Short Circuit: A Roundup of Recent Federal Court Decisions

Please enjoy the latest edition of Short Circuit, a weekly feature written by a bunch of people at the Institute for Justice.

New on the Short Circuit podcast: In which the panel bypasses the merits in recent abortion and gender transitioning cases and instead goes big on Article III standing.

  • When you start this D.C. Circuit opinion about a January 6 defendant’s sentence, you might think it’s about Capitol riots. You will be disappointed (or delighted) to learn that it’s actually a grammar lesson, complete with diagramed sentences. Conclusion: This fellow can’t be sentenced to both prison and probation for the same petty offense. Dissent: Poppycock! The word “same” at issue in the statute here is an adjective, not a pronoun.
  • Vehicle in Hooksett, N.H. is traveling in the right lane and doesn’t signal as the 2-lane road turns into a 1-laner. An officer stops vehicle and finds a passenger has outstanding warrants and was carrying a bag of drugs. But wait! The passenger argues state law does not require a signal when lanes merge, only when a vehicle has to change lanes. And this particular road doesn’t drop the right lane but just has the lanes equally blend together. District court: Indeed, “the two lanes gradually and almost imperceptibly blend into one lane.” First Circuit: The was no reasonable mistake of fact or law. Affirmed and evidence suppressed.
  • In which the First Circuit rejects claims that a computer software firm owes a former employee hundreds of thousands of dollars and, synchronally, Judge Selya sees fit to offer us this vocab quiz: quondam, plinth, prophylaxis, gainsay, consentient.
  • In 1993, artist Sam Kerson painted two large murals at the University of Vermont Law School, honoring the state’s role in the Underground Railroad and the abolition of slavery. But “[t]he Murals have not been without controversy,” with some complaining that they depict enslaved African people “in a cartoonish, almost animalistic style.” So in 2020 the law school decided to hide the murals behind acoustic paneling. Kerson sues, alleging the permanent concealment violates the Visual Artists Rights Act of 1990. Second Circuit: VARA protects against the alteration or destruction of works of art; it doesn’t require that art remain on display.
  • Circuit split alert! A fractured en banc Sixth Circuit has said it’s not a RICO if your economic injuries are derivative of personal injuries, but the en banc Ninth Circuit says it is a RICO. And now a Second Circuit panel weighs in, in a case involving economic injuries to a truck driver who was fired when he failed a drug test after it turned out the CBD gummies he was using were falsely advertised to contain no THC. Their answer? It is a RICO!
  • Disappointed after arriving at the Social Security Administration’s office in Philadelphia and finding it closed by the pandemic, local man gets into a scrape with two of the security guards. He’s convicted of assaulting federal officials. The man: But they were private security guards contracting with the feds. So they’re not federal officials. Technically. Third Circuit: “Technically” it is! The man is acquitted.
  • Hypothetically speaking, if a coalition of firearms businesses challenged a new New Jersey statute allowing the Attorney General to sue them for activities they claim are protected by federal law, federal judges wouldn’t say the businesses lacked standing and their claims weren’t ripe via the metaphor “jumped the gun,” would they? Well, perhaps in the Third Circuit they would.
  • Delaware physician is convicted on 13 counts of unlawfully dispensing opioids. At sentencing, the gov’t puts forward a medical expert who reviewed files for 24 of the 1,142 patients to whom the good doctor had prescribed controlled substances in the last two years, concluding that prescriptions for 18 of the patients were illegal. Extrapolating from the sample, prosecutors argued he should be sentenced based on a drug weight of 106,000 kilos. The doctor argues for 7,500 kilos and the court settles on 30,000 kilos, sentencing the doctor to 20 years in prison. Third Circuit: “Though the prosecution bears a heavy burden of proof, we will not let it cut corners.” Remanded for resentencing.
  • The Prison Litigation Reform Act requires inmates to exhaust an internal grievance process before filing a federal lawsuit against prison officials, but per the Fourth Circuit, that doesn’t mean inmates can be forced to “walk … a nonsensical and perplexing path” to achieve said exhaustion. No need to disturb a $700k jury verdict against a Baltimore, Md. warden who (in 2013) was deliberately indifferent to the risk his officers would assault a detainee.
  • Numerous Rapides Parish, La. deputies in bulletproof vests arrest man working in his garage at gun point. His crime? They thought a zombie joke he made on Facebook was at their expense. He’s charged with “terrorizing.” District court: Seems fine. Fifth Circuit: Grant of qualified immunity reversed. And no more relying on dustbinned WWI-era cases used to punish critics of the Wilson Administration. (This is an IJ case.)
  • The Dallas County Sheriff’s Department provides two days off per week for its officers; men can take weekends, but women cannot. Fifth Circuit (en banc): Which might well be sex discrimination under Title VII. We overturn our precedent saying that Title VII only applies to “ultimate employment decisions,” like firing and promotions.
  • “[The gov’t’s] theory is not merely new; it is also wrong.” Well, your editors always like reading that. Come for Jefferson Parish, La. seeking mandamus (to prevent a trial against it in one case because it had managed to delay class certification against it in another). Stay for the Fifth Circuit saying “no.”
  • The demanding standards for bringing constitutional claims against a city often support the old adage that you can’t fight city hall. But sometimes you can. For instance, if the mayor and city council direct city workers to enter private property without permission or authority to move a bunch of dirt around (causing flooding and a snake infestation), you can sue the city. So says the Fifth Circuit, reviving a suit against the City of Houston.
  • Madisonville, Tex. cop arranges for meth to be planted on his ex-wife, so that he can have her arrested and take custody of the kids. The ex-wife can (and did!) sue the cop. But can she also sue the city because the chief of police failed to supervise the cop and ratified his unlawful actions? The Fifth Circuit (unpublished) says no. While the Madisonville chief of police has the authority to set department policy, he is just a “decisionmaker,” not a “policymaker.”
  • In the latest installment of Nondelegation Doctrine Watch, the Sixth Circuit concludes Congress did not unconstitutionally delegate legislative power to OSHA when it charged the Secretary of Labor with making regulations “reasonably necessary or appropriate to provide safe or healthful employment and places of employment.” Dissent: I’ve looked all over this statute and I don’t see an “intelligible principle” anywhere.
  • Ohio man serves five years in prison after admitting to accidentally killing his toddler with an ATV. Five years after completing his sentence, he goes to the sheriff’s office and confesses to beating the boy to death. Double jeopardy to now charge the man with murder? The Sixth Circuit says no. He pled guilty to child endangerment, which is not the same offense as murder.
  • A so-called “breaching” shotgun is great for safely blowing the hinges off doors—but only if its projectile hits the door’s hinges directly and not the door itself. During a SWAT training exercise in DuPage County, Ill., trainee’s projectile hits door itself, ricochets, and strikes another trainee in the spine, causing grievous injuries. Injured trainee: The shotgun’s manufacturer should be liable for failure to warn of the door-breaching gun’s wildly dangerous potential when aimed at doors. Jury: Here’s $7.5 mil in damages. Seventh Circuit: Affirmed.
  • Allegation: During strip search, Ramsey County, Minn. corrections officer grabs detainee’s naked penis and gives it a hard squeeze. Officer: How could any officer be expected know this was over the line? Former state prison officials: “As a member of our profession, [he] was unquestionably aware that his conduct was unlawful.” Eighth Circuit: Denial of qualified immunity affirmed.
  • Ninth Circuit: Immigration Judges and the members of the Board of Immigration Appeals are “inferior officers of the United States” (who can be appointed by an agency head like the Attorney General) and not “principal officers” (who must be appointed by the President and confirmed by the Senate). So things are fine the way they are. The opinion doesn’t tell us what that means for someone in the immigration system named Fortunato de Jesus Amador Duenas, but we suspect he’s not happy about it.
  • The Tenth Circuit just held that a Colorado group that spends money advocating on issues appearing on the ballot has standing to bring a pre-enforcement First Amendment challenge to the state’s disclosure and registration requirements for ballot-issue committees. It’s a lucid 28-page ruling that walks through the relevant precedent in some detail, so it’s a little weird that the court issued it as an unpublished opinion.
  • Countless pages of the federal reporters have been devoted to the titanic struggle between the irresistible force of cities’ desire to restrict commercial billboards and the immovable object of the First Amendment’s prohibition on regulating signs based on their message. Colorado: What if we just restrict billboards based on whether someone paid to rent them? Tenth Circuit: That’s … yeah, that’s actually way easier.
  • On June 17, 2018, a Seneca airplane took off from Miami Executive Airport. Shortly thereafter, a Cessna radioed the control tower that it was inbound. Air traffic control sees the planes are on a collision course but cannot reach them in time, and 15 seconds later the planes collide in midair, killing all four people aboard. The pilots’ estates sue the United States under the Federal Tort Claims Act, alleging negligence by the air traffic controllers. Eleventh Circuit: It’s a tragedy, but it happened outside the airport’s airspace, which is also the limit of the air traffic controllers’ duty of care.
  • Alabama law prohibits providing puberty blockers or cross-sex hormone treatment to minors to treat a discordance between their sex and sense of gender identity. Eleventh Circuit: The use of these medications, let alone for children, is not deeply rooted in our nation’s history and tradition, and the law doesn’t discriminate based on sex. Accordingly, rational basis review applies, and the preliminary injunction is reversed.
  • And in en banc news, the Fifth Circuit will not reconsider its decision turning aside First Amendment retaliation claims brought on behalf of a Mississippi lawyer who told political activists where to find the ailing wife of a U.S. senator in a nursing home. (They snuck in and took a photo of her for an attack ad.) Dissent from denial of review: “Perhaps he shouldn’t have provided the information he was asked. But did he deserve to be arrested, prosecuted, and imprisoned? Did he deserve to be humiliated, even driven to suicide—and his family destroyed? It’s unfathomable that law enforcement officials would’ve devoted scarce police resources to pursuing [him], but for one thing: The people in power disliked his political views.”

Proponents of certificate of need (CON) laws—which require healthcare providers to prove to the gov’t that their services are “needed” before they can open or expand—claim CON laws lower costs, increase access to care, and increase the quality of care. And yet! A new IJ report (co-written with Matthew Mitchell) reviews 128 academic studies of CON laws and finds that overall 89 percent of tests show that CON laws lead to negative or neutral results. These laws are a failed policy that harm patients. Ask the Kentucky CON Task Force to repeal CON laws by submitting a comment by September 1 here.

The post Short Circuit: A Roundup of Recent Federal Court Decisions appeared first on Reason.com.

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America’s Alcohol Czar Wants Stricter Federal Guidelines for Drinking


A woman carrying two large mugs of beer | Photo 100128816 © Sergey Nazarov | Dreamstime.com

The federal government might soon take an interest in how many cold ones you’ve been cracking open.

George Koob, director of the National Institute on Alcohol Abuse and Alcoholism, tells the Daily Mail that the U.S. Department of Agriculture (USDA) might soon revise its dietary guidelines to recommend that adults consume no more than two alcoholic drinks per week. Canada’s health authorities recently shifted to that guideline, and Koob says that the U.S. could follow suit.

“I mean, they’re not going to go up, I’m pretty sure,” Koob said of the ongoing reevaluation of federal alcohol guidelines, a process that likely won’t be completed until 2025, according to the Daily Mail. “So, if [alcohol consumption guidelines] go in any direction, it would be toward Canada.”

Currently, the federal dietary guidelines advise no more than two drinks per day for adult men and one drink per day for adult women. Revising that down to two drinks per week would be a dramatic shift, to say the least.

Thankfully, most Americans don’t give a shit what the federal guidelines for drinking say. Following federal dietary guidelines to the letter of the law would mean a joyless existence devoid of many fine drinks (particularly if you’re a woman), anything less than well-done steak, or eggs benedict. Oh, and don’t forget to microwave your prosciutto!

It’s also true, of course, that the government is in no way forcing Americans to follow these rules. This doesn’t even rise to the level of a backhanded ban like the ones that are aimed at driving gas stoves into extinction. Still, these guidelines come with an air of authority to them—or, at least, the sense that they were made by people who know what they’re talking about.

But, often, they don’t. Remember the food pyramid? My entire generation was raised on the notion that we were supposed to eat six to 11 servings of starch per day, thanks to poorly researched government-based dietary guidelines

If the U.S. follows Canada in issuing dramatically lower guidelines for alcohol consumption, the USDA will likely justify the decision by pointing to a headline-generating 2018 article published in the British medical journal The Lancet that argued the safe level of alcohol consumption was basically zero. Indeed, in his remarks to the Daily Mail, Koob echoed that study by claiming there are “no benefits” to drinking alcohol in terms of physical health. The World Health Organization has been pushing a similar message in recent years.

Of course, that ignores many of the possible benefits that human beings derive from drinking—like social lubrication, relaxation, and fun.

“[Alcohol] helps us to be more creative. It helps us to be more communal. It helps us to cooperate on a large scale,” Edward Slingerland, author of Drunk: How We Sipped, Danced, and Stumbled Our Way to Civilization told ReasonTV last year. “It helps to make it easier for us to kind of rub shoulders with each other in these large-scale societies that we live in. So it solved a bunch of adaptive problems that we uniquely face as a species because of this weird lifestyle we have.”

As with so many other public health policies—many of which were on obvious display during the COVID-19 pandemic—alcohol guidelines focused exclusively on physical well-being at the expense of everything else that makes a life worth living will naturally be overly cautious and unrealistic.

Setting strict rules about alcohol consumption also requires ignoring other evidence that, actually, drinking might be good for you, as long as it’s done in moderation.

A study published in June by the medical journal BMC Medicine comparing drinkers and nondrinkers found that “infrequent, light, or moderate drinkers were at a lower risk of mortality from all causes, CVD, chronic lower respiratory tract diseases, Alzheimer’s disease, and influenza and pneumonia” when compared to lifelong teetotalers. Of course, heavy drinkers had a higher risk of dying “from all causes, cancer, and accidents.”

Having more information about the ways alcohol affects our health—positive and negative—is essential for adults who want to make informed decisions about what they ingest. But there’s no need for formal guidelines promulgated by government agencies, and that’s especially true when the people writing those rules are only looking at part of the picture.

The post America's Alcohol Czar Wants Stricter Federal Guidelines for Drinking appeared first on Reason.com.

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Tesla Investors Set For $12,000 Payout Each Over Musk’s “Funding Secured” Tweet

Tesla Investors Set For $12,000 Payout Each Over Musk’s “Funding Secured” Tweet

By Tsvetana Paraskova of OilPrice.com,

The U.S. Securities and Exchange Commission has asked a judge to approve a plan to distribute to investors the $40 million Tesla and Elon Musk have agreed to pay to settle a case over Musk’s infamous tweet from 2018 that he had secured funding to take the EV car manufacturer private.

The SEC filed a request with a judge this week to pay out $41.5 million to 3,350 eligible claimants who had sued Musk for the “funding secured” tweet. That’s around $12,400 per investor, on average.  

The judge in the case has said he would endorse the SEC proposal for payments to the investor claimants on September 1 if Musk or Tesla do not object to the plan.

Investors in Tesla have sued Musk for misleading and defrauding them after the Tesla founder tweeted in August 2018, “Am considering taking Tesla private at $420. Funding secured.”

The tweet sparked wide speculation and wild swings in the share price of Tesla, while a deal never happened, although Musk has claimed he had a handshake deal with investors from Saudi Arabia to help fund taking Tesla private.  

Musk backtracked on the idea to take Tesla private two weeks later. Tesla will stay public, Musk said on August 24, 2018, ending more than two weeks of speculation and calculation about how much a go-private deal would cost and who could be involved in it.  

A month later, the SEC charged Musk in September 2018 with securities fraud for the infamous tweets about taking Tesla private at $420 per share and for claiming “funding secured” for a potential deal. A few days later, Musk agreed to settle the securities fraud charge by the SEC in a settlement that included removing Musk as chairman at Tesla, and Musk and Tesla paying fines of $20 million each.

Tyler Durden
Fri, 08/25/2023 – 15:05

via ZeroHedge News https://ift.tt/jAaZfOL Tyler Durden

Truckers Are Accepting Rates 15-25% Below Their Costs

Truckers Are Accepting Rates 15-25% Below Their Costs

Authored by Mike Shedlock via MishTalk.com,

A friend of mine in the shipping business has comments on a trucking article he sent. Let’s tune in…

Truck image courtesy of Produce News

Truck Rates Abysmal, But Some lanes Active

Produce News reports Truck Rates Abysmal, But Some lanes Active

Two transportation brokers report that truck rates are extremely low without a lot of hope of overall improvement on the horizon. On the other hand, a San Joaquin Valley grape shipper said his rates have been climbing as he recently secured a load to Texas that was about 15 percent higher in mid-August than it was earlier in the month.

“Trucking is not a way to get rich right now,” said Mark Durfee, general manager of Giltner Logistics, based in Twin Falls, ID. “There are no earth-shattering rates out there. Oregon, Washington, Idaho and Utah are soft. The Southeast is soft. The Midwest is soft. You tell your California grape shipper to give me a call. I’ll find him a truck.”

Durfee added that “Southern California and Arizona are just wastelands right now if you are on the spot market. The rates are horrible.”

Yet Jared Lane, CEO of Grapeco Farms, based in Delano, CA, insists his rates have been climbing and as California grape shipments are expected to continue to increase for at least another month. He said truckers have the upper hand. “The rates are not as high as they were a couple of years ago, but they are increasing. The rate (to his Texas buyer) was $4,600 last week and this week it was $5,200,” he said on Aug. 16.

“Both statements can be true,” said John Stenderup, vice president of sales and marketing for Vektor Logistics, based in Monterey, CA. “This market is so incredibly depressed right now. We’re getting winter rates in the middle of summer, but there are still some lanes that can demand a higher rate.”

“The temperature-controlled space, which includes produce haulers, only represents about 15 percent of the overall (transportation) market,” Stenderup said. “Produce haulers have always been pretty resilient. There is a lot of seasonality in the produce space with truckers having to go in and out of the market as their normal traffic pattern.”

Consequently, he said these independent owner-operators tend to keep a watchful eye on their own costs and don’t get overextended. He expects they will be there when the market goes up.

“It’s not a matter of if, but when,” Stenderup said. “There will be an upcycle. “Right now, truckers are taking rates 15 to 25 percent below their costs. That can’t last forever. Rates will climb again and be in the $3 to $4 per mile range.”

Anecdotes From a Shipping Contact

Brad, who sent me the above article, offered his observations.

Normally it takes us 4-5 days to book a truck for direct shipments. Right now we’re able to get a truck within 24 hours. A couple weeks ago we had one in one hour, a full trucks, not LTL (Less Than Truckload).

Prices are down now 25-35 percent from a year ago or so. Prices are up a bit the last few weeks, mostly from Yellow/Holland shuttering.

RV trailers are also in the basement.

My contact friend ships liquid consumable chemicals to greenhouse and nursery operations for water treatment.

There will be an increase in shipping but will that happen before an industry shakedown with a huge number of bankruptcies? Before a full blown recession?

What will increase the demand for goods with housing in the gutter?

Existing-Home Sales Dip 2.2 Percent in July, Down 16 of Last 18 Months

Existing-home sales data from the NAR via St. Louis Fed

Existing Home Sales Long Term

Existing-home sales chart courtesy of Trading Economics.

On August 22, I noted Existing-Home Sales Dip 2.2 Percent in July, Down 16 of Last 18 Months

Transaction Crash

Existing home sales have crashed to a level seen in the mid 1990s. Prices have not crashed but transactions have. Crashes are rare, but we are in one now, from a transaction perspective.

Many people on Twitter tell me there is no housing crash. The above chart proves otherwise. What they really mean is there is no housing price crash.

In many ways, a transaction crash alone is worse.

On a full blown price crash, the Fed would be more prone to cut rates. Instead, interest rates are more likely to stay high, perhaps even rise.

If people are not buying houses, they are not buying as much furniture, landscaping, paint, appliances, cabinets, and lawn mowers, etc., to the same extent if housing was strong.

This means truckers are not shipping as much goods as they would be otherwise.

As long as housing is in the gutter, demand for goods and services related to housing will remain in the gutter and so will demand for shipping those items.

Subscribe to MishTalk Email Alerts.

Tyler Durden
Fri, 08/25/2023 – 14:25

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A Third Of US Investors Are Open To Trusting AI Financial Advice

A Third Of US Investors Are Open To Trusting AI Financial Advice

Authored by Jesse Coghlan via CoinTelegraph.com,

Around one in three United States investors would be open to following AI-generated financial advice without verifying it with another source, according to a recent survey.

On Aug. 22, the Certified Financial Planner Board of Standards released the results of a poll that surveyed over 1,100 adults in early July. 

Only 31% of the respondents had actually received financial planning advice from AI, with 80% recorded some level of satisfaction with the experience. Older respondents were more likely to be satisfied with the experience compared to those under 45 years of age.

However, nearly a third of all surveyed respondents, whether they have tried it or not, indicated they’d be comfortable taking advice without verifying it.

Before the wave of AI chatbots, such as OpenAI’s ChatGPT and Google’s Bard, it had been noted that more investors were beginning to rely on friends, influencers, and social media for investment advice.

Interestingly, the most recent survey found generative AI tools have beat out social media across all ages, with investors surveyed saying they were comparatively more comfortable using AI financial advice without verifying the information, compared to social media.

26% cited comfort in using unverified financial advice from social media, compared to 31% citing the same from a generative AI tool. Source: CFP Board

The CFP Board claimed, however, that investors of all ages cited being more comfortable with AI-generated and social media-derived financial advice if it was verified by a financial advisor.

Experience using AI for financial advice was low but was largely satisfying for those who had. Source: CFP Board

The findings, however, found that only 52% of the respondents were interested in receiving AI-created financial advice in the future. 

Tyler Durden
Fri, 08/25/2023 – 13:45

via ZeroHedge News https://ift.tt/5hGMdbI Tyler Durden

Court Rejects RNC’s Lawsuit Claiming Google Discriminatorily Treated RNC’s Email as Spam

From Republican National Comm. v. Google, Inc., decided yesterday by Judge Daniel Calabretta (E.D. Cal.):

[RNC] brings this suit alleging that [Google] has been intentionally misdirecting the RNC’s emails to Gmail users’ spam folders at the end of each month “to secretly suppress[ ] the political speech and income of one major political party.” According to the RNC, “[w]hether Google is characterized as a common carrier, public accommodation, or a business providing a service, California law prohibits Google’s spam filtration of RNC emails based on political affiliation and views.” Plaintiff seeks recovery for donations it allegedly lost as a result of its emails not being delivered to its supporters’ inboxes.

Defendant has moved to dismiss Plaintiff’s Complaint on the basis that Plaintiff has failed to plausibly allege its claims, and that section 230 of the Communications Decency Act, 47 U.S.C. § 230, compels the case be dismissed regardless. While it is a close case, the Court concludes that under the pleading standards set forth in Bell Atlantic Corp. v. Twombly (2007) and Ashcroft v. Iqbal (2009), the RNC has not sufficiently pled that Google acted in bad faith in filtering the RNC’s messages into Gmail users’ spam folders, and that doing so was protected by section 230….

Beginning in December 2021, the RNC observed a drop off of its messages’ inboxing rate at the end of the month, a pattern that repeated in every subsequent month in 2022. Compared to other large email providers, Google allegedly diverts a larger percentage of the RNC’s emails to spam at the end of every month, and with more consistency.

The RNC alerted Google to this trend in December 2021, and Google agreed to stay in communication to address the issue. Google told the RNC that the drop in the inboxing rate was likely due to a high number of user complaints and provided a list of best practices to avoid having its emails sent to spam. The RNC’s email service provider confirmed that there were “no irregulates” which would be causing the issue, and the RNC’s email marketing firm reported no increase in user complaints at the time the inboxing rate fell.

On March 29, 2022 the RNC met with Google to discuss the inboxing issue. Google did not provide any additional suggestions for troubleshooting the issue, but agreed to have additional follow up calls with the RNC. On June 28 and 29, 2023 Google provided additional potential explanations for the drop in inboxing: (1) the frequency of emails due to the RNC’s press releases, (2) a fault in the RNC’s domain authentication, and (3) Google’s spam filtering algorithm which collects user spam reports over the course of the month and causes emails to be diverted to spam folders. The RNC’s email service provider and email marketing firm refuted these explanations, confirming that the authenticator was functioning, and that there had been no increase in user spam reports detected. In addition, the press releases were from a different email account and comprised only 0.3% of the RNC’s total email volume so ostensibly should not have impacted the inboxing rate of their marketing emails.

On August 11, 2022, Google held a training for the RNC on “Email Best Practices.” The RNC followed these best practices, which did improve the overall performance of the RNC’s emails, but did not impact the monthly drop in inboxing rating. The RNC alerted Google to the ineffectiveness of the suggested practices on September 29, 2022 and did not receive a response.

The RNC alleges that Google is either purposefully or negligently diverting its emails to spam. The RNC internally tested its theory that Google was intentionally discriminating against it wherein it sent two sets of emails—identical in content and sender, with the only difference being that they contained different links to variants of the RNC’s donation page—to two sets of user groups. One version of the email inboxed at a “normal” rate, while the other was diverted almost entirely to spam. The RNC concedes that this test suggests emails are not being filtered by Defendant based on their communicative content. The RNC also cites to a study that found Google’s Gmail labels emails from Republican candidates and Republican organizations as spam at a higher rate than their democratic counterparts, though the study does not involve the RNC.

Plaintiff brought this suit alleging violations of California’s common carrier law, the Unruh Civil Rights Act, the California Unfair Competition Law, and the Federal Telecommunications Act, as well as claims alleging intentional and negligent interference with prospective economic relations, and negligence under California Civil Code § 2162. The RNC alleges that Defendant’s mislabeling of its emails has caused it to lose hundreds of thousands of dollars in potential donations and has harmed its relationships with its supporters.

The court held the suit was barred by § 230:

Section 230 affords interactive computer service providers immunity from liability for decisions related to blocking and screening of offensive material, or for providing others with the technical means to do so. “To assert an affirmative defense under section 230(c)(2)(A), a moving party must qualify as an ‘interactive computer service,’ that voluntarily blocked or filtered material it considers ‘to be obscene, lewd, lascivious, filthy, excessively violent, harassing, or otherwise objectionable,’ and did so in ‘good faith.'” Section 230 must be construed to protect defendants “not merely from ultimate liability, but from having to fight costly and protracted legal battles.” In “close cases” section 230 claims “must be resolved in favor of immunity.” …

Google’s filtering of spam constitutes filtering “material that the provider or user considers to be obscene, lewd, lascivious, filthy, excessively violent, harassing, or otherwise objectionable,” 47 U.S.C. § 230(c)(2)(A). In Enigma Software Group USA, LLC v. Malwarebytes, Inc. (9th Cir. 2019), the Ninth Circuit took up the issue of what kind of material would fall within the catchall of “otherwise objectionable.” The court rejected an interpretation of section 230 in its prior decision in Zango, Inc. v. Kaspersky Lab, Inc. (9th Cir. 2009) that gave unfettered discretion to a provider to determine what is “objectionable.” Specifically, the Ninth Circuit concluded that blocking and filtering decisions that are driven by anticompetitive animus do not concern “objectional material,” particularly in light of Congress’s codified intent that section 230 “preserve the vibrant and competitive free market that presently exists for the Internet and other interactive computer services ….”

At the same time, the Ninth Circuit rejected a narrow view of what constituted “objectiona[ble]” material, noting the “breadth” of that term. The court called into question cases interpreting “objectionable” in light of the other terms in section 230 on the principle of ejusdem generis (Latin for “of the same kind or class”), noting that the specific terms in section 230 “vary greatly.” And while it did not expressly adopt their reasoning, the Ninth Circuit appeared to approve decisions holding that “unsolicited marketing emails” are “objectionable” for purposes of section 230.

This Court likewise holds that a provider such as Google can filter spam, including marketing emails, as “objectionable” material under section 230. Congress itself has recognized the harm spam can cause in enacting the Controlling the Assault of Non–Solicited Pornography and Marketing (“CAN–SPAM”) Act of 2003. Given the near-universal use of spam filters by providers, the Court agrees with the weight of authority that, generally speaking, a “content provider or user could easily conclude that spam emails are ‘harassing’ within the meaning of the Act or are similar enough to harassment as to fall within the catchall ‘otherwise objectionable.'”

The fact that the RNC sent emails to individuals who requested them at some point in time does not undermine this conclusion. In its Complaint, the RNC alleges that it maintains a “list of people who have requested to receive emails from the RNC” and that its campaign emails “are only sent to people on this list.” The RNC further alleges that it removes individuals from this list who no longer wish to subscribe to the RNC’s emails, and that the emails it sends are “solicited.” As a result, the RNC concludes that the emails “are plainly not spam because they are only sent to Gmail users who requested them” and that therefore they are not “offensive.” However, just because the RNC complies with the CAN-SPAM Act does not preclude that Google may reasonably consider multiple marketing emails to be “objectionable.” First, “compliance with CAN–SPAM, Congress decreed, does not evict the right of the provider to make its own good faith judgment to block mailings.” Second, just because a user interacts with a company at one point in time does not mean that the user “solicits” each and every email sent by the entity. Most individuals who use email are likely familiar with having engaged with an entity one time (such as by purchasing a particular product) only to have that entity send numerous other emails, many or all of which are no longer relevant or wanted. While a user may be generally able to opt out of those emails, an email provider such as Google may reasonably segregate those sorts of mass mailings (even though they were originally requested by the user in the legal sense) in order to ensure that “wanted electronic mail messages” will not be “lost, overlooked, or discarded amidst the larger volume of unwanted messages.”

It is clear from the Complaint that the RNC sends out a significant number of emails to individuals on its list. While it may be that some, perhaps many, users specifically wanted each and every one of those emails, Google could reasonably consider these mass mailings to be objectionable, just as it can for other email senders….

Application of section 230 in this case, then, turns on whether the RNC has sufficiently pled that Google did not act in “good faith” when filtering the RNC’s emails. While it is a relatively close case, the Court concludes Plaintiff has not sufficiently pled facts to establish that Google has acted without good faith.

In Bell Atlantic Corporation v. Twombly, the Supreme Court concluded that a plaintiff must provide more than a “formulaic recitation of the elements of a cause of action” and that “[f]actual allegations must be enough to raise a right to relief above the speculative level.” Moreover, the claim has to be “plausible on its face,” a requirement that is met when “the plaintiff pleads factual content that allows the court to draw the reasonable inference that the defendant is liable for the misconduct alleged.”

In this case, the RNC’s allegation that Google acted in “bad faith” does not rise above the speculative level. At bottom, the RNC’s allegation is that Google diverted emails to spam at the end of the month which had been, coincidentally, a historically successful fundraising time for the RNC, and that the reasons Google gave for the low “inboxing” rate were—in the RNC’s view—not true. Plaintiff argues that the only reasonable inference for why its emails were labelled as spam is Google’s alleged political animus toward the RNC. This is pure speculation, lacking facts from which the Court could infer animus or an absence of good faith. The only affirmative allegation that includes any facts from which the Court could draw a conclusion of the absence of good faith is Paragraph 54 of the Complaint, which cites a North Carolina State University study that is alleged to have “found that Google’s Gmail labels significantly more campaign emails from Republican political candidates as spam than campaign emails from Democratic political candidates. Specifically, the study found that Gmail labeled only 8.2% of Democratic emails as spam, as compared with 67.6% of Republican campaign emails.”

While this study does provide some evidence that Google could be acting without good faith, the Court finds that this study is insufficient, standing alone, to meet the pleading requirements as described in Twombly and Iqbal. First, the study itself does not attribute any motive to Google, with the study authors noting “we have no reason to believe there were deliberate attempts from these email services to create these biases to influence the voters….” Second, the study indicates that all three email programs considered—Google, Outlook, and Yahoo—had a political bias, although Google’s left-leaning bias was greater than Outlook or Yahoo’s right-leaning biases. Third, the study indicates that Google’s spam filter “responded significantly more rapidly to user interactions compared to Outlook and Yahoo,” suggesting that a more plausible reason for the left-leaning bias was user input, not bad faith efforts on the part of Google.

Other allegations in the Complaint undermine the RNC’s reliance on the North Carolina study and render the RNC’s allegation that Google acted without good faith implausible. The RNC alleges that “for nearly a year” Google engaged with the RNC over its concerns. Google suggested that the RNC “reduce the frequency of emails that it sends at the end of each month,” informed the RNC that “the monthly crashing of the RNC’s inboxing rate was due to a high number of complaints,” met with the RNC on March 29, 2022 and offered the RNC a training on August 11, 2022. In the Complaint, the RNC recounts that adopting Google’s suggestions had a “significantly positive impact on [email] performance,” though they did not resolve the end-of-month issue. While the RNC may disagree with Google regarding what caused the drop in inboxing, the fact that Google engaged with the RNC for nearly a year and made suggestions that improved email performance is inconsistent with a lack of good faith. Indeed, district courts in this circuit rely on the extent to which a computer service engages with a content creator to determine why its material is being diverted to spam or removed in determining whether there is an absence of good faith.

Finally, the A/B test cited in Paragraph 33 of the Complaint undermines the RNC’s claim of bad faith discrimination on the basis of political affiliation. If Google were discriminating against RNC emails due to their political affiliation, then neither set of emails should have gotten through Google’s spam filter. The fact that one version did indicates it was not the substantive content or sender of the email, but rather some other factor, such as the different links contained with the email or some other technical feature of the email, that was triggering application of the spam filter. At oral argument, counsel for the Plaintiff conceded that the A/B test does not support a finding that emails are being filtered because the RNC is sending them or because the emails contain political content.

In short, the only fact alleged by the RNC to support its conclusory allegation that “Google’s interception and diversion of the RNC’s emails, and the harm it is causing to the RNC, is intentional, deliberate, and in bad faith,” is the North Carolina State University study that expressly states there is no reason to believe Google was acting in bad faith, and the remainder of the allegations in the Complaint are inconsistent with such a conclusion. In light of the multiple reasonable explanations for why the RNC’s emails were filtered as set forth in the Complaint, the Court does not find the RNC’s allegation that Google was knowingly and purposefully harming the RNC because of political animus to be a “reasonable inference.” Accordingly, the Court concludes that the RNC has not sufficiently pled that Google acted without good faith, and the protection of section 230 applies.

This result is consistent with the Congress’s stated policy goals in enacting the Communications Decency Act, one of which was “to encourage voluntary monitoring for offensive or obscene material.” … Section 230 also addresses Congress’s concern with the growth of unsolicited commercial electronic mail, and the fact that the volume of such mail can make email in general less usable as articulated in the CAN-SPAM Act. Permitting suits to go forward against a service provider based on the over-filtering of mass marketing emails would discourage providers from offering spam filters or significantly decrease the number of emails segregated. It would also place courts in the business of micromanaging content providers’ filtering systems in contravention of Congress’s directive that it be the provider or user that determines what is objectionable (subject to a provider acting in bad faith). See 47 U.S.C. § 230(c)(2)(A) (providing no civil liability for “any action voluntarily taken in good faith to restrict access to … material that the provide or user considers to be … objectionable” (emphasis added)).

This concern is exemplified by the fact that the study on which the RNC relies to show bad faith states that each of the three email systems had some sort of right- or left- leaning bias. (ECF No. 30-10 at 9 (“all [spam filtering algorithms] exhibited political biases in the months leading up to the 2020 US elections”).) While Google’s bias was greater than that of Yahoo or Outlook, the RNC offers no limiting principle as to how much “bias” is permissible, if any. Moreover, the study authors note that reducing the filters’ political biases “is not an easy problem to solve. Attempts to reduce the biases of [spam filtering algorithms] may inadvertently affect their efficacy.” This is precisely the impact Congress desired to avoid in enacting the Communications Decency Act, and reinforces the conclusion that section 230 bars this suit….

The court also held that the RNC’s claims were substantively insufficient, even absent a § 230 defense: It held that email service providers aren’t covered by current California common carrier law, a California statute that imposes “a duty of care for ‘carrier[s] of messages for reward,'” California’s ban on discrimination by places of public accommodation, the California tort law of intentional or negligent interference with prospective economic relations, or the California unfair competition statute (which bans “unlawful, unfair or fraudulent” activity).

The post Court Rejects RNC's Lawsuit Claiming Google Discriminatorily Treated RNC's Email as Spam appeared first on Reason.com.

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Generative AI and VR/AR/Gaming: Complementary Technologies

This may be pretty obvious to many readers, but I thought it would be fun to have a discussion about it: Generative AI should sharply propel forward the development of lifelike Virtual Reality and Augmented Reality environments (and of sub-VR visual environments, such as those for many computer games).

That’s particularly clear, I think, for art, but it should be especially true of Large Language Models, which will make it much easier for users to have conversations with non-player characters (or their non-game analogs). This should sharply increase the realism and immersiveness of the world. And for games, LLM hallucinations needn’t be much of a problem: If part of the game is that you need to talk to NPCs to get hints, or to organize joint activities, LLMs’ tendency to brazenly confabulate will just make things more life-like.

But that’s just my speculation. What do you folks think about it? In particular, are there computer games, VR/AR or otherwise, that are already creating LLM-based NPCs, or otherwise using generative AI in an interesting way? Please post your thoughts in the comments.

The post Generative AI and VR/AR/Gaming: Complementary Technologies appeared first on Reason.com.

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Government Continues To Deny Its Role in Adderall Shortage


A school child in profile with illustrative representations of Adderall pills. | Illustration: Lex Villena; Anna Shvets

In October 2022, the Food and Drug Administration (FDA) announced a shortage of amphetamine mixed salts, the active ingredient in Adderall. At the time, the FDA indicated that the shortage could last until March 2023.

But the shortage has persisted into August. Now, as students start a new school year, many of them will be forced to go without an essential medication, and government agencies continue to deny their own role in the shortage.

A prescription stimulant, Adderall is primarily used to treat attention-deficit/hyperactivity disorder (ADHD), which can cause inattentiveness, hyperactivity, and impulsiveness. Symptoms can range from mild to severe, and it can result in “impairment in social, academic or occupational functioning,” according to the American Psychiatric Association’s Diagnostic and Statistical Manual of Mental Disorders. Last week, The New York Times detailed the struggles of parents and children who are unable to access necessary medication.

The shortage has even affected alternative medications. Takeda Pharmaceuticals, manufacturer of Adderall competitor Vyvanse, announced in June that it was “experiencing low inventory of Vyvanse capsules due to a manufacturing delay compounded by increased demand,” which it expected to persist into September for certain dosages. Michael Ganio, senior director of pharmacy practice and quality for the American Society of Health-System Pharmacists, told PBS NewsHour in July that medicines like Ritalin and Concerta have only been “intermittently available” during the Adderall shortage.

When it first announced the shortage last year, the FDA blamed “ongoing intermittent manufacturing delays” at Teva Pharmaceuticals, the largest manufacturer of both name-brand and generic Adderall. But as Reason detailed at the time, the government also played a role in the shortage.

During the COVID-19 pandemic, the Drug Enforcement Administration (DEA) allowed physicians to prescribe controlled substances via telehealth appointments; at the same time, parents began noticing symptoms of inattentiveness in their kids who were stuck at home attending school over Zoom. As a result, ADHD diagnoses soared among children. Adults were not immune, either: The number of Adderall prescriptions among patients aged 22–44 increased 15.1 percent between 2020 and 2021, more than twice the rate of increase from the year before. (Adderall can also be used to treat eating disorders and narcolepsy.)

The DEA is empowered by federal law to set annual production quotas for all Schedule II narcotics, including amphetamines. Once it sets the quotas, companies apply for a piece of the total and are forbidden from manufacturing more than their allotment. Despite seeing a sharp increase in prescriptions for ADHD treatment, and in spite of an FDA-reported shortage, the DEA kept the same 2022 levels for its 2023 amphetamine quotas.

Earlier this month, the FDA and DEA put out a joint statement to address the continuing shortage. The statement noted that “for amphetamine medications, in 2022, manufacturers did not produce the full amount” allowed under the quotas. While the agencies “cannot require a pharmaceutical company to make a drug, make more of a drug, or change the distribution of a drug,” they nonetheless “called on manufacturers to confirm they are working to increase production to meet their allotted quota amount.”

But there’s more to the story than manufacturer supply. State and local governments sued the three largest pharmaceutical distributors and Johnson & Johnson over claims that the companies had contributed to opioid abuse and deaths. In February 2022, the companies settled for $26 billion and cracked down on potentially suspicious orders of controlled substances from independent pharmacies. As a result, many pharmacies were limited in the drugs they were able to order; some were banned altogether.

So on the one hand, the DEA declined to raise the limits in 2023 that would allow manufacturers to make more Adderall, even in the face of a declared shortage. Meanwhile, a lawsuit filed by state and local governments caused pharmaceutical distributors to cut off the supply of drugs like Adderall to pharmacies across the country. And now, as the new school year begins, countless students will be without needed medication that would help their classroom achievement.

The post Government Continues To Deny Its Role in Adderall Shortage appeared first on Reason.com.

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“Nothing’s Working” – China’s Latest ‘Stimulus’-Driven-Rally Lasted Just 30 Mins

“Nothing’s Working” – China’s Latest ‘Stimulus’-Driven-Rally Lasted Just 30 Mins

China’s problems are growing… and their ability to ‘fix’ it seems to be fading fast.

Having strong-armed funds into ‘not selling’ stock last week, then strongly-suggesting that companies escalate their share buyback programs (and then bullying banks into buying yuan to support the currency against the green back), and then clearly stepping with a ‘National Team’ panic bid (that didn’t work) Beijing was faced with the reality that nothing was working with Chinese stocks tumbling still.

Most problematically, the half-lifes of these interventions is shrinking rapidly…

And as Bloomberg reports, overnight saw the shortest duration of post-stimulus gains yet…

The Friday afternoon unveiling of property stimulus measures sparked an initial flurry of buying, with China’s benchmark CSI 300 Index reversing losses to climb as much as 0.3%.

But the gauge resumed declines after about 10 minutes, and within 30 minutes, CSI 300 had hit fresh session lows…

“The market is less sensitive to news at this current stage,” said Li Fuwen, a fund manager at Guangdong Value Forest Private Securities Investment Management.

“What’s key right now is letting that downward momentum run out organically as polices have already turned supportive but it will take time for the shorts to be exhausted.”

Overseas funds, which have been fleeing the mainland market, were sellers again on Friday.

They offloaded the equivalent of $10.7 billion in a 13-day run of withdrawals through Wednesday, the longest stretch since Bloomberg began tracking the data in 2016.

So, China has already resorted to its ‘plunge protectors’ and failed and now sees its ‘targeted’ stimulus measures doing nothing. With capital outflows soaring, one wonders just how far and fast Beijing is willing to go.

Tyler Durden
Fri, 08/25/2023 – 13:25

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Watch: The Southern Border Is Literally Wide Open

Watch: The Southern Border Is Literally Wide Open

Authored by Steve Watson via Summit News,

Thousands of illegal immigrants are simply walking over the border into the U.S. after the federal government decided to leave the gates wide open, saying that there is a risk of floods and resulting environmental hazards.

The New York Post reports “The US Border Patrol has now admitted it’s responsible for the decision to leave giant flood gates in the border wall wide open — giving thousands of illegal immigrants an easy opportunity to stream into Arizona.”

The report notes that “Border Patrol agents, acting on superiors’ orders, welded some 114 gates open to stop anyone from closing them — which the agents had repeatedly been doing in a bid to stop people from being able to cross the border.”

The CBP claims that “High water flow combined with excessive sediment and debris buildup can stress or comprise the design integrity of the barrier,” and therefore they have literally left the border wide open.

As a result, cartels are taking migrants by the busload and just dropping them off so they can walk into the country:

Brandon Judd, the president of the national Border Patrol union is enraged, stating that “Those gates should never be open,” adding “In my opinion and in the Border Patrol agent’s opinion, those gates should never come open.”

“We thought the agents were going to tell us something,” one Ecuadorean migrant said. “But we just walked in.”

Said another from Cuba: “It was so easy to get into the U.S.”

“Nothing like our journey through Mexico. That part was hard,” she added. “I thought there was going to be more security.”

Journalist Bill Melugin has been documenting the fallout of the gates being wide open for days now:

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Tyler Durden
Fri, 08/25/2023 – 13:05

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