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Legal News for Tues 2/20 - George Santos Sues Jimmy Kimmel, Debit Card Fee Lawsuit, What's Next for JD-Next, and Column Tuesday on SALT Reform

Legal News for Tues 2/20 - George Santos Sues Jimmy Kimmel, Debit Card Fee Lawsuit, What's Next for JD-Next, and Column Tuesday on SALT Reform

Santos sues Kimmel over Cameo pranks, a landmark debit card fee lawsuit hits the Supreme Court, JD-Next seeks ABA approval and Column Tuesday on the SALT tax deduction.

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Salt shaker labeled "REFORM", pencil sketch

This Day in Legal History: United States v. Peters

On this day in legal history, February 20, 1809, the U.S. Supreme Court delivered a landmark decision in United States v. Peters, fundamentally shaping the balance of power between federal and state authorities in the United States. Chief Justice John Marshall, presiding over the case, issued a ruling that underscored the supremacy of the federal judiciary over individual states, a principle that has remained a cornerstone of American constitutional law. The decision held, in relevant part:

“If the legislatures of the several states may at will annul the judgments of the courts of the United States, and destroy rights acquired under those judgments, the Constitution itself becomes a solemn mockery, and the Nation is deprived of the means of enforcing its laws by the instrumentality of its own tribunals.”

Marshall's decision came at a time when the young nation was grappling with the delineation of powers between state and federal governments. His ruling made it unequivocally clear that state legislatures cannot annul judgments made by federal courts, nor can they interfere with rights established under such judgments. This was a decisive moment that reinforced the framework of federalism in the United States, ensuring that the Constitution and federal laws would not be undermined by state actions.

The case itself revolved around a complex dispute involving a seized ship, but its implications went far beyond the immediate legal question, addressing the fundamental structure of American governance. Marshall's eloquent assertion that allowing state legislatures to override federal court decisions would reduce the Constitution to a "solemn mockery" and strip the nation of its ability to enforce its laws through its own tribunals, resonated deeply. 

United States v. Peters thus stands as a pivotal moment in the annals of American legal history, affirming the principle of federal supremacy and the crucial role of the federal judiciary in maintaining the constitutional balance. This decision has echoed through centuries, influencing countless rulings and shaping the understanding of the relationship between state and federal powers in the United States.

George Santos, a former New York Representative, initiated legal action against comedian Jimmy Kimmel, ABC, and the Walt Disney Co. in federal court over allegations that a prank involving Cameo videos aired on Kimmel's late-night show infringed on his copyright. Santos, having joined Cameo after his expulsion from the House, claims that Kimmel used pseudonyms to request at least 14 videos, which were then broadcasted on television and shared online, a move Santos argues goes beyond the personal use license stipulated by Cameo's terms of service. The lawsuit alleges that Kimmel's actions, including the fraudulent induction for creating the videos and breach of contract, resulted in unauthorized commercial exploitation of Santos' content. Santos is seeking $150,000 in damages for each act of infringement, alongside further damages and a permanent injunction to prevent future broadcasts and distributions of the contested videos. The case, highlighting issues around copyright and the boundaries of digital content use, is currently pending in the US District Court for the Southern District of New York.

George Santos Sues Jimmy Kimmel for Airing Prank Cameo Videos

The U.S. Supreme Court is currently deliberating a significant case brought by Corner Post, a convenience store in North Dakota, which challenges the Federal Reserve's rule on debit card "swipe fees." This rule, established in 2011, sets a maximum fee that businesses must pay to banks for debit card transactions at 21 cents. Corner Post's lawsuit, which was dismissed by lower courts, contests the regulation on the grounds it is excessively burdensome and was initiated too late, arguing that the statute of limitations should not apply to them since they began operations in 2018, beyond the standard six-year challenge period.

This case has attracted attention from various conservative and business groups, including Charles Koch's network and the U.S. Chamber of Commerce, advocating for businesses' ability to challenge regulations they find onerous. On the opposite side, the Biden administration, representing the Federal Reserve, warns that Corner Post's argument could lead to an increase in legal challenges against government regulations, burdening agencies and courts.

Small business associations have urged the Supreme Court to enforce a strict statute of limitations starting when a regulation is finalized, arguing that extending this period could result in regulatory inconsistency and chaos. The background of the dispute traces back to before the imposition of the cap, when retailers often paid up to 44 cents per swipe, a cost they argued was particularly onerous for small businesses. The Dodd-Frank Wall Street reform law's Durbin amendment directed the Fed to cap these fees, which led to the current cap of 21 cents per transaction, although this was contested by retailers who anticipated a lower limit.

In 2021, Corner Post filed a lawsuit against the Federal Reserve in North Dakota, claiming the rule contradicted congressional intent and was arbitrary under the Administrative Procedure Act. However, U.S. District Judge Daniel Traynor dismissed the case based on the expiration of the statute of limitations, a decision upheld by the 8th U.S. Circuit Court of Appeals. As the Supreme Court weighs in, with a decision expected by the end of June, the Fed has proposed reducing the cap further to 14.4 cents per transaction, a proposal currently under public review.

US Supreme Court weighs bid to challenge debit card 'swipe fee' rule | Reuters

JD-Next, an innovative law school admissions program, is under consideration by the American Bar Association (ABA) for approval as a valid predictor of law school performance, similar to the LSAT and GRE. This comes at a crucial time, as nearly 50 law schools have sought ABA permission to use JD-Next scores for admissions following the U.S. Supreme Court's restrictions on race consideration in college admissions. The program, developed by the University of Arizona James E. Rogers College of Law with support from AccessLex Institute and Educational Testing Service, aims to address racial score disparities evident in traditional standardized tests. Unlike the LSAT and GRE, JD-Next includes an eight-week online course on contracts, ending with a law school-style exam. The program, operational at a cost of $299 to participants, is seen as a tool for promoting equity, diversity, and efficiency in law school admissions. The ABA's Council of the Section of Legal Education and Admissions to the Bar is deliberating whether to fully recognize JD-Next, maintain the current need for special permission for its use, or discontinue its sanctioned use in admissions. This decision is pivotal for the future of law school admissions, signaling a potential shift towards more inclusive and accessible evaluation methods.

Law school admissions program JD-Next seeks ABA's blessing | Reuters

In my column, I delve into the contentious issue of the state and local tax (SALT) deduction cap, emphasizing the need for policy reform that eliminates the so-called marriage penalty and introduces an income limit. The current cap, set in 2017, doesn't allow married couples to double the deduction granted to single filers, a discrepancy that has sparked debate and failed reform attempts, most recently in the House this past February. I argue that while raising the cap could offer tax relief to some, it risks exacerbating housing affordability issues by increasing demand and, consequently, prices in high-tax states.

The SALT deduction cap's impact on housing markets is profound, particularly in states where supply struggles to meet demand. The cap effectively raises taxable income for homeowners by limiting the amount of state property and sales or income tax they can deduct. This not only affects individual home buyers' budgets but also their eligibility for loans, ultimately influencing the socioeconomic fabric of communities.

I propose a nuanced approach to reform: eliminating the marriage penalty but implementing an income phaseout. This would ensure fairness without negatively impacting the housing market. An income limit, particularly one that phases out above the upper level of the middle-income range, would offer relief to the middle class while minimizing unintended market consequences. The Penn Wharton Budget Model estimates that doubling the SALT cap for married filers making less than $500,000 would cost $22 billion over ten years, suggesting a targeted approach could be more financially sustainable.

The political landscape complicates the path to reform, with recent opposition from Democrats highlighting the challenges of achieving bipartisan consensus. However, the fact that states most affected by the SALT cap are often Democratic strongholds suggests that opposition may be more about political dynamics than policy substance. I conclude that despite these challenges, advocates for SALT reform should continue their efforts, aiming for a compromise that addresses the marriage penalty and income disparities. This approach not only aligns with principles of equity and efficiency but also offers a pragmatic solution to a complex problem, potentially paving the way for rare bipartisan agreement in a politically charged environment.

SALT Deduction Should Cut Marriage Penalty and Add Income Limit

Minimum Competence - Daily Legal News Podcast
Minimum Competence
The idea is that this podcast can accompany you on your commute home and will render you minimally competent on the major legal news stories of the day. The transcript is available in the form of a newsletter at