From the category archives:

Law

Rum and trademarks

by Jacob Grier on June 9, 2011

Since intellectual property law and cocktails are a recurring topic here, it’s worth mentioning a couple recent developments. First, the tiki-themed craft cocktail bar Painkiller in New York has been forced to change its name to PKNY after Pusser’s rum sued over its use of the name Painkiller, a pre-existing cocktail that the company trademarked:

In the lawsuit filed April 12 in U.S. District Court, plaintiff Pusser’s Rum Ltd., which sells rum, cocktail mixers and rum products such as cakes under the brand name “Painkiller” sued tiki bar owners Giuseppe Gonzalez and Richard Boccato, claiming irreparable harm to its brand, unfair competition and unfair business practices, according to court documents on file in the Southern District of New York. [...]

The plaintiffs demanded that the bar stop calling itself and any of its drinks by the name Painkiller, for which they hold two U.S. trademarks, one for “alcoholic fruit drinks with fruit juices and cream of coconut and coconut juice,” and one for “non-alcoholic mixed fruit juices,” which they market as “Pusser’s Painkiller Cocktail Mix.” [...]

In a consent order signed by both parties May 16, Gonzalez and Boccato, along with their corporate entity, Essex Street Bar & Lounge, Inc., agreed to be “permanently restrained and enjoined” from using the trademarked term Painkiller or “any other confusingly similar term” in association with any bar, restaurant, grill, lounge or other establishment, or any “beverage, libation or cocktail” unless it is made with Pusser’s rum. They also agreed not to use the term in any marketing or advertising materials, and to give up their website domain within 45 days of the order, though the court did not require them to turn it over to Pusser’s.

Similarly, Portland’s own Trader Tiki has been forced to change the name of his line of syrups to B. G. Reynolds. He doesn’t name the company that would object to his marketing a line of tiki syrups with “Trader” in the name, but if you’re into cocktails you can probably make a good guess who that might be. (Side note: Why do these disputes always seem to involve rum and tiki companies?)

About a year ago, I was approached by the owners of another company of similar name, and asked cordially to stop calling myself a Trader and go off and do something else. I fought tooth and nail, but they weren’t having it. So, in respect to the original “Trader”, and with the advice of a few good friends, I am moving forward with the name change from Trader Tiki’s Exotic Syrups to B.G. Reynolds’ Exotic Syrups.

Naturally this is creating some ill will in the cocktail community, at least in the direction of Pusser’s, which is getting blasted on Twitter today. This is part of a general backlash against trademarking cocktail names (see the conflict over the Dark and Stormy). There’s also a lot of confusion over copyright and trademarks. Tim Lee helpfully clarified the difference last year:

But perhaps the most important difference is that trademarks have a dramatically different policy rationale from patents and copyrights. Copyrights and patents are designed to create legal monopolies that drive up the price of creative works and thereby reward authors and inventors for their creativity. Although consumers may benefit from the resulting increase in creativity, the short-term effect is to force them to pay more than they would in a competitive market. Trademarks aren’t like that at all. The point is not to limit competition. To the contrary, the point is to enhance competition by ensuring that consumers know what they’re getting. This is why it’s emphatically legal to run comparative advertising featuring your competitor’s trademarks. Microsoft may own the “Windows” trademark, but Apple is free to use it as a punching bag as long as they don’t mislead consumers about what they’re getting.

The same principle applies in the Dark and Stormy case. The point of trademark law is to make sure consumers know what they’re getting (whether it’s Gosling or Zaya), not to give Gosling a monopoly on the concept of mixing ginger beer with rum. I haven’t seen Zaya’s ad and I’m not a trademark lawyer, so I don’t want to speculate on the legal merits of Gosling’s position. But certainly the apparentl purpose of Zaya’s ad—encouraging bartenders to substitute their own rum in place of Gosling’s—is entirely within the spirit of trademark law. If the net effect of Gosling’s threats is that consumers wind up with fewer opportunities to try mixing ginger beer with different kinds of rum, that is certainly not what trademark law is supposed to accomplish.

This is a matter of trademark law, not copyright. The company actively markets and owns a trademark to a product called Pusser’s Painkiller Cocktail Mix. So while it was arguably excessive of them to sue a tiki bar with the same name, it’s not totally implausible that the bar might create confusion among customers.

A more concerning part of the settlement is the requirement that PKNY no longer offer any drink called a Painkiller that doesn’t use Pusser’s rum. Though the settlement doesn’t bind anyone else, liquor companies would love to be able to trademark popular cocktails and forbid bars from substituting other brands. This is part of what was behind the Dark and Stormy dispute, and there are rumors of one whiskey brand sending cease and desist orders to bars advertising a classic drink of the same name if they don’t use their product (I haven’t been able to confirm this, so I’m not naming it here). If this strategy continues, that would be potentially be much more restrictive of bartenders’ creativity. Whatever the legal merits of the case, Pusser’s deserves all the scorn their receiving for forcing use of their rum in a cocktail that they didn’t invent.

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Non-unanimous juries safe for now

by Jacob Grier on January 12, 2011

Unfortunately, the Supreme Court has declined to grant cert in Herrera v. Oregon, a challenge to the state’s non-unanimous jury convictions. I wrote about the case here.

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Challenging Oregon’s non-unanimous juries

by Jacob Grier on September 17, 2010

I have a post at the Examiner today summarizing why the time is ripe to challenge Oregon and Louisiana’s laws allowing non-unanimous jury convictions.

Previously:
Oregon’s low bar for conviction
Dawkins doesn’t get juries

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Mixing it up without IP

by Jacob Grier on August 31, 2010

Man, do not steal a recipe for Eben Freeman:

After the seminar, I spoke to Freeman, who admitted he came up with the idea for the talk after becoming fed up with other bartenders and establishments taking credit for and profiting from his recipes and techniques. (Fat washing, for example, the process by which a spirit can be infused with, say, bacon, was pioneered in part by Freeman, yet is often attributed to others.) “Someone needs to get sued … to set a precedent,” he told me.

“In no other creative business can you so easily identify money attached to your creative property,” Freeman went on. “There is an implied commerce to our intellectual property. Yet we have less protection than anyone else.”

No disrespect to Freeman, who is understandably frustrated, but he fails to address the purpose of intellectual property in copyrights and patents. This is neatly summed up in the Constitution:

[The Congress shall have power] To promote the Progress of Science and useful Arts, by securing for limited Times to Authors and Inventors the exclusive Right to their respective Writings and Discoveries.

Intellectual property exists to promote progress. Its purpose is not to ensure that no one’s ideas are stolen or that creative people can earn a living, unless those things are needed to promote progress in a field. The granting of temporary monopolies in the form of patents and copyrights is the price we pay for progress, not a goal in itself.

It might be completely true that bartenders are shamelessly stealing from each other, and that’s certainly something we should condemn, but we probably shouldn’t get the law involved unless we can show that this theft is causing mixology to stagnate. Along with fashion, cooking, and even magic, we’re in an industry that’s arguably better off with weak IP. This decade’s boom in craft cocktails is a sign that we’re doing OK without stricter protections, and I’d be worried that additional threats of lawsuits would have a chilling effect on the sharing of new techniques and recipes.

Perhaps Freeman or someone else has a workable, beneficial idea for expanding intellectual property related to cocktails, but I have a hard time imagining what that would be.

Update 9/1/10: Ezra Klein agrees.

Previously:
Two Pimm’s, one cup
Dark and Stormy and the piracy paradox
Dark ‘n’ Sue Me

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Beware of CARE

by Jacob Grier on August 19, 2010

Over at the Examiner, I take a look at the CARE Act, a wholesaler-backed bill that would essentially reverse Granholm v. Heald and exempt state alcohol laws from Commerce Clause challenge.

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The Watts case and jury nullification

by Jacob Grier on April 30, 2010

I’ve been following, from a distance, the case of Canadian sci-fi writer Peter Watts. Watts’ car was searched at the US border and he was beaten, pepper sprayed, and detained when he questioned the purpose of the search. I’ve refrained from commenting until all the facts were out, but with the trial concluded there’s little to vindicate his treatment and the government’s refusal to release video of the incident lends no credence to the case against him.

A jury convicted Watts of resisting customs officials. Fortunately the sentencing judge chose not to imprison him. Read Peter’s own account for a humorous take on the hearing, his friend’s for a more touching one.

One of the jurors who convicted Watts went so far as to advocate against a jail sentence. Regrettably, the jurors felt that they had no choice but to throw Watts at the mercy of the judge. Two quotes from jurors:

As a member of the jury that convicted Mr. Watts today, I have a few comments to make. The jury’s task was not to decide who we liked better. The job of the jury was to decide whether Mr. Watts “obstructed/resisted” the custom officials. Assault was not one of the charges. What it boiled down to was Mr. Watts did not follow the instructions of the customs agents. Period. He was not violent, he was not intimidating, he was not stopping them from searching his car. He did, however, refuse to follow the commands by his non compliance. He’s not a bad man by any stretch of the imagination. The customs agents escalted the situation with sarcasm and miscommunication. Unfortunately, we were not asked to convict those agents with a crime, although, in my opinion, they did commit offenses against Mr. Watts. Two wrongs don’t make a right, so we had to follow the instructions as set forth to us by the judge.

And:

Peter,

I believe your description of the trial and deliberations is more accurate than you could know. As a non-conformist and “libertarian” (who has had some experiences not unlike yours) I was not comfortable with my vote, but felt deep inside that it was consistent with the oath we took as jurors. I believe nearly all the jurors searched for a legitimate reason to vote differently. In the end it came down to the question “Was the law broken?”. While I would much rather have a beer and discussion with you than Officer B. I never the less felt obligated to vote my conscience. I also believe most, if not all, the jurors sincerely hope that you are handled with a great degree of leniency, we, unfortunately have no say in that matter.

It’s great that Watts was lucky enough to have a sympathetic judge but tragic that the jurors who convicted him felt compelled to do so. If there is ever a time for jurors to stand up against prosecutorial indiscretion it’s in cases in which the defendant has been abused by agents of the state. Cases like this are exactly why we have citizen juries. It’s not enough to convict and hope that, as happened here, the judge will make the right decision instead of siding with his fellow authorities. Even though Watts avoided a jail sentence he will have to bear the costs of a felony conviction, including infringements on his right to travel.

Unfortunately current law generally forbids discussion of jury nullification within the courtroom. I encourage everyone who may serve as a juror to read up on their rights and responsibilities so that they can render an informed verdict should they sit on a case such as this one.

Previously:
Oregon’s low bar for conviction
Filan doesn’t go far enough
Dawkins doesn’t get juries

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Knox’s trial by majority jury

by Jacob Grier on December 5, 2009

I’ve included morning links pointers to Timothy Egan’s excellent coverage of the murder trial of Amanda Knox and Raffaele Sollecito in Italy; see here and here. Sadly, they were both convicted today. By most accounts that don’t slip into tabloid-style junk reporting, the conviction was based on shaky evidence, anti-American sentiment, and the deluded fantasies of the local prosecutor. (See this post on Simple Justice, via Radley.)

I know very little about the Italian justice system, but one thing this trial demonstrates is the virtue of requiring unanimous juries for conviction. The Seattle Times notes that Italian prosecutors have to meet a much lower standard:

Italian juries have only to reach majority consensus. Each of the eight jurors imposes a sentence they believe proper, from life down to acquittal. The ultimate sentence given is the maximum that at least five of the jurors will support.

I’m not aware of the jury’s vote being published, but it’s possible that the two were sentenced to more than 20 years in prison on the basis of just 5 of the 8 jurors’ vote. They will hopefully fare better on appeal, though that process could take years.

Previously:
Oregon’s low bar for conviction

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We are journalists, not marketers

by Jacob Grier on October 5, 2009

The FTC has issued new guidelines cautioning bloggers to disclose ties to products they endorse or risk an $11,000 fine:

The revised Guides also add new examples to illustrate the long standing principle that “material connections” (sometimes payments or free products) between advertisers and endorsers – connections that consumers would not expect – must be disclosed. These examples address what constitutes an endorsement when the message is conveyed by bloggers or other “word-of-mouth” marketers. The revised Guides specify that while decisions will be reached on a case-by-case basis, the post of a blogger who receives cash or in-kind payment to review a product is considered an endorsement. Thus, bloggers who make an endorsement must disclose the material connections they share with the seller of the product or service. Likewise, if a company refers in an advertisement to the findings of a research organization that conducted research sponsored by the company, the advertisement must disclose the connection between the advertiser and the research organization. And a paid endorsement – like any other advertisement – is deceptive if it makes false or misleading claims.

Yes, it’s true: Sometimes marketers send me stuff hoping that I will write about it. Shocking, right?

Speaking only of the booze blogging world, I don’t see how this rule is either necessary or workable. It’s not necessary because we all know that our credibility will take a hit if we endorse bad products. I’m more likely to mention a product that I’ve received for free than one that I have to pay for simply because I don’t have an infinite budget for liquor, but I’m not going to sell out by giving a review to every crappy product that hits my door; I have the barely touched bottles of flavored spirits to prove it. (Actually I don’t, because I give those away for friends to use at house parties when people are too drunk to care.)

If there’s a demand for disclosure policies bloggers will provide them. Doug’s doing this now at his Pegu Blog by appending every post using a free product with a note saying that “the Liquor Fairy was here.” It’s a good idea and seems to work for him. In my case though I’d have a hard time deciding when to include a disclaimer, in part because I’m courted by marketers not just as a blogger but as a bartender as well.

A clear case of when I could (and generally do) include a disclaimer is when I get a package in the mail with a sample bottle and a note saying the sender hopes I will write about the product. Some less clear and entirely realistic cases include:

A liquor company holds a contest for bartenders offering real or potential rewards to those who participate by creating a drink with their product. I like the drink I come up with and feature it here; I mention that it was for a contest but don’t specify the rewards of participation.

A liquor company gives me a bottle or taste of their product unaware that I am a blogger. I like the product and write about it.

A liquor company takes me to dinner and offers samples of their products. A few months later the same company comes out with a new product that I independently purchase and enjoy. I write about it here.

A liquor company holds an open tasting event geared toward bartenders, bloggers, and enthusiasts. I attend and blog about the product.

A liquor company sends me a bottle for review. I don’t review it here, but I mention liking it on Twitter.

You get the idea: Spend enough time in this business and a lot of free stuff is going to come your way. And given the massive consolidation in the liquor industry there’s not going to be any brand owned by one of the big companies that I won’t have some plausible connection to. Trying to disclose all of this would get rapidly out of hand; not disclosing it leaves me liable to thousands of dollars in fines under an untested rule. (It’s unlikely the FTC would come after me, but all it takes is one vindictive person to file a complaint.)

I’ve been considering adding an explicit review policy to this site and may do so soon, but I don’t know how I could fully comply with the FTC guidelines even if I wanted to. The same ends are accomplished by bloggers’ need to maintain credibility without the potentially chilling effect this rule would have if it’s enforced too liberally.

What strikes me as the biggest flaw in these guidelines is that they treat bloggers as equivalent to celebrity endorsers or “word-of-mouth marketers” rather than as journalists. With possible exception for sites designed specifically as disguised ads, it seems better to leave disclosure to journalistic discretion rather than codifying it into law.

[Via @BrookeOB1.]

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Two Pimm’s, one cup

by Jacob Grier on August 18, 2009

Here’s another case of cocktails and intellectual property colliding. This time it’s Diageo’s Pimm’s product versus a chain store knock-off called Pitchers. Click through to see the two labels; Pitchers is clearly building off of Pimm’s image. I don’t know what the legal ramifications of this would be in the UK.

More interestingly, part of Diageo’s claim has to do with the use to which the products are put. Specifically, Diageo doesn’t like the fact that Pitchers boasts that it mixes well with lemonade and fruit, a traditional pairing for Pimm’s often ordered by customers as a Pimm’s Cup. Pitchers also boasts that it outperforms Pimm’s in taste tests.

This is strikingly similar to the Dark and Stormy controversy. Diageo might have a legitimate claim that the bottle design dilutes their brand, but it’s hard to imagine any public good coming from forbidding competitors to tout their superiority in a popular mixed drink.

(For more on the American law regarding trademarks and cocktails, be sure to check this guest post at The Scofflaw’s Den by practicing attorney Chris Leger.)

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Dark and Stormy and the piracy paradox

by Jacob Grier on August 7, 2009

My friend Tim Lee, whose new blog I linked to this morning, follows up on the Dark and Stormy controversy with a clarification about the purpose of trademark law:

[...] trademarks have a dramatically different policy rationale from patents and copyrights. Copyrights and patents are designed to create legal monopolies that drive up the price of creative works and thereby reward authors and inventors for their creativity. Although consumers may benefit from the resulting increase in creativity, the short-term effect is to force them to pay more than they would in a competitive market. Trademarks aren’t like that at all. The point is not to limit competition. To the contrary, the point is to enhance competition by ensuring that consumers know what they’re getting. This is why it’s emphatically legal to run comparative advertising featuring your competitor’s trademarks. Microsoft may own the “Windows” trademark, but Apple is free to use it as a punching bag as long as they don’t mislead consumers about what they’re getting.

The same principle applies in the Dark and Stormy case. The point of trademark law is to make sure consumers know what they’re getting (whether it’s Gosling or Zaya), not to give Gosling a monopoly on the concept of mixing ginger beer with rum. I haven’t seen Zaya’s ad and I’m not a trademark lawyer, so I don’t want to speculate on the legal merits of Gosling’s position. But certainly the apparent purpose of Zaya’s ad—encouraging bartenders to substitute their own rum in place of Gosling’s—is entirely within the spirit of trademark law. If the net effect of Gosling’s threats is that consumers wind up with fewer opportunities to try mixing ginger beer with different kinds of rum, that is certainly not what trademark law is supposed to accomplish.

This a good point. It’s also of interest that the recent boom in craft bartending has occurred with very little IP protection for recipes. Some enterprising writer might want to look into mixology as an example of creativity that thrives in a low IP environment as discussed in this famous paper on the “piracy paradox” in the fashion industry. My impression is that most of the recent innovations in recipes and technique have been driven by bartenders and bars seeking acclaim for their work and patrons eager to try their drinks; I’m personally thrilled when a recipe of my own invention is copied elsewhere, especially if credit is given to me or my bar. In contrast, the cocktails pushed by marketing campaigns tied to specific products are usually pretty unremarkable.

My perspective may be biased however by being so tied into the transparent, blogging parts of the bar community, and marketing cocktails may improve as firms realize the importance of getting their products used in craft bars. But even then it’s not clear that IP would play any essential role in the development of drink recipes.

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Dark ‘n’ Sue Me

by Jacob Grier on August 4, 2009

The Dark ‘n’ Stormy is a cocktail I like on a summer day. And like any good bartender, I know that it’s generally made with Gosling’s Black Seal Rum. What I didn’t know is that the name of the drink is a legal trademark:

That’s according to two trademark certificates on file with the United States Patent and Trademark Office, which — in an exceptionally rare instance in the cocktail world — dictate the precise ingredients and amounts required to call a Dark ‘n’ Stormy, well, a Dark ‘n’ Stormy.

“We defend that trademark vigorously, which is a very time-consuming and expensive thing,” said E. Malcolm Gosling Jr., whose family has owned Gosling’s since its founding in Bermuda in 1806. “That’s a valuable asset that we need to protect.”

But a trademark-protected drink — especially one as storied and neo-classically cool as a Dark ‘n’ Stormy — seems anathema to the current bartending practice of putting creative individual spins on time-tested drinks. Drinks like this one undergo something like a wiki process: a tweak here, a substitution there, and the drink is reimagined.

As this article at Halogen Life notes, applying intellectual property to cocktails is a rare thing. (The article uses “patent,” “copyright,” and “trademark” somewhat interchangeably, but I think it generally intends to refer to trademarks.) An early example (non-trademark) is the Bacardi cocktail, which by court decision can only be made with Bacardi rum. This is understandable given the value of the brand name and the expectations of customers ordering it. Similarly, if a customer orders a Captain and Coke the bartender shouldn’t serve him a Sailor Jerry’s and Pepsi instead, at least not without asking. (Though I have to wonder if it’s possible to harm the Captain Morgan brand any more than one would do by actually serving Captain Morgan.)

Of the few cocktails that are trademarked, most are the gimmicky concoctions found in chain restaurants and tourist spots. The Dark ‘n’ Stormy is a rare trademarked cocktail that craft bartenders care about.

This would all be of merely intellectual interest if not for the fact that a competing rum company, Zaya, ran an ad in the most recent issue of Imbibe recommending its 12 Year Estate Rum in a Dark ‘n’ Stormy. According to the New York Times article quoted above, Gosling’s plans to take action protecting their trademark. Zaya responded with a press release arriving in my inbox on Monday:

Zaya Rum fully supports Mixology as an artform. By imposing a trademark or patent on a cocktail recipe one is suggesting to undermine a Mixologists’ artistic freedom. We applaud bartenders who put their personal thumbprint on a libation as an integral part of the artform; it’s what creates a recipe in the first place.

Gosling’s might be on solid legal ground, but as a craft bartender I’m firmly on the side of Zaya. I use Gosling’s in a Dark ‘n’ Stormy because it tastes good, but it’s hardly written in the fabric of the universe that no other rum pairs so perfectly with ginger beer. If another rum company thinks they’ve made a product that’s even better, I want them to tell me about it. Using unique ingredients in classic cocktails is part of what makes tending bar creative. For example, a couple weeks ago my pal RumDood wrote about his good results substituting different rums in the Painkiller, a cocktail marketed by Pusser’s Navy Rum. It’s that kind of experimentation that moves mixology forward.

Gosling’s contends that using any other rum in a Dark ‘n’ Stormy would leave customers unimpressed, decreasing sales of the cocktail and therefore of Gosling’s itself. Perhaps. The New York Times compares Gosling’s to Campari, but you don’t see bartenders throwing other Italian aperitifs willy-nilly into Negronis despite that drink’s not having any trademark that I know of. Or they give the drink a new name if they do, like the Cin-Cyn using Cynar; not because they’re required to, but because Campari really is distinctive enough to merit its own iconic cocktail. This kind of bottom-up market test is a working method of deciding when a recipe deserves a distinct name.

So when I see Gosling’s calling in the lawyers to prevent people from trying out substitutes, I start to doubt whether their rum is as good as they say it is. Hell, they’re a rum company. Would this kind of behavior impress Ernest Hemingway? Or would he mock them from his bar stool whilst demonstrating knife stunts and tossing back a daiquiri? The question answers itself!

Here’s the three-word response I’d rather see from Gosling’s: “Bring. It. On.” Dark ‘n’ Stormy competition, blind tastings by a panel of consumers and mixologists, sampled side-by-side. The loser pays for the winner’s ad campaign touting its brand as the ultimate rum for the Dark ‘n’ Stormy. What do you say, Gosling’s? Will you put your money where your mouth is?

No, of course they won’t. And I can’t say I blame them. They’ve got a good thing going with their trademark and no reason to risk losing it. But their actions have made me want to switch brands out of spite. If a “Dark ‘n’ Sue Me” shows up on my cocktail menu soon, you’ll know I found a winner.

Further discussion: Inventor’s Rock provides legal clarification and Vidiot at Cocktailians provides an excellent overview of coverage.

Update: It’s worth noting that Australian rum maker Bundaberg markets a bottled Dark and Stormy beverage. I have no idea if they have any plans to enter the US market, but keeping that particular bottle off of store shelves might be one reason Gosling defends its trademark so vigorously.

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Oregon’s low bar for conviction

by Jacob Grier on July 7, 2009

We’re one of only two states that allows felony convictions from a non-unanimous jury, requiring only 10 votes to convict out of 12. The law is being challenged by an Oregon man and may reach the Supreme Court:

Mr. Bowen may find allies in two of the current court’s more conservative members, Justices Antonin Scalia and Clarence Thomas, who have often joined with more liberal justices to enforce the original meaning of constitutional provisions protecting the rights of criminal defendants.

The men who drafted the Sixth Amendment understood criminal convictions to require, as William Blackstone put it in 1769, “the unanimous suffrage of 12” of the defendant’s “equals and neighbors.” The Supreme Court has invoked that language in recent decisions concerning the importance of the jury’s role in determining facts supporting convictions.

I don’t have an informed opinion on the original meaning of trial by jury, but as a matter of policy I’d be happy to see a higher bar needed for felony convictions. Local prosecutors aren’t pleased with the prospect, a sign that requiring unanimity is a good idea:

Joshua Marquis, the district attorney in Clatsop County, Ore., said requiring agreement among just 10 jurors was efficient.

“Pretty much the only difference is that we have fewer hung juries,” he said.

Mr. Marquis added that 10 votes were required for conviction or acquittal and so the requirement favored neither the prosecution nor the defense. “Those two people who hold out,” he said, “are as often holdouts for the prosecution.”

Obviously the situation isn’t really so symmetric: In the case of a hung jury the defendant doesn’t go to prison and the prosecution may not bother to retry him. Hung juries are a useful signal that reasonable doubt exists. Nor do we necessarily want symmetry. Various rules of criminal justice (the burden of proof, non-reviewable acquittals) are intentionally biased against the prosecution to protect against false convictions. This will be an interesting case to watch if the Court takes it up.

Previously:
Dawkins doesn’t get juries

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Starbucks vindicated

by Jacob Grier on June 3, 2009

Last year Starbucks took a lot of heat in the press for an $86 million ruling against them for taking tips from baristas and giving them to management. In reality the “managers” in question were shift supervisors doing essentially the same job as baristas and customers leaving tips reasonably expected them to get their share. I defended Starbucks at the time and I’m glad to see that a California appeals court has reached the same conclusion [full decision in .DOC format here):

Specifically, the undisputed facts show: (1) the vast majority of the time shift supervisors and baristas perform the same jobs; (2) these employees rotate jobs and work as a "team" throughout the day; (3) customers intend that their tips placed in the collective tip boxes collectively reward all of these service employees; and (4) Starbucks's manner of dividing the collective tip boxes among the service employees (based on the time worked by each employee) is fair and equitable. [...]

Because the trial court’s interpretation of section 351 was not supported by the statutory language and led to a result contrary to the fundamental purpose of the statutory scheme, it is one that the Legislature could not have intended. We reverse the judgment in its entirety.

Cue allegation from amazingly persistent commenter Gary that the appeals court must have been bribed by Starbucks in 3… 2…

[Via Starbucks Gossip.]

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For the sake of a quirky, historic upper-case ‘E’

by Jacob Grier on March 9, 2009

made in oregon

The sign above graces the entrance to downtown Portland from the Burnside Bridge. It’s a nice sign. I like it. Does that make it mine?

I don’t think so, but many of my fellow Oregonians do. The owners of the sign have asked the Portland Historic Landmark Commission for permission to change its text. Citizens are protesting the alteration; nearly 10,000 of them have joined a Facebook group dedicated to opposing it. Pat Mobley, writing at Blue Oregon, argues that the sign “transcended simple advertisement status long ago” — apparently a good enough reason for denying its owners the right to put it to profitable use. City officials have put forth an even stranger justification: “The loss of the quirky, historic upper-case ‘E’ and cut-off ‘g’ in the text are not in keeping with the landmark character of the sign,” they write in a staff recommendation.

The facts are straightforward:

– The sign with Oregon outline was built in 1940 and advertised White Satin Sugar.

– In 1959 it was switched to an ad for White Stag sportswear, adding the iconic white stag.

– In 1997 it was changed again to promote Made in Oregon stores, a retailer that sells Oregon products.

– Made in Oregon no longer has any ownership of or presence in the building that hosts the sign. Nor does it pay for the electricity used to light it.

– With the exception of holidays, the sign went dark from 1989 to 1996 because no one was paying for it, and it may do so again.

– The University of Oregon now has a presence in the building and has paid for major renovations. They’ve offered to purchase the sign from its current owner, Ramsey Signs, and to keep it lit, under the condition that they are allowed to change it to read “University of Oregon.”

Perhaps I cling to quaint notions of property rights or maybe I just dislike the idea of text that’s younger than me being declared a historic landmark, but that strikes me as a perfectly reasonable transaction. And if the people of Portland feel strongly otherwise, they don’t have to resort to seizing the sign without compensating its owners. They or their proxies at City Hall could offer a competing bid to keep the sign intact. I suspect they’d realize they don’t actually care all that much about the sign if preserving it required making a donation or spending tax money rather than simply joining a feel-good Facebook group.

Unfortunately, given the realities of historic landmark laws, feeling good is practically cost-free. As Robert Levy and William Mellor describe regulatory takings in their book The Dirty Dozen:

If property is taken for public use, it makes sense — both morally and economically — to spread the cost of obtaining the property over the entire public. [...]

The allocation of these costs also has political implications. If the government is required to pay for the benefits it seeks to provide, taxpaying voters can weigh the costs they incur against the benefits they receive. Legislators will then have an electoral incentive to engage in takings only when the net benefit to society exceeds the net cost. Voters who must bear the additional cost will punish legislators who abuse such takings.

In contrast, if legislators are free to enrich a large group of voters at the expense of a single property owner or a small group of owners, it is in their electoral best interest to do so. Voters can be expected to accept and even demand any benefit, no matter how insignificant, if it costs them nothing to obtain it.

I have a slight preference for the sign reading “Made in Oregon” rather than “University of Oregon.” I have a strong preference for seeing property rights respected. I hope the change goes through.

[Photo from the Flickr stream of Drewish.]

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Not so good on this…

by Jacob Grier on January 6, 2009

The L.A. Times also ran this piece. Shorter version: Let’s make it illegal to donate money to any politician not pre-approved by the ruling parties. What could go wrong?

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A cause for delegation

by Jacob Grier on September 24, 2008

The editors at The New York Times are amused by the irony of seeing congressional Republicans suddenly calling for oversight of the executive branch now that the Treasury is asking for $700 billion to play with:

As delighted as we were to hear Republicans talk about oversight and accountablity, we couldn’t help but wonder where they were for the last seven years as the Bush administration essentially operated without Congressional oversight…

We can’t help but wonder how much the Republicans’ newfound zeal for regulating the executive branch and the equally out-of-control financial sector will last.

Probably until the elections are over.

All valid points. Congressional deference to the Bush Administration on matters of security has been shameful. But before calling out Republicans for their hypocrisy, the board ought to consider a little history. Congress has a long tradition of passing vague delegations of power and letting administrative agencies sort out the details. It’s a neat trick that lets them appear to address problems while washing their hands of responsibility when the execution goes awry. The practice goes back at least to the Great Depression with attempts to grant Roosevelt unprecedented power to regulate economic activity.

As Robert Levy and William Mellor document in their new book The Dirty Dozen: How Twelve Supreme Court Cases Radically Expanded Government and Eroded Freedom, the Court initially ruled against these delegations as violations of the Article 1 requirement that “All legislative Powers herein granted shall be vested in a Congress of the United States.” In Schechter, for example, the Court struck down a portion of the National Industrial Recovery Act because it under it “The discretion of the President in approving or prescribing codes, and thus enacting laws for the government of trade and industry throughout the country, is virtually unfettered.”

There, unfortunately, the Court stopped. Not a single statutory program since then has been struck down as an impermissible delegation of congressional authority. As long as there is an “intelligible principle” to guide agencies’ discretion, they’re allowed to make and enforce new law — and these “intelligible principles” can be remarkably vague. The laws created by unelected administrative agencies now dwarf those passed by Congress. The Federal Register runs more than 77,000 pages long, listing rules from more than 300 agencies. The FCC, FDA, EPA, SEC, and countless other agencies derive their sweeping authority from the Court’s long history of letting Congress foist responsibility for costly regulations onto unaccountable bureaucracies. Levy and Mellor conclude that:

…delegation buttresses the power and influence of special interests. Ordinary citizens are even less well equipped to press their case before administrative agencies than before Congress. National legislators– but not agency heads — are responsive to the needs and desires of voters, who can exact retribution at the polls. By contrast, individual voters have no direct representation in the administrative process, nor do they typically have access to trained legal counsel, expert witnesses, and consultants…

Delegation has become a political narcotic — hooking Congress on more and bigger regulatory schemes with scant regard for their costs, little concern over the political repercussions, and most of all, disrespect for a Constitution expressly designed to prohibit what Congress has eagerly promoted.

Over at Volokh, David Bernstein speculates that approving a blank check for Paulson could provide the Court a fresh opportunity to revisit the non-delegation doctrine and the limits of what counts as an intelligible principle. If it does so, I expect the NYT editorial board will be among the loudest defenders of broad regulatory power.

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“The Libertarian” speaks

by Jacob Grier on September 17, 2008

Forbes.com launched a new column this week called “The Libertarian” featuring Richard Epstein. I’d rather see libertarian ideas mainstreamed than walled off into their own cage at the ideological zoo, but I’m glad that Epstein is contributing regularly. He’s a fascinating scholar and his book Skepticism and Freedom is one of the most rigorous defenses of classical liberalism there is. The introduction to the column is light but the coming articles about labor markets promise to be interesting.

[Via the University of Chicago Faculty Blog.]

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