Friday has come and gone without a jury verdict in the Proud Boys case in front of Tim Kelly in DC District Court.

Couple of days ago, somebody asked me when I expected a verdict. That is fools’ play, but I said probably Friday because juries want to get on with their lives, and not come back, yet again, the next week.

Apparently I got that all wrong. Go figure.

So why did the PB jury blow past an obvious chance to be done? I do not know that either, but there is a fair chance it is not about ultimate guilt or innocence, but about multiple defendants and the complexity of the seditious conspiracy charge so many people (even here) have long clamored for.

Sometimes you get what you asked for, and that may be the case here. Counts, charges and jury instructions matter. I hope that is not the holdup here, but very much fear it could be. And that is what happens when you do not keep things narrow and strong.

We shall see.

[Editor note: This is a guest post by my friend Bob Lord. I am no tax policy legal expert, but he really is and I ask him to weigh in occasionally. Commenters asked about this question previously, so here is the answer. – bmaz]

My friend bmaz, noting reporting in The Lever that Fox News could claim a tax deduction for its massive settlement payment to Dominion Voting Systems, asked me to explain it further here.

Yes, Fox News claiming a massive tax deduction, resulting in a $200 million or so tax reduction, is an unpleasant thought.

It’s also sound tax policy. Fox News is a business. A shady one perhaps, but still a business. In the course of operating a business, employees sometimes screw up. Businesses get sued. Sometimes the suits are justified. Sometimes they’re not. Sound tax policy dictates that the cost of resolving such claims reduce the taxable profits of a business.

To see this, consider a different scenario. Say Donald Trump, who we know to be litigious, files a bogus claim against your corporation for trade libel. You hire lawyers to defend the corporation and the corporation eventually agrees to pay a small amount to settle, rather than incur the expense of going to trial. Should the cost of settling be deductible by your corporation? Obviously, yes.

Objectively, Fox News’ position is the same as yours. The corporation was sued for trade libel, and it settled the case. If your corporation is entitled to a deduction, so is Fox News. We all may be sure Fox News’ employees promoted lies here, but the objective facts are that Dominion agreed to settle for less than half the amount it was claiming in damages.

Should the tax result be the same if the case had gone to trial and Fox lost? Should the payment of the judgment be deductible? Yes, for multiple reasons. First, judgments in civil cases are not definitive. They are decided based on a preponderance of the evidence. Second, the claim arose out of the conduct of Fox’s business operation, the same operation that generates its profits. Third, treatment of payment of a judgment differently from payment of settlement would put defendants in these cases in an untenable position, as their financial incentive to settle would be greater than that of the plaintiffs.

To be sure, as The Lever’s reporting mentions, there are areas where public policy considerations are so compelling that tax deductions for payments of legal claims should not be allowed. But for that to make sense in Fox’s case, it would have to make sense in all trade libel cases. Yes, Fox’s alleged conduct here was particularly odious, but consider the case of a company that settles a claim for an allegedly false statement about a competitor’s product. Do public policy considerations demand that the company not be allowed a tax deduction? In evaluating this, remember that if the company is allowed a deduction, the tax outcome is a breakeven for the government, as the claimant would be required to pay tax on the settlement payment, and if the company is not allowed a deduction, the government gets a windfall. Also, making the economic consequences of trade libel more harsh by not allowing damage payments to be deductible would have a chilling effect on speech.

So, does all that mean our tax system is not really rigged in favor of the rich? No, it absolutely is rigged in favor of those at the top. Louis Brandeis famously said that “we can have democracy in this country or we can have great wealth concentrated in the hands of the few, but we can’t have both.” I’d put it differently: “We can have democracy in this country or we can have a tax system that allows great wealth to be concentrated in the hands of the few, but we can’t have both.”

For over four decades, our tax system has failed us and the failure now threatens our democracy. When 13,000 out of 130 million households (that’s 0.01 percent) hold close to ten percent of the country’s wealth, that’s great wealth concentrated in the hands of the few. The average wealth of those 13,000 families, by the way, is very close to one billion dollars. And this situation is the direct result of over four decades of tax policies rigged in favor of the rich.

Those who did most of the rigging want to rig it further. A few weeks ago, 41 Republican Senators introduced their “Death Tax Repeal Act.” That bill, as I explain more fully here, would allow Jeff Bezos to pass his Amazon shares to his children on his death, who then could sell them for about $130 billion, with zero income tax and zero estate tax paid on the entire amount. We’re already likely to have families with wealth in excess of one trillion dollars (think about that) within the next decade or so. If the Republicans’ bill were to become law, that likelihood would become a certainty. And, by the way, when a similar bill was passed by the House in 2015, Kyrsten Sinema, then a House member, voted for it.

That’s why the Patriotic Millionaires, the organization I advise on tax policy, has proposed a complete overhaul of the federal tax code. You can read about it here.

The bottom line: You shouldn’t be angry about Fox News’ tax deduction, but you should be very angry about the state of our tax system and join the effort to fix it, before it’s too late.

Bob Lord is Senior Advisor, Tax Policy at Patriotic Millionaires and an Institute for Policy Studies associate fellow.

One of the few perks I have here at Emptywheel is being able to say what I think. I think you should go buy and read The Shadow Docket by Steve Vladeck.

Mr. Vladeck has been intoning this for a long time. Here he was back in November 2019:

“But insofar as this description is accurate, it is not obvious that it is a positive development. Among other things, such an approach is radically out of kilter with the Court’s approach to the rest of its docket. The Justices have repeatedly emphasized, especially lately, that “[o]urs is ‘a court of final review and not first view,’”20 and for good reason. By waiting for most cases to go through multiple layers of review by lower courts (and, often, multiple cases going through those multiple layers), the Court gives itself the benefit of multiple rounds of briefing and argument — and, usually, lower court rulings — on which to base decisions to grant certiorari and, if necessary, analysis of the merits. To abandon this norm only in cases in which the federal government is the complaining party is to invite serious objections grounded in fairness and equity — and to necessarily tilt the Court’s limited resources toward an undoubtedly important, but importantly narrow, class of disputes. Worse still, such a shift gives at least the appearance that the Court is showing favoritism not only for the federal government as a party, but for a specific political party when it’s in control of the federal government.”

True then, and increasingly so now. In the age of the internet, books are given short shrift. But they are still vital and important. Sales of books, especially early, are vitally important. This is a book that is important, and quite affordable. If you can, please go give Steve a bit of support, he is a pretty decent chap and, hopefully, a friend.

Not exactly breaking news at this point, but the SpaceX Starship blew up after a successful launch this morning. Not entirely clear if it was inherent in the vehicle, or if it was intentionally taken out by SpaceX as it was malfunctioning. Either way, a disaster. From the New York Times:

“SpaceX’s Starship rocket exploded on Thursday, minutes after lifting off from a launchpad in South Texas. The spacecraft, the most powerful ever to launch, failed to reach orbit, but it was not a total failure for the private spaceflight company.

Before the launch, Elon Musk, the company’s founder, had tamped down expectations, saying it might take several tries before Starship succeeds at this test flight, which was to reach speeds fast enough to enter orbit before splashing down in the Pacific Ocean near Hawaii.”

As much as I dislike Musk, and trust me I have likely been doing so longer than most anybody, the SpaceX program is part and parcel of NASA now, and getting into, and out of, space is progress for the US and humanity. It really is “rocket science”, and it is not easy. There have always been things like this in the human approach to space. But no lives were lost this morning, and much was probably learned.

You could tell there was something wrong though. There was film of the bottom of the giant rocket, and there were several of the 33 engine pods that were clearly not firing. Was that the catastrophic failure, or was there really a failure to separate stages? The news people do not seem to know, and neither do I.

The SpaceX term has been “rapid unscheduled disassembly”. Orwellian almost, but I guess. In short, it blowed up, by whatever mechanism.

Forget El Mo on this one, SpaceX is effectively part of the government now, and their effort should be supported.

All thanks to Moonraker by Ian Fleming and Supersonic Rocket Ship by Ray Davies and the Kinks.

The nuts and graphs are here courtesy of the New York Times:

“The judge in the Fox News defamation case said on Tuesday that the case was resolved, abruptly ending a long-running dispute over misinformation in the 2020 election just as a highly anticipated trial was about to begin.

It was a last-minute end to a case that began two years ago and after the disclosure of hundreds of thousands of pages of documents that peeled back the curtain on a media company that has long resisted outside scrutiny. The settlement included a $787.5 million payment from Fox, according to Justin Nelson, a lawyer for Dominion.

“The truth matters. Lies have consequences,” he said outside the courthouse. “Over two years ago, a torrent of lies swept Dominion and election officials across America into an alternative universe of conspiracy theories causing grievous harm to Dominion and the country.”

Dominion had originally sought $1.6 billion in damages. Fox Corporation said in a statement that “we acknowledge the court’s rulings finding certain claims about Dominion to be false.”

It added: “We are hopeful that our decision to resolve this dispute with Dominion amicably, instead of the acrimony of a divisive trial, allows the country to move forward from these issues.”

The agreement was reached a few hours after a jury in Wilmington, Del., was selected on Tuesday, just as opening statements were expected to begin. Lawyers for both sides had been preparing to make their cases to the jury, their microphones clipped to their jacket lapels.

The sudden settlement means no high-profile Fox figures — including those who privately expressed concerns about the veracity of claims being made on its shows — will have to testify. The expected witness list had included Fox executives, including Rupert Murdoch, the chairman of Fox Corporation, and the hosts Tucker Carlson, Sean Hannity and Maria Bartiromo.

It was the latest extraordinary twist in a case that had promised to be one of the most consequential against a media organization in a generation.

The trial had been expected to be a major test of the First Amendment, raising questions about whether defamation law adequately protects victims of misinformation campaigns.

While the settlement avoids a lengthy trial, it still results in a rare instance of accountability for attempts to delegitimize President Biden’s victory. Few people or organizations have faced legal ramifications for claims related to electoral fraud that were brought by former President Donald J. Trump or his supporters.

Dominion sued Fox in early 2021, arguing that its reputation was badly damaged when Fox repeatedly aired falsehoods about its voting machines. Fox denied wrongdoing, saying that it had merely reported on newsworthy allegations that were coming from Mr. Trump and his lawyers and that it was protected in doing so by the First Amendment.

Judge Eric M. Davis had previously ruled that statements Fox had aired about Dominion were false, and functionally limited some of its potential defenses by deciding that its lawyers could not argue that it broadcast false information on the basis that the allegations were newsworthy.

At trial, a jury would have been tasked with answering the question of whether Fox had acted with “actual malice” — a legal standard meaning it had knowingly broadcast lies or had recklessly disregarded obvious evidence that the statements were untrue.”

Personally, I am shocked to find such gambling here in Ricks Cafe. Or not so much. Am feeling pretty good about my post yesterday morning.

I’ll leave it at that for now. Who could have known?

And for the inevitable dopes that will wander in to say “Ohhh, this was not enough!”, or “Ohhh there needed to be more admission and contrition!”, please stop. This was a fine and appropriate settlement. This case was NEVER about you and your politics, it was a jury trial case, which was NEVER going to be about you. Stop now.

Members of the Emptywheel community are on top of almost everything. So you probably know that late over the weekend, the judge in the Dominion v. Fox defamation trial in Wilmington Delaware continued the trial. For one day, moving the continuation of jury selection from this morning, Monday, to the same time, 9:00 am, tomorrow, Tuesday.

That caused quite a stir on the internet, but, as the judge explained today, is quite common, although he did not say why it had been done in this case.

The speculation is that it was to give one extra day past the weekend for the parties to contemplate settlement. Courts, especially a rapid moving one like the Delaware Court, rarely do that on their own. One or both parties have to request it. Was it Fox, Dominion, or both?

Then late last night, there were reports there had been no settlement reached. That is not surprising in the least, as Sunday would have just been the start, any really settlement would come Monday. So far, so good, but now what?

Short answer is that is unclear. Even today is not a drop dead deadline. Trials can be settled even during jury voir dire or into arguments and evidence. I would very much think the judge here would rather it be sooner rather than later, but doubt given the strain on the court, would probably accept it at any point.

The internet hills are alive with the sound of (almost always) non-trial lawyers yammering that Dominion should “not” settle, because the “public” is entitled to this spectacle.

What a load of bullshit. There are two parties to this civil litigation, and the “public” is not one of them. But the two actual parties in interest, Dominion and Fox have their own interests and needs that obliterate public call for a show trial for their puerile amusement, and “popcorn” moment.

Attorney Brad Moss noted:

“For those asking why Dominion might settle, there are at least three things to remember:

1) non-trivial chance the pre-trial rulings get reversed on appeal and the whole thing is tossed;

2) trials are a wild card; and

3) if they can accomplish their primary goals, why not?”

Attorney Peter Zeidenberg, who this blog knows well if you go far enough back, said:

“Better reason: the damages case for $1.6B is pretty weak. If awarded it could easily get tipped on appeal. $500M would be a tempting offer.”

Frankly, I agree with both on this. Will the case settle? I have no idea, but there are good reasons for both parties to try. And it would certainly thrill the court. There is a lot of sense in making the attempt.

So, while some digital jackass named “Microchip” is dominating so much discussion here, let us talk about other things.

When I was a kid, I read Mad Magazine.

If I had to ride my training wheels bicycle there to the local store, I did. There were Playboys there on the shelf, and I did not even know that yet. I went for Mad. Alfred E. Neuman.

There were a lot of “illustrators” of Mad over the years, too many to go into currently, but (thank you Scribe) Al Jaffee was one of the most important.

“Microchip” is a blip, Al Jaffee spanned, and influenced, in a very good way, generations.

Upon request I, hopefully, will come back to the big Alvin Bragg indictment of Trump. Later. When have really had a chance to digest and analyze it.

So far, at least, not too sold on it. Not like all the Boyz at Just Security, several of whom I respect, but they have been been overselling, led by Weissmann, this entire scenario mercilessly. To the extent of being dubious.

Anybody who thinks this is all cut and dried as Bragg makes it is a dope. To what extent we shall see. But, yes, we shall see. Tomorrow will be merely the start of the analysis, not merely the end like other dopes will tell you.

So, let us see what is, and what will never really be. They are very different things. Am prepared to be totally wrong. Are you? And how long are you willing to play the long game out?

Criminal law will never be your personal political savior.

As commenter David F. Snyder noted yesterday, yes Michael Flynn has filed a complaint for $50,000,000 damages against the US Government for all the perceived wrongs and grievances that he, his unhinged lawyers like Sidney Powell, and rabid MAGA Republicans have been carping about forever. A thread on this started out in Marcy’s “JUDGE UNSEALS DETAILS ON COOPERATING WITNESS IN DOUGLASS MACKEY CASE”, but I am going to bring it here so as to not pollute that post and give people a place to discuss Flynn.

I took a look at the docket for the fledgling case. It is filed in the Middle District of Florida, where Flynn resides. That is the only discernible nexus to MDFL as pretty much all facts, actors and witnesses would be in or about the DC District. Here is the docket entry for the complaint, which was actually filed on March 3, 2023:

NEW CASE ASSIGNED to Judge Mary S. Scriven and Magistrate Judge Christopher P. Tuite. New case number: 8:23-cv-0485-MSS-CPT. (SJB)

The complaint itself is attached to this Rolling Stone article by a detestable SCRIBD (seriously, nobody should ever convey documents by SCRIBD). It is 50 pages long, and I am not wasting my PACER account on it.

Marcy, in the earlier thread, said:

Not only does it not have legs, but if it survives the summary judgment stage (which is unlikely) it may catastrophically backfire on him.

I think that is right, but the case may not ever get that far. It may not even make it to a summary judgment motion, as it may well not make it past a 12b6 motion, which would be the initial attack by the government.

Couple of notes, the complaint alleges compliance with the FTCA (Federal Tort Claims Act), but claims the government never responded. Scriven is a Bush Jr. appointee and Tuite a Trump appointee to the magistrate bench. Sid Powell is noticeably absent from noticed attorneys, but Shawn Flynn, son of Michael’s brother, Gen. Charles Flynn, is listed. That could be interesting if Charles is to be a fact/damages witness, which would kind of be expected.

Very hard to see this matter gaining any real traction given all the facts and rulings against Flynn in the underlying criminal case in front of (now senior status) Judge Emmet Sullivan of DC District.

As you may have heard, Super Bowl LVII is today and is here in Phoenix. The last time the SB was here, which was Super Bowl XLIX I went to a lot of the SB week festivities and live reported on it for all you fine friends. No opportunity to do that this time out. But game day is here now, so let’s get down to it.

Today’s game features the Kansas City Chiefs and the Philadelphia Eagles, and should be an excellent game. Both teams come in with the same record and same amount of relative dominance in their respective conferences. They appear on paper to be quite evenly matched.

The weather here, all week, has been beyond gorgeous, and looks to continue today with temps in the mid 70’s and maybe light clouds moving in very late afternoon. Perfect. Not that it matters because State Farm Stadium has a roof that can be closed if necessary.

As to the game itself, my eye says the Eagles are a better team overall, but the Chefs have Patrick Mahomes. Mahomes is an absolute wizard. So, it is a pick em, who you got?

Today’s music is by Floyd.

Also the evil balloons we keep downing out of the sky, discuss the balloons! Frankly, I think this is some way overblown and overhyped stuff but the news is all over it.