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  • Tobacco Settlement Bars Smokers' Punitive Damage Claims

    August 1, 2007
    A court has just ruled that a multibillion dollar tobacco settlement bars punitive damages in lawsuits by smokers against tobacco companies. In 1998, 46 states entered into a tobacco settlement with the major tobacco companies, which agreed to pay the States roughly $250 billion over the first 25 years of the settlement, and more in perpetuity. Federal district judge Charles Brieant has just ruled in Mulholland v. Philip Morris that smokers in New York can't seek punitive damages against the tobacco companies, because New York is one of the states that joined that tobacco settlement, known as the Master Settlement Agreement (MSA), which the judge ruled bars further punitive damages claims in member...
  • English Plaintiffs' Long-Distance Suit Moved Closer to Home

    August 1, 2007
    Usually, it's the plaintiff who seeks to sue in his home state, while the defendant seeks to have lawsuits heard in its own home state. But New Jersey law is so biased against corporate defendants that New Jersey-based drug-maker Merck & Co. sought to keep English lawsuits against it out of the New Jersey courts and in English courts instead. By contrast, English plaintiffs sought to sue Merck not in their own country's courts, as plaintiffs typically do, but rather wanted to sue it all the way across the ocean in New Jersey, several thousand miles away from their own homes. A New Jersey appeals court has just ruled that the suits belong in England. The court's decision is correct and would be unremarkable in any other state, since the suits do, in...
  • Nanny State In Montgomery County

    August 1, 2007
    Montgomery County, Maryland, is considering a law that would require food chains to post nutritional information about their food. In terms of its intrusion into people's lives, this obviously isn't that big. But it's darn annoying and unfair to small business. The big fast food chains like McDonald's and Burger King already post nutrition information on their websites. (Links lead to nutrition pamphlets.) McDonald's, in fact, prints nutrition information on nearly all food packaging. Since the proposed law applies to eating places with 10 or more locations, it might impose a substantial food laboratory bill on many smaller chains. And, of course...
  • Collaring Markets into a Chokehold

    August 1, 2007
    Greg's post on the Whole Foods/Wild Oats merger brings to mind another pending merger: that between satellite radio firms XM and Sirius, which, while substantially different, is being opposed on a similarly overbroad definition of the relevant market. In comments submitted to the Federal Communications Commission, the National Association of Broadcasters, which opposes the merger, argues that "the proposed merger would permit a single licensee to hold 100 percent of the available spectrum allocated to satellite DARS [digital audio radio service]," and that, "the relevant product market for purposes of the Commission's analysis of the proposed merger is the market for satellite DARS." This is, of course, ridiculous,...
  • Tangent on Antonioni -- and Tom Snyder

    August 1, 2007
    I don't want to continue a debate over Ingmar Bergman here, but there is an odd connection between the late film director Michelangelo Antonioni and another famous person who passed away in the last few days, late-night talk show host Tom Snyder: They were both players in two strange tangents in rock history (for those who find that kind of thing interesting). Antonioni's Blowup includes a nightclub scene featuring the Yardbirds, the band where guitar legends...
  • Drug Price Ceilings Overturned

    August 1, 2007
    An appeals court ruling today struck down Washington, D.C.'s price ceilings for prescription drugs. In Biotechnology Industry Organization v. District of Columbia, the Court of Appeals for the Federal Circuit upheld a federal district court ruling that held that D.C.'s municipal price-control ordinance was preempted by federal patent laws. The D.C. Council had voted to ban "excessive prices," a vague term for which they provided no specific statutory definition. The Council did, however, include a provision declaring that a drug price is presumptively excessive when it is "30% higher than the comparable price" charged in Australia, Germany, the United Kingdom, or Canada. It also authorized lawsuits against pharmaceutical manufacturers by any organization claiming to act "in the public interest;" "any person" claiming...
  • Whole Foods Merger Analysis

    August 1, 2007
    I may be going out on a limb here, but I predict, on the basis of what happened in court yesterday, that the Whole Foods merger with Wild Oats Market will eventually be approved. Antitrust aficionados will know that the crux of this case is how the court will define the relevant market, and whether or not the merged firm would be a monopolist in that market. Is the market to be narrowly defined as including only nationwide, premium, organic and "natural" foods supermarkets (a definition that really includes only the merging firms), as the FTC supports? Or should it include all retailers of organic and "natural" foods (which includes almost every major supermarket chain and Wal-Mart), as Whole Foods insists? The way court go about defining the relevant market is a little too convoluted to explain in a blog post, but I'll refer readers the joint Justice Department/Federal Trade...
  • Don't Believe the Ethanol Hype

    July 31, 2007
    We happy few here at Open Market have really been in tune with the rock journalists of America recently. First Kurt Loder trashes Michael Moore's Sicko, and now Rolling Stone blows the whistle on the ethanol scam:
    As the king of ethanol hype, Sen. Chuck Grassley of Iowa, put it recently, "Everything about ethanol is good, good, good." This is not just hype -- it's dangerous, delusional bullshit. Ethanol doesn't burn cleaner than gasoline, nor is it cheaper. Our current ethanol production represents only 3.5 percent of our gasoline consumption -- yet it consumes twenty percent of the entire U.S. corn crop, causing the...
  • Just when you thought the Farm Bill couldn't get any worse...

    July 31, 2007

    Over the last several days, my colleagues at CEI have pointed out some of the worst aspects of the Farm Bill -- and it's bad. But now The Wall Street Journal shines a spotlight on a little-noticed aspect of the bill that would make it even worse:

    The overstuffed farm bill now waddling through Congress -- toward a possible veto by President Bush -- has attracted so much waste that everyone with a genuine interest in agriculture is feeling disheartened. Yet the bill has earned unlikely support from the labor union lobby.

    Hmmm. Could this be at all related to a new and unprecedented Davis-Bacon requirement for ethanol construction? Davis-Bacon is the Depression era holdover that forces federal construction contracts to pay a "prevailing union wage" -- determined by the Department of Labor --...

  • The Not-Just-Private-Equity Tax hits shareholders of REITs

    July 31, 2007
    An Associated Press story today on proposed "carried interest" tax hike legislation aimed at soaking private equity had this interesting description of what the proposals would do:
    Congress is debating whether to force companies set up as limited partnerships -- and their managers -- to pay taxes at the same rate as income earned by ordinary Americans.
    But reading the fine print of the press release of main sponsor Rep. Sander Levin (D-Mich.) shows that the House bill would also hike the taxes of plenty of "ordinary Americans" as well -- specifically, the numerous American shareholders in real estate investment trusts, or REITs. The question-and-answer section at the end of Levin's release asks, "Would...


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