Coyote Blog

This is a great article about the fraudulent practices people pursue to try to take advantage of rules about service animals that help people with true disabilities to bring their pets with them everywhere.  This kind of crap strikes me as being in the same category as folks who used to hire disabled kids to go to Disneyworld with them so they could skip the lines (a practice, by the way, that led to Disney giving fewer special privileges to handicapped kids because of the abuse).

I will say from personal experience that the pressure on service businesses to succumb to this sort of service animal fraud is immense, especially in places like California where the financial penalties for even tiny well-meaning infractions of bewildering ADA rules are substantial.  My employees once felt they had to allow a woman to bring her horse (!) into the park because she had letters like the ones in this article saying she required the horse for emotional support.

This week I was at a conference where a featured speaker was an executive of the Forest Service named Joe Meade who happens to be blind.  I say "happens to" because Joe is one of the best, and best-loved, executives in that organization and what makes him great has little or nothing to do with his disability.  But I watched him work his way through a hotel with his service dog -- a casino hotel I got lost in about 4 times and I could read the signs -- and the skills that dog had are simply amazing.  Service dogs like that get deference from service businesses for a reason.  It infuriates me that people are trying to counterfeit that kind of credential so they don't have to pay an extra airplane fare for their cat.  And the only way they get away with it is because of our screwed up tort system that leaves service businesses at the mercy of even the most outrageous claims.  Because we businesses have given up on, particularly in places like California, ever getting real justice.

hattip:  Overlawyered.

Via Walter Olson

Can websites be forced to change to accommodate the disabled — by using “simpler language” to appeal to the “intellectually disabled or by making them accessible to the blind and deaf at considerable expense?

Apparently, the White House is gearing up to force costly changes on websites in the name of ADA compliance.   The implications could be staggering, and in certain scenarios would basically force me to certainly close down this site, and likely close down many of my business sites.

Generally, the First Amendment gives you the right to choose who to talk to and how, without government interference. There is no obligation to make your message accessible to the whole world, and the government can’t force you to make your speech accessible to everyone, much less appealing to them. The government couldn’t require you to give speeches in English rather than Spanish …

But now, the Obama administration appears to be planning to use the Americans with Disabilities Act (ADA) to force many web sites to either accommodate the disabled, or shut down.

1.  On the lighter side, a customer came into our establishment in California the other day with a horse.  Claimed it was a "therapy animal" and therefore it would be a violation of the ADA to not allow the horse in.  Not knowing the law but with some experience with California, my managers rightly let the animal in, then researched it later.  It appears that we are safe denying entry to animals that are not licensed service animals, but this is an evolving part of the law, apparently.  Since it costs us about $25,000 a pop to get even the craziest suits dismissed in California, we will continue to err on the side of caution.

2.  Perhaps even crazier, we recently were forced to institute an HR policy in California that working through lunch is a firing offense.  One warning, then you are gone.  Why?  California has a crazy law that allows employees to collect substantial ex post facto compensation if they claim they were denied a 10 minute break every four hours or a thirty minute unpaid lunch break after five.  Suffice it to say we have spent years honestly trying to comply with this law.   The 10-minute break portion is less of a compliance hurdle, but the lunch break portion has caused us no end of trouble.   Theoretically, under the law, the employee has a choice - work through lunch paid, eating at the job post  (e.g. in a gatehouse of a campground) or leave the job post for 30 minutes for an unpaid lunch break.   As background, every one of our employees have always begged to have the paid lunch because they are from a poorer area and need the extra 30 minutes of pay.

Unfortunately, it does not matter what preferences the employee expressed on the job site.  In the future, the employee can go to the labor department and claim he or she did not get their break, and even if they did not want it at the time, and never complained to the employer about not getting it, the employer always, always, always loses a he-said-she-said disagreement in a California Court or review board.  Always.  Sure, it takes someone utterly without honor to make this claim in Court, but there seems to be no shortage of those.  So, we took a series of approaches to getting people on-paper, on-the-record as having asked to work through lunch.  Unfortunately, one court case after another has demolished each safe harbor we thought we had.

A few weeks ago I was advised by a senior case-worker at the California Department of Labor that the only safe harbor left for employers is to FORCE employees to take an unpaid lunch.  This means they clock in and back out, this means they have to leave the job site (because if a customer happens to ask them a question, then they are "working"), and this means we have to ruthlessly enforce it.  Or we are liable for scads of penalties.  So, we find ourselves at the bizarre crossroads of making working through lunch a firing offense, and employees who generally want to work an extra thirty minutes each day to earn more money are not allowed to do so.  Yet another example of laws that are supposed to be "empowering" to employees actually ending up limiting their choices.

The whole topic of licensing as anti-consumer efforts to restrict competition is a long-running one here.   Since I am sort-of-kind-of not-blogging right now, I won't excerpt or comment on it a lot, but this is a very interesting piecelooking at internal documents of the American Dietetic Association discussing their efforts to pass laws in various states that essentially ban anyone but their members from giving diet and nutrition advice.  It is one such law in North Carolina which required that Steve Cooksey take down all his blog posts about his dieting experiences (since he is not licensed by the state, it is illegal for him to speak on the topic).

The funniest part for me in the ADA materials is that they constantly seem to be put out that their efforts to  ban competition from anyone outside of their organization are described by critics as creating a monopoly.  Who, us? Monopoly?  We are just trying to help customers.  Missing in all this, of course, is any evidence of a grass roots effort by nutrition customers.  I will remind everyone of this great Milton Friedman quote:

The justification offered is always the same: to protect the consumer. However, the reason is demonstrated by observing who lobbies at the state legislature for the imposition or strengthening of licensure. The lobbyists are invariably representatives of the occupation in question rather than of the customers. True enough, plumbers presumably know better than anyone else what their customers need to be protected against. However, it is hard to regard altruistic concern for their customers as the primary motive behind their determined efforts to get legal power to decide who may be a plumber.

I am increasingly convinced that contradictory regulations that make it impossible even for people of goodwill to be in compliance are a feature, not a bug of the current system.

…Common sense dictates that any medication that carries with it a warning that it “may cause drowsiness” or that the patient should “use caution” if operating machinery may pose a risk in the workplace. It is for this reason that many employers adopt a policy requiring employees to self report the use of prescription pain killers. This is especially important in potentially dangerous workplaces such as manufacturing and construction.

In a recent action that defies common sense, the Equal Employment Opportunity Commission has taken the position that such policies are unlawful under the Americans With Disabilities Act. The ADA prohibits an employer from conducting “medical inquiries” without a business reason to do so. In EEOC v. Product Fabricators, Inc., an action in federal court in Minnesota, the EEOC required a manufacturing employer to abandon its policy of encouraging employees to inform supervisors if they are under the influence of narcotic pain killers such as Vicodin. The EEOC took the position that an employer cannot ask about prescription pain killer usage unless it has “objective” evidence that an employee is impaired on the job.

This places employers in a very difficult position….

Walter Olson also has comments at the link.

Via Carpe Diem and a whole string of other sites:

"How will California parents react when they find out they will be expected to provide workers' compensation benefits, rest and meal breaks, and paid vacation time for…babysitters? Dinner and a movie night may soon become much more complicated.

California Assembly Bill 889 will require these protections for all “domestic employees,” including nannies, housekeepers and caregivers. The bill has already passed the Assembly and is quickly moving through the Senate with blanket support from the Democrat members that control both houses of the Legislature – and without the support of a single Republican member. Assuming the bill will easily clear its last couple of legislative hurdles, AB 889 will soon be on its way to the Governor's desk.

Under AB 889, household “employers” (aka “parents”) who hire a babysitter on a Friday night will be legally obligated to pay at least minimum wage to any sitter over the age of 18 (unless it is a family member), provide a substitute caregiver every two hours to cover rest and meal breaks, in addition to workers' compensation coverage, overtime pay, and a meticulously calculated timecard/paycheck.

Failure to abide by any of these provisions may result in a legal cause of action against the employer ("parents") including cumulative penalties, attorneys' fees, legal costs and expenses associated with hiring expert witnesses, an unprecedented measure of legal recourse provided no other class of workers – from agricultural laborers to garment manufacturers."

I know this is exactly the kind of thing you would expect me to oppose, but I have decided this is exactly the kind of thing California needs.  I am tired of average citizens passing crazy requirements on business without any concept of the costs and injustices they are proposing, and then scratch their head later wonder why job creation is stagnant.
I want to propose that California do MORE in this same vein.  Here are some suggestions:

• Every household will have to register for a license to conduct any type of commerce, a license to occupy their house, and a license to hire any employees.  Homeowner will as a minimum have to register to withhold income taxes, pay social security taxes, pay unemployment insurance, pay disability insurance, and pay workers comp insurance.
• Households should have to file a 1099 for every payment they make to contractors
• All requirements of Obamacare must be followed for any household labor, including payment of penalties for even part-time labor for which the homeowner does not provide medical insurance
• No alcohol may be purchased by any individual without first applying for and receiving a state liquor license
• No cigarettes may be purchased by any individual without first applying for and receiving a state cigarette license
• No over the counter drugs may be purchased by any individual without first applying for and receiving a state over the counter drug license
• No eggs may be purchased by any individual without first applying for and receiving a state egg license
• Any injuries of any type in the household must be reported to OSHA
• Form EEO-1 must be filed once a year to catalog the race and gender of anyone who did any work in the home
• Any time one has a dispute in court with another citizen or an employee, they will now be treated the same as businesses in California, which means that the presumption, irregardless of facts, will be strongly in favor of any employee and against the homeowner, and in favor of any other party in any dispute whose net worth is perceived by the jury as less than the homeowner's.
• At least once a year the home's kitchen must be inspected and certified by both the fire marshal and the health department.  Any deficiencies must be immediately repaired before the kitchen can be used.  All code requirements for commercial kitchens will apply to household kitchens, including requirements for a three-basin washup sink, separate mop sink, and fire extinguishers
• All homes will be inspected once per year for ADA compliance.  All parts of the home must be wheelchair accessible, even if there are currently no handicapped residents in residence.  Homes more than one-story tall will require an elevator.  All counters must be of the proper height, and all bathrooms must have ADA fixtures.
• Each home will be required to prominently display all its required licenses as well as state and federal information posters for workers.
• All homes will be audited at least once every three years to ensure that use taxes have been filed and paid on all out of state Internet purchases
• Material Safety Data Sheets must be on file for all household cleaning products and other chemicals and available for inspection by the fire marshal
• All gas tanks (car, lawnmower, portable 5-gallon) will be treated just like commercial gasoline storage tanks, and require monthly leak / loss reporting.  Annually, a complete spill prevention plan must be filed with the state.
• A stormwater discharge plan must be filed annually with the state
• Any dropped thermometer or CFL bulb will require homeholder to call out (and pay disposal costs) of a state hazmat team
• Lifeguards are required at all home pools during daylight hours
• Households should file property tax returns in the same way that businesses must, listing individually every single piece of personal property they own, from their car to their lawnmower to the pink flamingo in the front yard.
• Homeowner must track the number of days any guests stay in their house so they can file and pay lodging taxes on a monthly basis
• Any homeowner who hauls a boat or trailer on US highways must register with the Department of Transportation and receive a DOT number.  They must keep full driver logs and maintenance records available for DOT audit and inspection, and every driver must be drug-tested at least once per year.
• All food on pantry shelves must meet all state labeling laws
• At each entrance to the house, a sign warming those entering must be posted warning that certain cancer causing chemicals may be present

Finally, after spending the entire day complying with these rules, the homeowner must read at least 3 posts each day from progressive blogs explaining why anyone who complains about such rules as unreasonable is just a reactionary who doesn't really know how to run his business very well, and they could certainly do better.

Postscript:  Every single item on this list is something my company has been required to do.  I am sure I left a bunch out.

Here is a portion of Kevin Drum's argument against lowering the minimum wage to stimulate employment

Is this really what we've come to? That we should provide a (probably very small) boost to the job market by allowing businesses to hire people for $9,500 per year instead of $14,500? Seriously? I mean, this is the ultimate safety net program, aimed squarely at working people at the very bottom of the income ladder. If we're willing to throw them under the bus, who aren't we willing to throw under the bus?

Part of the problem is that Drum is absolutely convinced that our intuition (and, oh, 200 years of experience) that demand curves slope downward is flawed in the case of low-skill labor.  He has read the two studies out of a zillion that, contrary to all the others, suggests that minimum wage increases may not affect employment and has convinced himself that these are the last word in the science.    As an employer who has laid people off and made larger and larger investments in automation with each successive minimum wage increase, I will continue to trust my intuition that higher minimum wages makes hiring less desirable.

I will say, though, that there are a number of reasons why a change in the minimum wage may have a smaller overall effect nowadays than one might expect.  That is because the minimum wage vastly understates the cost of taking on an unskilled worker.  Even with a lower minimum wage, these government costs will remain:

• Soon, the employer will have to pay for the employees health care, a very expensive proposition
• Workers comp and other labor taxes add as much as 20% to the cost of labor
• In states like California, bad employees have an increasing number of avenues to prevent employers from firing them, from appeal to an ADA law stretched out of recognition to any number of other legal presumptions that employers have to just live with hiring mistakes

Hiring employees used to be a joyous occasion.  Now I cringe and wonder what kind of liabilities I am taking on.

But back to Drum's statement, how sick is it that allowing people off the dole to actually get a job is called "throwing them under the bus?" Drum, for someone so fired up to make decisions based on academic work, sure is willing to put on blinders to all the academic work that actually characterizes who works for minimum wage and how long they stay on it.  He who argues against making policy based on flawed intuition is operating here entirely from a flawed perception of who minimum wage workers are.  He seems to want to picture families of eight supported for decades by someone trapped in the same minimum wage job, for whom a raise only comes when Congress grants it, but that is simply not the reality.

Just as one metric, for example, the percentage of all wage and salaried workers making minimum wage or less fell from 8.8% in 1980 to 1.7% in 2008.  In fact, the actual absolute number of people making the minimum wage fell by over 2/3 during these years.    I would argue that this number is probably too low.  A dynamic labor market needs to bring people in at the bottom, and raising the minimum wage makes this harder, and so traps people into unemployment.  In fact, the number of unemployed in this country is at least 6 times larger than the number of minimum wage workers.

If we dropped the minimum wage, only a fraction of the 2 million or so who make the minimum wage would see their wages go down, but lets assume a quarter of them would.  We are therefore trying to prop up wages for 500,000 but at the same time creating barriers for 13.9 million people who are unemployed and are looking for work.  And it is low-skilled workers who we are most particularly throwing under the bus by keeping minimum wages high.

From Walter Olson, on the House health care bill:

Contacts on Capitol Hill inform me that Republicans yesterday managed to block a remarkable provision that had been slipped into the House leadership's 794-page health care bill just before it went to a House Ways & Means markup session. If their description of the provision is accurate "” and my initial reading of the language gives me no reason to think it isn't "” it sounds as if they managed to (for the moment) hold off one of the more audacious and far-reaching trial lawyer power grabs seen on Capitol Hill in a while.

For some time now the federal government has been intensifying its pursuit of what are sometimes known as "Medicare liens" against third party defendants (more)....

The newly added language in the Thursday morning version of the health bill (for those following along, it's Section 1620 on pp. 713-721) would greatly expand the scope of these suits against third parties, while doing something entirely new: allow freelance lawyers to file them on behalf of the government "” without asking permission "” and collect rich bounties if they manage thereby to extract money from the defendants. Lawyers will recognize this as a qui tam procedure, of the sort that has led to a growing body of litigation filed by freelance bounty-hunters against universities, defense contractors and others alleged to have overcharged the government.

It gets worse. Language on p. 714 of the bill would permit the lawyers to file at least some sorts of Medicare recovery actions based on "any relevant evidence, including but not limited to relevant statistical or epidemiological evidence, or by other similarly reliable means". This reads very much as if an attempt is being made to lay the groundwork for claims against new classes of defendants who might not be proved liable in an individual case but are responsible in a "statistical" sense. The best known such controversies are over whether suppliers of products such as alcohol, calorie-laden foods, or guns should be compelled to pay compensation for society-wide patterns of illness or injury.

He has a lot more detail.  Ask anyone in a public contact business in California how similar laws for ADA violations have worked out.  Just one more horrible, failed law from California that has driven the state into the ground now being emulated at the national level.

A while back, I wrote about wealthy, legally savvy parents exploiting disabled-education funds to get their high achieving kids into private schools, paid for by the state.  Apparently we can't get $6000 vouchers, but this is legally OK, if you are persistent enough in gaming the system:

In Sonoma County, for example, a family recently enrolled its child in an
out-of-state boarding school, then billed its district not only for tuition,
but airfare, car rental, hotel, cell phone calls, meals, tailoring, new
clothes, an iBook computer, stamps, tolls, gas and 13 future round-trip visits.
Total tab: $67,949....

Here is the mom, in this case, explaining her son's "disability" which justified this largess

"He was not offered the classes that I thought he needed," the mother
said. "If my son didn't get what he needed, my fear was that he would drop out
of school.'' 

She acknowledged he had never been a discipline problem. The hearing
records describe him as a "young adult who is likable, friendly, energetic and
highly motivated. He is physically active, plays lacrosse and soccer, and
enjoys wakeboarding and snowboarding."

"He's a model child," she said. "However, his frustration and anxiety were
so high that I could see that this is the type of person who, out of
frustration, turns to drugs or something that he shouldn't be doing."

Well, the good news, I hope, is that the Supreme Court is set to review this kind of legal abuse of the ADA and other disable rights legislation:

the Supreme Court has accepted for review a case in which, according to
the New York Times's account, a former chief executive of Viacom did
not even give a public school program a try before enrolling his son in
a private school and demanding that New York City pick up much of the
resulting bill. The New York Times's account is distinctly
unsympathetic toward the parent, and quotes Julie Wright Halbert,
legislative counsel for the Council of the Great City Schools, as
saying: "Many wealthy, well-educated people are gaming the system in
New York City and around the country."

Let's have school choice for everyone, not just for the well-connected, legally savvy, or downright irritating.

Patterico has a link to this interesting account of a week in the life of Jarek Molski, who makes a living from filing ADA suits (emphasis added):

For example, in Molski v. El 7 Mares Restaurant, Case
No. C04-1882 (N.D. Cal. 2004), Molski claims that, on May 20, 2003, he
and significant other, Brygida Molski, attended the El 7 Mares
Restaurant for the purposes of dining out. Molski alleges that the
restaurant lacked adequate handicapped parking, and that the food
counter was too high. After the meal, Molski attempted to use the
restroom, but because the toilet's grab bars were improperly installed,
he injured his shoulders in the process of transferring himself from
his wheelchair to the toilet. Thereafter, he was unable to wash his
hands because of the lavatory's design.

Although this complaint appears credible standing alone, its
validity is undermined when viewed alongside Molski's other complaints.
In Molski v. Casa De Fruta, L.P., Case No. C04-1981 (N.D. Cal. 2004),
Molski alleges that he sustained nearly identical injuries on the exact
same day, May 20, 2003. In Casa de Fruta, Molski alleges that he and
significant other, Brygida Molski, patronized Casa de Fruta for the
purpose of wine tasting. On arrival, Molski was again unable to locate
van accessible parking. Once inside, Molski again found the counter to
be too high. After wine tasting, Molski again decided to use the
restroom, and again, injured his upper extremities while in the process
of transferring himself to the toilet. Thereafter, he was once again
unable to wash his hands due to the design of the lavatory.

This was, apparently, not the end of Molski's day. In Molski v.
Rapazzini Winery, Case No. C04-1881 (N.D. Cal. 2004), Molski once again
alleges that he sustained nearly identical injuries on the exact same
day, May 20, 2003. Molski, again accompanied by Brygida Molski, claims
he visited the Rapazzini Winery for the purpose of wine tasting. Again,
Molski complains that the parking lot lacked adequate handicapped van
accessible parking. Upon entering the establishment, he discovered that
the counter was too high. After tasting wine, he again needed to use
the restroom. In the course of transferring himself from his wheelchair
to the toilet, he injured himself yet again. Thereafter, he was again
unable to wash his hands due to the lavatory's design.

The Court is tempted to exclaim: "what a lousy day!" It would be
highly unusual "” to say the least "” for anyone to sustain two injuries,
let alone three, in a single day, each of which necessitated a separate
federal lawsuit. But in Molski's case, May 20, 2003, was simply
business as usual. Molski filed 13 separate complaints for essentially
identical injuries sustained between May 19, 2003 and May 23, 2003. The
Court simply does not believe that Molski suffered 13 nearly identical
injuries, generally to the same part of his body, in the course of
performing the same activity, over a five-day period. This is to say
nothing of the hundreds of other lawsuits Molski has filed over the
last four years, many of which make nearly identical allegations. The
record before this Court leads it to conclude that these suits were
filed maliciously, in order to extort a cash settlement.

I was in the Peoples Republic of Santa Monica this weekend.  Yes, I'm glad I don't have to live there (but I paid $50 per night in hotel taxes -- wow!) but the beach is gorgeous and the weather usually good.  We were shopping down the 3rd Avenue outdoor mall and were in a fairly large (3 story) Borders Books store when we found there was no bathrooms for customers.  The manager told us that it was for liability reasons.

Liability?  Has it really gotten this bad, or is this just becoming the convenient excuse nowadays when any public service is not offered?  I did a search and found that Santa Monica is ruthless in going after ADA access issues, so my guess is that they could not bring their bathroom into compliance in this older building for the 0.1% of customers who were handicapped so they closed it for the other 99.9%.  My other guess is that it might have something to do with the huge homeless population in Santa Monica, perhaps with them having trouble barring access to them (the public restroom we finally found had a homeless man camped out in it).

Via Overlawyered, one of my absolute favorite blogs, comes my favorite headline of the week, courtesy of KCRA in California:

Paraplegic Activist Leaps From Wheelchair, Runs From Police

That's classic.  Apparently, the person involved had defrauded numerous organizations with spurious ADA complaints under California's ridiculous sue-anyone-with-higher-net-worth-than-yours laws.

Police said Laura Lee Medley, who repeatedly filed claims and lawsuits
for noncompliance with the Americans with Disabilities Act, was a con
artist.

A San Bernardino County spokesman, David Wert, said
Medley had complained to police earlier that she was having medical
problems so she was taken to a hospital for treatment.

Wert said, "That's where the great miracle occurred."

Officers
said Medley, 35, leaped from her wheelchair and ran for freedom after
being placed under arrest by Las Vegas police. The barefoot woman was
caught after a brief pursuit.

According to authorities in
Southern California, Medley was never disabled but used her supposed
condition to file many medical claims and lawsuits. Her questionable
claims led to the arrest in Las Vegas.

The vast majority of my employees and many of my customers are over 60, so we try extra-hard to accommodate people with all kinds of disabilities.  That is why this type of fraud really burns me up.  Not once but twice we have killed incipient lawsuits when we have had customers who were claiming severe physical disabilities observed playing football or unloading a truck.  I have had one person I was interviewing for a job tell me that I had to hire him since he was disabled, because if I didn't choose him I would be discriminating against the handicapped (we chose a different candidate).

Update: More Unruh act silliness:

A Los Angeles psychologist who was denied a tote bag during a Mother's
Day giveaway at an Angel game is suing the baseball team, alleging sex
and age discrimination.

Michael Cohn's class-action claim in Orange County Superior Court
alleges that thousands of males and fans under 18 were "treated
unequally" at a "Family Sunday" promotion last May and are entitled to
$4,000 each in damages.

One of the things that takes some of the fun out of running a small business is knowing that, despite all your best efforts, you are probably violating the law somewhere and there is a bureaucrat (or in California, a tort lawyer) trying to make a name for themselves by nailing you for this technical violation.  Now, I'm not talking about chaining employees to the assembly line or even paying below the minimum wage.  I am talking about $45,000 fines for not splitting the two portions of a Davis-Bacon wage out correctly on a pay stub or getting sued for not properly posting one of your required labor department posters or having a counter 1/2" too high for ADA regulations.

Via Overlawyered comes this Independence Institute (pdf) report about the criminalization of everything, a practical primer on the philosophic  musings on individual decision-making here.

There is a principle in jurisprudence that "ignorance of the law is no excuse." In other words, no one can justify his illegal conduct on the grounds that he was unaware of the law. But what happens when the sheer volume, complexity, and ambiguity of the law means that neither citizens, nor the government, can reasonably know
what is and is not against the law?

Colorado currently has some 30,000 laws filling more than 50 volumes of the Colorado Revised Statutes, both criminal and regulatory. Every session, the Colorado General Assembly passes hundreds of new laws for government to enforce and citizens to both understand and obey. Aside from the sheer number of laws, the definition of what constitutes a criminal act has changed; often the legislature actually creates new crimes, and thus, new criminals, where no inherent criminality exists.

We operate in 11 states.  Think of it.  50 volumes times 11 states plus the federal code.  Eeek.

In his book Drug War Addiction, Sheriff Bill Masters of San Miguel County Colorado describes his discovery of the Colorado Statutes of 1908. At the time, "all the laws of the state fit in one volume. Murder, rape, assault, stealing, and trespassing were all against the law in 1908.

So the other 49 volumes outlaw, what?

Update:  Welcome Overlawyered readers.  More thoughts on the dangers of the over-regulated state here.

California has another confusing slate of initiatives on the ballot for the next election, including several related to various interventions in pharmaceutical pricing  (helping to demonstrate that grass roots democracy can be just as tyrannical to individual rights as any other form of government).  Bill Leonard, of the California BOE, notes in his weekly email:

Proposition 79 seeks to capitalize on public outrage over high drug prices by creating a new big government program that would supposedly mandate drug discounts for low-income Californians.

It turns out that the initiative contains a little-noticed provision that will allow private trial lawyers to sue drug companies for the new tort of "profiteering in prescription drugs."  Under this sneaky provision, which will be effective immediately even if the drug discount program is never implemented (Federal approval is required), drug makers would be prohibited from demanding "an unconscionable price" or demanding "prices or terms that lead to any unjust and unreasonable profit." These terms are not defined anywhere in the initiative or elsewhere in state or federal law, so your guess as to what these terms mean is probably as good as mine.  A violation of this new offense would carry a minimum fine of $100,000 or triple the amount of damages (whichever is greater) plus court costs and legal fees.  You can see why the trial lawyers love this initiative!  It is bad enough to have government bureaucrats setting drug prices, but imagine having drug prices set by randomly-selected jurors!

Can you imagine offering a product in a market and not knowing if your pricing was legal until after a jury trial?  Actually, until after multiple jury trials, since in cases like this there is effectively no restriction on being tried one, two, or ten thousand times for the same thing.  Not only will prices be set by a jury, but they will be set by the single most aggressive jury in what is sure to be an onslaught of trials.

In case you have any confusion or failure of imagination as to how poorly this will work out, California tort lawyers have slipped this same provision into other laws, notably the sue your boss over picayune labor code violations law and the Unruh Act, which allows lawyers to serially sue businesses for picayune technical violations of the ADA.  Here is an example of Unruh at work:

Molski, who lives in Woodland
Hills, has sued dozens of Central Coast businesses, from the Santa Ynez
Valley to Paso Robles, for alleged violations of the ADA. Among them
are Firestone, Fess Parker and Kalyra wineries in the Santa Ynez
Valley, Cambria Winery in northern San Luis Obispo County, and Fosters
Freeze restaurants in San Luis Obispo and Morro Bay.

A provision of California state law known as the Unruh Act allows Molski to demand $4,000 in damages per violation, per day.
                  

Molski
has said in the past that an average settlement is $20,000. He
testified in the Los Angeles trial that he personally nets an average
of $4,000 per settlement, after paying attorney's fees, Beardsley said....

As of Friday, 528 cases were listed under Molski's name in federal civil courts....
   

Also
fighting Molski in court is Harmony Cellars in northern San Luis Obispo
County. Winery owner Chuck Mulligan sees the L.A. decision as a good
sign, but isn't counting on winning.

"You
just never know. A jury trial is always a crap shoot," Mulligan said.
"I think the public sees through this whole quagmire that's going on.
They claim they are trying to do something for society but it's really
just pulling money away from society that could be used for jobs," and
other purposes, he said.
                   

Molski's
suit against the Hitching Post in Casmalia alleged a wheelchair ramp
was too steep, and the bathroom wasn't accessible because the toilet
was a half inch too close to the wall; and the sink was three inches
too high, and the soap dispenser was too high.
                   

Stricklin contends the bathroom is fully accessible.
                   

"Our
restaurant's accessible and has been for a long time. Our mother is in
a wheelchair. Of course it would be accessible," Stricklin said. "Every
customer we have that's disabled has gotten into our restaurant, and
we've never had a complaint."

"I've
talked to about five people in Solvang and Cambria who have been sued
twice in the last year," Stricklin said. "They're stuck. Unless you
close your doors, somebody else can come along and sue you, and that's
why we're fighting. If they can see that we're not going to roll over
and settle, they'll think twice about going to trial."

At least in the case of Unruh, there is a defined legal standard, even if suing for $4000 per day for violations of 1/2-inch are ridiculous.  Prop 79 would allow suits with no standards, except whatever a jury happens to come up with on a particular day.  And we all know how smart and thoughtful juries can be (from recent Vioxx case):

Jurors who voted against Merck said much of the science sailed right over their
heads. "Whenever Merck was up there, it was like wah, wah, wah," said juror John
Ostrom, imitating the sounds Charlie Brown's teacher makes in the television
cartoon. "We didn't know what the heck they were talking about."...

... [juror] Ostrom, 49, who has a business remodeling homes, was also disturbed
that former Merck Chief Executive Raymond Gilmartin and another top Merck
official gave videotaped testimony but weren't in the courtroom. "The big guys
didn't show up," said Mr. Ostrom. "That didn't sit well with me. Most definitely
an admission of guilt."...

One juror, Ms. Blas, had written in her questionnaire that she
loves the Oprah Winfrey show and tapes it. "This jury believes they're going to
get on Oprah," Ms. Blue told Mr. Lanier. "They only get on Oprah if they vote
for the plaintiff."

Previously, I made my own tongue-in-cheek suggestions for follow-ups to Unruh, but prop 79 may be worse than any of these:

So, I would like to propose my
own Unruh II law.  I propose that in California, every citizen now has
the right to sue any other person they observe violating any sort of
traffic law.  If you observe someone speeding, doing a rolling stop at
a stop sign, failing to signal a lane change or turn, with a burned out
tail light, not wearing a seat belt, jaywalking, etc, you may now sue
them for $4000 per occurrence. 

Coming in future posts, I will
propose Unruh III to empower citizens to sue over health code
violations, Unruh IV to empower citizens to sue over fire code
violations, and Unruh V to sue anyone for any reason if they have a net
worth higher than you do.

It strikes me that my suggestion for Unruh V is where we are really going.

Update: More bounty hunting here, via Overlawyered.

The original purpose of this blog was to pass on my experiences and lessons-learned running a small business.  Over time, though, since I have the attention span of an 8-year-old boy mainlining Hershey bars, I have gone many different places with this blog, well beyond day-to-day experience of a small business.

However, today I will return to this original goal, at least for one post, by asking the question "what's on my desk this morning?"  I tackle this question for two reasons.  First, it is interesting to compare how different the issues I struggle with day-to-day are as compared to my previous life as an executive at several Fortune 50 companies.  I am sure I did more, but all I can remember from my daily activities at large companies seems to involve either working on PowerPoint presentations or traveling to give them to somebody.  The second reason for visiting the contents of my desk is to reinforce my usual libertarian political points, which I think will be made sufficiently obvious just in the description of my to-do list that I won't need to editorialize further.

So here is what's got to get done today [ed note -- while published on Sunday, this is based on my worklist on Friday morning, May 13.]

• Sales tax returns have to be completed, which I usually do myself.  We file monthly returns in six states, but one of those is Florida, where we have to file multiple returns county by county.  This month I also must complete a lodging tax return for two counties.  If it was the end of the quarter, an additional three state returns and two county returns would be due.

• We are nearly completed with a sales tax audit from Washington state.  I have written before how complicated the WA sales tax return is, but the funny part was seeing a trained tax accountant from the state of Washington sit in my office for nearly 6 hours and still not be able to figure out how much tax I owed.  She kept encountering crazy exceptions like "such-and-such county requires 2% lodging tax unless the facility has more than 63 rooms or campsites and then it owes 50 cents per room-night except if it is in the Seattle convention district where it owes an additional .25% or if it is on a metro bus line where ... etc."  When tax law is too complicated for the paid employees of the tax department to figure out, it is too complicated.  Wonder of wonders, though, we may get a refund!

• Also sitting on my desk from Washington is a notice that I did not pay my leasehold excise tax last year.  For those who don't know what that is, it is a way that states like WA and CA effectively charge property tax on the US government, evading the federal rules against such (basically, I have to pay the tax for the Feds, and then I take it out of the rent I bid to the Feds).  Actually, though, I did pay it.  Well in advance of the due date.  The state has spent the last 2 weeks trying to decipher their own records, and so I need to call them back today to see if they have figured everything out yet.

• The department of Health in one California county is holding up my building approval because the condensate line from a refrigerator condenser coil runs out and drips fresh water on the ground (about a gallon a day).  If you have an air-conditioning system at your home, it is very very likely your air conditioning condenser does the same thing.  Unfortunately, the county wants this to run into the sewage system.  Why the county wants extra load on the sewer system, I don't know, but fortunately my builder caught this early so the change won't cost us much money.

• Speaking of inspections, the ADA inspector at another California facility ruled yesterday that our sales counter was an inch too high and our ramp a half-degree too steep to the front door, so I spent part of this morning already getting the original contractor out there to tear these improvements out and redo them.  Interestingly, we previously had the bathroom that was originally in this modular building ripped out, because it could not be made ADA compliant.  This was not a big headache for our employees, because there is a public bathroom building next door.  However, the local health inspector is now reluctant to approve the building because... it has no bathroom and hand-wash sink.  The only food we sell is packaged (think Twinkies) but some health inspectors still want you to follow the same requirements as if you were a restaurant.  I am not sure how we are going to resolve this.

• I just got a call from a customer who was mad that the county Sheriff would not respond to several complaints about drunk and disorderly conduct in the early morning hours at one of our campgrounds.  A few of our campgrounds, like this one, are too small to justify a live-on-site staff, and the rowdies seem to get the word out which campgrounds do not have on-site security.  I promised the customer a refund, and made a note to myself to talk to our manager about having one of our employees come by a few times in the night on a security sweep.

• I have a meeting at 3:00 to meet with my accountant to finish up our income taxes.  Since we have to file a federal, 9 state, and a number of county tax returns, our total company return fills two 3-inch binders.   Today we are trying to sort out the depreciation schedule, which in and of itself is hundreds of pages long given that we have so many small assets.

• We are still trying to get a liquor license approved for our store on Lake Havasu.  The whole liquor license process is one of those funny holdovers.  Coming out of prohibition, most states wrote tough procedures to make sure that the organized crime figures who control liquor during prohibition did not receive licenses.  As a result, to get a license, my wife and I and my managers have to be finger-printed and have FBI background checks.  The applications tend to be long and tedious and small errors cause the application to be returned for corrections. Worse, though, I have found that many towns use the licensing process as an anti-competitive protection for incumbents.  In California, if a County is "over its limit" (set fairly arbitrarily) in terms of licenses, it requires the county board of supervisors to meet and approve the new license.  In one California county I was told that this was really for my protection - they are protecting me from getting my business in a situation where I might fail due to too much competition.  Anyway, I suspect that the strong powers-that-be in Lake Havasu City may be holding up our license, and I need to try to figure out what is going on,though I am not sure how to go about it.

• While I have been writing this, I got a call from a county DA in Arizona.  Most states have bad check programs where, if you have a bounced check and can't collect, you turn it over to the courts and they seek collection.  In extreme cases, they will arrest and try the offender.  I have never been entirely comfortable with this situation.  Sure, bounced checks irritate the heck out of me, but arresting people for a $20 bounced check feels like sending someone to a Victorian debtors prison.  This morning, I spent about 30 minutes trying to talk the DA out of prosecuting the heck out of some guy who claims that he paid us and we lost his check.  I give his story about a 30% possibility, but whatever is the case I have no desire to prosecute the guy.  The DA's blood is up, so it takes me a while to talk him out of it.  I am adding to my worklist something I have put off for a while, which is to investigate 3rd party NSF check collection. 

• My bank just called and still needs yet more paperwork before they can complete an equipment financial loan.  AAARRRRGGGG. 

• I just finished my annual rant with Arizona Game and Fish about fishing licenses.  We sell fishing licenses at a number of locations.  We only sell fishing licenses, we don't sell hunting licenses or duck stamps or all kinds of other special licenses that the state seems to sell.  Unfortunately, if you are a Game and Fish registered license seller, you can't get just fishing license inventory from them.  You have to take their full range of licenses, which they send you piles of in January.  We take all this stuff we don't want to sell and put it in the safe, and hope that we can keep track of it for the next 12 months.  If we somehow misplace anything and don't return it the following year, we pay for it (and some of those stamps and licenses cost hundreds of dollars).  Many of you  will recognize that this practice of the state government would in many situations be illegal for a private company.  There are many laws out there that limit a manufacturers ability to force a retailer to carry their full line of inventory, or worse, their ability to send the stores a bunch of inventory they did not order.

• I have been putting off registering our 15+ trucks in Washington, but I am going to have to get to it today or this weekend.  Last year Washington passed a law that vehicles had to be registered with an in-state physical address (no PO Box).  I am not sure if this is a tax or terrorism thing, but it is obviously awkward for an out of state corporation, so they have finally relented a bit and said that you can still have to have an in-state physical address but they will mail paperwork to an out of state address.  I or my assistant will need to spend a couple of hours soon typing in two addresses each on all these vehicles before we can register them.

There are a million other things going on, but that is what is burning me up today.  In fact, since I have been spending the last hour writing this post, these tasks will probably also be occupying me this weekend.  An alien from another planet in reading this post might question whether I am really working for myself or this "government" entity.

This post could also be titled Reason #634 to be scared of doing business in California.  In a frightening trend, California passes yet another law giving citizens and their lawyers seeking unearned windfalls to police small, picky violations of regulations by filing large and expensive-to-fight suits (see also sue-your-boss law)  From the central Californian Santa Maria Times the story of Jarek Molski, who makes a very good living for himself suing public businesses over tiny, technical ADA violations:

Molski's suit against the Hitching Post in Casmalia alleged a wheelchair ramp was too steep, and the bathroom wasn't accessible because the toilet was a half inch too close to the wall; and the sink was three inches too high, and the soap dispenser was too high.

What do such picayune violations cost?  Mr. Molski averages a $20,000 settlement in such cases, though usually demands much more at first.  And, by the crazy Unruh law in California, targets get no time to redress these faults before up to $4000 per day per violation can be extorted sued for.

So is this an isolated incident?  Well, Mr. Molski is but one person in the ADA lawsuit business, and

As of Friday, 528 cases were listed under Molski's name in federal civil courts

Without reasonable standards, and with huge gains to be made for picayune rules interpretations, one victim summed it up this way:

"I've talked to about five people in Solvang and Cambria who have been sued twice in the last year," Stricklin said. "They're stuck. Unless you close your doors, somebody else can come along and sue you, and that's why we're fighting. If they can see that we're not going to roll over and settle, they'll think twice about going to trial."

My Proposal

So, I would like to propose my own Unruh II law.  I propose that in California, every citizen now has the right to sue any other person they observe violating any sort of traffic law.  If you observe someone speeding, doing a rolling stop at a stop sign, failing to signal a lane change or turn, with a burned out tail light, not wearing a seat belt, jaywalking, etc, you may now sue them for $4000 per occurrence. 

Coming in future posts, I will propose Unruh III to empower citizens to sue over health code violations, Unruh IV to empower citizens to sue over fire code violations, and Unruh V to sue anyone for any reason if they have a net worth higher than you do.

For this post, I will leave aside for a moment the unfairness of monetary penalties for ridiculous claims or the incredible erosion of individual responsibility that is being created by jackpot litigation.

In addition to these problems, runaway litigation is causing people and organizations everywhere to take defensive postures to protect themselves from suits, and many of these defensive tactics are generally not in the public's interest.  Here are some examples:

• College forces depressed students out of school to avoid potential liability if the student commits suicide.
• Swings are disappearing from playgrounds, subject first to liability suits and more recently to ADA suits
• Doctors spend billions on tests and drugs that are not necessary but prescribe anyway to cover their butt in lawsuits  (and here and here and here)

One area that bothers me a lot is the area of safety engineering, whether it be for cars or whatever.  I was a mechanical engineer at an oil refinery for several years.  A big part of my job was assessing if a certain condition was "safe" or "unsafe".  Very often, I was working with shades of gray - safety is never absolute.  In fact, the only real way to make a refinery 100% safe is the same way you make cars 100% safe:  you don't have any. 

The way we dealt with the gray was to have a lot of discussion.  I might observe that I was concerned with a certain situation, and my colleagues and I would discuss it.  With some additional research, we would generally reach a consensus on the best approach.  Because we usually made these trade-offs with an inherent bias to err towards safety, I can't think of a decision we made that led to a problem.  We did have several fires/explosions, and one man was killed in one of these, but each and every one was generally caused by some combination of factors we never anticipated, e.g:

there was a steam leak under the insulation of that pipe, and since the pipe was running at a lower temperature than expected, the water condensed, and it turned out the water had an unexpected contaminant such that when it came in contact with the flange bolts it caused an unusual crack propagation mode, made worse by the fact that the flange bolt material was not the kind specced because the vendor had made a mistake on delivery, and the flange eventually gave way and a fire started.

Yeah, this really happened- I include it to say that the situation is never like on the TV mini-series -- evil corporation skimps on 30 cent part knowing it created an unsafe situation.  Safety engineering means tough trade-offs, and, after a ton of work, problems usually occur in an area no one imagined.

Anyway, this is the type of thing I used to do, and doing it well relied mainly on open, honest dialog about safety problems.  Nowadays, however, my sense is that this open dialog in corporations may soon be over.  Corporations are legitimately worried that some young engineer like myself might have written a memo about a potential hazard, and that this memo will end up being exhibit A in some plaintiffs case that the company "knew about" some hazard and did nothing about it.  Think about all the cases you hear about, even the recent Vioxx case -- the center piece of every plaintiffs argument is often that the company "was warned" and is therefore truly evil, because it knew of the problem and did nothing.  The words "smoking gun memo" are practically attached to these lawsuits, but I have always asked myself - are these smoking guns that point to culpability, or are they in fact pointing to a robust safety engineering process?

So, if we have gotten to the point where having internal people asking questions and challenging the company's product and process safety makes companies more vulnerable to lawsuits rather than less, then companies are going to start clamping down on the open internal dialog about safety.  And then the world really will be a less safe place.

UPDATE

Having written this post, I had a flashback to a training video I was shown early on at Exxon.  The video was anti-trust training, and the only message I remember is "don't write it down".  The message was mainly aimed at sales people, who tend to be gung ho and competitive and say things like "lets go out there and crush the competition this week".  This is all fine and good for Joe's Auto Body, but written on an Exxon letterhead, it becomes the central exhibit of some anti-trust trial.  Thus the don't write it down advice.  Anyway, I will be very sad, but not surprised, if they are now showing this video to the engineers as well.

As with any labor law or legal liability issue, there are probably more ways to trip up than you ever imagined.  This article at Faegre.com, which I found via George's Employment Blawg, has a nice summary of key issues in five categories.

Because the vast majority of our employees are over 70, and a number of them have disabilities, we have to be very careful in hiring.  Many of our jobs can be physically challenging, and dangerous to perform with some disabilities, so we have to take care to make sure an employee understands the work and that we mutually agree they can do it safely. 

One related area that I am not sure has been tested regards our corporate insurers.  Increasingly, insurers, particularly for our corporate vehicle policies, are refusing to insure over-70 drivers without some kind of letter from a doctor that they are capable of driving safely.  As you can imagine, doctors face liability if they put in writing the employee can drive safely (so the doctor might be liable if there is an accident) or if they write that the employee can't drive safely (so the doctor might be liable for effectively denying the employee insurance, or even a job).  As a  result, doctors are reluctant to produce such letters. 

It has not come up yet, but what happens if one of my employees is uninsurable for driving, and driving the company vehicle is an essential part of their job?  Do I face an ADA case for discharging them?  What choice would I have in that case?

We also have very severe challenges with off-duty behavior.  Most all of our employees live on the job site (i.e. the campground managers live in the campground).  So, off-duty behavior occurs on the job site.  Until I had this company, I always said that I did not care what an employee did on her own hours at home - but now, what happens on the employee's own time occurs in front of my customers.

We continue to walk a fine line on this.  To date, we have told employees that even if they are not on the clock, if they are wearing our uniform or verbally representing themself as a company employee, they are subject to on-the-job behavior rules.  Once the uniform is off and they are just "Joe", and not "the manager", they are free to do as they please, though they are still bound both by federal and state laws as well as campground rules.