What Does A Catastrophic First Half Mean For The Rest Of The Year (Spoiler: Nothing Good)

What Does A Catastrophic First Half Mean For The Rest Of The Year (Spoiler: Nothing Good)

Contrary to some erroneous and superficial assessments that a catastrophic first half of the year has historically been good for future returns, the reality is that an ugly H1 – and this year was certainly ugly, in fact the worst first half since 1970 –  suggests a volatile and lackluster second half.

According to the latest analysts from BofA chief technician Stephen Suttmeier (full note available to pro subs), when the SPX Index has a negative first half of the year, the second half of the year tends to recover but is much less robust. The 2H average return after a down 1H is 1.33% (2.09% median), which is considerably lower when compared to the average return after a positive 1H of 5.67% (6.45% median). Additionally, after a down 1H, 2H tends to have a lower percent of time up, as well as more volatile returns given that the range of returns tends to be double that of 2H returns after a positive 1H.

There is some silver lining, and it has to do with midterm years: according to Suttmeier, after a down 1H, the midterm year tends to recover in 2H and is up 55% of the time on an average return of 4.42% (3.38% median)

Of course, one has to look back decades to find a similar shitshow when it comes to US governance, so it’s probably best to not get one’s hopes up, although once the market starts pricing in the Democratic devastation of the midterms, it’s not too far-fetched to see stocks soaring in anticipation.

Midterm outliers aside, the BofA goes down the list of historic events with some more bad news: specifically, as the data next show, first half declines often precedes a down 2H during bear markets, which this now is. According to Suttmeier, “when the SPX drops in 1H of a secular bear year, 2H trades higher only 39% of the time with an average return of -2.10% (-5.35% median). The range of 2H returns after a down 1H are also more volatile during a secular bear market vs a secular bull market.”

There’s more, because as Suttmeier shows next, 2 consecutive down quarters = lackluster forward returns. As the BofA technician reminds us, the SPX was down 16.46% in 2Q, which follows a 1Q drop of 4.95%. After two consecutive down quarters, the SPX is somewhat less likely to trade higher with lackluster 1 to 4-quarter forward returns. The biggest drag on forward returns is at the 2-quarter forward return period. Going out one year shows the SPX up 59% of the time on an average return of 6.25% (5.31% median), which compares to a historical average return of 7.90% (9.54% median) with the SPX up 67% of the time.

Going back to the “midterm year” special case, Suttmeier notes that two consecutive down quarters either within or heading into the midterm year “provide a stress test for the Presidential Cycle. This scenario shows weaker returns going out from one to two quarters prior to better 3-quarter returns and more robust 4-quarter returns. In our view, this is a risk for 2H 2022 SPX returns.”

One final point from BofA on the big picture, and it has to do with pullbacks: yes, over the long run stocks have enjoyed a higher path since 1930s but with plenty of big dips.

After the 1929 market crash and downtrend into a 1932 low, the SPX has trended higher, but only surpassed the 1929 peak in 1954, a quarter century later! Intra-day data show an early January into mid June cyclical bear market of 24.5%, which corrects the 120% rally from the March 2020 low.

The chart below shows that big rallies over the years get interrupted by sizeable corrections, but the SPX has trended higher over time, especially after bullish breakouts in 1950, 1950, 1980 and 2013.

According to Suttmeier, the big pullbacks in the chart above average 36.7% (29.6% median).

The table below provides the key statistics around the biggest drawdowns that the SPX has seen throughout the years. The average drop of 36.7% lasts 17 months, while the median drop lasts 14 months and is less severe at 29.6%. Rallies from big lows take a while to recover the prior high The data for all pullbacks back to the late 1920s suggest that the rallies from big correction lows to a monthly close above the prior intra-month high happen 55 months later on average on an average rally of 91.4%. The median rally from the low to a close above the prior monthly high is 42.1% and takes 25 months.

Finally, those wondering how long they have to wait for a new high, the answer is (on average) just over two years, as rallies from lows to new highs from five to 25 months.

The data during secular bull markets suggest that the rallies from big correction lows to a monthly close above the prior intra-month high average 15 months on an average rally of 36.8%. The median rally from the low to a close above the prior monthly high is 33.2% and also takes 15 months. However, the rallies from the lows in 1957, 1962, 1982 and 1987 took 22 to 25 months to surpass the prior high, while those from lows in 1990, 1998, 2018 and 2020 took only four to eight months to achieve a new high.

There are many more stats in the full BofA report available to professional subs.

Tyler Durden
Tue, 07/05/2022 – 15:29

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DeSantis’ Team Responds To Newsom Ad Saying Florida Residents Should Move To California

DeSantis’ Team Responds To Newsom Ad Saying Florida Residents Should Move To California

Authored by Jack Phillips via The Epoch Times (emphasis ours),

Florida Gov. Ron DeSantis’s office has responded to California Gov. Gavin Newsom’s advertisements encouraging residents of the Sunshine State to move to the Golden State.

Governor Gavin Newsom speaks to reporters at AltaMed Urgent Care in Santa Ana, Calif., on March 25, 2021. (John Fredricks/The Epoch Times)

The people of Florida pay no mind to the pathetic smear campaigns from the Democrats and their allies in the corporate media,” DeSantis spokesman Dave Abrams told The Daily Wire. “We’re too busy enjoying the freedom Gov. Ron DeSantis has created in the Sunshine State.”

The ad from Newsom, a Democrat, triggered speculation that the California governor would run for office in 2024, possibly against DeSantis. Some have speculated that the Florida Republican would throw his hat into the race, although DeSantis has repeatedly downplayed those suggestions at events.

Florida Gov. Ron DeSantis speaks during a press conference held at the Cox Science Center & Aquarium in West Palm Beak, Florida, on June 08, 2022. (Joe Raedle/Getty Images)

Newsom, meanwhile, has previously said he has no interest in running for president. The California governor survived a statewide recall effort last year and is running for reelection in the gubernatorial race in 2022.

It’s Independence Day—so let’s talk about what’s going on in America,” Newsom said in the ad, which was posted on his Twitter account. “Freedom is under attack in your state.

Using left-wing talking points, Newsom then alleged, without providing evidence or details, that Florida officials are “banning books,” “restricting speech,” “making it harder to vote,” and “criminalizing women and doctors.”

‘Light a Pile of Cash on Fire’

Abrams told the news outlet that “Newsom might as well light a pile of cash on fire” with the advertisements. “Pass the popcorn for his desperate attempt to win back the California refugees who fled the hellhole he created in his state to come to Florida,” he said.

Despite Newsom saying he doesn’t want to run for president in two years, it’s unclear why he’s running an ad in Florida.

In 2021, reports indicated that more than 300,000 people left California and moved to places like Texas and Florida, possibly due to the state’s left-wing politics and high cost of living.

Speaking about whether Newsom would join the 2024 presidential race, Cedric Richmond, a former senior Biden White House official who works for the Democratic National Committee, told Politico that “everybody is trying to be relevant for the next race.”

Newsom “came through the recall election, and he’s doing a pretty good job as governor,” Richmond told the outlet. “However, I think ambition makes people do different things.”

Read more here…

Tyler Durden
Tue, 07/05/2022 – 15:06

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Norwegian Strikes Could Sever NatGas Supplies To UK 

Norwegian Strikes Could Sever NatGas Supplies To UK 

The European energy crunch is set to worsen this week after Norwegian offshore oil and gas workers went on strike, threatening to sever the Scandinavian country’s energy supplies to the UK and Europe, according to Reuters

As much as 1,117,000 barrels of oil equivalent, or 56% of daily natural gas exports, while 341,000 barrels of oil would be lost by Saturday if strikes continue closing down fields, the Norwegian Oil and Gas (NOG) employer’s lobby warned. 

“The strike has begun,” Audun Ingvartsen, the leader of Norway’s oil workers’ union, Lederne, said in an interview. He added the strike would escalate as workers pressure oil/gas companies to increase wages and benefits amid the worse inflation in Europe in decades. 

Norway is Europe’s second-largest energy supplier after Russia. The timing of strikes comes as European countries rush to inject NatGas supplies into storage ahead of the winter, and Russian energy giant Gazprom significantly reduced Nord Stream flows to Europe. Gazprom plans to halt Nord Stream flows for routine maintenance from July 11 for ten days. 

Norway’s Gassco, a state-owned pipeline operator, explained to Financial Times, “in a worst-case scenario, deliveries to the UK could stop totally.” 

“The UK has also become a key conduit for moving supplies on to Europe over the summer, with its export pipelines to Belgium and the Netherlands running at speed to send excess imports of liquefied natural gas and Norwegian supplies into continental storage ahead of the winter,” FT said. 

News of the strikes sent British wholesale NatGas price for day-ahead delivery up 16%. 

Strikes began on Monday and knocked offline 89,000 barrels of oil equivalent a day of production at three fields on Norway’s continental shelf. Three more fields could be closed by Wednesday, affecting even more production. If the labor union and energy companies don’t come to a resolution on wages, a total of 14 sites could be offline by Saturday, representing a 56% reduction in NatGas exports. 

Considering Norway is the UK’s largest source of NatGas in 2021, NatGas and power prices are soaring on supply woes. Prices in Europe are rising as well. 

Tom Marzec-Manser, an analyst at consultancy ICIS, said the UK will receive four LNG cargos between July 10 and July 19 and might be able to weather the acute loss of NatGas supplies from Norway. 

“But for Europe as a whole this couldn’t really be happening at a worse time, outside the depths of winter, as we desperately need to fill storage ahead of the colder months,” Marzec-Manser added.

Besides Norwegian supplies, Europe has been betting on LNG cargoes from the US. However, the closure of the Freeport LNG Terminal in Texas last month due to an explosion will affect roughly 16% of the total US LNG export capacity through late year. 

As the supply crunch worsens across Europe, Goldman Sachs’ Samantha Dart increased her European NatGas price forecast as she “no longer sees” a full resumption of Nord Stream flows. 

“Instead, the lack of resolution around required turbine repairs, and the absence of any Gazprom-driven re-routing of the reduced NS1 flows via an alternative pipeline to mitigate the impact to supply suggest a prolonged reduced flow rate at NS1 is more likely going forward,” Dart wrote in a note to clients on Monday. She bumped her TTF price forecasts to €153 per MWh in the third quarter, up from €104.

Strike developments from Norway, affecting supplies to the UK and Europe, couldn’t have come at the worst time. 

Tyler Durden
Tue, 07/05/2022 – 14:45

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Nine Cases From OT 2021 Term For The Barnett/Blackman Supplement

Every summer, we prepare the supplement for the Barnett/Blackman casebook. In recent years, we have tried to edit the cases on the same day they are decided. This year, the back-to-back Dobbs/Bruen drops delayed our schedule. We have now finished our review. Here are the nine cases that will be in the supplement.

What a momentous term! If I had to predict, about half of these cases will make their way into the fifth edition of the casebook. Dobbs overruled RoeCarson completes the trilogy that began with Trinity Lutheran and EspinozaKennedy finally interred Lemon, and more importantly, eliminated the Lemon defense. Bruen finally decided the issues left unresolved in Heller and McDonaldTorres v. DPS may represent a new schism on the Court with sovereign immunity. And West Virginia may be the first step (or at least half a step) to a reinvigoration of the non-delegation doctrine.

The fifth edition of the casebook should be published in 2026–just in time for the Semiquincentennial. What will constitutional law look like for the 250th anniversary of the signing of the Declaration of Independence?

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Ron Paul: Biden’s Sanctions Are A Windfall For Russia, Foreign Policy Fail

Ron Paul: Biden’s Sanctions Are A Windfall For Russia, Foreign Policy Fail

Authored by Ron Paul via The Ron Paul Institute for Peace & Prosperity,

It’s easy to see why, according to a new Harris poll, 71 percent of Americans said they do not want Joe Biden to run for re-election. As Americans face record gas prices and the highest inflation in 40 years, President Biden admits he could not care less. His Administration is committed to fight a proxy war with Russia through Ukraine and Americans just need to suck it up.

Last week a New York Times reporter asked Biden how long he expects Americans to pay record gasoline prices over his Administration’s Ukraine policy. “As long as it takes,” replied the president without hesitation.

“Russia cannot defeat Ukraine,” added Biden as justification for his Administration’s pro-pain policy toward Americans. The president has repeatedly tried to deflect blame for the growing economic crisis by claiming Russia is solely behind recent inflation. “The reason why gas prices are up is because of Russia. Russia, Russia, Russia,” he said in the same press conference.

But Biden has a big problem: Americans do not believe him. According to a Rasmussen poll earlier this month, only eleven percent of Americans believe Biden’s claim that Russian president Vladimir Putin is to blame for high prices.

When it comes to disdain for the average American hurt by higher prices, there is more than enough in the Biden Administration to go around.

Brian Deese, Director of President Biden’s National Economic Council, was asked in a recent CNN interview, “What do you say to those families that say, listen, we can’t afford to pay $4.85 a gallon for months, if not years?”

His answer? “This is about the future of the Liberal World Order and we have to stand firm.”

Has there ever been an Administration more out of touch with the American people? If you asked working Americans whether they’d be happy to suffer poverty for the “liberal world order,” how many would say “that sounds like a great idea”?

President Biden’s attempts to bring down gasoline prices are bound to fail because he does not understand the problem. He can beg the Saudis to pump more oil, he can even threaten the US oil companies as he did in a Tweet yesterday. He can buy and sell from the Strategic Petroleum Reserve in attempt to give the impression that prices are lowering. None of it will work.

The strangest part of this idea that Americans must suffer to hurt the Russians is that these policies aren’t even hurting Russia! On the contrary: Russia has been seen record profits from its oil and gas exports since the beginning of the Ukraine war.

According to a recent New York Times article, increasing global oil and gas prices have enabled Russia to finance its war on Ukraine. US sanctions did not bring the Russian economy to its knees, as Biden promised. They actually brought the American economy to its knees while Russian profits soared.

As Newsweek noted last week, Russian television pundits are joking that with the financial windfall Russia has seen since sanctions were imposed, “Biden is of course our agent.”

Washington’s bi-partisan foreign policy of wasting trillions on endless wars overseas has finally come home. Biden is clearly out of touch, but there is plenty of blame to go around. The only question is whether we will see an extended recession…or worse.

Tyler Durden
Tue, 07/05/2022 – 14:25

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JPMorgan The Latest To Sour On Tesla, Sees Shares 40% Lower On Reduced Deliveries

JPMorgan The Latest To Sour On Tesla, Sees Shares 40% Lower On Reduced Deliveries

After Tesla’s big Q2 deliveries miss and despite the fact that the company recorded its best production for June in history, analysts are souring on the name.

The latest investment bank to lower its price target on Tesla has been JP Morgan, who has said that shares could fall 40% from current levels. 

“Expansion into higher volume segments with lower price points seems fraught with greater risk relative to demand, execution and competition,” a note from JP Morgan analysts said on Monday, according to Reuters

The note continued: “There may be reason to believe that production, and financial results, could be being impacted also by company-specific execution issues at the company’s new factories in Austin and Berlin.” 

The investment bank then cut its price target on the company from $395 to $385 – about a 40% drop from the stock’s current levels close to $680 per share. 

JP Morgan’s price target is considerably lower than the Refinitiv median price target, which stands at $950. 

Recall, Tesla was out over the weekend said that it delivered just 254,695 vehicles for Q2 2022, as the company hit snags due to its Shanghai shutdown and supply chain issues.

Despite this, the company’s June month was the highest vehicle production month in Tesla’s history, according to Bloomberg. The company’s deliveries represent a 26.7% gain in deliveries from last year and a drop from last quarter’s record of 310,048. 

The drop marked the lowest delivery quarter since Q3 2021 for Model 3/Y vehicles. 

The company was originally expected to deliver 295,000 vehicles, but analysts had reduced their estimates to around 256,000 over the last week, TheStreet noted. Tesla delivered 238,533 Model 3 and Model Ys for the quarter, and 16,162 Model S and Model X vehicles. 

As you can see, the company’s phase out of the Model S and Model X looks to have continued, despite a slight uptick:

The company stated: “In the second quarter, we produced over 258,000 vehicles and delivered over 254,000 vehicles, despite ongoing supply chain challenges and factory shutdowns beyond our control.”

Q2 was widely expected by Wall Street to be a miss due to the disruptions. “This has been a very tough quarter, primarily due to supply chain and production challenges in China. So we need to rally hard to recover!” CEO Elon Musk said back in mid-June

Morgan Stanley was out 2 weeks ago bracing for the Q2 plunge, lowering price targets on the name and saying it expected lower Q2 volumes. “We mark to market our 2Q forecasts for lower volume (latest data, China) with most of the shortfall made up for in 2H volume and higher pricing,” analyst Adam Jonas wrote last month. He also predicted the company would have a good June: 

Despite the cuts, Jonas is still encouraging “buying the dip” into what will likely be a weak Q2 print. He said that “with TSLA 2Q sales estimated to be around 100k units through May (EV-Volumes.com), we believe TSLA will flex its manufacturing prowess, aided by accelerated ramp of Austin and Berlin, and deliver ~170-175k units in June.”

Also in June we had highlighted a Wedbush note from Dan Ives said Tesla’s shutdown in China was an “epic disaster” for its June quarter. Ives said he expects to see “modest delivery softness” for the quarter. 

Ives also said he is expecting a “slower growth trajectory” in China into the second half of the year and called the headwinds out of Asia “hard to ignore”. He also commented that the ongoing Twitter drama “may be a distraction” for Musk at a time when his attention should be focused on dealing with Tesla’s issues. 

Recall, we noted weeks ago that “no vehicles were sold in Shanghai last month [April]” as a result of the lockdown, according to an auto-seller association in the city. 

 

Tyler Durden
Tue, 07/05/2022 – 14:05

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Nine Cases From OT 2021 Term For The Barnett/Blackman Supplement

Every summer, we prepare the supplement for the Barnett/Blackman casebook. In recent years, we have tried to edit the cases on the same day they are decided. This year, the back-to-back Dobbs/Bruen drops delayed our schedule. We have now finished our review. Here are the nine cases that will be in the supplement.

What a momentous term! If I had to predict, about half of these cases will make their way into the fifth edition of the casebook. Dobbs overruled RoeCarson completes the trilogy that begin with Trinity Lutheran and EspinozaKennedy finally interred Lemon, and more importantly, eliminated the Lemon defense. Bruen finally decided the issues left unresolved in Heller and McDonaldTorres v. DPS may represent a new schism on the Court with sovereign immunity. And West Virginia may be the first step (or at least half a step) to a reinvigoration of the non-delegation doctrine.

The fifth edition of the casebook should be published in 2026–just in time for the Semiquincentennial. What will constitutional law look like for the 250th anniversary of the signing of the Declaration of Independence?

The post Nine Cases From OT 2021 Term For The Barnett/Blackman Supplement appeared first on Reason.com.

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Lawsuit by Tara Reade (Who Accused President Biden of Sexual Assault) Against N.Y. Times Dismissed

From Reade v. N.Y. Times Co., decided Friday by Judge William Shubb (E.D. Cal.):

Plaintiff Tara Reade brought this action against defendant The New York Times Company challenging the alleged publication of a photograph containing her Social Security number in defendant’s newspaper, The New York Times ….

During the 2020 United States presidential campaign, plaintiff publicly accused then-candidate Joe Biden of having sexually assaulted her in the 1990s, while plaintiff was working at the United States Senate. The Times investigated plaintiff’s allegations and, to corroborate them, plaintiff provided the Times with a photograph of her federal identification card from her time with the Senate. That ID card included what turned out to be the upper portion of plaintiff’s Social Security number.

The Times published an article about plaintiff’s allegations in April of 2020, in which it included the photo of her ID card, though plaintiff had not expressly given the Times consent to publish the photo. The Times removed the photo after roughly nine hours, after plaintiff demanded its removal. Plaintiff alleges that the photo was viewed thousands or millions of times before it was removed and that there have since been hundreds of attempts to steal her identity using her Social Security number….

The court concluded that Cal. Civ. Code § 1798.85—”a person or entity may not … [intentionally communicate or otherwise make available to the general public] in any manner an individual’s social security number”—doesn’t create a private right of action:

Because § 1798.85 contains no “obvious language” indicating that cause of action exists, the court turns to legislative history. To demonstrate the existence of a cause of action, the legislative history must offer a “clear indication that the Legislature intended to create a private cause of action under the statute.” …

[P]laintiff points to two portions of a report on the law by the Assembly Committee on Banking and Finance. She first points to the report’s statement that the law represents “a modest effort to allow the victim to assertively deal with the consequences of identity theft.” Although this statement suggests the Committee’s view that the law could assist victims of identity theft in addressing the effects of such theft, its meaning is clarified when read in context with the second portion plaintiff identifies. There, the Committee recommends that the bill’s “author … consider specific causes of action and monetary sanctions for violations” and that such sanctions include “costs and attorney fees to the prevailing plaintiff.” This language makes plain the Committee’s understanding that the statute, as written, did not provide a cause of action for violations, hence the Committee’s recommendation that one or more causes of action be added. That recommendation was never adopted.

In light of those statements, this court cannot conclude that the report’s vague reference to victims “assertively deal[ing] with the consequences of identity theft” constitutes a “clear indication that the Legislature intended to create a private cause of action under the statute.” Likewise, that the report lists the statute’s projected “fiscal effect” as “None,” provides too weak an inference of intent to create a cause of action for the court to recognize one here. Although plaintiff argues the lack of a projected fiscal impact indicates that the legislature did not intend for the state Attorney General to enforce the law, and that individuals whose Social Security numbers are published therefore must be able to enforce the law themselves, (Opp. at 11 (Docket No. 15)), this rationale is far too speculative to represent a “clear indication” of legislative intent. Moreover, it appears that the Attorney General has indeed sought to enforce this statute on at least one occasion, via an action brought under California’s Unfair Competition Law, Cal. Bus. & Prof. Code § 17200, indicating that a means of enforcing the law does in fact exist.

Plaintiff also cites an unpublished California Superior Court decision, Skylight Advisors, LLC v. Does 1-25 (Cal. Super. Ct. 2021), … in arguing that a cause of action exists.There, the court stated that, “[a]s a remedial statute, the Court believes that there is a manifest intent to allow a private right of action” in § 1798.85. However, that conclusion is expressly qualified by the court’s statement that “[n]o party provide[d] the Court with the full legislative history, including what the Legislative Analyst or Counsel stated about [the existence of a] claim (if anything),” and that “the Court [was] open to persuasion on this point at a later stage of the proceedings, perhaps with a better recitation of Legislative history.” This discussion makes clear that that court did not consider the legislative materials that this court has reviewed. Skylight Advisors is therefore unpersuasive.

The court also concluded that plaintiff hadn’t sufficiently alleged that the Times had “intentionally” displayed the social security number:

The court has reviewed an unredacted image of the photo, which the court has separately ordered to be sealed, and it is not at all obvious that the number is in fact a Social Security number.Only the top half of the digits are visible at the bottom of the image, and it is not even clear what numbers they are. The two dashes typically separating the digits are also absent from the photo. The mere fact that defendant has a practice of reviewing photos before publishing them online does not plausibly suggest that its inclusion of a portion of plaintiff’s Social Security number was intentional…. [C]ourts not “required to accept as true allegations that are merely … unwarranted deductions of fact[ ] or unreasonable inferences” ….

There is no suggestion as to how defendant would have known that portions of what appear to be numbers on what was represented to be plaintiff’s identification badge as an employee of the United States Senate were in fact her Social Security number. Moreover, the Complaint does not even definitively state that defendant’s publication of the Social Security number was, in fact, intentional, but rather alleges that the publication may instead have been reckless. Because the statute specifies that intentional display or dissemination is required, recklessness is insufficient….

The court also rejected a California public disclosure of private facts claim, concluding that this generally applies only to “intimate details of [a] plaintiff’s private life,” which are “embarrassing, uncomplimentary, discreditable, indecent, derogatory, or reprehensible”:

In sum, this court concludes that, under existing California law, to state a claim for public disclosure of private facts a plaintiff must allege disclosure not merely of facts she would prefer to keep private, but rather of private facts that rise to such a level as could be characterized as embarrassing in nature, such as would adversely affect her personal or professional reputation if disclosed. Personal identifying information such as a Social Security number, standing alone, clearly does not qualify because it discloses nothing about the individual’s conduct or personal life that would adversely affect her reputation if made known to others.

And the court rejected Reade’s negligence claim, because such claims generally require physical injury to the plaintiff or plaintiff’s property, and not merely emotional or financial damages. “Precedent also establishes that allegations of ‘increased risk of identity theft,’ standing alone, are insufficient to show actual damages” recoverable in a negligence case.

Finally, the court granted the Times‘ anti-SLAPP motion (which would require Reader to pay the Times‘ attorney fees); the Ninth Circuit had held that the California anti-SLAPP statute can apply in federal cases:

“A court considering a motion to strike under the anti-SLAPP statute must engage in a two-part inquiry.” The defendant must first show “that the plaintiff’s suit arises from an act by the defendant made in connection with a public issue in furtherance of the defendant’s right to free speech under the United States or California Constitution.” “The burden then shifts to the plaintiff,” who “must show a reasonable probability of prevailing in [her] claims for those claims to survive dismissal.”

Where an anti-SLAPP motion is made at the pleading stage, challenging the legal sufficiency of a claim, the second part of the analysis is identical to the analysis performed in evaluating a motion to dismiss under Rule 12(b)(6). Accordingly, where a court concludes that a plaintiff’s complaint fails to satisfy the 12(b)(6) standard, the only remaining question is whether the suit arises from “an act by the defendant made in connection with a public issue in furtherance of the defendant’s right to free speech.”

Such an “act” includes, as relevant here, “any written or oral statement or writing made in a place open to the public or a public forum in connection with an issue of public interest” and “any other conduct in furtherance of the exercise of the constitutional right of petition or the constitutional right of free speech in connection with a public issue or an issue of public interest.” “[P]ublic issues,” in turn, include “statements concerning a person or entity in the public eye” and “topic[s] of widespread, public interest.” …

The publication of the photo, which plaintiff voluntarily provided to the newspaper that she knew intended to write a story about her, was clearly done in connection with a public issue in furtherance of the newspaper’s constitutional right to free speech…. Moreover, in the article in which the photo was published, the Times was reporting on plaintiff’s accusation that a leading candidate for President of the United States had sexually assaulted her. Such an accusation would certainly have been of interest to a substantial number of people.

Plaintiff argues that the article could have told the story just as effectively without the photo or if the editors had omitted the number segments from the bottom of it. First, since it was plaintiff who submitted the photo with the partial number visible on the bottom to the Times, presumably she agreed that both the photo and the numbers had some relevance to the article in that they corroborated her claim that she had worked for the Senate. More importantly, the test is not whether the article could have been written or presented differently, but rather only whether the defendant has shown that its actions were “in furtherance of” its constitutional right of free speech in connection with a public issue.

Congratulations to the Times’ lawyer Al-Amyn Shiraz Sumar and to Kanika D. Corley of Akerman LLP on the victory.

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Lawsuit by Tara Reade (Who Accused President Biden of Sexual Assault) Against N.Y. Times Dismissed

From Reade v. N.Y. Times Co., decided Friday by Judge William Shubb (E.D. Cal.):

Plaintiff Tara Reade brought this action against defendant The New York Times Company challenging the alleged publication of a photograph containing her Social Security number in defendant’s newspaper, The New York Times ….

During the 2020 United States presidential campaign, plaintiff publicly accused then-candidate Joe Biden of having sexually assaulted her in the 1990s, while plaintiff was working at the United States Senate. The Times investigated plaintiff’s allegations and, to corroborate them, plaintiff provided the Times with a photograph of her federal identification card from her time with the Senate. That ID card included what turned out to be the upper portion of plaintiff’s Social Security number.

The Times published an article about plaintiff’s allegations in April of 2020, in which it included the photo of her ID card, though plaintiff had not expressly given the Times consent to publish the photo. The Times removed the photo after roughly nine hours, after plaintiff demanded its removal. Plaintiff alleges that the photo was viewed thousands or millions of times before it was removed and that there have since been hundreds of attempts to steal her identity using her Social Security number….

The court concluded that Cal. Civ. Code § 1798.85—”a person or entity may not … [intentionally communicate or otherwise make available to the general public] in any manner an individual’s social security number”—doesn’t create a private right of action:

Because § 1798.85 contains no “obvious language” indicating that cause of action exists, the court turns to legislative history. To demonstrate the existence of a cause of action, the legislative history must offer a “clear indication that the Legislature intended to create a private cause of action under the statute.” …

[P]laintiff points to two portions of a report on the law by the Assembly Committee on Banking and Finance. She first points to the report’s statement that the law represents “a modest effort to allow the victim to assertively deal with the consequences of identity theft.” Although this statement suggests the Committee’s view that the law could assist victims of identity theft in addressing the effects of such theft, its meaning is clarified when read in context with the second portion plaintiff identifies. There, the Committee recommends that the bill’s “author … consider specific causes of action and monetary sanctions for violations” and that such sanctions include “costs and attorney fees to the prevailing plaintiff.” This language makes plain the Committee’s understanding that the statute, as written, did not provide a cause of action for violations, hence the Committee’s recommendation that one or more causes of action be added. That recommendation was never adopted.

In light of those statements, this court cannot conclude that the report’s vague reference to victims “assertively deal[ing] with the consequences of identity theft” constitutes a “clear indication that the Legislature intended to create a private cause of action under the statute.” Likewise, that the report lists the statute’s projected “fiscal effect” as “None,” provides too weak an inference of intent to create a cause of action for the court to recognize one here. Although plaintiff argues the lack of a projected fiscal impact indicates that the legislature did not intend for the state Attorney General to enforce the law, and that individuals whose Social Security numbers are published therefore must be able to enforce the law themselves, (Opp. at 11 (Docket No. 15)), this rationale is far too speculative to represent a “clear indication” of legislative intent. Moreover, it appears that the Attorney General has indeed sought to enforce this statute on at least one occasion, via an action brought under California’s Unfair Competition Law, Cal. Bus. & Prof. Code § 17200, indicating that a means of enforcing the law does in fact exist.

Plaintiff also cites an unpublished California Superior Court decision, Skylight Advisors, LLC v. Does 1-25 (Cal. Super. Ct. 2021), … in arguing that a cause of action exists.There, the court stated that, “[a]s a remedial statute, the Court believes that there is a manifest intent to allow a private right of action” in § 1798.85. However, that conclusion is expressly qualified by the court’s statement that “[n]o party provide[d] the Court with the full legislative history, including what the Legislative Analyst or Counsel stated about [the existence of a] claim (if anything),” and that “the Court [was] open to persuasion on this point at a later stage of the proceedings, perhaps with a better recitation of Legislative history.” This discussion makes clear that that court did not consider the legislative materials that this court has reviewed. Skylight Advisors is therefore unpersuasive.

The court also concluded that plaintiff hadn’t sufficiently alleged that the Times had “intentionally” displayed the social security number:

The court has reviewed an unredacted image of the photo, which the court has separately ordered to be sealed, and it is not at all obvious that the number is in fact a Social Security number.Only the top half of the digits are visible at the bottom of the image, and it is not even clear what numbers they are. The two dashes typically separating the digits are also absent from the photo. The mere fact that defendant has a practice of reviewing photos before publishing them online does not plausibly suggest that its inclusion of a portion of plaintiff’s Social Security number was intentional…. [C]ourts not “required to accept as true allegations that are merely … unwarranted deductions of fact[ ] or unreasonable inferences” ….

There is no suggestion as to how defendant would have known that portions of what appear to be numbers on what was represented to be plaintiff’s identification badge as an employee of the United States Senate were in fact her Social Security number. Moreover, the Complaint does not even definitively state that defendant’s publication of the Social Security number was, in fact, intentional, but rather alleges that the publication may instead have been reckless. Because the statute specifies that intentional display or dissemination is required, recklessness is insufficient….

The court also rejected a California public disclosure of private facts claim, concluding that this generally applies only to “intimate details of [a] plaintiff’s private life,” which are “embarrassing, uncomplimentary, discreditable, indecent, derogatory, or reprehensible”:

In sum, this court concludes that, under existing California law, to state a claim for public disclosure of private facts a plaintiff must allege disclosure not merely of facts she would prefer to keep private, but rather of private facts that rise to such a level as could be characterized as embarrassing in nature, such as would adversely affect her personal or professional reputation if disclosed. Personal identifying information such as a Social Security number, standing alone, clearly does not qualify because it discloses nothing about the individual’s conduct or personal life that would adversely affect her reputation if made known to others.

And the court rejected Reade’s negligence claim, because such claims generally require physical injury to the plaintiff or plaintiff’s property, and not merely emotional or financial damages. “Precedent also establishes that allegations of ‘increased risk of identity theft,’ standing alone, are insufficient to show actual damages” recoverable in a negligence case.

Finally, the court granted the Times‘ anti-SLAPP motion (which would require Reader to pay the Times‘ attorney fees); the Ninth Circuit had held that the California anti-SLAPP statute can apply in federal cases:

“A court considering a motion to strike under the anti-SLAPP statute must engage in a two-part inquiry.” The defendant must first show “that the plaintiff’s suit arises from an act by the defendant made in connection with a public issue in furtherance of the defendant’s right to free speech under the United States or California Constitution.” “The burden then shifts to the plaintiff,” who “must show a reasonable probability of prevailing in [her] claims for those claims to survive dismissal.”

Where an anti-SLAPP motion is made at the pleading stage, challenging the legal sufficiency of a claim, the second part of the analysis is identical to the analysis performed in evaluating a motion to dismiss under Rule 12(b)(6). Accordingly, where a court concludes that a plaintiff’s complaint fails to satisfy the 12(b)(6) standard, the only remaining question is whether the suit arises from “an act by the defendant made in connection with a public issue in furtherance of the defendant’s right to free speech.”

Such an “act” includes, as relevant here, “any written or oral statement or writing made in a place open to the public or a public forum in connection with an issue of public interest” and “any other conduct in furtherance of the exercise of the constitutional right of petition or the constitutional right of free speech in connection with a public issue or an issue of public interest.” “[P]ublic issues,” in turn, include “statements concerning a person or entity in the public eye” and “topic[s] of widespread, public interest.” …

The publication of the photo, which plaintiff voluntarily provided to the newspaper that she knew intended to write a story about her, was clearly done in connection with a public issue in furtherance of the newspaper’s constitutional right to free speech…. Moreover, in the article in which the photo was published, the Times was reporting on plaintiff’s accusation that a leading candidate for President of the United States had sexually assaulted her. Such an accusation would certainly have been of interest to a substantial number of people.

Plaintiff argues that the article could have told the story just as effectively without the photo or if the editors had omitted the number segments from the bottom of it. First, since it was plaintiff who submitted the photo with the partial number visible on the bottom to the Times, presumably she agreed that both the photo and the numbers had some relevance to the article in that they corroborated her claim that she had worked for the Senate. More importantly, the test is not whether the article could have been written or presented differently, but rather only whether the defendant has shown that its actions were “in furtherance of” its constitutional right of free speech in connection with a public issue.

Congratulations to the Times’ lawyer Al-Amyn Shiraz Sumar and to Kanika D. Corley of Akerman LLP on the victory.

The post Lawsuit by Tara Reade (Who Accused President Biden of Sexual Assault) Against N.Y. Times Dismissed appeared first on Reason.com.

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BoJo Government On Verge Of Collapse After Top Ministerial Resignations

BoJo Government On Verge Of Collapse After Top Ministerial Resignations

In the latest shock to Boris Johnson’s shambolic cabinet, on Tuesday afternoon Chancellor Rishi Sunak and health secretary Sajid Javid both unexpectedly resigned from BoJo’s government as a row over the UK prime minister’s honesty intensified.

In separate letters to Johnson, both ministers criticized the prime ministers conduct: Sunak wrote that “we cannot continue like this,” while Javid told Johnson that he’s lost confidence in him. Both men published their resignation letters on Twitter.

Sunak wrote: “The public rightly expect government to be conducted properly, competently and seriously . . . I recognise this may be my last ministerial job, but I believe these standards are worth fighting for and that is why I am resigning.”

He added that “the public rightly expect government to be conducted properly, competently and seriously” and said that “I believe these standards are worth fighting for and that is why I am resigning.”

In his letter to Johnson, Javid wrote “the vote of confidence last month showed that a large number of our colleagues agree. It was a moment for humility, grip and new direction. I regret to say, however, that it is clear to me that this situation will not change under your leadership.”

The resignations of two of his most senior ministers came just as Johnson was acknowledging in a televised address that it was a “mistake” to promote Chris Pincher in February – two years after being told of a complaint against the Tory MP. Pincher quit as a government enforcer, or whip, last week when the Sun newspaper alleged he had groped two men.

While Pincher has denied allegations of specific incidents, he said in his resignation letter last week that he’d “embarrassed” himself and “caused upset” to others. He and his office haven’t replied to repeated requests for comment.

“I think it was a mistake and I apologize for it,” Johnson said of Pincher’s promotion. “In hindsight it was the wrong thing to do. I want to make absolutely clear that there’s no place in this government for anybody who is predatory or who abuses their position of power.”

But, as Bloomberg notes, the apology came too late for Sunak and Javid after a febrile day in Westminster in which Conservative MPs demanded the Cabinet act to oust Johnson.

While BoJo recently survived a vote of no confidence, the odds that he stays on as UK PM through August have collapsed from virtual certainty to just over 50%…

… suggesting that it is now a coin toss if BoJo calls it quits after all the recent humiliating setbacks to his cabinet.

Tyler Durden
Tue, 07/05/2022 – 13:55

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