On this day in legal history, October 17, 1977, President Jimmy Carter signed Public Law 95-79, a bill that retroactively restored the U.S. citizenship of Jefferson Davis, the former President of the Confederate States of America. The restoration of his citizenship by Carter, a Southern Democrat, was seen by some as a symbolic gesture aimed at post-Civil Rights Era reconciliation.
Debates surrounding the restoration of Jefferson Davis's citizenship have a long history dating back to the 1870s. In 1872, the Civil Rights Act of 1872 or the Third Enforcement Act aimed to ensure civil rights and equal protection for African Americans in the post-Civil War era. The Act barred high-ranking Confederate officials, such as Davis, from voting or holding public office.
Davis had declared during his lifetime that he would not seek a pardon to regain these rights, underscoring his unwavering commitment to the Confederate cause. In 1884, for instance, Davis maintained his unyielding stance on the Civil War, saying, "Remember as I must all which has been lost, disappointed hopes, and crushed aspirations, yet I deliberately say, If I were to do it over again, I would do just as I did in 1861.”
The legal significance of this action lies in its demonstration of presidential authority to grant or restore citizenship. This event also raised questions about the legal and moral implications of forgiving and rehabilitating former Confederate leaders who had been involved in the secession and war against the United States.
Major U.S. food companies, including a Kraft Heinz Co. unit, Kellogg Co., General Mills Inc., and Nestle USA Inc. are heading to trial to address antitrust allegations against egg producers Cal-Maine Foods Inc. and Rose Acre Farms Inc. Kraft and company claim that the egg producers conspired to inflate egg prices from the late 1990s through at least 2008, leading to increased costs for egg products used in popular foods like cake mix, cereal, and waffles. The trial, set in an Illinois federal court, is the third attempt to prove these antitrust claims after two previous attempts failed.
The plaintiffs argue that egg producers manipulated the supply and artificially increased prices, reflecting broader concerns about the market power held by large food producers. The case is significant because it underscores the consolidation of the food industry, potentially leading to price increases and production control that impact consumers, particularly during a period of high inflation.
The success of the plaintiffs will depend on whether the judge instructs the jury to decide the case under the less rigorous "per se" rule in antitrust law, which presumes anticompetitive effects, giving the plaintiffs an advantage. The case moved forward after it was determined that the defendants had conspired to restrain trade in violation of the Sherman Act. While the case relates to past conduct, it reflects concerns about collusion and the power of major food producers over the U.S. food supply.
The trial signifies an ongoing debate surrounding antitrust issues in the food industry, mirroring broader regulatory and congressional scrutiny of the market power held by major corporations.
Senator Amy Klobuchar, along with Senators Chris Coons, Thom Tillis, and Marsha Blackburn released the discussion draft of the No Fakes Act. This bipartisan discussion draft, aims to introduce federal protections against AI-generated deepfakes featuring celebrities and performers. This legislation establishes a federal right of publicity, allowing individuals to control their own image and voice. The bill targets concerns raised by public figures like MrBeast and Tom Hanks, who warned about AI-created deepfake ads falsely depicting them endorsing products. The proposed law would cover digital replicas of an individual's "image, voice, or visual likeness" and provide protection for 70 years post-death. Violators, including platforms knowingly sharing these deepfakes, could face fines and economic damages.
However, the bill has raised questions about its potential impact on free speech and its interaction with existing intellectual property laws. It introduces exceptions for news, documentaries, and parodies but could still conflict with the First Amendment. The bill could also incentivize legal threats from companies, leading to potential abuses of the law. The legislation's focus on post-mortem rights has raised concerns about prioritizing commercial gain over combating nonconsensual deepfake usage. Furthermore, it might affect how social media platforms handle legal liability, as it doesn't align with existing laws like the Digital Millennium Copyright Act. The creative industry, including artists and entertainment companies, supports the legislation due to concerns about AI exploiting their creative work and livelihoods. However, further revisions and discussions are expected as the bill progresses through Congress.
Binance's U.S. affiliate has suspended the withdrawal of dollars from its platform, according to updated terms. This move follows a previous suspension of dollar deposits in early June, prompted by the U.S. Securities and Exchange Commission (SEC) seeking to freeze Binance's assets. Customers looking to withdraw U.S. dollars are now required to convert them into stablecoins or other digital assets before withdrawal. The SEC had filed a lawsuit against Binance, its CEO Changpeng Zhao, and Binance.US in June, accusing the company of various charges, including inflating trading volumes and misusing customer funds.
U.S. drugstore chain Rite Aid has filed for bankruptcy protection due to its heavy debt burden, declining revenues, increased competition, and opioid-related litigation. The company, founded in 1962, plans to close underperforming stores and sell its pharmacy benefit subsidiary, Elixir. Rite Aid also aims to resolve lawsuits linked to its sale of addictive opioid medications. Despite facing these challenges, the company intends to remain operational during the bankruptcy process.
In fiscal year 2023, Rite Aid reported $24 billion in revenue but also incurred $750 million in losses due to mounting litigation costs. The U.S. government has accused Rite Aid of disregarding "red flags" while dispensing illegal opioid prescriptions, and the company faces approximately 1,600 other opioid-related lawsuits. Rite Aid, while denying wrongdoing, hopes to reach an equitable settlement in bankruptcy.
Rite Aid's financial situation includes $4 billion in debt, $8.6 billion in total liabilities, and $7.65 billion in assets. The company plans to fund its restructuring with a $3.45 billion bankruptcy loan from existing lenders.
Rite Aid has received a $575 million offer from pharmacy benefit firm MedImpact Healthcare Systems for Elixir but will seek higher offers for this business. The company is also considering the sale of some or all of its retail business. However, Rite Aid's bankruptcy announcement has led to a dispute with drug distributor McKesson, which supplies 98% of the prescription medicines sold by Rite Aid. The company is suing McKesson to prevent the termination of its drug supply agreement over a $700 million debt. Rite Aid expects to close more stores as its Chapter 11 case progresses and has appointed Jeffrey Stein as its CEO and chief restructuring officer, replacing interim CEO Elizabeth Burr.
In his latest column at Bloomberg, my co-host Andrew Leahey argues that the US should adopt a carbon border tax to address climate change. The EU recently introduced a carbon border adjustment mechanism (CBAM), a tax on carbon at the border, aiming to offset carbon evasion by producers. This policy sets a precedent for other nations to follow suit, including the United States. Leahey argues that the US should adopt a similar CBAM, aligning its climate efforts with the EU to encourage countries without effective carbon pricing systems to implement policies addressing carbon emissions during production.
In the past, attempts to pass a US CBAM were hindered by political challenges, but with the growing focus on climate change, there's renewed potential for success. The EU's CBAM offers the US both motivation and a blueprint for a carbon pricing system that can garner bipartisan support. By framing the policy as a means to protect domestic production while addressing climate change, the US can find common ground.
Despite potential legal obstacles involving the World Trade Organization and trade agreements, the adoption of a US CBAM could protect domestic industries, prevent carbon leakage, and prompt other countries to implement carbon pricing systems. Leahey writes that the EU's move presents an opportunity for the US to take meaningful action in the fight against climate change and protect its economic interests.