Maintaining Online Copy of Court Opinion Isn’t Libelous, Even When It’s Reversed

From Thomas v. Leagle, Inc., decided Oct. 23 by Judge David Carter (C.D. Cal.), but just added to Westlaw:

The following facts are taken from Plaintiff’s Complaint …. Defendant Leagle, Inc. … operates a website that provides information about legal cases, including publishing copies of judicial opinions. [Leagle] published a trial court order where Plaintiff was found liable for fraud in a California state trial court.

An appellate court subsequently reversed the trial court, and the case against Plaintiff was dismissed with prejudice. Defendant did not update its report of the trial court’s opinion to indicate that the opinion was reversed and Plaintiff was not liable for fraud. According to Plaintiff, the Leagle’s reporting “created the false impression that a final judgment has issued finding that Thomas was guilty of civil fraud.”

After unsuccessfully trying to persuade Leagle to remove its report or update it, Plaintiff filed this lawsuit. Plaintiff alleges Defendant’s allegedly misleading reporting constituted defamation, and “false light invasion of privacy.”

Despite being served with the Complaint, Defendant never filed an answer or otherwise defended against Plaintiff’s suit. Accordingly, Plaintiff moved for default judgment. In his Motion, Plaintiff seeks nominal damages of one dollar, costs of suit, and a permanent injunction prohibiting Defendant from publishing the state trial court opinion without a disclaimer that the action was later dismissed with prejudice….

Federal Rule of Civil Procedure 55(b) provides that the Court may, in its discretion, order default judgment following the entry of default by the Clerk…. Upon entry of default, the well-pleaded allegations of the complaint are taken as true, with the exception of allegations concerning the amount of damages. However, “… claims which are legally insufficient[] are not established by default.” …

The court concluded these claims are indeed insufficient:

Plaintiffs allege that Defendant’s report of the trial court order where Plaintiff was found liable for fraud constitutes defamation and false light given that the ruling was reversed on appeal and the case dismissed with prejudice. Plaintiff does not claim that Defendant inaccurately reported the trial court’s order but rather that the report was misleading and incomplete….

“The fair report privilege confers an absolute privilege on any fair and true report in, or a communication to, a public journal of a judicial proceeding, or anything said in the course thereof.” “‘Fair and true’ in this context does not refer to the truth or accuracy of the matters asserted in the judicial proceedings, but rather to the accuracy of the challenged statements with respect to what occurred in the judicial proceedings.” When the privilege applies, the reported statements are “absolutely privileged regardless of the defendants’ motive for reporting” them.

Here, [Leagle]’s publication of the trial court order finding Plaintiff liable for civil fraud is unquestionably a “fair and true” reflection of what happened during a judicial proceeding. Although the order that [Leagle] published was reversed, the appellate court’s reversal does not change the fact that Plaintiff was found liable in the trial court, and thus does not alter the accuracy of [Leagle]’s reporting. Thus, Leagle’s reporting is protected by the fair report privilege and the motion should be denied.

Finding liability here would also be inconsistent with the fair report privilege’s purpose. The fair report privilege is an exception to the normal common-law position that one who republishes a libel adopts it as his own and becomes liable as if he were the originator of the defamation. The fair report privilege departs from this common law rule because of the public’s interest in knowing what happens in courtrooms.

Holding a reporter liable for repeating defamatory remarks made during a court proceeding would lead to less coverage of those proceedings. Thus, the clear upshot of the fair report privilege is to encourage media coverage of public meetings. Requiring reporters to continuously update stories on trial proceedings to account for appellate developments would disincentivize coverage of trial proceedings….

Note that the factual account in the opinion seems to be not quite correct—the Complaint alleges that (1) Leagle published a California Court of Appeal opinion, and not a trial court order, and (2) the appellate opinion wasn’t reversed, but instead the underlying case was dismissed on remand. The dismissal apparently stemmed from a settlement (“Modarres and Thomas settled the lawsuit“). I wrote the court to note the factual error, but there has been no response.

But in any event, the decision is a precedent (though persuasive rather than binding) as to the facts as the court related them. Note that I represented amici Free Law Project, the Foundation for Individual Rights and Expression, and myself in arguing against the grant of default judgment in this case (though I think we correctly described the case as involving a settlement after the opinion is issued, rather than a reversal of the opinion).

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Californians Are Discovering Why Government Is a Terrible Landlord


Firefighter stands in burnt out building | M Natalie Byers/U.S. Navy/ZUMA Press/Newscom

I once had the misfortune of living next to vacant land managed by a county fire department, which became a potential problem during a particularly bad wildfire year. The dry weeds were nearly the height of cornstalks. I had enough after my neighbors and I—most of whom had green, well-maintained lawns—received notices from the county telling us to keep our yards trimmed.

I started making calls to the appropriate agencies and got the usual bureaucratic runaround. I still remember my call to the weed abatement department, which assured me it would handle the situation. “Aren’t you going to take the address?” I retorted as the person was about to hang up. The county finally mowed the property after the right staffer in an elected official’s office intervened.

Local officials and prosecutors often make a big deal about clamping down on some allegedly villainous slumlord—and it’s no surprise some property owners behave irresponsibly—but often the biggest slumlords are government agencies. I was reminded of this after two high-profile news stories captured Southern Californians’ attention.

The first was the tragic fire at the historic north hangar at the former Marine Corps base at Tustin, which turned one of the world’s largest and most spectacular wooden structures—built to house blimps that patrolled the Pacific after Pearl Harbor—into a smoldering heap. The second was the fire that damaged Interstate 10 in Los Angeles, thus shuttering two miles of freeway and creating a commuter nightmare.

Fires happen, but both are the result of government neglect. The hangar is owned by the United States Navy, which has let the property languish since the base was decommissioned in 1999. Severe wind storms battered it in 2013, but that didn’t spur the military into action. The inadequately fenced area was easily accessible. The Register reports many other buildings on the site are in disrepair.

Although the Navy also owns the south hangar, the city leases it and has taken far better care of it. Tustin even uses it as a filming location and for community events. Nevertheless, city, county and federal officials have dragged their feet on redevelopment plans for years. The military—which, by the way, remains perhaps the nation’s largest polluter—has yet to complete its remediation. It’s only been decades.

Regarding the freeway mess, it took place in an area where 16 homeless people were living. The AP reported that a federal judge three years ago blasted the city and county of Los Angeles over its inability to deal with the 7,000 people living under freeways. A company that leased the land where the fire apparently started said it had “complained to city officials numerous times about fires started by homeless people on or near the property” and “had been denied access to the site since October.” Now think back to my story about cutting weeds.

State officials have repaired the freeway damage quickly given bad publicity, but the dangerous fire would never have happened if the government maintained its property. Just look at the constant state of freeway and road disrepair—not to mention the near collapse of spillways at the Oroville Dam in 2017—to recognize that public agencies are terrible stewards of property. It’s enough to make one dust off a copy of Ayn Rand’s Atlas Shrugged to remember that lesson.

For another reminder, here’s an excerpt from a 2011 editorial I wrote about Caltrans, which “used the power of eminent domain to acquire thousands of homes and other properties for roads and freeways that it never built, as a 2006 Orange County Register investigation revealed. Instead of selling off the properties, the agency mostly disregarded them, thus becoming what the Register referred to as the biggest slumlord in the state.”

As another example, the city of Santa Ana had long been awash in vacant lots. It’s not the only California city where now-defunct government redevelopment agencies condemned and collected tracts for potential new developments, but instead largely let them turn into fenced-off, weed-choked blights. Now please tell me again why you want government to have more power over private property.

And just look at how cities manage their own “public” property. San Francisco might not be the hellscape that some critics say it is, but the homelessness crisis has spiraled out of control. Many streets and parks resemble tent cities. City officials cleaned up part of the downtown area in record time in anticipation of a meeting between President Joe Biden and Chinese President Xi Jinping, but expect things to deteriorate again quickly.

The lesson is clear: When everyone owns something, no one does. That leaves its management to red-tape-laden and indifferent government agencies, which lack the incentives of private owners (who want to protect their investment and avoid liability). If we want to fix infrastructure or even keep the weeds down, we need less government involvement, not more.

This column was first published in The Orange County Register.

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Stocks Face A Nasty Pothole From A Miss In Today’s ISM

Stocks Face A Nasty Pothole From A Miss In Today’s ISM

Authored by Simon White, Bloomberg macro strategist,

A significant miss in the November manufacturing ISM, released later today, leaves stocks open to downside, as overboughtness and less favorable liquidity conditions meet hard-landing fears.

The US manufacturing ISM is one of the most consequential pieces of macro-economic data for markets.

It is the single largest explanatory factor for the performance of global stock markets, it is leading, and it is minimally revised. Last month it surprised to the downside, coming in at 46.7 versus 49 expected.

It’s a volatile number, and last month’s print could just be noise.

Moreover, short-term leading indicators for the ISM, such as the new orders-to-inventory ratio (see chart below), point to a continued rise in the headline index. Also the manufacturing PMI is more stable, and came in for November at 49.4.

Nonetheless, ISM could surprise negatively again. Stocks would be exposed to more downside this time, as it would happen when they are significantly more overbought – after one of the best November performances on record – and when liquidity conditions are becoming less favorable.

As discussed fully earlier this week, liquidity has been buoyant over the last month, principally due to the ~$200 billion rise in central bank reserves. Money market funds (MMFs) de facto funding the fiscal deficit via the purchase of T-bills, and the government withdrawing funds from the Treasury’s account at the Federal Reserve, combined to boost high-powered liquidity, driving a rally in stocks and bonds.

But that impulse from reserves has started to fade.

The one-month change of the one-month change of Fed reserves is now falling (blue line in chart below), which translates as the absence of a tailwind for stocks.

Thus far, the stock market has been greeting data with a soft-landing lens.

The expectation is the Fed will be able to cut rates a little as inflation softens – a typically Panglossian outlook for stocks – which have rallied as bond yields have fallen.

But a big drop in the ISM would (with some credence) amplify hard-landing fears. Stocks in this case would be likely to sell off as falling bond yields start to reflect a Fed cutting rates to try to stem a recession, which stocks are very much not discounting.

Tyler Durden
Fri, 12/01/2023 – 07:45

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Pfizer Tumbles After Abandoning Weight-Loss Pill

Pfizer Tumbles After Abandoning Weight-Loss Pill

With shares already reflecting a post-COVID dearth of revenue streams, Pfizer’s growth outlook just took another hit as it halted development of its experimental weight-loss pill after a high rate of side effects appeared in a mid-stage study.

More than half of patients in the study had to stop taking danuglipron due to nausea and vomiting, according to a statement Friday.

While the most common adverse events in the study were mild, nausea was seen in up to 73% of patients, vomiting in up to 47% and diarrhea in as much as 25%.

Pfizer will continue developing a once-daily version of the pill in hopes that it may improve its tolerability profile.

Pfizer had hoped to follow Eli Lilly and Novo Nordisk’s lead (both of which provide the shot-based GLP-1 agonists that have made so much news this year) and driven massive outperformance…

Pfizer and AstraZeneca saw pills as a way to make inroads into a market projected to reach $100 billion within seven years. Maybe not so much now…

Pfizer CEO Albert Bourla has said that oral weight-loss drugs will capture a third of the obesity market.

The company had pinned its weight-loss hopes on danuglipron after discontinuing another experimental obesity drug in June due to safety concerns.

Pfizer shares are down around 4% in the pre-market, back near their lowest since March 2020 on the back of this news…

Presumably, they did not have a liability waiver this time…

Tyler Durden
Fri, 12/01/2023 – 07:20

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US Boat Sales Set To Sink To Decade Low 

US Boat Sales Set To Sink To Decade Low 

Americans panic-bought boats, jet skis, campers, UTVs, ATVs, and anything with a motor that could be ridden in the great outdoors during Covid. Lakes and oceans were flooded with shiny new pontoon boats and +$100k wakeboarding boats. Much of the boat panic-buying was seen in 2020-21, when interest rates were at rock bottom. Now, the high-rate environment has frozen the industry as new and used boat sales are expected to plunge to a decade-low this year. 

Bloomberg cites new data from the National Marine Manufacturers Association (NNMA), the leading trade association representing boat, marine engine, and accessory manufacturers, which states that 1.4 million new and used boats were sold in 2021, up 16% from 2019. This followed several years of low single-digit growth. 

Fast forward to 2023, NNMA expects the industry will only sell 269,000 new powerboats and about 900,000 used ones, the lowest dating back to 2011. The vicious slowdown in demand is a function of an interest rate shock produced by the Fed. 

Michael Prince Jr., who sells pontoon and fishing boats in Atlanta, expects the industry to normalize after two years of a buying frenzy. 

“I don’t think interest rates have killed this industry yet, but if they go up more, they could,” said Prince, managing partner of boat dealer Grass Shack.

He noted, “It’s just coming off such a high that it feels like an incredible downturn.” 

Bloomberg pointed out how several boat manufacturers have cited interest rates as one of the factors for a slowdown in demand: 

Higher rates were a factor for lower sales at boat manufacturers like Brunswick Corp. and Malibu Boats Inc. in their latest quarter. It was also an issue for Robalo fishing boat manufacturer Marine Products Corp. — which saw sales slump 22% — citing a moderation in demand after the Covid surge as well as a hit to production from Hurricane Idalia, which struck the southeast US in August.

And it’s not just boats. The RV industry has been suffering a downturn due to high interest rates. If you took a road trip this past Thanksgiving, traveled on a major interstate, and, out of boredom, looked at any of the businesses that lined the highway, you would’ve noticed some companies selling RVs – and those lots were completely full. 

The good news for the patient consumer who did not buy into the hype during Covid and still has buying power – is that the deals on boats and RVs look pretty good and probably will get much better next year. 

Tyler Durden
Fri, 12/01/2023 – 06:55

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Cheap Valuations No Panacea For European Equities

Cheap Valuations No Panacea For European Equities

By Farah Elbahrawy and Sagarika Jaisinghani, Bloomberg markets live reporters and strategists

Even a near-record discount for European stocks relative to the US isn’t proving enough to entice investors worried about a slowing economy and weakening profits.

After starting the year well ahead of the S&P 500, the Stoxx Europe 600 lost ground from May onward as the buzz around artificial intelligence fired up technology stocks across the Atlantic. Worries about a regional recession have also fueled an exodus from European stock funds, and the index is back to underperforming US stocks in dollar terms for the full year.

That’s a frustrating turn of events for equity bulls who were banking on a 35% discount in Europe’s price-to-earnings ratio — almost the lowest on record — to rekindle investor interest. Wall Street strategists say the gap isn’t closing any time soon.

Forecasters from Bank of America to Deutsche Bank expect the S&P 500 to hit a record high in 2024. The outlook for European benchmarks is a lot more timid, with earnings expected to rise just 6.7% versus an 11% gain in the US, according to data compiled by Bloomberg Intelligence.

“We expect European stocks to underperform the US,” says Marija Veitmane, senior multi-asset strategist at State Street Global Markets. “We are already in a global manufacturing downturn and it’s really weighing on cyclical exporter markets like Europe.” While she agrees European stocks are relatively cheap, “unfortunately value tends to underperform in a recession,” she says.

Veitmane is not alone. A multi-asset portfolio team at Societe Generale says European stocks are likely to show no gains at all next year amid an economic slowdown. They see the region’s stocks potentially slumping nearly 10% early in the year — a starkly bearish stance compared with the US, where they expect the S&P 500 to flirt with its all-time peak.

The gloom has also been reflected in the investor exodus from the region this year. European stock funds had outflows for 37 straight weeks, according to a Bank of America note citing EPFR Global. Even Goldman Sachs’s Sharon Bell, who expects the Stoxx 600 to rise next year, says the main buyers will come from within Europe via corporate buybacks.

Not that the discount doesn’t matter. Part of Bell’s optimism stems from Europe’s “reasonable valuations.” And while JPMorgan’s Mislav Matejka is staying underweight on the euro zone versus the US for now, his team say they could potentially change that call through the first half of 2024 “given the increasingly attractive valuations.” Oliver Collin, co-head of European equities at Invesco, says that “European equities are one of the few equity markets to still be attractively priced relative to bonds.” 

But that’s not enough for bears like BofA’s Sebastian Raedler, who expects the Stoxx 600 to slide 15% halfway through the year. “We see scope for a meaningful deterioration in growth momentum ahead on the back of a weakening credit cycle,” he says.

Tyler Durden
Fri, 12/01/2023 – 06:30

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Fix the Border Crisis by Making Legal Immigration Easier


A hand grabs at a chain link fence with an American flag on the other side, symbolizing the struggle to immigrate to America. | Bradley Greeff | Dreamstime.com

There’s no doubt that there’s a mess at the Southwestern border—and elsewhere as illegal migrants get passed around in a game of human hot potato. Driven by disastrous governments (hello, Venezuela) and hobbled economies, people arrive at the border in waves, creating humanitarian problems and concerns about who might be hiding among those legitimately seeking opportunity. There’s little Americans can do about abusive foreign officials or the global chaos of recent years, but the federal government makes the problem worse by putting legal immigration out of reach for most so that a desperate run for the border is virtually the only way to enter the country.

For starters, it’s worth knowing that those crowds at the border aren’t reflected in the illegal immigrant population of the United States.

Crowds at the Border, But Not Inside the Country

“As of 2021, the nation’s 10.5 million unauthorized immigrants represented about 3% of the total U.S. population and 22% of the foreign-born population,” Pew Research noted in November. “These shares were among the lowest since the 1990s. Between 2007 and 2021, the unauthorized immigrant population decreased by 1.75 million, or 14%.”

The Migration Policy Institute puts the number at roughly 11 million, using 2019 figures. Either way, this represents a decline from the 2007 peak of 12.2 million illegal immigrants.

Nor are migrants flooding particular states: “Only Florida and Washington saw increases to their unauthorized immigrant populations, while California and Nevada saw decreases,” adds Pew (though some border communities have a different experience).

But those crowds at the border are undeniable. In October, Customs and Border Protection recorded 188,778 “migrant encounters” between ports of entry (meaning illegal crossings) along the southwest border. That’s down 14 percent from September, but still impressive. Why are so many people flocking to the border to enter illegally instead of going through legal immigration procedures?

The answer is that for many of them that’s the only way to get into the U.S.

Few Legal Pathways to Immigration

“America traditionally had few immigration restrictions, but since the 1920s, the law has banned most aspiring immigrants,” David J. Bier wrote in a Cato Institute report published in June. “Today, fewer than 1 percent of people who want to move permanently to the United States can do so legally.”

Bier breaks down the pathways remaining for legal immigration. Those include: the refugee program, which gives qualified applicants a 0.1 percent chance of being accepted for resettlement; the diversity lottery, which offers a 0.2 percent chance of success; family sponsorships, which are capped for anybody other than spouses, minor children, and parents of adult U.S. citizens leading to years-long waits; employment-based self-sponsorship available only to the wealthy or those whose work is “extraordinary” or of “national importance”; and limited, red-tape-bound employer sponsorships out of reach of all but the lucky and well-educated.

The chart of the byzantine requirements for legal immigration captures the problem well, like a maze puzzle with no real means of escape.

https://www.cato.org/sites/cato.org/files/2023-03/2023-bier-immigration-figure-4-expand-4.png
Cato Institute

As we’ve learned again and again in the history of this country and all the others from which our ancestors came, if you make it difficult or impossible for people to legally do something they want to do, they’ll find ways to do it illegally.

Denied a Legal Route, Migrants Come Illegally

“Immigration is now prohibited in a similar way to alcohol during Prohibition,” Bier commented. “Although it had exceptions for religious, medical, or industrial purposes, alcohol prohibition outlawed all other sales. For both alcohol and immigration, the result of prohibition has been the same: widespread violations of the law, black markets, the spread of criminal organizations, arbitrary enforcement, government corruption, and massive government expenditures of taxpayer money to stop the violations.”

So, with legal pathways to entering the United States out of reach of most would-be migrants, they turn to illegal means. That necessarily includes “coyotes”—smugglers who get people through migration routes and across borders for a fee. They operate in the underworld with all that implies; they might be decent people just working a job, or they could be dangerous and abusive.

“Despite the illicit nature of their work and being cast as villains in the public eye, smugglers have complex, multifaceted relationships with their migrant clients,” Jasper Gilardi wrote in 2020 for the Migration Policy Institute. “At times, the relationship can be mutually beneficial or even lifesaving; at others, it can be predatory and dangerous. Abandonment, extortion, kidnapping, and even death are common.”

Any time you hand an area of life to criminal operators, you surrender much accountability as well. In the case of illegal immigration, you also give up control over who mixes into crowds cutting border fences. Customs and Border Protection says its “top priority is to keep terrorists and their weapons from entering the United States” and documents arrests of “criminal noncitizens.” But it’s easier for potential undesirables to hide in large crowds swelled by innocent people who have no other pathways to entry than it would be if legal immigration were easier and more aspiring migrants were at home filing paperwork.

Ease Legal Immigration to Fix the Border Crisis

Members of Congress are once again discussing immigration issues. But given public concerns (41 percent of Americans want immigration decreased, 26 percent want it increased, and 31 percent favor keeping it at current levels, according to Gallup), the conversation is framed in terms of security and tighter restrictions.

That’s too bad, because unless Congress finds a way to make the country an unattractive place to live, or at least less attractive than their old homes in poor and authoritarian countries (they’ve been working on it!), they’ll keep coming anyway. If they can’t come legally, they’ll come illegally. Not wanting more immigration and trying to block it by law doesn’t mean we won’t get it; it just means that we’ll get it flowing around the law enforcers.

“Congress should overhaul the system to open legal immigration for any person willing to work to contribute to the success of the United States,” suggests Cato’s Bier.

That’s a good place to start. Easier pathways for legal immigration might be the most effective way to fix the border crisis.

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Review: The Cross Florida Barge Canal That Never Was


A crane works in a ditch | University Press of Florida

For as long as there have been maps of Florida, there have been men who have looked at them and thought: “Gee, it sure would be nice not to have to go all the way around.” Enter the Cross Florida Barge Canal project—the eponymous Ditch of Dreams in Steven Noll and David Tegeder’s 2015 history of the effort to dig a channel across northern Florida, from the Gulf of Mexico to the Atlantic. The story begins in the 16th century and peaks with the construction of just over 100 miles of canal as part of a New Deal initiative before petering out.

Framed as a David and Goliath story, the tale might be better read as a long, dispiriting chronicle of the ways that bureaucracy, political horse-trading, and environmental activism can paradoxically kill an ambitious idea in its prime and keep it alive in expensive, zombified form long after it should have been laid to rest.

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Review: The Album That Helped Make Florida the Epicenter of Death Metal


Album cover for Death's 1990 'Spiritual Healing' | Morrisound Recording

Florida might be most famous for family-friendly theme parks and fun in the sun—but in 1989, in a cheap Tampa-area motel room, the band Death was hard at work on one of the state’s darker contributions to American culture. It was there the four-member band and its manager stayed while recording the seminal 1990 album Spiritual Healing.

Death’s third studio album evolved its sound beyond its thrash metal roots into something slower, heavier, more melodic, more distinctly “death metal,” with lyrics that focused less on bloody gore and more on the darker corners of society and the human soul. Alongside contemporary offerings from the bands Morbid Angel, Obituary, and Deicide, it helped solidify the then-nascent Tampa Bay scene as the capital of American death metal.

Death metal is hardly a conservative art form. Yet the lyrics on Spiritual Healing paint a right-wing culture warrior’s nightmare vision of America at the time—a society overcome by violence, abortion, crime, drug addiction, crack babies, and commercialized, cynical religion.

Improbable as it might seem today, this message and musical style received something close to mainstream appeal. Songs from Death and its fellow Tampa Bay death metallers would receive generous airplay on MTV and even show up in a few Beavis and Butt-Head episodes.

While Death might not be the first thing people associate with the Sunshine State anymore, there’s no separating Death from the state that birthed it. A 2012 rerelease of Spiritual Healing includes a few “joke and jam” tracks of the band, recording in a warehouse without air conditioning, trying to play while suffering the early stages of heat exhaustion.

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