Plaintiff drops privacy suit that stretched to claim against UMass Medical in nationwide data breach

UMass Chan Medical School
Mass. Office of Travel & Tourism via Flickr CC BY-ND 2.0

Until six days ago, the University of Massachusetts Chan Medical School was defending a privacy suit over a data breach, though the plaintiff liability theories looked thin.

There doesn't seem to be any dispute over the fact of the data breach. UMass Chan was just one of hundreds of organizations nationwide implicated in a breach affecting tens of millions. According to electronic security firm Emsisoft (which has a commercial interest in higher numbers), the breach affected more than 2,700 organizations and the data of more than 94 millions persons (last updated Jan. 18, 2024).

The vulnerability for all of these organizations was a file transfer platform called MOVEit, a product of publicly traded, Burlington, Mass.-based Progress Software Corp. UMass Chan used MOVEit to transfer personal information to other state agencies and programs. Hackers obtained and published the data of more than 134,000 persons, including recipients of state supplemental income and elder services.

According to state officials, WBUR reported, the "exposed data varies by person, but in each case includes the person's name and at least one other piece of information like date of birth, mailing address, protected health information like diagnosis and treatment details, Social Security number, and financial account information." The commonwealth notified affected persons and offered free credit monitoring and identity theft protection.

The complaint filed in federal court in September 2023 sought class action certification. The named plaintiff blamed UMass Chan for weak security and delayed notification resulting in a fraudulent attempt to use her debit card. Wednesday last week, the plaintiff voluntarily dismissed without prejudice, meaning the case might not yet be over.

The articulated causes of action, though, were a stretch. That's not to say that the putative plaintiffs suffered no injury. The problem rather is that the law in most states, including Massachusetts, and at the federal level still fails to define data privacy wrongs in a manner on par with the law of Europe and most of the rest of the world.

There was no statutory cause of action in the UMass Chan complaint. The diversity complaint alleged counts of negligence, breach of contract, and unjust enrichment.

Negligence has not been a productive vein for privacy plaintiffs, who lack the usually prerequisite physical injury. Massachusetts cracks open the door more than most other states to negligence actions based on lesser injury claims, such as emotional distress or economic loss. But it's not a wide opening.

Privacy actions in state law meanwhile are problematic because American common law has not yet well established the nature of the plaintiff's loss according to conventional understandings of injury. Indeed, federal courts disagree over when a statutory state privacy action supplies the "injury-in-fact" standing required by the federal Constitution. 

The named plaintiff in the UMass Chan case hastened to emphasize her contractual relationship with UMass Chan as a service provider, in an effort to anchor the negligence claim within a strong relationship of duty to get through the Massachusetts doorway. She described the identity risk of the debit-card incident to establish economic loss at least.

It's not clear that the pleading could have pushed over the hurdles to negligence recovery. I have advocated for the evolution of common law tort to close the gap in recognition of privacy violations in U.S. law, similarly to how UK courts developed the "misuse of private information" tort in common law to complement transposition of EU data protection. The Massachusetts Supreme Judicial Court could do that; certification would be required here in a federal case. But the trend in American data privacy law rather has been for the courts to wait on legislators to move the ball forward.

The other liability theories were a stretch, too. In contract, the plaintiff alleged herself a third-party beneficiary of data sharing agreements between UMass Chan and its state partners. Third parties can claim rights in a contract, but the proof is stringent. Contract law also raises a damages problem. The plaintiff here was not seeking specific performance, and it's not clear that any recovery in contract law would exceed the remediation the commonwealth already offered.

The equitable claim of unjust enrichment theorized essentially that UMass Chan benefited financially by cheaping out on security. That's creative, but a plaintiff in equity usually wants back something she lost to the defendant. A differential in the cost of contract services is speculative, and it's an attenuated causal chain to allege detriment to UMass Chan clients.

Privacy plaintiffs in the United States have seen some success using laws that predate contemporary data breach. But those theories won't work here. Massachusetts once had a leading data regulatory system for its requirements of secure data management. But the law is now well worn and has not kept up with other states, California being the model. Critically, the Massachusetts regs don't provide for private enforcement.

Some plaintiffs have found success with the dated (1986) Computer Fraud and Abuse Act. But a federal CFAA claim would be leveled properly against the hacker. The alleged culpability of UMass Chan is more accident than abuse.

American privacy plaintiffs flailing to state wrongs in litigation unfortunately is common and will continue as long as the United States lacks a comprehensive approach to data protection. I wrote 10 years ago already that American expectations in data privacy had outpaced legal entitlements.

The pivotal factor in whether MOVEit breach victims find any relief is likely to be the state where they and their defendants are located. Perhaps the case will push commonwealth legislators at last to act on a bill such as the proposed Massachusetts Information Privacy and Security Act (see, e.g., Mass. Tech. Leadership Council).

The case is Suarez v. The University of Massachusetts Chan Medical School (D. Mass. filed Sept. 18, 2023).

Recklessness claim in fatal Ford rollover accident allows plaintiff to push past Ga. statute of repose

"Crash Overview Diagram" by defense expert Donald F. Tandy, Jr.
(no. 103 filed Mar. 15, 2022) in Cosper v. Ford Motor Co.
(N.D. Ga. filed Oct. 11, 2018).

The Georgia Supreme Court defined "recklessness" in an erudite November opinion that allowed a plaintiff to surmount the statute of repose with a product liability claim.

In federal court in Georgia, the underlying case involves a fatal Ford Explorer rollover accident on Christmas Day in 2015. The plaintiff sued Ford Motor Co. in product liability over the integrity of the vehicle roof. Arising more than 10 years after the vehicle's manufacture, the claim seems to run afoul of the Georgia statute of repose.

But the statute of repose has an exception for "conduct which manifests a willful, reckless, or wanton disregard for life or property." The plaintiff aimed to surmount the statute of repose by accusing Ford of recklessness. The federal court certified the case to the Georgia Supreme Court to explain what recklessness means in the statute.

Recklessness is a useful but sometimes elusive concept in tort law. Insofar as culpability can be described on a spectrum running from intentional tort to negligence to no fault, recklessness is usually located at the midway point between intent, a subjective state of mind, and negligence, an objectively tested condition. One formulation of recklessness employs the canny "reason to know" analysis, which mixes subjective and objective testing of a defendant's state of mind by allowing reasonable inference (objective) from actually known facts (subjective).

But recklessness is a quirky creature of perspective. Recklessness looks different if you approach the concept from its intent side, when it describes a state of mind short of but indicative of pure subjective intent, or from its negligence side, when recklessness describes a kind of highly exaggerated carelessness.

This Janus-faced character causes recklessness to manifest in different legal tests amid different fact patterns. At a more theoretical level, the dichotomy reveals a deeper truth about culpability, which is that the useful metaphor of a spectrum disguises arguably qualitative differences between intentional wrongs and accidents.

The upshot is that recklessness can mean many things to many people. And the fact that the Georgia Supreme Court had never defined the term in the statute of repose was problematic for the federal court in the Ford Motor Co. case.

The Georgia statute pairs recklessness with the famous doublet, "willful" and "wanton." These terms are even more problematic. While they are well known to historical common law, they have not been uniformly incorporated into modern conceptions of culpability. Their ambiguity thus has been an occasional source of controversy in modern times, for example, in international disagreement over construction of the Warsaw Convention that governed air carrier liability in the 20th century.

The plaintiff in Ford Motor Co. did not allege "willful" misconduct, which smacks of intent and feels incompatible with a product liability claim. That's OK, the Georgia Supreme Court decided, because the disjunctive ("or") in the statute should be taken at face value. So recklessness can suffice by itself.

In a review worth reading for legal linguaphiles, to define recklessness, the court reviewed a range of precedents and sources, including the Restatement of Torts. (The court cited the "Restatement (First) of Torts § 500"; section 500 appears in the Second Restatement.) In the end, the court settled on a definition that hewed to the Restatement:

[when] the actor intentionally does an act or fails to do an act which it is his duty to the other to do, knowing or having reason to know of facts which would lead a reasonable person to realize that the actor's conduct not only creates an unreasonable risk of harm to another's life or property but also involves a high degree of probability that substantial harm will result to the other's life or property.

The approach comprises definitional components that are common in recklessness formulations, even if the words and particulars sometimes vary: volitional action (not necessarily intent as to result), knowledge of predicate facts (from which one might deduce risk), unreasonable risk (not necessarily unreasonable conduct), elevated probability of harm, and elevated magnitude of harm. (Cf. my YouTube Study of Intent (2017).)

Significantly, this approach to recklessness is free of moral appraisal. Thus, modern recklessness often is synonymized with "actual malice" and distinguished from "common law malice." The older latter imports the notion of "evil," or at least "hatred." My torts textbook examines this distinction when it is salient in punitive damages, for which some states employ one standard, some employ the other, and some employ them both in the alternative.

In the Georgia case, if recklessness can be proved, the plaintiff will be able to work around the statute of repose. The proof won't come easily. But usually it is easier for a plaintiff to show that a corporate defendant was reckless than to show that it acted "willfully" or "evilly," descriptors more often associated with persons.

Justice Verda M. Colvin

The case is Ford Motor Co. v. Cosper (Ga. Sept. 19, 2023). Justice Verda M. Colvin wrote the opinion of the court.

In 2021, Justice Colvin became the first African-American woman appointed to Georgia's high court by a Republican governor. An Atlanta native, she studied government and religion at Sweet Briar College, graduating in 1987 (just a couple of years before I arrived at my alma mater in nearby Lexington, Va.), and law at the University of Georgia, graduating in 1990. In May 2023, Justice Colvin gave the commencement address at Sweet Briar. 

Justice Colvin told New Town Macon that "Jesus Christ and Martin Luther King Jr. inspired her since she was a child through their devotion to service." In 2016, Judge Colvin spoke to youth in the "Consider Consequences" program of the Bibb County, Ga., Sheriff's Office; a recording (below) of the powerful allocution went viral.

It's education and healthcare, stupid

CC0 Pixabay via picryl

Experts are puzzled over American discontent while economic indicators ride high. Yet they consistently fail to recognize what seems to me an obvious factor: the exorbitant cost of education and healthcare.

My feeds have been awash in stories and analyses of the disconnect between economic indicators of a prosperous America and people's simultaneous sourness on their economic prospects. The Atlantic tackles the problem perennially (e.g., Apr. 2022, Oct. 2023, Nov. 2023, Dec. 2023, Jan. 2024). Yesterday I caught up on my podcast backlog with Paddy Hirsch and Darian Woods enumerating five explanations for The Indicator earlier this month.

To be fair, the explanations are multiple, complicated, and interrelated. Almost every writer fairly points to inflation as a capstone problem. As Hirsch put it, Americans care less about mathematical formulae than about strain on the wallet at the gas pump and the grocery checkout. 

Moreover, The Indicator helpfully told me, data show that even if wages are keeping up with inflation on average across the economy, that's not the experience of many, if not most, Americans. Wages in volatile markets, especially for young people who have the economic flexibility to change jobs more readily, are outpacing inflation times over. But wages in career tracks, for middle-aged and older Americans tied to mortgages and other responsibilities, are failing to keep pace with inflation. So yes, we're rightly frustrated when a smiling employer gleefully announces a wage hike, yet we somehow have less money in our pockets at month's end.

At the same time, I have been frustrated repeatedly by writers' and analysts' failure to recognize an elephant in the room: the exorbitant cost of education and healthcare in America. The problem is amplified by inflation, but it's not a byproduct of inflation, and it won't be remedied by any number of interest-rate hikes.

Let me interject that there is an overarching problem as well that analysts often fail to recognize, which is simply that economic indicators are not interchangeable with human happiness. American culture habituates us to equate, mistakenly, economic prosperity with personal joy. Yet ample social science data gathered around the world show that wealth, whether societal or personal, does not necessarily correlate with happiness; much less is it causal. And see Matthew 6:19-24. A productive society by economic measures is not necessarily a society that produces art, that affords opportunity for recreation and leisure, or that values freedom for individual and interpersonal fulfillment.

Even by economic measures, though, healthcare and education are anomalous sectors. As a matter of morality, healthcare cannot be left to the free market—and I say this as an economic conservative—because the essentiality of healthcare for survival makes any bargain inherently unfair, any playing field invariably unlevel.

Similarly, education, at least in part, also must operate extrinsically to the free market for goods and services. Education does not guarantee upward economic mobility. But upward economic mobility is profoundly unlikely without education. And a market has no incentives to provide educational opportunity as long as labor is abundant.

Consider: A society based on slave labor might look marvelous by economic measures: full "employment," efficient resource distribution, pyramid-building productive capacity. Yet there is zero potential for laborers' upward social or economic mobility. In America, we purport to abhor servitude and to prize socioeconomic potential as "the American dream."

Both healthcare and education are therefore imperative in our society; their absence, or unattainability, is hard felt. But the free market will provide neither in adequate supply. Healthcare will be unattainable for those unable to pay the going price. Education is a byproduct of a healthy economy only insofar as it is necessary to ongoing productivity. The economy won't provide for retraining as long as labor is abundant, and upward mobility is not even on the board.

This isn't an abstract problem. This is what Americans feel on the ground.

I went to the ER in the fall.  I was in the hospital for maybe seven hours, out-patient.  I am lucky to have insurance that covered most of the roughly $15,000 cost.  I am blessed with employment that allows me to cover without much strain the roughly 10% of the cost allotted to me. 

But for many Americans, in many instances, medical treatment is unaffordable or entails bankrupting medical debt. People choose to live with pain—not economic pain, but real pain, sometimes a toothache, sometimes terminal illness—because they can't afford healthcare. 

Why would we expect that people suffering with pain and ailments, unable to see doctors, would ever report feeling good about the economy?

My wife and I make decent money (for now). By some measures, our U.S. household ranks as high as the 93rd percentile by income. By tightening our belts for a few years, we mostly managed to put our one child, after public K12, through a bachelor's program. Still, she had to borrow about $50,000, much of it at 6.5%, to close the gap for four-year university. And we co-signed on those loans even while we were still, in our 40s, paying off our own higher-education debt. Neither our education debt nor the mortgage on our modest home discounted our income on the FAFSA that blithely informed us of our ample capacity to pay for college. And again, we're lucky and blessed. We could make it work.

For too many Americans, the cost of higher education is crippling or prohibitive. To my point, the economy doesn't care about education other than an efficient means to an end. The only relevant question is whether the hamster wheel is still turning. There's no need for people to better themselves, their lot. 

Why would we expect that people without hope for a better life for themselves or their children would ever report feeling good about the economy?

Education costs and debts work an enormous strain, financially and emotionally, on Americans. Healthcare costs, sometimes risks, sometimes debts, work an enormous strain, financially, emotionally, and physically, wearing us down, day after day.

And here's what really gets my goat: Things don't have to be this way. My cousins in Canada and Europe don't suffer under these strains. They have affordable healthcare and education. They are free to move about their lives.

My cousins pay more in overall tax burden—but not much more, and maybe less if I factor in my lifetime healthcare and education costs, as well as property taxes. And don't get into it with me over quality. As to education, I teach in Europe, and my students there are, to be frank and on average, better equipped as liberal arts undergrads than my American 1Ls, not for lack of work ethic. As to healthcare, I haven't met my primary care doctor since three primary care doctors ago. The reason I went in the fall to the ER, where I waited for five hours to be seen, was that neither my primary care network nor any area urgent care had a single opening. My "best healthcare plan anywhere in the world" must have been mislaid with my jetpack.

Can you imagine an America in which a university degree or a hospital admission would not have to be followed by years or decades of monthly payments? in which people could retrain for better jobs without incurring crippling debt? in which people could change jobs without sweating the burden of massive debts or the risk of losing access to life-saving medicine for themselves or their families?

That would be a free market. A level playing field. 

That's not what American corporations want. So that's not what Congress wants.

It's ludicrous (ludacris?) to expect that people—consumers—would radiate joy about a rosy economy as long as they're shackled, compelled to run the hamster wheels of a market that's not really free.

Police reform shines light on disciplinary records

CC0 Pixabay via picryl

A favorable reform to follow the police protest movement of recent years, stemming in particular from the killing of George Floyd, has been transparency around police disciplinary dispositions.

There is room for disagreement over what police reform should look like. I'm of the opinion that it costs society more to have police managing economic and social problems, such as homelessness and mental health, than it would cost to tackle those problems directly with appropriately trained personnel. I wouldn't "defund" police per se, but I would allocate public resources in efficient proportion to the problems they're supposed to remedy. We might not need as much prison infrastructure if we spent smarter on education, job training, and recreation.

Regardless of where one comes down on such questions, there is no down-side to transparency around police discipline. Police unions have cried privacy, a legitimate interest, especially in the early stages of allegation and investigation. But when official disciplinary action results, privacy should yield to accountability. 

Freedom-of-information (FOI) law is well experienced at balancing personnel-record access with personal-privacy exemption. Multistate FOI norms establish the flexible principle that a public official's power and authority presses down on the access side. Because police have state power to deprive persons of liberty and even life, privacy must yield to access more readily than it might for other public employees.

In September 2023, Stateline, citing the National Conference on State Legislatures, reported that "[b]etween May 2020 and April 2023, lawmakers in nearly every state and [D.C.] introduced almost 500 bills addressing police investigations and discipline, including providing access to disciplinary records." Sixty-five enacted bills then included transparency measures in California, Colorado, Delaware, Illinois, Maryland, Massachusetts, and New York.

The Massachusetts effort has come to fruition in online publication of a remarkable data set. Legislation in 2020 created the Massachusetts Peace Officer Standards and Training (POST) Commission. On the POST Commission website, one can download a database of 4,570 law enforcement disciplinary dispositions going back 30 years. There is a form to request correction of errors. The database, at the time of this writing last updated December 22, 2023, can be downloaded in a table by officer last name or by law enforcement agency, or in a CSV file of raw data.

The data are compelling. There are plenty of minor matters that can be taken at face value. For example, one Springfield police officer was ordered to "Retraining" for "Improper firearm usage or storage." I don't see that as impugning the officer, rather as an appropriately modest corrective and a positive for Springfield police. Many dispositions similarly suggest a minor matter and proportional response, for example, "Written Warning or Letter of Counseling" for "conduct unbecoming"/"Neglect of Duty."

Then there are serious matters. The data indicate termination of a police officer after multiple incidents in 2021, including "DRINKING ON DUTY, PRESCRIPTION PILL ABUSE, AND MARIJUANA USE," as well as "POSING IN A HITLER SALUTE." Again, it's a credit to the police department involved that the officer is no longer employed there. Imagine if such disciplinary matters were secreted in the interest of personal privacy, and there were not a terminal disposition.

The future of the POST Commission is to be determined. It's being buffeted by forces in both directions. Apropos of my observation above, transparency is not a cure-all and does not remedy the problem of police being charged with responsibility for social issues beyond the purview of criminal justice.

Lisa Thurau of the Cambridge-based Strategies for Youth told GBH in May 2023 that clarity is still needed around the role and authority of police in interacting with students in schools. Correspondingly, she worried whether the POST Commission, whose membership includes a chaplain and a social worker, is adequately funded to fulfill its broad mandate, which includes police training on deescalation.

Pushing the other way, the POST Commission was sued in 2022, GBH reported, by police unions and associations that alleged, ironically, secret rule-making in violation of state open meetings law. Certainly I agree that the commission should model compliance in rule-making. But I suspect that the union strategy is simply obstruction: strain commission resources and impede accountability however possible. Curious that the political left supports both police unions and police protestors.

WNYC has online a superb 50-state survey of police-disciplinary-record access law, classifying the states as "confidential," "limited," or "public." Massachusetts is among 15 states in the "limited" category. My home state of Rhode Island and my bar jurisdictions of Maryland and D.C. are among the 24 jurisdictions in the "confidential" category.

"Sunshine State" Florida is among 12 states in the "public" category. In a lawsuit by the Tallahassee Police Benevolent Association, the Florida Supreme Court ruled unanimously in November 2023 that Marsy's Law, a privacy law enacted to protect crime victims, does not shield the identity of police officers in misconduct matters. (E.g., Tallahassee Democrat.)

Western myopia marginalizes war in Sudan, Ecuador

My prayers, especially over the recent holidays, have admittedly felt cliché, if not comical, being dominated by desire for "world peace."

In case Ricky Gervais is right and prayer works like a democratic election (jk; it doesn't), I've focused on the conflicts of the world that my otherwise-trusted David Muir & co., reporting on Israel and Ukraine, seem quick to forget: Sudan and Ecuador.

I've written previously about Sudan (Apr. 2023, Sept. 2023). The New York Times in December reported a death toll in excess of 10,000 and displaced persons rounding 6 million. My friend from Khartoum remains safe abroad, but it looks increasingly like there will be nothing to come home to. I just read in Christianity Today that hospitals have been targeted and destroyed by the warring generals in the unscrupulous scorched-earth struggle.

I'm the last to rush to judgment with the r-word, but is there another explanation for seeming western indifference to this ongoing tragedy?

And then there's Ecuador, which in recent weeks also has entered a chaotic kind of civil war. It's a country dear to me for personal history there, but also of professional interest for fascinating and groundbreaking developments in constitutional law in recent years.

The Daniel Noboa Administration declared war on organized crime after drug lords were broken out of prison, almost certainly with the help of corrupt insiders. As Noboa cracked down, the country was besieged by retaliatory violence, especially in the Guayaquil Canton.

Efforts to remedy the desperate situation are closely related to the social and economic prosperity Ecuador experienced in recent decades. Ecotourism, again especially in Guayaquil, an access point for the Galápagos, had been an engine of economic and social development, precipitating recognition of rights of indigenous people and of nature with which the nation's courts were experimenting.

When I was last in Guayaquil about a dozen years ago, it was safe enough to walk around, for me, at least, by day. Security and the economy were on the upswing. On January 9, 2024, in contrast, the world was horrified to see armed terrorists, some of them teenagers, holding guns to the heads of journalists in a Guayaquil news station broadcasting live. My friend Ugo Stornaiolo Silva, an Ecuadorean lawyer living and working in Poland, reports that his family in Ecuador is safe, but the hatches are battened down. Domestic travel is out of the question.

Elected only in November 2023, Noboa promised to get a grip on drug trafficking and restore the rule of law. In a sense, then, the present violence is a promising sign of a much needed reckoning. Yet it remains to be seen whether the cause is winnable. Observers predict a bloody road ahead, or maybe worse if Noboa wavers in his resolve.

Ecuador's problem is part of the wider narrative of drug trafficking and human migration through Colombia and Central America, driven by the wealth, demand, and relative opportunities of the United States. America's backyard is declining into a mega-narco-state, while neither of our only choices of political party has demonstrated the will or ability to tackle the problem even in its domestic dimension.

Say what you will about China, the PRC recognizes that stability in its neighborhood is essential to the country's own national security. The means to the ends of course are problematic, exemplified by Nauru's recent change of alignment from Taiwan to China. But that matter again demonstrates the ascendancy of Chinese foreign policy over America's apparent appetite for isolationism.

Pray for world peace, as a spiritual matter. Know that it will only happen with American commitment, as a political matter.

*     *     *

As often happens in the course of the school year, my personal blogging in the fall semester had to yield to professional workload. I have been logging matters I'm eager to share and will endeavor to catch up in the coming months.

War protests expose double standards in higher ed

Ted Eytan CC BY-SA 4.0

I've refrained from commenting on the Israel-Hamas war, specifically and especially on the eruption of conflict, mostly, fortunately, non-violent, in higher ed in the United States, in which my own interests in academic freedom and free speech are most immediately implicated.

Despite my reticence—I'm under water with exams and a textbook deadline, though I follow the war closely in the news and remain in contact with friends in Tel Aviv—I read something in The New York Times that hit the nail on the head, so I want to amplify it.

In "Why Campus Speech Is Vexing" for The Morning from the Times, David Leonhardt wrote today:

[U]niversity leaders do face a basic choice. Do they want to expand the list of restricted speech to include more statements that make conservatives, Jewish students and others feel unsafe? Or do they want to shrink the list and tell all students that they will need to feel uncomfortable at times?

What since-resigned UPenn President Liz Magill said to Congress—essentially that the First Amendment protects a call for the genocide of Jews in the political abstract, absent hallmarks of unprotected speech such as incitement to imminent violence, or the severity and pervasiveness that characterize harassment—however socially and politically tone deaf, was technically a correct statement of the law from the former professor of constitutional law and Stanford Law dean.

The problem that Leonhardt recognized is that the First Amendment is not the standard that university administrators and their henchpersons have been applying on campuses for decades. Rather, hate speech codes, anti-discrimination policies, anti-bullying rules, and related prohibitions have proliferated and been enforced vigorously, First Amendment notwithstanding. And the standard has been a double one, because enforcement has been variable based on viewpoint, protecting only favored classes of minority persons or condemning disfavored, read: politically incorrect, viewpoints.

The problem is only compounded for university faculty, who are supposed to be the standard bearers for free expression, but have our livelihood hanging in the balance. At renowned schools where misdoings garner headlines, faculty might have a fighting chance to protect themselves. But what I've seen at the universities where the rest of us work, in the trenches, faculty routinely are intimidated, disciplined, and terminated for not toeing the line. When it happens in flyover country or in the lowest tiers of rankings, no one bats an eye.

When I was accused of stepping out of line years ago at another institution, Foundation for Individual Rights in Education founder Harvey Silverglate gave the local paper a quote condemning me. He apparently responded to the paper's inquiry with the assumption that a typically liberal law prof had gone off the rails. He failed utterly to learn anything about the case before he opined on it. When a mutual friend reached out to tell him that "he got it wrong," FIRE adjusted its public position thenceforth. But Silverglate never retracted his remarks, nor ever said anything apologetic to me.

At the University of Massachusetts Law School, which ranks at #167 in the U.S. News ranking of U.S. law schools, I've been told that University of Massachusetts policy, which requires that all employees show "respect" for all other employees, is violated by calling out misfeasance. So when I see an opportunity through faculty governance to do things better for our students and our community, I keep my mouth shut.

Tenure means nothing in these fights. I wrote many years ago about that paper tiger. Big-name-school academics, who don't have to toil at the hamster-wheel-spinning labor of assessment data collection and interim-strategic-plan-benchmark-attainment reports, don't well understand how faculty governance roles, as distinct from teaching and research responsibilities, are weaponized against faculty in the schools of the trenches.

Just last week, I completed a survey on academic freedom by the University of Chicago NORC that asked about ideological intimidation of faculty. The check-all-that-apply list of contexts in which intimidation or suppression of viewpoints might happen named a range of research and teaching contexts, but, true to form, University of Chicago, said almost nothing about school and university service roles. I added the response in "Other."

Professor Keith E. Whittington recently published a characteristically compelling paper on faculty "intramural speech" and academic freedom. It doesn't cite my 2010 work, in which I coined the term "penumbral academic freedom." I was working in a flyover state then, so it's like the paper never existed. Or maybe, as an east-coast, Duke Law would-be mentor once gently advised me when I was toiling voicelessly in flyover country, I should accept that my writing just isn't very good.

Well, I digress. My aim here is principally to say: When Magill fell, and as Harvard President Claudine Gay flounders, I'm torn between a head-shaking sorrow for the supposed quintessential marketplace of ideas and a mite more than a modicum of schadenfreude.

Back to work. The provost's dusty bookshelf is crying out for another strategic plan, and these exams aren't going to grade themselves.

FTC 'junk fees' proposal needs tightening

The CFPB is attacking junk fees in banking. The FTC rule
would govern consumer sales transactions. CFPB image.

Today I submitted the following comment to the Federal Trade Commission on the notice of proposed rule-making regarding "Trade Regulation Rule on Unfair or Deceptive Fees." These are the "junk fees" that the Biden Administration has pledged to combat.

The NPRM was published on November 9, 2023. You too can comment at the Federal Register website. You can bet that business will be crying loudly about the impracticality of simply telling customers what the price of a thing is.

I support the proposed rule, though I don't think it goes far enough. My comment focuses on select points of ambiguity on which already I foresee business intransigence.

Elsewhere in the world, even tax is part of a price. When my friends and family visit from abroad, they are flummoxed by the repeated experience of seeing a price and then having to pay more. For some reason we countenance this in America, as if in some kind of wild West approach to market regulation, it's OK for a seller to put a gun to the consumer's head at the point of sale. As I say in my comment, that is not what "free market" means.

---

December 6, 2023

I support the proposed rule because I support free-market transaction and regulatory policy. A free market requires transparency around the terms of transaction to both buyer and seller. When a buyer is surprised by junk fees, that is, fees that are applied to a transaction after the customer believes that she or he has concluded negotiation of the terms, the seller is able to conclude the transaction upon an unfair advantage. It is an appropriate role for government regulation to level the marketplace by ensuring transparency, and that means upfront total pricing.

I note [a] point of potential ambiguity, and, thus, potential abuse by sellers. In the proposed rule, “Government charges” are defined as

all fees or charges imposed on consumers by a Federal, State, or local government agency, unit, or department. This definition covers only fees or charges imposed by the government on consumers and does not encompass fees or charges that the government imposes on a business and that the business chooses to pass on to consumers.

I anticipate argument over two points.

First, I expect that quasi-governmental actors, such as a corporations created by statute, and government contractors, such as service concessionaires, are not agencies of government. Sellers might disagree.

Second, if a governmental actor compels a seller to report and pay a per consumer or per transaction fee, I expect that the fee is nonetheless a fee that the business “chooses to pass on to consumers.” Sellers might disagree.

By way of example, I have just made a car reservation with Avis at BWI. My upfront price was $104.82.

On the payment page, the following fees were added:

• Concession Recovery Fee (11.11%): 12.27
• Customer Facility Charge-3.75/day: 7.50
• Transportation Facility Charge-2.25/day: 4.50
• Vehicle License Fee-0.56/day: 1.12
• Total Tax: 14.97

The additional fees sum $40.36, which is a 38.5% markup on the upfront price.

All of these fees are sanctioned by Maryland law. The former two fees are passed on by Avis to the Maryland Airport Authority (MAA), and the latter fee is, self-evidently, a tax. I do not know the beneficiary of the penultimate two fees, but I assume that the Transportation Facility Charge goes to an MAA shuttle contractor.

So first, is the MAA contractor a “government agency, unit, or department” under the proposed rule? I suggest no, because contractors and concessionaires, like quasi-governmental “sue or be sued” entities created by Congress, are expected to comply with the rules of the competitive marketplace when they act in a commercial capacity. However, Avis might disagree, arguing that the fee is set by the MAA. The MAA is a governmental unit of Maryland state government.

Second, are these fees “impose[d] on a business[,] and … the business chooses to pass [them] on to consumers”? I suggest yes, because Avis owes these fees to the MAA, et al., but is not obligated to pass them on to consumers. As long as Avis accounts for the fees with the government, Avis remains free to price its services as it pleases. Moreover, to calculate the state tax on the car rental, 11.5%, the tax basis includes the fees. Thus, it seems plain to me that the fees represent the price of service and are not akin to a tax that is imposed upon the transaction. However, Avis might disagree, arguing that the seller is a mere conduit for fees set by the MAA.

I suggest that the junk-fee rule is virtually impotent in a broad range of transactions if it does not address fees in a transaction such as this one. While I might like to see tax and all incorporated into upfront pricing—as it is in countries the world over—I understand that that is not the American custom. But any fee besides tax on sale or service should be disclosed to a customer as part of an upfront price. Otherwise, the proposed rule is completely undermined. I must go all the way to the payment page of the Avis transaction before I discover the actual price, a substantial markup, for the transaction I desire.

I hope you will clarify that government contractors and comparable quasi-governmental actors are not governmental actors within the meaning of the proposed rule. And I hope you will clarify that government-sanctioned fees that are incorporated into the tax basis of a transaction, even if imposed on a per customer or per transaction basis, are fees that a seller “chooses to pass on to consumers.”

Professor Marshall Shapo leaves extraordinary legacy

Marshall S. Shapo
Northwestern photo by Jasmin Shah

Barukh atah Adonai Eloheinu melekh ha'olam, dayan ha-emet. 

A luminary in American legal education, a brilliant scholar in torts, and a dear mentor and friend, Professor Emeritus Marshall S. Shapo died Friday, at 87, in Chicagoland.

A professor at Northwestern University Law School for more than 40 years, most of his more-than-half-century academic career, Shapo was a prolific scholar and award-winning authority on torts and product liability law. In his books, articles, and teaching, Shapo saw tort law as inextricable from culture, politics, and society. Accordingly, he approached his subject matter holistically, embracing historical, economic, and critical perspectives as all essential, and none alone definitive, to understand the law.

It was that breadth of perspective that prompted me to adopt the second edition of Shapo's Tort and Injury Law as my textbook when I started teaching torts 20 years ago, in 2003. Reflective of Shapo's versatility of mind and insatiable curiosity, his pedagogy challenged students at once with writings in ancient philosophy and religion, and with theories of economics and feminism. References to the Torah appeared alongside excerpts from research in the latest interdisciplinary social science.

I reached out to Marshall in 2003 for guidance in using his book; I did not then suspect that he would become my extraordinary mentor. I was privileged to join Tort and Injury Law as a co-author for the third edition in 2006. My teaching today in torts, and in Tortz, is and forever will be a product of Shapo's worldview. His teaching lives on in my career and classes, and no doubt in the practices and lives of his generations of students and mentees, and theirs in turn.

Yet Tort and Injury Law was a only small part of Marshall's importance to me. Of incalculable value were his insights into academic life, his counsel, especially in times of hardship, and, so often, simply his enduring friendship. As relentlessly busy and productive as he always was, he called me periodically with no agenda, just to check in. However much I wished not to burden him with mundane ups and downs, he somehow, with the skill of a seasoned counselor, elicited my confessions. His humility and wisdom were invariably comforting. Never was there a frustration—a discontented student, a shortsighted colleague—that Shapo had not faced and hurdled already in his career: evidence that I, too, could land well on the other side.

Shapo above else modeled balance of work and life. His obituary honors his surviving wife, Helene—also an inspiring and renowned legal educator—sons, Benjamin and Nathaniel; and six grandchildren and great-grandson.

Appropriately, Shapo's family led off the obituary, before any mention of his career. Marshall himself placed his wife and sons at the top of his CV. Never did I have a catch-up conversation with Marshall in which he did not update me on their well-being. When speaking of grandchildren, he radiated with a joy that not even product liability litigation could evoke. All of his accomplishments and honors as a lawyer and educator meant nothing to him in comparison with his devotion to family.

Marshall, rest in peace.

The Shapo family invites memorial contributions to the American Parkinson's Disease Association, P.O. Box 61420, Staten Island, N.Y. 10306.

Gunshots are the soundtrack of America

A shooting range features at Elvis's Graceland.
Adam Fagen via Flickr CC BY-NC-SA 2.0

'Tis the season for gunshots and sirens.

The last weekend in October, I spent the night at a Memphis hotel near the airport to catch a 5 a.m. flight homeward. I pulled up to the hotel on Elvis Presley Boulevard in the Whitehaven neighborhood to see people running and chaos at the restaurant across the street, Tha Table. Before long, police came streaming in, sirens blaring. A fire engine and an ambulance followed.

Two men were shot and killed. One was the owner of Tha Table; it looks like he came out into the parking lot to confront would-be car thieves, one of whom shot him with an automatic weapon. The other person killed was a bystander "in the wrong place at the wrong time," Fox 13 Memphis said, merely driving by with his three young children in the car on the way to a park.

A man arrested in the shooting, police say found with weapons including an AR-15 and a Glock with switch (converting the pistol into an automatic weapon), blames his companions for firing the fatal shots, Fox 13 reported.

When I left the hotel later that night, to go to a gym in West Memphis, I had to ask police to let me drive out and back under yellow tape that had cordoned off the block.

That shooting occurred as I arrived at the Red Roof Inn at about 3:30 p.m.  Just eight minutes later, two-and-a-half miles down the same road, a 15-year-old was shot at an Exxon station. According to WREG, he was selling water at the side of the road at the time. He was transported by a private car to the hospital and reported in critical condition.

When I came back from the gym, I fueled up at that Exxon, to return my rental car full the next morning. I didn't know about the second shooting until I got back to my room and checked the news about the first shooting.

About 60 hours later, a 19-year-old sitting in his car at a gas station in West Memphis was fatally shot multiple times by another customer, KARK reported. I was long gone, but that shooting took place 500 feet from the gym I had gone to, just around a corner. I learned of that third shooting when I checked the news to see if anyone had been arrested in the earlier two.

It happens that while I was in Memphis and Arkansas, I visited an old friend and mentor I had not seen in many years. He retired in recent years from work in Memphis and told me he wants to move away. He's tired, he said, of having to worry every day about being car-jacked.

I also visited my aunt and uncle at their home in south Little Rock. They've been renovating, and their place looks great, homey. They're very happy there, my uncle said, except only for the unwelcome ring of gunshots at night. Sometimes the shots ring so close to the house that they fear they're being targeted. My uncle, a Vietnam vet, lamented of the contemporary life of youth in the Little Rock neighborhood: "I'd rather be judged by twelve than carried by six."

When I boarded my plane home from Memphis, I overheard one flight attendant telling another that she's looking for a new apartment. She was working through the calculation of finding lower rent, but having to hear gunshots at night.

As I rejoined the world that Monday, I learned about the Lewiston, Maine, shootings, and that the suspect was found dead from a self-inflicted gunshot wound. He had killed 18 people and injured 13 just before I left home for Memphis. Ensconced as I was in my business away, I had not known the details. It was a kind of blessing, I figured, that I didn't know what was happening. While the suspect was at large, I did not know to worry about my wife in Rhode Island or a friend's son at university in Vermont.

I'm not a gun control advocate. I believe the Supreme Court got it right when it said that the Second Amendment protects an individual right to bear arms. I'm informed by the Second Amendment analysis of my constitutional law professor, William Van Alstyne. I believe that the Second Amendment anticipated the possibility that revolution might one day again be necessary.

At the same time, I don't want life cut short for me, my family, or my friends just because I drove to the park at the wrong time, or a stray bullet pierced the walls of my home. The price of the Second Amendment cannot be that gunshots and sirens are the soundtrack of American life.

Sorry, if you read this far thinking I'd have the answer; I don't. 

I want to be prepared to revolt when the time comes, because I think that corrupt politicians already have aggrandized an excess of power; that they now represent corporations, not constituents; and that the federal legislature has become perhaps irretrievably dysfunctional.

I also want the people I love to be safe against meaningless violence. I don't want to live in the Wild West of the movies.

I want my tres leches and to eat it too.

Court quashes $19m side deal in casino creation

Encore Boston Harbor, shiny and new in 2018.
Photo by Pi.1415926535 via Wikimedia Commons CC BY-SA 3.0

A $19m side deal in a major casino real estate transaction is invalid and unenforceable as a matter of public policy, the Massachusetts Supreme Judicial Court ruled this morning.

The ruling demonstrates the rarely seen hand but overriding importance of public policy in the law of obligations. The state high court was answering a certified question from the First Circuit.

First, some context.

For the record, nobody does corruption in America like northeasterners. It's been eye opening for me, living in this part of this country for the first time in my life, since moving here in 2011: the weird way roads and bridges remain perpetually under construction for decades—the orange barrel is said to be Rhode Island's state flower; the revolving doors that shuffle politicians between corporate boards and regulatory bodies and back again. Everywhere I've lived—"developed" world or not—I've seen the continuum of corruption that runs from smoke-filled rooms to the open-and-legal-yet-shocking. But you have to take your hat off to the New York-Boston corridor, where milking the system is a way of life. If the taxpayer is a cash cow, then this is Big Ag.

It's for that reason that I have found myself strangely attracted, like a rubbernecker to a car wreck, to everything having to do with the creation of a Wynn-operated casino complex, the Encore Boston Harbor, in the once rusty, quaint, and relatively sleepy Boston suburb of Everett. 

I liked Everett when I discovered it. It's rough around the edges, but genuine. I had to be there now and then, and I found both a corner bar and a gym I liked. Everett reminded me of the working-class neighborhoods of my hometown Baltimore. First news of a casino project in Everett broke when I arrived in New England in 2011, so I became interested in the natural social science experiment that ensued.

A piece of the development of the Encore project landed in the courts. When Wynn enterprises sought to site a casino in Everett, they offered to buy land from an outfit called FBT Everett Realty, LLC, for $75m. And because Wynn also was looking for a casino license, the real estate transaction drew the attentive oversight of the Massachusetts Gaming Commission.

As anyone who studies development will tell you, these major land acquisitions are always suspect. I remember when Baltimore announced plans to build the twin Ravens and Orioles stadiums in the heart of downtown, and there were rumblings, however futile, about the strangely coincidental land rush that had occurred in the area prior to the announcement. Too many buyers had political connections, and they profited handsomely by flipping their deeds over to the quasi-public stadium projects. That's how economic opportunity works in America, at least for people who pay the lower tax rates for capital gains.

In Massachusetts in 2011, the commonwealth had newly opened itself to big-time, Las Vegas-style gambling, so the commission was under heavy scrutiny to do its due diligence. Though it couldn't prove the precise relationship, as the Supreme Judicial Court explained, the commission suspected that an FBT co-owner was "a convicted felon with possible connections to organized crime": naturally, a red flag in gaming regulation. To its credit, the commission put the brakes on the real estate transaction and conditioned its casino approval on a renegotiation. FBT had to buy out its suspicious stakeholder, and the purchase price was dramatically reduced to $35m.

One minority owner of FBT was unhappy with the new deal and demanded compensation for the reduction. It happened that the same minority owner had bought out the interest of the problematic co-owner and still owed him money. To quell the quarrel and get the deal done, Wynn made a side deal in which it would pay the minority owner $19m, a proportional share of the price reduction that had satisfied the commission.

Wynn didn't pay, and the minority owner sued, alleging breach of contract, common law fraud, and unfair trade practices under the commonwealth's powerful and wide-ranging consumer protection statute, "chapter 93A." Ultimately resulting in the instant case, the First Circuit asked the Massachusetts Supreme Judicial Court to assess the enforceability of the side deal.

The high court opened its analysis with the supreme public policy of America, "The general rule of our law is the freedom of contract" (quoting Massachusetts precedent that in turn quoted the U.S. Supreme Court in Smith v. The Ferncliff (1939)). "However," the court qualified, "it is 'universally accepted' that public policy sometimes outweighs the interest in freedom of contract, and in such cases the contract will not be enforced" (also quoting state precedents).

I just finished a unit of 1L torts in which the class sees the interaction of tort with contract and equity principles in the assumption of risk. Specifically, we see how theories in equity, if rarely, can quash a cause of action or vitiate an affirmative defense. I hasten to clarify that public policy, like equity, is not a rule of law. It's like someone saying to the court "I should win, despite the rule, because that's what's best for society." It's why the judge gets to wear a sharp black robe, sit on a dais, and wield a gavel: to bring human judgment to bear when the usual operation of law would defy common sense. It's why judges cannot be replaced by AI. Yet.

Gaming regulation is among the "core police powers" of the political branches, the court reasoned. And the legislature clearly empowered the gaming commission to ensure "the integrity of the gaming licensing process" with "strict oversight" and "a rigorous regulatory scheme." The $19m side deal was within the scope of the commission's broad mandate. The deal had not been disclosed to the commission and it was inconsistent, the court opined, with the property sale that the commission approved.

The court had little trouble concluding: "Secret deals in violation of the public terms and conditions required for gaming licensure are unenforceable violations of public policy. They place in grave doubt the integrity of the public process for awarding the license, and thereby defeat the public's confidence in that process."

The Encore project has been a powerful economic boost to communities north of Boston, including Everett, delivering an infusion of business in the billions of dollars. The construction phase especially yielded social and economic benefits, creating jobs and opportunity.

Of course, the secondary effects of "sin" businesses such as casinos don't turn up until the projects have been in operation for awhile, and then especially as they age and decline in high-end commercial appeal. To date, there is conflicting evidence on the social impact of Encore with regard to factors such as crime and the environment. For me, the jury is still out on whether north Boston will see a net benefit from Encore in the long term. I hope it does, but I'm skeptical.

Game on.

The case is Gattineri v. Wynn MA, LLC, no. SJC-13416 (Mass. Nov. 3, 2023). Justice Scott L. Kafker wrote the unanimous opinion of the court. The case in the First Circuit is Gattineri v. Wynn MA, LLC, no. 22-1117 (1st Cir. Mar. 22, 2023) (referring questions).