a Hummer, you can be sure their CPAs are on the ball.

For some reason, Congress thought it would be good social policy to allow businesses to deduct up to $24,000 for purchases of cars weighing more than three tons.  Businesses began buying SUVs instead of Sonatas.

Businesses that purchase hybrids get the same deduction as everybody else, a measly $3,400.

Now, a U.S. Senate bill would allow deductions of up to $100,000 for business purchases of hybrid vehicles.

This may a case of two wrongs making a right.  At least, the driver can use the carpool lane.

Posted by Joseph R. McFaul on Thursday, March 02, 2006 at 00:00 Comments Closed

Government Agency in Charge of Port Security objects to foreign port management

The U.S. Coast Guard, the federal agency in charge of port security throughout the United States, reported that it was unable to determine whether a foreign owned management company could adequately protect U.S. ports against terrorist attacks.

Although the company  is based in Dubai, home of at least two of the September 11 terrorists, it is a global company and recently acquired a legendary British company's stevedoring division.  It is not a question of any particular nationality it is a question of foreign nationality.  One reason the Coast Guard cannot ensure port safety is that there is no national identity card and now there is no generally accepted port credential.

There are significant difficulties in preparing a port security credential program but there was such a program during World War II and the Korean War.  In those days, globalization was non-existent and, as a result, all port workers could be U.S. citizens and subject to detailed background investigations before being issued credentials.   With the advent of globalization, it is far more difficult to limit access to U.S. citizens.  Other countries recognize the same problem.

The answer requires controlling access to vast areas of water and port facilities.  A system of background checks and credentialing must be developed.  In World war II, the ships were almost exclusively American, the cargo was not containerized and the port workers overwhelmingly U.S. citizens.  Today, that is no longer the case.  Developing a successful port security program is more complicated and more urgent today than it was fifty years ago.

Disclosure:  I was a member of the U.S. Coast Guard in the port security program for over ten years.  I and the other members of my teams successfully prevented all nuclear devices from entering West Coast ports during that time.

Posted by Joseph R. McFaul on Monday, February 27, 2006 at 00:00 Comments Closed

Do you drive a SULEV in the carpool lane?

One of the new year’s laws in California allowed electric hybrid cars in the carpool lanes.  Under a new combined federal and state program, 75,000 qualifying cars would be authorized to drive solo in the car pool lane.  In Northern California, things are never easy.  The procedure is a little more complicated, also requiring a transponder

Not all hybrids are eligible to use the carpool lane.  Also there are a large number of electric vehicles that are not designed for freeway driving.  These are often called “NEVs” (Neighborhood Electric Vehicles.)  Here is one example of an NEV. Although there are a number of NEV manufacturers, there is only one all-electric vehicle certified for freeway driving by the California Air resources Board.

Classification of a particular vehicle is both important and  complicated.  Electric bikes for example are regulated differently than motorcycles.  The regulations, like all environmental regulations, perhaps inevitably generate their own alphabet soup.  You can check out the meaning of the acronyms here.   You perhaps didn’t realize that you probably drive a LEV.  The goal, of course, is that all cars will someday be ZEVs.

In the meantime, there are tax and social benefits to encouraging the use of PZEVs, NEVs and SULEVs.  One of those is that hybrids qualifying as SULEVs under state law and also qualifying as ILEV’s under U.S. EPA standards can drive solo in the carpool lanes.

Driving solo in the car pool lane in California is one of the few crimes deemed worthy of swift but excruciatingly painful capital punishment.  To prevent any vigilantes from making any mistakes, the hybrid vehicles are required to display a sticker on all sides of the vehicle.  The stickers are “puke colored” and some see a plot to make them as ugly as possible.

Here’s the sticker.  You can judge its aesthetics for yourself.

Reducing emissions also reduces use pf petroleum products so some form of ZEV's will inevitably be in our future.  In the interests of full disclosure, I own and ride this electric bike. 

Posted by Joseph R. McFaul on Sunday, February 26, 2006 at 00:00 Comments Closed

Man bites dog: H&R Block gets its own taxes wrong.

I shouldn't delight in other business's misfortunes, but this one made me smile.  Courtesy of the Tax law professor, H&R Block reports a sharp decline in third quarter earnings because it failed to accurately calculate its own taxes over several years.  Presumably, it wasn't charged for the tax preparation costs of the erroneous returns. 

May I recommend a tax course?  Maybe not.

Seriously, the Tax Prof Blog is a great website for tax and economic resources.  If I have general tax questions, I start there.  You should, too.

Posted by Joseph R. McFaul on Friday, February 24, 2006 at 00:00 Comments Closed

Does your boat float?

Today, the U.S. Supreme Court is hearing oral arguments in a trio of Clean Water Act cases.

The Clean Water Act started out as the Federal Water Pollution Control Act of 1972.  As a member of the Coast Guard, I enforced the Clean Water Act from 1975 through 1997 in various capacities.

The act prohibits pollution of “navigable water of the United States.  Not surprisingly, the term “navigable waters" is subject to interpretation and determining whether particular waters are “navigable” is particularly tricky.

The U.S. Coast Guard, the U.S. Environmental Protection Agency and the U.S. Army Corps of Engineers all have important regulatory roles in Clean Water Act enforcement. The Army regulates chiefly through issuance or refusal to issue section 404 permits authorizing dredging or filling of navigable waters.

The term "navigable waters" conjures images of ships and harbors, or at least canals.  In fact, all federal agencies interpret "navigable waters" to mean any waters that are now capable of commerce, were capable in the past or might be capable of navigation in the future, or waters connected to such navigable waters.  If you think I exaggerate, you can read the regulations yourself.

Under such a definition even a drainage ditch may be navigable waters.

Unfortunately for some farmers and persons interested in reclaiming swamps, wetlands that are part of the hydrological cycle are sometimes deemed navigable.  Leveling fields or tilling crops under certain conditions may require a section 404 permit.

Rapanos is one of these vexing wetlands cases.  In that case, Rapanos filled in 22 acres of wet low lying ground about 20 miles from Lake Huron. 

Lake Huron is unquestionably navigable waters of the United States.  Federal agencies, however, interpret “navigable waters “  as any waters connected in a hydrological cycle with "traditional" navigable waters.  Opponents of this position , such as Mr. Rapanos, argue that all waters are part of the hydrological cycle, and such a broad interpretation means that the Clean Water Act’s reach is unlimited.  His attorneys suggest that “navigable waters” are waters where you can actually float a boat.

Carabell v. Army Corps of Engineers is an even more extreme hydrological cycle wetlands case.  In that case, a berm had been constructed between the navigable waters and the developer’s property.  The property would be wetlands and part of the hydrological cycle in the absence of the berm.  Nevertheless, the developer was required to get a section 404 permit before construction, and the Army refused to issue the permit.

These are the first cases heard by the new Roberts/Alito Supreme Court, so the result should be interesting.

Posted by Joseph R. McFaul on Tuesday, February 21, 2006 at 00:00 Comments Closed