Category: reason

To Fight Coronavirus, Trump Wants a Trillion-Dollar Stimulus That Could Make the Crisis Worse

In last night’s address to the nation about the government’s response to coronavirus, President Donald Trump called on Congress to pass a payroll tax holiday that would last through the end of the year.

The proposal, as explained by the administration, would eliminate the collection of both individual and employer payroll taxes, which fund Social Security and Medicare. The idea, administration officials say, is to stimulate the economy by giving workers bigger paychecks.

You might be wondering: Isn’t this just a tax cut that allows people to keep more of their own money? Not exactly, at least if funding for Social Security and Medicare continues, as administration officials have suggested. From a budgeting perspective, cutting off a dedicated revenue stream while continuing to spend as if it still existed is the same as sending out checks. Like other forms of fiscal stimulus, Trump’s proposed tax holiday would disburse money while vastly increasing the deficit.

The plan could result in $840 billion in lost revenue if it lasted through the end of 2020, and more than $1 trillion if it lasted a full year, according to an estimate by the Committee for a Responsible Federal Budget—more than the stimulus package passed in 2009 under President Barack Obama. Trump, in essence, is proposing a nearly $1 trillion fiscal stimulus plan designed to prop up an economy in crisis.

It’s likely to fail on just about every level: Not only would it push the already high federal budget deficit to unprecedented levels, but it would also offer little help to those who need it most, wouldn’t address the underlying economic or health issues, and might even exacerbate the crisis. Trump’s proposal isn’t a response to the current crisis so much as an anti-response—a policy that wouldn’t solve anything and could make existing problems even worse.

Under Trump, annual budget deficits, which trended downward during President Obama’s second term, have climbed faster than previously projected, thanks to a combination of increased spending and tax reductions. Budget deficits are now projected to come in at $1 trillion or more for the foreseeable future. With a payroll tax holiday in place, the annual deficit would close in on $2 trillion, according to The New York Times—far higher than the $1.4 trillion record set under Obama in the aftermath of the recession.

Debt and deficits are already a drag on economic growth. That’s why the Congressional Budget Office (CBO) currently expects growth to slow in the coming years, in large part because of the drag of high debt and deficits. To fight an economic slowdown, in other words, Trump wants to implement a policy that would have a negative effect on growth.

High debt and deficits present other risks as well: In particular, they limit the tools that policy makers have to respond to a crisis, which is exactly what we are in now. For years, the CBO has been warning that running an economy on borrowed money carries systemic risks during moments of crisis. Trump’s plan would exacerbate those risks.

Then there’s the issue of targeting: Policy responses should be designed to help people who need it the most. In this case, that means low-income workers, especially those in the service, travel, and hospitality industries, many of whom rely on tips. The workers who face the brunt of the impact are, more than likely, going to be out of work or working reduced hours. The biggest effect of a payroll tax holiday would be to put cash in the pockets of people who still have jobs.

And that, in turn, could lead to a different problem: If anything, a payroll tax holiday, which boosts the reward to work, could encourage struggling workers to go to work, even when they should be staying home. The effect probably wouldn’t be huge, but, in theory, it could increase the spread of coronavirus by creating an incentive for people to go to the office when they should be isolating themselves.

That Trump and his advisers have settled on a payroll tax holiday as their preferred response is both telling and worrying since it suggests they fundamentally misunderstand the nature of the crisis. Although closures and cancellations brought on by the virus will undoubtedly result in substantial economic damage, the coronavirus is, at its root, a crisis of community health.

The nation’s health system is at risk of being overwhelmed, with hospital beds and ventilator equipment becoming scarce, as is currently happening in Italy. The most effective tools for mitigating its impact are physical distance and rigorous personal hygiene, which can slow the spread of the disease and reduce the strain on the health system. A payroll tax holiday treats the coronavirus as if it is an ordinary economic downturn; it isn’t.

Up until this week, Trump has viewed the coronavirus primarily as an economic (and thus political) threat. He has also been slow to grasp the severity of its impact. The insistence on the payroll tax, which would at best be ineffective and could well be counterproductive, is yet another sign that he still does not fully grasp the nature of the problem.

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To Fight Coronavirus, Trump Wants a Trillion-Dollar Stimulus That Could Make the Crisis Worse

In last night’s address to the nation about the government’s response to coronavirus, President Donald Trump called on Congress to pass a payroll tax holiday that would last through the end of the year.

The proposal, as explained by the administration, would eliminate the collection of both individual and employer payroll taxes, which fund Social Security and Medicare. The idea, administration officials say, is to stimulate the economy by giving workers bigger paychecks.

You might be wondering: Isn’t this just a tax cut that allows people to keep more of their own money? Not exactly, at least if funding for Social Security and Medicare continues, as administration officials have suggested. From a budgeting perspective, cutting off a dedicated revenue stream while continuing to spend as if it still existed is the same as sending out checks. Like other forms of fiscal stimulus, Trump’s proposed tax holiday would disburse money while vastly increasing the deficit.

The plan could result in $840 billion in lost revenue if it lasted through the end of 2020, and more than $1 trillion if it lasted a full year, according to an estimate by the Committee for a Responsible Federal Budget—more than the stimulus package passed in 2009 under President Barack Obama. Trump, in essence, is proposing a nearly $1 trillion fiscal stimulus plan designed to prop up an economy in crisis.

It’s likely to fail on just about every level: Not only would it push the already high federal budget deficit to unprecedented levels, but it would also offer little help to those who need it most, wouldn’t address the underlying economic or health issues, and might even exacerbate the crisis. Trump’s proposal isn’t a response to the current crisis so much as an anti-response—a policy that wouldn’t solve anything and could make existing problems even worse.

Under Trump, annual budget deficits, which trended downward during President Obama’s second term, have climbed faster than previously projected, thanks to a combination of increased spending and tax reductions. Budget deficits are now projected to come in at $1 trillion or more for the foreseeable future. With a payroll tax holiday in place, the annual deficit would close in on $2 trillion, according to The New York Times—far higher than the $1.4 trillion record set under Obama in the aftermath of the recession.

Debt and deficits are already a drag on economic growth. That’s why the Congressional Budget Office (CBO) currently expects growth to slow in the coming years, in large part because of the drag of high debt and deficits. To fight an economic slowdown, in other words, Trump wants to implement a policy that would have a negative effect on growth.

High debt and deficits present other risks as well: In particular, they limit the tools that policy makers have to respond to a crisis, which is exactly what we are in now. For years, the CBO has been warning that running an economy on borrowed money carries systemic risks during moments of crisis. Trump’s plan would exacerbate those risks.

Then there’s the issue of targeting: Policy responses should be designed to help people who need it the most. In this case, that means low-income workers, especially those in the service, travel, and hospitality industries, many of whom rely on tips. The workers who face the brunt of the impact are, more than likely, going to be out of work or working reduced hours. The biggest effect of a payroll tax holiday would be to put cash in the pockets of people who still have jobs.

And that, in turn, could lead to a different problem: If anything, a payroll tax holiday, which boosts the reward to work, could encourage struggling workers to go to work, even when they should be staying home. The effect probably wouldn’t be huge, but, in theory, it could increase the spread of coronavirus by creating an incentive for people to go to the office when they should be isolating themselves.

That Trump and his advisers have settled on a payroll tax holiday as their preferred response is both telling and worrying since it suggests they fundamentally misunderstand the nature of the crisis. Although closures and cancellations brought on by the virus will undoubtedly result in substantial economic damage, the coronavirus is, at its root, a crisis of community health.

The nation’s health system is at risk of being overwhelmed, with hospital beds and ventilator equipment becoming scarce, as is currently happening in Italy. The most effective tools for mitigating its impact are physical distance and rigorous personal hygiene, which can slow the spread of the disease and reduce the strain on the health system. A payroll tax holiday treats the coronavirus as if it is an ordinary economic downturn; it isn’t.

Up until this week, Trump has viewed the coronavirus primarily as an economic (and thus political) threat. He has also been slow to grasp the severity of its impact. The insistence on the payroll tax, which would at best be ineffective and could well be counterproductive, is yet another sign that he still does not fully grasp the nature of the problem.

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A Qualified Immunity Case That the Federal Courts Got Right

Qualified immunity is a controversial legal doctrine that generally shields police officers and other government officials from being sued when they violate citizens’ constitutional rights. In most cases, as the Cato Institute’s legal scholar Clark Neily memorably put it, the doctrine amounts to “a get-out-of-responsibility-free card for rights-violating cops who shoot first and ask questions never.”

Thankfully, the U.S. Court of Appeals for the 5th Circuit took a different view in a qualified immunity case decided this week. Amador v. Vasquez originated in 2015 when Deputies Greg Vasquez and Robert Sanchez of the Bexar County, Texas, Sheriff’s Department shot and killed a man named Gilbert Flores while responding to a call about an alleged domestic violence incident. When the deputies arrived, Flores was holding a knife and behaving erratically. Twelve minutes after the encounter began, while Flores stood some 30 feet away with his hands raised in apparent surrender, the deputies opened fire. They justified their use of deadly force by claiming that Flores posed an immediate threat to them.

Flores’ wife and family subsequently filed suit against the two deputies, arguing that the fatal shooting violated his Fourth Amendment right to be free from the use of excessive force. Vasquez and Sanchez urged the courts to squash the suit, claiming their actions were protected by qualified immunity.

The U.S. District Court for the Western District of Texas rejected the deputies’ position. In its decision this week, the U.S. Court of Appeals for the 5th Circuit did the same. “A reasonable officer would have understood that using deadly force on a man holding a knife, but standing nearly thirty feet from the deputies, motionless, and with his hands in the air for several seconds, would violate the Fourth Amendment,” the ruling declared. The family’s excessive force suit against the deputies “should proceed to trial.”

Among the jurists who signed on to that ruling was Judge Don Willett. There is little surprise in that. Since joining the 5th Circuit in 2017, Willett has rarely missed the opportunity to raise doubts about the constitutionality of modern qualified immunity doctrine. “To some observers,” Willett remarked in a 2018 case, “qualified immunity smacks of unqualified impunity, letting public officials duck consequences for bad behavior.”

Willett has even butted heads over qualified immunity with some of his fellow Trump-appointed judges on the 5th Circuit. In Cole v. Carson (2019), Judge James Ho and Judge Andrew Oldham faulted Willett’s “one-sided approach” to qualified immunity for being too tough on the cops. “Originalism for plaintiffs, but not for police officers,” Ho and Oldham asserted, “is not principled judging.”

Willett fired back in a footnote. “As for the sidelong critique of me in the dissenting opinion of Judges Ho and Oldham,” he wrote, “it is, respectfully, a pyromaniac in a field of straw men.” It is neither unoriginalist nor unprincipled, Willett pointed out, for a federal judge to question the constitutionality of qualified immunity. “Justice Thomas—no ‘halfway originalist’—has done the same.”

The federal bench could use a few more judges in the Willett mold in future qualified immunity cases.

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A Qualified Immunity Case That the Federal Courts Got Right

Qualified immunity is a controversial legal doctrine that generally shields police officers and other government officials from being sued when they violate citizens’ constitutional rights. In most cases, as the Cato Institute’s legal scholar Clark Neily memorably put it, the doctrine amounts to “a get-out-of-responsibility-free card for rights-violating cops who shoot first and ask questions never.”

Thankfully, the U.S. Court of Appeals for the 5th Circuit took a different view in a qualified immunity case decided this week. Amador v. Vasquez originated in 2015 when Deputies Greg Vasquez and Robert Sanchez of the Bexar County, Texas, Sheriff’s Department shot and killed a man named Gilbert Flores while responding to a call about an alleged domestic violence incident. When the deputies arrived, Flores was holding a knife and behaving erratically. Twelve minutes after the encounter began, while Flores stood some 30 feet away with his hands raised in apparent surrender, the deputies opened fire. They justified their use of deadly force by claiming that Flores posed an immediate threat to them.

Flores’ wife and family subsequently filed suit against the two deputies, arguing that the fatal shooting violated his Fourth Amendment right to be free from the use of excessive force. Vasquez and Sanchez urged the courts to squash the suit, claiming their actions were protected by qualified immunity.

The U.S. District Court for the Western District of Texas rejected the deputies’ position. In its decision this week, the U.S. Court of Appeals for the 5th Circuit did the same. “A reasonable officer would have understood that using deadly force on a man holding a knife, but standing nearly thirty feet from the deputies, motionless, and with his hands in the air for several seconds, would violate the Fourth Amendment,” the ruling declared. The family’s excessive force suit against the deputies “should proceed to trial.”

Among the jurists who signed on to that ruling was Judge Don Willett. There is little surprise in that. Since joining the 5th Circuit in 2017, Willett has rarely missed the opportunity to raise doubts about the constitutionality of modern qualified immunity doctrine. “To some observers,” Willett remarked in a 2018 case, “qualified immunity smacks of unqualified impunity, letting public officials duck consequences for bad behavior.”

Willett has even butted heads over qualified immunity with some of his fellow Trump-appointed judges on the 5th Circuit. In Cole v. Carson (2019), Judge James Ho and Judge Andrew Oldham faulted Willett’s “one-sided approach” to qualified immunity for being too tough on the cops. “Originalism for plaintiffs, but not for police officers,” Ho and Oldham asserted, “is not principled judging.”

Willett fired back in a footnote. “As for the sidelong critique of me in the dissenting opinion of Judges Ho and Oldham,” he wrote, “it is, respectfully, a pyromaniac in a field of straw men.” It is neither unoriginalist nor unprincipled, Willett pointed out, for a federal judge to question the constitutionality of qualified immunity. “Justice Thomas—no ‘halfway originalist’—has done the same.”

The federal bench could use a few more judges in the Willett mold in future qualified immunity cases.

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Dems Want to Combat Coronavirus By Mandating Paid Sick Leave for Stalking Victims?

House Speaker Nancy Pelosi (D–Calif.) on Thursday unveiled the House’s coronavirus appropriations bill, a measure that she says will put “families first.” With its blatantly partisan insertions, however, a more apt description would be that it puts Democrats’ policy priorities first—some of which have nothing to do with addressing a global pandemic.

The major tenets of the bill are as follows: establish free coronavirus testing; mandate private businesses provide additional paid sick leave; expand unemployment insurance eligibility; strengthen food security initiatives for senior citizens, children, pregnant women, and food banks; increase funding for Medicaid; and bolster unemployment benefits, among other provisions. 

While the total cost of the bill is still unclear, it would cost, at a minimum, tens of billions of dollars. The price tag associated with the food portion alone is $1.3 billion; unemployment benefits follow closely behind at $1 billion. 

But perhaps the most outrageous part of the proposed legislation is the government-mandated paid sick leave program, which, as the bill currently reads, would be permanent. Should the bill pass, businesses would be federally required to provide seven days of paid sick leave—with or without a pandemic. This provision has little relevance to addressing coronavirus and much more to do with leveraging the crisis to prop up policies popular within the Democratic Party.

That couldn’t be more clear in the legislation’s stalking component. The text specifies that, should someone need to miss work due to an instance pertaining to stalking, domestic violence, or sexual assault, or should an employee need to help a friend going through such an event, a private business would be federally required to provide paid sick leave. 

What does that have to do with coronavirus?

The bill further carves out an additional 14 days of required paid sick leave in a public health emergency, although in that case, the Department of the Treasury—a.k.a. taxpayers—would foot the bill. Only one provision of the paid sick leave portion pertains to coronavirus specifically: It establishes a federal program reimbursed via Social Security, which would compensate those who contract coronavirus (as well as their caretakers) with two-thirds of their wages.

Even the latter provision is more fantasy than reality. House Minority Leader Kevin McCarthy (D–Calif.) noted that, if set up through Social Security, such a program would take six months to establish.

Democrats aren’t the only ones using this moment to further their party’s political profile. Take Sen. Tom Cotton (R–Ark.), for example, who issued a press release this morning to avow revenge on “those who inflicted [coronavirus] on the world.” He later clarified that he meant China, though what he will do to punish the country for getting sick is still ambiguous.

And President Donald Trump, during a news conference this morning, gave a similarly cryptic declaration. “The question is: how many people will die?” Trump asked. “And I don’t want people dying. That’s what I’m all about.”

Trump isn’t about people dying, Pelosi is about “putting families first.” I’m sure both of them would like to stem this crisis, but right now they seem all too concerned with scoring political points.

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Dems Want to Combat Coronavirus By Mandating Paid Sick Leave for Stalking Victims

House Speaker Nancy Pelosi (D–Calif.) on Thursday unveiled the House’s coronavirus appropriations bill, a measure that she says will put “families first.” With its blatantly partisan insertions, however, a more apt description would be that it puts Democrats’ policy priorities first—some of which have nothing to do with addressing a global pandemic.

The major tenets of the bill are as follows: establish free coronavirus testing; mandate private businesses provide additional paid sick leave; expand unemployment insurance eligibility; strengthen food security initiatives for senior citizens, children, pregnant women, and food banks; increase funding for Medicaid; and bolster unemployment benefits, among other provisions. 

While the total cost of the bill is still unclear, it would cost, at a minimum, tens of billions of dollars. The price tag associated with the food portion alone is $1.3 billion; unemployment benefits follow closely behind at $1 billion. 

But perhaps the most outrageous part of the proposed legislation is the government-mandated paid sick leave program, which, as the bill currently reads, would be permanent. Should the bill pass, businesses would be federally required to provide seven days of paid sick leave—with or without a pandemic. This provision has little relevance to addressing coronavirus and much more to do with leveraging the crisis to prop up policies popular within the Democratic Party.

That couldn’t be more clear in the legislation’s stalking component. The text specifies that, should someone need to miss work due to an instance pertaining to stalking, domestic violence, or sexual assault, or should an employee need to help a friend going through such an event, a private business would be federally required to provide paid sick leave. 

What does that have to do with coronavirus?

The bill further carves out an additional 14 days of required paid sick leave in a public health emergency, although in that case, the Department of the Treasury—a.k.a. taxpayers—would foot the bill. Only one provision of the paid sick leave portion pertains to coronavirus specifically: It establishes a federal program reimbursed via Social Security, which would compensate those who contract coronavirus (as well as their caretakers) with two-thirds of their wages.

Even the latter provision is more fantasy than reality. House Minority Leader Kevin McCarthy (D–Calif.) noted that, if set up through Social Security, such a program would take six months to establish.

Democrats aren’t the only ones using this moment to further their party’s political profile. Take Sen. Tom Cotton (R–Ark.), for example, who issued a press release this morning to avow revenge on “those who inflicted [coronavirus] on the world.” He later clarified that he meant China, though what he will do to punish the country for getting sick is still ambiguous.

And President Donald Trump, during a news conference this morning, gave a similarly cryptic declaration. “The question is: how many people will die?” Trump asked. “And I don’t want people dying. That’s what I’m all about.”

Trump isn’t about people dying, Pelosi is about “putting families first.” I’m sure both of them would like to stem this crisis, but right now they seem all too concerned with scoring political points.

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Is a 1% Case Fatality Rate for COVID-19 Bad News or Good News?

During congressional testimony yesterday, Anthony Fauci, director of the National Institute of Allergy and Infectious Diseases, estimated that the case fatality rate (CFR) for COVID-19 will prove to be about 1 percent. Is that good news or bad news? It depends on how you look at it.

Fauci’s estimate is less than one-third the commonly cited CFR calculated by the World Health Organization and one-tenth the CFR for SARS, another disease caused by a coronavirus. But as he noted, it is 10 times the CFR for the seasonal flu, which is not as readily transmissible. And it is higher than President Donald Trump’s guess that the share of infected people who die from COVID-19 will turn out to be “a fraction of 1 percent.”

The basic problem is that the total number of cases is unknown, since the vast majority involve mild symptoms that would not necessarily cause people to seek medical attention or testing. The ratio of known deaths to identified cases, which currently yields a CFR of about 3.6 percent, is therefore bound to exaggerate the lethality of the disease. Studies of patients in China and infected cruise ship passengers indicate a substantially lower rate of 2.3 percent, but that is also likely to be an overestimate, since the denominator includes only people who are known to be infected.

Fauci’s estimate is close to the CFR in South Korea, which has an aggressive testing program with the capacity to process 20,000 samples a day. So far, more than 200,000 people have been tested there, compared to fewer than 10,000 in the United States, a country with a population more than six times as large. As of yesterday, South Korea had reported 7,755 cases and 60 deaths, which implies a CFR of about 0.8 percent. As in China, the death rate varied widely by age, ranging from 0 percent for patients younger than 30 to 7.2 percent for patients 80 or older. But overall, more than 99 percent of patients survived.

While those odds seem pretty good, even a relatively low CFR can result in many deaths if the infection rate is high. German Chancellor Angela Merkel yesterday warned that 70 percent of her country’s population could ultimately be infected by the COVID-19 virus. It’s not clear how Merkel arrived at that estimate. But if that worst-case scenario came true, a CFR of 0.8 percent would mean more than 400,000 deaths in Germany. If 70 percent of the U.S. population were infected, the number of deaths would be nearly 2 million.

Is the infection rate likely to be anywhere near that high in the United States? That depends on the effectiveness of measures aimed at curtailing the spread of COVID-19 and developing a vaccine. It also depends on whether COVID-19 follows a seasonal pattern similar to what is seen with the flu. Fauci said that is possible but warned that “we can’t proceed under that assumption.”

So far epidemic control measures in the U.S. have included isolation of patients, quarantines of potential carriers, cancellation of large-scale public events, school closures, increased reliance on telecommuting, “social distancing,” hygienic precautions such as frequent hand washing, and the international travel restrictions that Trump announced yesterday. Fauci said Phase 1 clinical trials of about 10 different vaccines should begin within a month or so, but vaccination probably will not begin until “a year to a year and a half” from now.

“We will see more cases, and things will get worse than they are right now,” Fauci said. “How much worse [it] will get will depend on our ability to do two things: to contain the influx of people who are infected coming from the outside and the ability to contain and mitigate within our own country.”

The 1918 Spanish flu pandemic, which involved a virus with a CFR somewhere between 2 percent and 5 percent, affected about a third of the world population and caused some 50 million deaths, including about 675,000 in the United States. The world population is more than four times as big today as it was then, the U.S. population is about three times as big, and international travel is much more common. But the CFR for COVID-19 appears to be much lower than the CFR for the 1918 pandemic, and disease control measures a century later are much improved.

Fauci declined to predict how many Americans will eventually be infected by the virus. “It is going to be totally dependent upon how we respond to it, so I can’t give you a number,” he said. “I can’t give you a realistic number until we put into [the calculation] the factor of how we respond. If we are complacent and don’t do really aggressive containment and mitigation, the number could go way up and [reach] many, many millions.”

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Sealing Court Filings Drawn from Discovery Requires More Than Just General Assertions of Confidentiality

From IDC Financial Pub., Inc. v. Bonddesk Group, decided Monday by Judge Pamela Pepper (E.D. Wisc.):

The plaintiff’s motion asks the court to restrict Exhibits A, E, F, H and J attached to the declaration of Matthew M. Wuest in support of the plaintiff’s motions in limine. Dkt. No. 160. In support of the motion, the plaintiff asserts that under Fed. R. Civ. P. 5.2(d) and Civil Local Rule 79(d)(4), the court has the authority to allow parties to restrict documents “for good cause.” It asserts that courts allow parties to restrict documents that contain sensitive business information, “especially, where, as here, the confidential material consists of ‘trade secrets or other categories of bona fide long-term confidentiality.’ ” Id. (citing Baxter Int’l, Inc. v. Abbott Labs. (7th Cir. 2002).

The plaintiff asserts that the court should restrict the exhibits because “they reference, describe, and quote from documents and information that the parties have designated as ‘CONFIDENTIAL’ or ‘ATTORNEYS EYES ONLY,’ and which the designating party has asserted contains non-public and confidential business and/or financial information.” Specifically, the plaintiff says the attachments contain “confidential deposition testimony and confidential client names and information.” The plaintiff says that ” ‘CONFIDENTIAL’ or ‘ATTORNEYS EYES ONLY’ information can also be damaging to the parties’ ability to compete in the marketplace if public disclosures were permitted.” BondDesk’s motion is similar…. Fidelity’s motion is much the same ….

None of the motions state good cause to restrict the attachments. “The Seventh Circuit has emphasized that ‘the public at large pays for the courts and therefore has an interest in what goes on at all stages of a judicial proceeding.'” A party may override this interest only if its privacy interest surmounts the public’s interest; “that is, only if there is good cause for sealing a part or the whole of the record in that case.”

In Baxter—the case the plaintiff itself cited—the Seventh Circuit faced a motion like the one the plaintiff has filed. The court explained, “[a] few weeks ago a single judge of this court, serving as motions judge for the week, received and denied a joint motion to maintain documents under seal. The motion was generic: it related that the parties had agreed on secrecy, that the documents contained commercially sensitive information, and so on, but omitted details. What is more, the motion did not attempt to separate genuinely secret documents from others in the same box or folder that could be released without risk.

“The motion was patterned on the sort of broad secrecy agreement that often accompanies discovery in order to expedite that process by avoiding document-by-document analysis. Secrecy is fine at the discovery stage, before the material enters the judicial record. But those documents, usually a small subset of all discovery, that influence or underpin the judicial decision are open to public inspection unless they meet the definition of trade secrets or other categories of bona fide long-term confidentiality.”

The court went on explain that the parties had made “no effort to justify the claim of secrecy,” simply asserting it on the ground that the documents to be sealed were commercial documents. The court stated, “[t]hat won’t do.” The court allowed the parties to amend their motion to seal, but stated that it would “in the future deny outright any motion … that does not analyze in detail, document by document, the propriety of secrecy, providing reasons and legal citations.” Since then, the court has affirmed that it would not seal documents “simply because the parties had agreed to do so among themselves because that practice deprives the public of material information about the judicial process.”

The plaintiff mentions “trade secrets” and confidential client names and information. In Formax Inc. v. Alkar-Rapidpak-MP Equipement, Inc. (E.D. Wis. Feb. 25, 2014), Judge Griesbach discussed the issues with these sorts of unsupported assertions. He explained: “Motions to seal are becoming increasingly common and occupy an increasing portion of the court’s time. In litigation involving businesses expecially, it is common for one or both parties to request entry of a protective order to govern the handing [sic] information they may be obligated to disclose in discovery that the disclosing party believes could damage its business if the information is disclosed to the wider general public, including their competitors. The typical protective order requested by the parties allows the disclosing party to designate such information ‘confidential’ and thereby create a duty on the part of the receiving party to avoid any further disclosure of the information than is necessary to conduct the litigation. The benefit of such an order is that it increases a party’s willingness to respond to discovery requests without involving the court on closer questions because of fear that providing information that is not directly relevant may cause injury to their businesses.

“The difficulty arises when one of the parties decides to include information from a document designated ‘confidential’ as part of a court filing. The standard protective order states that if information from a document designated ‘confidential’ by another party is filed with the court, it must be sealed. Filing documents under seal, however, conflicts with the general rule that litigation in the courts of the United States is open to the public.”

Judge Griesbach went on to explain that it is “not enough to simply assert that disclosure would place a party at a competitive advantage.” While acknowledging that documents “containing highly sensitive pricing information, sales figures, sales dollar amounts, profit and loss data, and other financial records not normally made known to the public may be properly filed under seal,” he explained that “not all pricing information or customer lists are entitled to protection.” He found that “[a]bsent further explanation, the fact that documents contain such information does not constitute good cause for sealing them.”

The court will deny all three motions, because they do not state good cause for restricting. The court will allow the parties to file amended motions within twenty-one days—motions which comply with the Seventh Circuit’s directive that they analyze in detail, document by document, the propriety of the requested secrecy and provide reasons….

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Is a 1% Case Fatality Rate for COVID-19 Bad News or Good News?

During congressional testimony yesterday, Anthony Fauci, director of the National Institute of Allergy and Infectious Diseases, estimated that the case fatality rate (CFR) for COVID-19 will prove to be about 1 percent. Is that good news or bad news? It depends on how you look at it.

Fauci’s estimate is less than one-third the commonly cited CFR calculated by the World Health Organization and one-tenth the CFR for SARS, another disease caused by a coronavirus. But as he noted, it is 10 times the CFR for the seasonal flu, which is not as readily transmissible. And it is higher than President Donald Trump’s guess that the share of infected people who die from COVID-19 will turn out to be “a fraction of 1 percent.”

The basic problem is that the total number of cases is unknown, since the vast majority involve mild symptoms that would not necessarily cause people to seek medical attention or testing. The ratio of known deaths to identified cases, which currently yields a CFR of about 3.6 percent, is therefore bound to exaggerate the lethality of the disease. Studies of patients in China and infected cruise ship passengers indicate a substantially lower rate of 2.3 percent, but that is also likely to be an overestimate, since the denominator includes only people who are known to be infected.

Fauci’s estimate is close to the CFR in South Korea, which has an aggressive testing program with the capacity to process 20,000 samples a day. So far, more than 200,000 people have been tested there, compared to fewer than 9,000 in the United States, a country with a population more than six times as large. As of yesterday, South Korea had reported 7,755 cases and 60 deaths, which implies a CFR of about 0.8 percent. As in China, the death rate varied widely by age, ranging from 0 percent for patients younger than 30 to 7.2 percent for patients 80 or older. But overall, more than 99 percent of patients survived.

While those odds seem pretty good, even a relatively low CFR can result in many deaths if the infection rate is high. German Chancellor Angela Merkel yesterday warned that 70 percent of her country’s population could ultimately be infected by the COVID-19 virus. It’s not clear how Merkel arrived at that estimate. But if that worst-case scenario came true, a CFR of 0.8 percent would mean more than 400,000 deaths in Germany. If 70 percent of the U.S. population were infected, the number of deaths would be nearly 2 million.

Is the infection rate likely to be anywhere near that high in the United States? That depends on the effectiveness of measures aimed at curtailing the spread of COVID-19 and developing a vaccine. It also depends on whether COVID-19 follows a seasonal pattern similar to what is seen with the flu. Fauci said that is possible but warned that “we can’t proceed under that assumption.”

So far epidemic control measures in the U.S. have included isolation of patients, quarantines of potential carriers, cancellation of large-scale public events, school closures, increased reliance on telecommuting, “social distancing,” and hygienic precautions such as frequent hand washing as well as the international travel restrictions that Trump announced yesterday. Fauci said Phase 1 clinical trials of about 10 different vaccines should begin within a month or so, but vaccination probably will not begin until “a year to a year and a half” from now.

“We will see more cases, and things will get worse than they are right now,” Fauci said. “How much worse [it] will get will depend on our ability to do two things: to contain the influx of people who are infected coming from the outside and the ability to contain and mitigate within our own country.”

The 1918 Spanish flu pandemic, which involved a virus with a CFR somewhere between 2 percent and 5 percent, affected about a third of the world population and caused some 50 million deaths, including about 675,000 in the United States. The world population is more than four times as big today as it was then, the U.S. population is about three times as big, and international travel is much more common. But the CFR for COVID-19 appears to be much lower than the CFR for the 1918 pandemic, and disease control measures a century later are much improved.

Fauci declined to predict how many Americans will eventually be infected by the virus. “It is going to be totally dependent upon how we respond to it, so I can’t give you a number,” he said. “I can’t give you a realistic number until we put into [the calculation] the factor of how we respond. If we are complacent and don’t do really aggressive containment and mitigation, the number could go way up and [reach] many, many millions.”

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Sealing Court Filings Drawn from Discovery Requires More Than Just General Assertions of Confidentiality

From IDC Financial Pub., Inc. v. Bonddesk Group, decided Monday by Judge Pamela Pepper (E.D. Wisc.):

The plaintiff’s motion asks the court to restrict Exhibits A, E, F, H and J attached to the declaration of Matthew M. Wuest in support of the plaintiff’s motions in limine. Dkt. No. 160. In support of the motion, the plaintiff asserts that under Fed. R. Civ. P. 5.2(d) and Civil Local Rule 79(d)(4), the court has the authority to allow parties to restrict documents “for good cause.” It asserts that courts allow parties to restrict documents that contain sensitive business information, “especially, where, as here, the confidential material consists of ‘trade secrets or other categories of bona fide long-term confidentiality.’ ” Id. (citing Baxter Int’l, Inc. v. Abbott Labs. (7th Cir. 2002).

The plaintiff asserts that the court should restrict the exhibits because “they reference, describe, and quote from documents and information that the parties have designated as ‘CONFIDENTIAL’ or ‘ATTORNEYS EYES ONLY,’ and which the designating party has asserted contains non-public and confidential business and/or financial information.” Specifically, the plaintiff says the attachments contain “confidential deposition testimony and confidential client names and information.” The plaintiff says that ” ‘CONFIDENTIAL’ or ‘ATTORNEYS EYES ONLY’ information can also be damaging to the parties’ ability to compete in the marketplace if public disclosures were permitted.” BondDesk’s motion is similar…. Fidelity’s motion is much the same ….

None of the motions state good cause to restrict the attachments. “The Seventh Circuit has emphasized that ‘the public at large pays for the courts and therefore has an interest in what goes on at all stages of a judicial proceeding.'” A party may override this interest only if its privacy interest surmounts the public’s interest; “that is, only if there is good cause for sealing a part or the whole of the record in that case.”

In Baxter—the case the plaintiff itself cited—the Seventh Circuit faced a motion like the one the plaintiff has filed. The court explained, “[a] few weeks ago a single judge of this court, serving as motions judge for the week, received and denied a joint motion to maintain documents under seal. The motion was generic: it related that the parties had agreed on secrecy, that the documents contained commercially sensitive information, and so on, but omitted details. What is more, the motion did not attempt to separate genuinely secret documents from others in the same box or folder that could be released without risk.

“The motion was patterned on the sort of broad secrecy agreement that often accompanies discovery in order to expedite that process by avoiding document-by-document analysis. Secrecy is fine at the discovery stage, before the material enters the judicial record. But those documents, usually a small subset of all discovery, that influence or underpin the judicial decision are open to public inspection unless they meet the definition of trade secrets or other categories of bona fide long-term confidentiality.”

The court went on explain that the parties had made “no effort to justify the claim of secrecy,” simply asserting it on the ground that the documents to be sealed were commercial documents. The court stated, “[t]hat won’t do.” The court allowed the parties to amend their motion to seal, but stated that it would “in the future deny outright any motion … that does not analyze in detail, document by document, the propriety of secrecy, providing reasons and legal citations.” Since then, the court has affirmed that it would not seal documents “simply because the parties had agreed to do so among themselves because that practice deprives the public of material information about the judicial process.”

The plaintiff mentions “trade secrets” and confidential client names and information. In Formax Inc. v. Alkar-Rapidpak-MP Equipement, Inc. (E.D. Wis. Feb. 25, 2014), Judge Griesbach discussed the issues with these sorts of unsupported assertions. He explained: “Motions to seal are becoming increasingly common and occupy an increasing portion of the court’s time. In litigation involving businesses expecially, it is common for one or both parties to request entry of a protective order to govern the handing [sic] information they may be obligated to disclose in discovery that the disclosing party believes could damage its business if the information is disclosed to the wider general public, including their competitors. The typical protective order requested by the parties allows the disclosing party to designate such information ‘confidential’ and thereby create a duty on the part of the receiving party to avoid any further disclosure of the information than is necessary to conduct the litigation. The benefit of such an order is that it increases a party’s willingness to respond to discovery requests without involving the court on closer questions because of fear that providing information that is not directly relevant may cause injury to their businesses.

“The difficulty arises when one of the parties decides to include information from a document designated ‘confidential’ as part of a court filing. The standard protective order states that if information from a document designated ‘confidential’ by another party is filed with the court, it must be sealed. Filing documents under seal, however, conflicts with the general rule that litigation in the courts of the United States is open to the public.”

Judge Griesbach went on to explain that it is “not enough to simply assert that disclosure would place a party at a competitive advantage.” While acknowledging that documents “containing highly sensitive pricing information, sales figures, sales dollar amounts, profit and loss data, and other financial records not normally made known to the public may be properly filed under seal,” he explained that “not all pricing information or customer lists are entitled to protection.” He found that “[a]bsent further explanation, the fact that documents contain such information does not constitute good cause for sealing them.”

The court will deny all three motions, because they do not state good cause for restricting. The court will allow the parties to file amended motions within twenty-one days—motions which comply with the Seventh Circuit’s directive that they analyze in detail, document by document, the propriety of the requested secrecy and provide reasons….

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