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Month: December 2016
In the midterm elections of 1994, Republicans swept both houses of Congress in a victory that ended 40 years of Democratic control of the House of Representatives. The GOP touted as its charter a “Contract with America,” a 10-point plan that called for, among other things, a balanced budget, welfare reform, a pullback on military support for U.N. peacekeeping, a 50% cut in tax on capital gains, and term limits for representatives and senators.
Newt Gingrich, the GOP leader and co-author of the contract, pronounced the results a revolution. “I think I am a transformational figure,” Gingrich said before the election. “I think I am trying to effect a change so large that the people who would be hurt by the change, the liberal Democratic machine, have a natural reaction – which gets wearying.”
And yet with the exception of a reform of welfare that became law two years later, the revolution failed to achieve the reordering of society that Gingrich envisioned. For that, credit goes to an opposition led by Sen. Ted Kennedy, who countered Republicans and held Bill Clinton, who as president reacted to the GOP sweep with a strategy of accommodation, in check.
I was reminded of all of this recently while reading a review by Jeff Madrick of “Lion of the Senate: When Ted Kennedy Rallied the Democrats in a GOP Congress,” a book by former Kennedy staffers Nick Littlefield and David Nexon. I plan to read it when I return to New York (there’s a copy on the shelf in the local branch of the public library), in part because Kennedy demonstrated how to curb the excesses of a majority. That may make the book a must-read for anyone who wonders how to function in a time of Trump.
So what explained Kennedy’s effectiveness?
He was tireless, according to Madrick (citing Littlefield and Nexon), who notes the intensity of preparation that the senator brought to issues. “He gathered groups of analysts and academics to debate the issues before he presented a new bill or had a meeting with the president, an opposition leader, or his fellow Democrats,” Madrick writes.
The congressional scholar Norm Ornstein, in his own review of Littlefield’s and Nexon’s book, recalls Kennedy this way:
Kennedy was a true workhorse who left the office every day with a huge, thick briefcase filled with bills and staff memos, and returned the next morning with all of them heavily annotated. He was genuinely passionate about social justice and indefatigable in trying to achieve results. He was a liberal ideologue but a supreme pragmatist, always seeking support across party lines and always willing to take a half, quarter or tenth of a loaf if that was necessary. He mastered the rules and norms of the Senate enough to use them to advantage in achieving his goals.
The senator knew how to legislate, which as Madrick explains, required the ability to keep your friends close and your enemies closer. According to Madrick:
Kennedy worked constantly, and if he had to make an intense effort to win over a senatorial colleague he did so. Sometimes he sang a song in a meeting, or he would memorize a thousand-word poem, as he did to win approval for federal funds to renovate the Longfellow House in Cambridge, Massachusetts. Mostly, he was a purposeful presence on the Senate floor or in the cloakroom, or he was visiting the offices of senators to form voting alliances to support his programs or defeat those of Republicans or right-wing Democrats.
Compared with Clinton, whose tendency was to triangulate, Kennedy clung to his convictions. Madrick cites a speech by Kennedy on Jan. 11, 1995 at the National Press Club, as a call to arms by Kennedy to Democrats intimidated by the Republican landslide.
Though Madrick quotes form the speech, I recommend watching it. Kennedy, addressing a capital that is in the thrall of a GOP takeover, startles you by beginning seemingly in medias res:
I come here as a Democrat. I reject such qualifiers as New Democrat or Old Democrat or neo-Democrat. I am committed to the enduring principles of the Democratic Party, and I am proud of its great tradition of service to the people who are the heart and strength of this nation: working families and the middle class.
Though Republicans presented their proposals as the product of a revolution, the contract, as Madrick notes, “boiled down to major tax cuts for the wealthy, paid for by sharply cutting social programs, including Medicare benefits, and reducing federal government expenditures on education by up to 25 percent, with the announced goal of balancing the budget.”
With Kennedy in opposition, Democrats halted most of the Gingrich revolution, which would end four years later with Republicans losing seats and Gingrich resigning as speaker of the House (and his seat). In 1996, Kennedy helped pass an increase in the minimum wage. A year later, he co-sponsored legislation that expanded health insurance coverage for children.
Ornstein recalls the shift that Kennedy helped bring about. “The political process went from one where Gingrich and his troops were on their way to establishing a parallel presidency, seizing control of the initiative and the agenda immediately after the 104th Congress convened, to one where they were back on their heels after the disastrous government shutdowns and threats over the debt ceiling at the end of 1995 and the beginning of 1996, to a period of bipartisan legislating that lasted into 1997 before collapsing into the morass of impeachment politics,” Ornstein writes.
An airline cannot be held responsible for damage to cargo caused by the government’s delay, a federal court in Brooklyn has ruled.
The ruling dismisses a lawsuit filed in April by Best Value Kosher Foods, a Newark-based seller of dairy products, against American Airlines, which Best Value accused of damaging a shipment of cheese delivered to New York from Paris.
According to Best Value, the cheese arrived via American at Kennedy Airport, where the airline notified a courier service working for Best Value of the shipment’s arrival. The courier picked up the cheese six days later, by which time ice packs accompanying it had melted and the cheese itself allegedly became unmarketable, which Best Value said cost the company roughly $18,000.
Best Value’s CEO testified that the delay in picking up the cheese stemmed from a hold put on it by both the Food and Drug Administration and U.S. Customs and Border Protection while they inspected the cargo. Still, American had an obligation to refrigerate the shipment until it could be retrieved, Best Value charged.
U.S. District Judge Jack Weinstein disagreed, noting that both the U.S. and France are parties to the Montreal Convention, which relieves a carrier from responsibility for damage to cargo where such damage follows “an act of public authority carried out in connection with the entry, exit or transit of the cargo.”
Best Value’s CEO “testified that inspections of the shipment by the United States agencies responsible for inspecting food imports prevented Best Value’s agents from picking up the in a timely manner,” Weinstein wrote in a ruling dated Dec. 7. “Damage to the cheese falls squarely within the ‘act of public authority’ exception.”
Though Best Value and American disputed whether American refrigerated the cheese while in its possession, Weinstein rejected a contention by Best Value that American’s putting the cheese in a cooler for shipment triggered a responsibility to refrigerate the cheese until its release to Best Value following the inspection.
“Even if American’s decision to gratuitously place the cargo in a cooler gave rise to some duty to keep the cargo refrigerated at a certain temperature, American is only obligated to ‘use reasonable care’ in discharging that duty,” Weinstein said. [citation omitted] “It was unreasonable to expect American to refrigerate Best Value’s shipment indefinitely until Best Value was able to pick it up. Six days is too long to have expected American to keep the cheese at a low temperature.
An insurance company that has charged an erstwhile Wall Street investment bank with lying on an application for insurance can file a new legal pleading after the first one was dismissed, a New York appeals court has ruled in a decision that highlights fallout from the financial crisis eight years on.
In 2006, Bear Stearns & Co. approached CIFG Assurance North America about purchasing insurance in connection with two collateralized debt obligations (CDOs), which held bundles of mortgages that varied in their risk.
Bear Stearns, which was acquired in 2008 by JPMorgan after the former failed amid a run on the bank by customers, allegedly assured CIFG that the mortgages that went into the securities would be selected by managers acting independently of Bear Stearns and in the interest of long-term investors. While that assurance led CIFG to insure the securities, the company says, Bear Stearns itself allegedly chose the collateral, which according to the insurer, consisted of risky mortgage-backed securities from the bank’s own books, and then bet on the portfolios to fail. (For more on that type of thing, see “The Big Short.”)
A trial judge dismissed the lawsuit with prejudice (meaning permanently) because CIFG’s court papers contained insufficient information about the insurance policies and the circumstances under which they were issued. The court found fault with a failure by CIFG to describe the terms of the policies, the dates they were issued, the period of time they covered, the parties to the contracts, the beneficiaries, or any information about so-called credit default swaps that would guarantee the CDOs. (In the context of the transaction, CIFG insured the credit default swaps, which, in turn, guaranteed notes issued by the CDOs.)
But while the trial judge properly dismissed the lawsuit, she erred in not allowing CIFG to re-file it, the state’s Appellate Division ruled on Nov. 29. “A request for leave to amend a complaint should be ‘freely given, and denied only if there is prejudice or surprise resulting directly from the delay, or if the proposed amendment is palpably improper or insufficient as a matter of law,’” Judge Judge Rosalyn Richter wrote on behalf of a five-judge panel. [citations omitted] Further, “[a] party opposing leave to amend must overcome a heavy presumption of validity in favor of [permitting amendment.]”
According to the panel, CIFG, which in July merged into Assured Guaranty, asserted that it paid more than $100 million pursuant to the policies but did not identify to whom the payments were made, or the events that triggered them.
Still, CIFG alleged on appeal that Bear Stearns created the CDOs to transfer high risk assets from its own books to other investors and knew that the market would require that the senior notes issued by the CDOs be insured. CIFG also alleges that Bear Stearns misrepresented repeatedly that the CDOs’ portfolios would be selected by managers independent from Bear Stearns. The specificity of those allegations entitle CIFG to file its lawsuit anew, the panel said.
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Albany fire victim can sue city, court rules
You can sue a city for negligence in performing a governmental function if you can establish that the municipality owes you a duty of care, a New York appeals court has ruled in a lawsuit brought by a homeowner whose house burned down after the fire department told him it had been extinguished.
The blaze at issue began on the evening of Feb. 2, 2013 at the home of John Trimble, an Albany man who called 911 to report the emergency. The fire department responded to the call and proceeded to put out the fire. Some time later, according to Trimble, the lead investigator for the department advised him that the fire had been extinguished and it was safe to enter the house.
The Trimbles went in, retrieved some belongings and then left to spend the night with relatives. Several hours later, the fire started again and burned down the house. Trimble sued the city, claiming negligence. A trial judge dismissed the case, finding the city owned him no duty and was entitled to governmental immunity.
The Appellate Division’s third department disagreed. “We are of the view that, by making affirmative representations to plaintiffs that the fire had been fully extinguished and that it was safe to re-enter the home, the [d]epartment assumed an affirmative duty to plaintiffs,” Justice Karen Peters wrote for a three-judge panel in a ruling dated Nov. 23 that returned the lawsuit to a jury.
Nor could the city rely on the immunity that shields cities from lawsuits for discretionary actions taken during the performance of governmental functions. Though fighting fires invariably involves discretion, the city failed to demonstrate that its alleged negligence resulted from an exercise of judgment.
According to Trimble, the department failed, in violation of its own procedures, to remove a stack of firewood and the remains of lawn furniture and other debris from a window well that the department determined was the location of the second fire. A report by the department later showed that none of the firefighters could remember pulling away the debris.
“Thus, on this record, it cannot be said that the asserted negligence — failing to remove and fully extinguish a stack of firewood and damaged lawn furniture — was the consequence of an actual decision or choice on the part of the [d]epartment,” the court noted.