Monthly Archives: March 2010

Will One Breakfast Cost a Colorado Woman $42 Million?

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Good Morning America had an interesting interview this morning with Louise Chavez, a Colorado woman who claims she won $42 million from a slot machine jackpot.

“All of a sudden I saw the light come on on top of the machine,” Chavez told “Good Morning America.” “I’m like, ‘Oh, my God! Oh, my God!’ I’d never had this feeling before in my life, never.”

The payout she was expecting? $42,949,673. She said she usually makes about $12,000 per year as an in-home personal care provider.

But champagne and caviar dreams quickly evaporated.

Casino employees told Chavez that the machine had malfunctioned, that the jackpot was WAY too large, and refused to pay the jackpot.  Although the linked story doesn’t mention it, Chavez noted this morning that the casino offered her a free overnight stay, a breakfast, and a refund of the money she played in the machine.  She refused everything but the breakfast.

Could that breakfast have constituted an accord and satisfaction?  ”An accord is a contract under which an obligee promises to accept a stated performance in satisfaction of the obligor’s existing duty.  Performance of the accord discharges the original duty.”  Restatement (Second) of Contracts § 281(1).  In other words, accord and satisfaction would have occurred if the parties agreed that, instead of receiving $42 million, Chavez would receive yummy breakfast.

It sounds crazy, but by eating the breakfast, it seems like the casino could at least argue that Chavez implicitly agreed to an accord and satisfaction.  Scarfing down delicious bacon is, after all, an objective act.  Such a situation would be analogous to a plaintiff cashing a settlement check:  when the plaintiff cashes a check that is meant to be full settlement, the plaintiff cannot turn around and sue.  The actual outcome would of course depend on what the casino said to Chavez.  If they said, “We want to make you happy, have some breakfast,” Chavez has probably still got a chance at that jackpot.  But if they were smart, they said something like, “We can resolve this conflict right now.  We’ll give you breakfast, etc. to make everything even, deal?”

The worst part about all this?  Chavez said the breakfast “wasn’t even that good.”  If you’re going to pay that much for eggs, they better be good eggs.

-Michael

Toxic Fun

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One of the only big cases I’ve been involved in since joining my current firm is a toxic mortgage assets case.  Even though the econ. side of me thinks the stuff is pretty interesting, most people’s eyes glaze over when I start talking about SPVs and credit enhancements and magic gnomes.  (Ok, so maybe there are no magic gnomes in mortgage-backed securitizations, but there should be.)

Anyway, the folks over at NPR’s Planet Money actually went out and bought one of those assets.  Now, they’re explaining what’s happening to it,in a more interesting, none-eye-glazing way than I ever could:

Planet Money is committed to following the financial crisis to the bitter end. And what better way to do that than to own a piece of it. We bought one of those things that no one wanted, one of those things that almost brought down the global economy: our very own toxic asset. This one has more than 2,000 mortgages in it. We paid $1,000, with our own money, for our piece. It used to be worth more like $75,000. Click on the timeline and roll over the states to watch a disaster in progress.

Readers have named the asset “Toxie.”  Click over to watch Toxie die a slow death.

-Michael

When Did The Volokh Conspiracy Go Crazy?

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So I apologize for blogging about another blog (how very meta, right?), but I had to note something. . .

I used to read The Volokh Conspiracy religiously.  In the past, the legal blog full of scholars, academics, and respected practitioners used to host some interesting discussion with a right-of-center bent.  For the past few months, though, I’ve noticed that the site just doesn’t have the same draw for me as it used to.   Each writer on the site seems fixated on one or two topics:  Eugene Volokh only talks about free speech and gun nut issues (predictably), newer writer Stewart Baker seems to be conservative-asshole-in-chief, Todd Zywicki rants against anything that might be liberal, and David Kopel does a pretty good impression of me (long, rambly posts about nothing at all).  The site has also gone from right-of-center to right-of-Rush Limbaugh.

Sure, there are still a few decent things written on the site.  (I’m looking at you, Prof. Kerr.)  But as someone said to me the other day, “The site has just become too political.”  And too “meh.”

Has anyone else noticed that the site has been sucking it lately?

-Michael

51st State Joins Heath Care Lawsuit?

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In reading over the Complaint filed by various state Attorneys General against the health care bill, I noticed something interesting.  Paragraph 14 of the Complaint notes that the state of “Nebraska Carolina” is a plaintiff in the lawsuit.  Not only that, but it’s a “sovereign state in the United States of America.”

I can only guess that some fine folks from North Carolina and Nebraska have gotten together and formed a new state!  Having lived in both states, I congratulate the new sovereign, and wish them the best of luck in their lawsuit.

But does this mean we have to add another star on the flag?

-Michael

Update:  The first paragraph also lists the plaintiffs, but has a bracketed “[ADD STATES AND AG’s]” rather than the party names.  Do the lawyers over at Baker Hostetler not know how to proofread?

brb, out of town.

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There are exactly two conferences this year that I had any interest in attending: the American Society of International Law Annual Meeting and PAX East. This meant, predictably, that they would both be scheduled for the same weekend. Drat it. Gaming vs. international law, how’s a girl possibly supposed to decide?

But I guess it’s clear where my priorities lie. The ASIL Annual Meeting is conveniently located in Washington, DC — but I’m going up to PAX East instead, whoohoo. I still think the ASIL people should have thought this through and rescheduled the conference, so as not to cause any conflicts for me, but they declined to do so.

-Susan

Cuccinelli Birther – Health Care Conspiracy, Redux

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Half of the predictions in my last post has come true. According to the Washington Post, Cuccinelli’s office confirms Virginia will sue over health care. As Cuccinelli noted, the only way he, as the AG, could get a chance to challenge the Obama birth certificate is “only if there is a conflict where we are suing the federal government for a law they’ve passed. So it’s possible.” Looks like he found his chance. According to the AG’s letter to Rep. Pelosi,

[T]o be validly enacted, the Senate bill would have to be accepted by the House in a form that is word-for-word identical. Should you employ the deem and pass tactic, you expose any act which may pass to yet another constitutional challenge. (Emphasis added.)

And just what, pray tell, are the ‘other’ challenges? That the Bill was not signed into law by a valid president?? You heard it here first, folks.

-Susan

Could the Virginia Attorney General Use Federal Health Care Reform to Bring the Obama Birth Certificate Controversy to Trial?

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h/t Blogasm

Virginia Attorney General Ken Cuccinelli has been learning the hard way that prohibiting educational institutions from prohibiting discrimination against gays and lesbians is not a good way to make friends. He is also learning that it tends to lead to an unwanted increase in scrutiny from the public. Although Cuccinelli was not a name anyone not unusually dedicated to Virginia politics would know, that all changed after he told Virginia universities that they were not allowed to forbid discrimination based on sexual orientation.

As a result of this new-found notoriety, a blogger has turned up an audio clip in which Cuccinelli speaks about his possible “birther” beliefs:

Q What can we do about Obama and the birth certificate thing?

Cuccinelli: It will get tested in my view when someone… when he signs a law, and someone is convicted of violating it and one of their defenses will be it is not a law because someone qualified to be President didn’t sign it.

Q: Is that something you can do as Attorney General? Can you do that or something?

Cuccinelli: Well only if there is a conflict where we are suing the federal government for a law they’ve passed. So it’s possible.

Ouch. I bet today wasn’t a very fun day for the AG’s office.

For the record, no, I don’t actually think it’s even remotely likely that Cuccinelli intends to launch such a campaign challenging the validity of all post-Obama federal enactments. But clearly Cuccinelli has at least thought about the quest as an academic matter, so I’m allowed to do so as well.

And Cuccinelli’s right. He very much could institute a suit challenging President Obama’s qualifications for the presidency. And given his office, such a case would likely be taken a lot more seriously than anything instituted by lawyer-dentist Orly Taitz.

So assuming Cuccinelli did intend to argue in court that Obama is not the lawful president, where might he find such a possible conflict between Virginia and federal law to bring the case to court?

Well, conveniently, the Virginia state government recently enacted what is potentially the perfect vehicle for such a law suit: the Virginia health care nullification bill. (Of course, Cuccinelli would have to beat out the Florida Attorney General if he wanted to be first to challenge it in court.)

Nullification refers to the practice of states passing legislation that purports to contradict or nullify a federal enactment. Under the Supremacy Clause, the theory of nullification does not have much of a legal leg to stand on, though it remains as a fairly powerful form of symbolic protest by states against the federal government.

Most legislators know this, and do not seriously believe that a nullification law can do what it purports to. This is somewhat problematic in its own right — as a general rule, and ignoring my own personal opinions on the desirability of a federally enforced individual mandate, I strongly dislike the idea of states deliberately passing unconstitutional laws in order to make a political point.

Moreover, the last time Virginia engaged in a campaign of nullification was back in the 1950′s, when Virginia passed a series of laws resisting desegregation, using a number of different convoluted legislative strategies to try and avoid the force of federal law. These attempts were eventually struck down by federal courts.

Nevertheless, Virginia went ahead and became the first state to enact a bill that purports to negate any potential federal health care bill that would require citizens to purchase insurance. The bill

“[p]rovides a resident of the Commonwealth shall not be required to obtain or maintain a policy of individual insurance coverage except as required by a court or the Department of Social Services … The measure also states that no provision of Title 38.2 renders a resident liable for any penalty, assessment, fee, or fine as a result of his failure to procure or obtain health insurance coverage.”

If this bill were ever challenged in court, and the commerce clause challenges to it were swatted aside, Cuccinelli could always argue that the Virginia statute is lawful because the supposedly preempting Federal health care bill was not signed into law by a Constitutionally valid president.

So if Cuccinelli really wanted to go ahead and prove that Obama was some sort of Constitutional changeling, with his qualifications for the Presidency switched at birth, assuming a federal bill with a provision for individual mandates ever gets passed, he’ll have his chance.

-Susan

Meat Legalization Movement Earns Delicious Victory in Iowa

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Yummy, delicious food has recently come under increasing fire across North America.  In New York, one legislator proposed a ban on salt in restaurants.  In British Columbia, a town is considering a ban of fast food (something that has already been done in South Los Angeles and other places).  California will soon bar the sale and production of foie gras.  Even parts of Kentucky — home of Kentucky Fried Chicken – are considering a trans fat ban. 

Food finally struck back when Iowa recently ‘legalized‘ awesome loose meat sandwiches called Maid-Rites.  There were, of course, stupid “do it for the kids” people who voted against the sandwiches, which were deemed dangerous because of the cooking method.  Said one Senator:

“I’m the mom of six kids. E. coli’s a big deal. I think we ought to protect kids.”

Thankfully, however, some legislators ignored the stupid kids and sided with beef:

“Maid-Rites are very important to me.”

Well said, Senator.  God bless Iowa.

-Michael

First One @ One First = Fraud?

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The legal blogosphere has recently given a lot of attention to Mike Sacks, the Georgetown 3L and author of “First One @ One First” who aspires to be the first one in the Supreme Court’s general admission line for “every politically salient case from January through April.”  He’s even posting over at Above the Law now.  The gimmick is certainly interesting, and his writing is good (though a bit pompous).  But is he really trying to make it to every “politically salient” case?  Or is the gimmick really an overstatement?

As Susan has already mentioned, we (unsuccessfully) tried to see Samantar v. Yousuf when it was recently argued.  I was the second person denied entry (at #52), while Susan got pushed all the way back to #69 (*giggle*).  As I stood there trembling in the cold, one of the guards walked up and asked, “What is this case about? There are more people here today than there were for McDonald.”   The guard was right:  there were tons of people there, stretching all the way down the steps of the plaza and along the sidewalk on First.

With a case that popular, one would expect Mr. Sacks to deem it “politically salient.”  Mr. Sacks, however, was nowhere to be found.  Turns out, he decided to sit this one out.  Wha?!  By his own definition (given on Above the Law), this case was somewhere between a “mid-major” and a “blockbuster,” as I got there before 7am and still didn’t get a seat.  Why didn’t he at least try to show up?  Of course, he concedes that he has not always been first in line, even for the ones he deems important.  But this time he didn’t even try.

I propose he rename his blog “Frequently Towards the Front of the Line at One First.”  I say this recognizing that, in the end, it’s not a big deal if some Georgetown 3L has taken liberties with his blog title.  And my title doesn’t have the same ring as “First One . . .”  But can’t we stop paying so much attention to a guy who can’t even follow through on his own schtick?

-Michael

Update:  A gracious Mike Sacks comments, “Busted.”  I’m glad to see he didn’t take my little review too seriously (and that he recognized it as the tongue in cheek piece I intended it to be).

Gay Rights as Economic Policy

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Whether or not sexual orientation can be made a protected class by Virginia agencies has been a very prominent news topic the past few weeks. When Governor McDonnell eliminated anti-discrimination protections for gays and lesbians, I doubt he expected a political quagmire to erupt. The heat on McDonnell only got worse last week when Attorney General Cuccinelli issued an opinion stating that Virginia’s public schools and colleges were prohibited from treating sexual orientation as a protected class.

Those opposing Governor McDonnell policies, however, now have a new argument to add to their list of reasons reversing McDonnell’s exclusion of gays and lesbians from state protection: economic policy.

Although gay rights have long been debated on the basis of morality, human rights, and equality, the current debate in Virginia has started to strike a rather pragmatic tone. While the Falls Church School Board reacted to Cuccinelli and McDonnell’s recent actions by defying the State government and adding gays and lesbians to its anti-discrimination policy, the Falls Church Chamber of Commerce has released a (draft) statement focusing on the fiscal considerations. If McDonnell’s policies stand, they argue,

“[M]any new and relocating businesses will choose to avoid Virginia because this posture on discrimination (by Cuccinelli-ed.) will have a profoundly chilling effect on prospective employees, contractors, vendors and customers… Surveys confirm overwhelmingly that those seeking employment in the high-tech sectors of the national economy, such as defines the predominant economic growth of Northern Virginia, hold very strongly to values of equal rights and justice for all persons.”

This is more than a hypothetical. Northrop Grumman, a California-based company, is planning to move to the East Coast — the mid-Atlantic, to be precise, and Virginia, Maryland, and D.C. are all courting the corporation. Last month, a Maryland representative wrote a letter to Northrop suggesting that Maryland would make a better new home for the company, as it does not have the exclusionary policies Virginia does.

Yesterday, however, a State Senate panel voted to add the following language to a bill designed to encourage Northrop Grumman to relocate to Virginia: “The Commonwealth of Virginia maintains an ecumenical atmosphere in its sexual orientation hiring policies in the private and public workforce.”

And passing this sort of legislation makes sense, from the perspective of a state seeking to vitalize the local economy. On first blush, whether or not Virginia provides protections to gays and lesbians wouldn’t seem to be an important business consideration, as State discrimination policies have no effect on a private corporation’s own internal regulations. However, it could make a very real difference in acompany’s operations, through affecting the signaling strategies the company hopes to adopt as well as the quality of the local talent it hopes to recruit. A state with an open minded and modern view on gays rights may well prove to be a better source of the dynamic, modern work force that corporations need in order to synergize and break the paradigm, or whatever else it is big corporations do.

A company could also help establish a “hip and vibrant” image by settling in a more socially progressive state in order to improve its corporate branding. For instance — and no offense intended to my home state’s lovely next door neighbor — but if Google were based in Alabama instead of Northern California, it would probably not have succeeded in attracting a lot of the young, college-educated talent that it does have.

Unfortunately, the gay-friendly language was eliminated from the Bill today, showing that Virginia is not quite ready to embrace gay rights as a fiscal policy initiative. This whole episode, however, does indicate the potential of using market forces as a way to promote human rights.

-Susan