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An E-Mail From A Restauranteur

Tuesday, July 21, 2009  |  posted by Hugh Hewitt

E-mail from a restauranteur:

Hugh- as a small business restaurant owner I’m appalled that very few (politically, media) are discussing the massive impact Obama-care will have on small businesses. We simply cannot afford mandated employer health care in our industry, and keep in mind that our industry is one of the most critical backbones of the entire American economy- there are over 945,000 restaurants in America, employing over 13 million people. [# More #]

Keep in mind we primarily employ entry level and relatively unskilled laborers in the restaurant business. Our business models are built on razor thin margins as our customers (the American public) demand great value for their food- we simply cannot afford to provide health insurance for our majority unskilled and frequently transitory workforce whom in many cases are already paid higher wages than their skills could demand in an unregulated market via inflation indexed mandatory minimum wage laws. Mind you we do offer solid compensation and health benefits to management and senior staff who by virtue of their skills, responsibilities, achievements and longevity have earned them We are already hammered by mandatory minimum wage increase that have siphoned off critical profits from our business in this time of recession- contributing greatly to significant price increases and labor force reductions already. Now Obama-care is proposing an 8% payroll surtax to finance mandatory healthcare?! This is INSANITY. Restaurants are built on after tax cash flow business models of less than 5% (which mind you has already been chipped by about 2% for min wage increases and price discounting to maintain traffic during a recession has hurt profits as well). Given payroll represents on average 25% of a restaurant businesses sales, an 8% surtax represent another 2 % hit to the bottom line! The senate version is almost as bad. And don’t let the small business exceptions fool you as restaurants are VERY labor intensive, and even a single small restaurant operation typically employees 20-30 people- practically every restaurant in America will be impacted by the mandate. Given that most small business restaurant operators survive on scale (2-10 locations) and again at very low margins, the small business exceptions will provide no relief for the those in the restaurant industry who provide the majority of jobs.

What does the administration think businesses will do in reaction to this law? For starters we will be forced to drastically reduce staffing in an effort to reduce our payrolls and offset the tax impact on our profits- I anticipate the current hiring freezes in the industry to turn into massive layoff waves, and the industry to cut back dramatically to levels that will significantly impact our service models and even our ability to continue to operate. Second we will have no choice but to raise prices significantly- the HIDDEN TAX on the American public is that all taxes are ultimately passed on to the consumer. Third, and perhaps worse, many, many, MANY restaurants will simply not be able to cope with the cost burden and will fold almost overnight, swelling the ranks of the unemployed even more drastically. Finally, the financial incentive to build new restaurants in America will be gone. Say goodbye to new and interesting and convenient cuisine options in your neighborhood as no rational investor will put money in the future into a money losing business proposition.

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“The Plausability Bar”

Tuesday, July 21, 2009  |  posted by Hugh Hewitt

It has been no secret among those of us who defend businesses in court that the Supreme Court’s May decision is Ashcroft v. Iqbal was a long-overdue injection of fairness into civil litigation.

Now the New York Times does a survey of the near-term after-effects of the decision and discovers that many judges are taking the Court’s direction seriously and dismissing implausible claims against businesses without first obliging them to endure costly and destructive discovery proceedings.

Rest assured that the genuinely injured won’t find Iqbal to be a bar of any sort, and that the vast majority of civil filings will easily pass this first-level of scrutiny.

But if even the worst strike suits can be flushed from the system early on by a rigorous application of the Iqbal standard, everyone wins including plaintiffs seeking quicker judgment, wrongly accused businesses and individuals, and of course the economy as a whole.

For the convenience of the reader, here are the key portions of Justice Kennedy’s opinion:[# More #]

To survive a motion to dismiss, a complaint must contain sufficient factual matter, accepted as true, to “state a claim to relief that is plausible on its face.” Id., at 570. A claim has facial plausibility when the plaintiff pleads factual content that allows the court to draw the reasonable inference that the defendant is liable for the misconduct alleged. Id., at 556. The plausibility standard is not akin to a “probability requirement,” but it asks for morethan a sheer possibility that a defendant has acted unlawfully. Ibid. Where a complaint pleads facts that are “merely consistent with” a defendant’s liability, it “stopsshort of the line between possibility and plausibility of ‘entitlement to relief.'” Id., at 557 (brackets omitted).

Two working principles underlie our decision in Twombly. First, the tenet that a court must accept as true all of the allegations contained in a complaint is inapplicable to legal conclusions. Threadbare recitals of the elements of a cause of action, supported by mere conclusory statements, do not suffice. Id., at 555 (Although for the purposes of a motion to dismiss we must take all of the factual allegations in the complaint as true, we “are notbound to accept as true a legal conclusion couched as afactual allegation” (internal quotation marks omitted)).Rule 8 marks a notable and generous departure from thehyper-technical, code-pleading regime of a prior era, but itdoes not unlock the doors of discovery for a plaintiff armed with nothing more than conclusions. Second, only a complaint that states a plausible claim for relief survives a motion to dismiss. Id., at 556. Determining whether acomplaint states a plausible claim for relief will, as theCourt of Appeals observed, be a context-specific task thatrequires the reviewing court to draw on its judicial experience and common sense. 490 F. 3d, at 157-158. But where the well-pleaded facts do not permit the court to infer more than the mere possibility of misconduct, thecomplaint has alleged-but it has not “show[n]”-“that thepleader is entitled to relief.” Fed. Rule Civ. Proc. 8(a)(2).

In keeping with these principles a court considering amotion to dismiss can choose to begin by identifying pleadings that, because they are no more than conclusions, are not entitled to the assumption of truth. While legal conclusions can provide the framework of a complaint, they must be supported by factual allegations. When there are well-pleaded factual allegations, a court should assume their veracity and then determine whether they plausiblygive rise to an entitlement to relief.

Our decision in Twombly illustrates the two-prongedapproach. There, we considered the sufficiency of a complaint alleging that incumbent telecommunications providers had entered an agreement not to compete and toforestall competitive entry, in violation of the Sherman Act, 15 U. S. C. ?1. Recognizing that ?1 enjoins only anticompetitive conduct “effected by a contract, combination,or conspiracy,” Copperweld Corp. v. Independence Tube Corp., 467 U. S. 752, 775 (1984), the plaintiffs in Twomblyflatly pleaded that the defendants “ha[d] entered into a contract, combination or conspiracy to prevent competitive entry . . . and ha[d] agreed not to compete with one another.” 550 U. S., at 551 (internal quotation marks omitted). The complaint also alleged that the defendants’ “parallel course of conduct . . . to prevent competition” andinflate prices was indicative of the unlawful agreement alleged. Ibid. (internal quotation marks omitted).

The Court held the plaintiffs’ complaint deficient underRule 8. In doing so it first noted that the plaintiffs’ assertion of an unlawful agreement was a “‘legal conclusion'” and, as such, was not entitled to the assumption of truth. Id., at 555. Had the Court simply credited the allegation of a conspiracy, the plaintiffs would have stated a claim for relief and been entitled to proceed perforce. The Court next addressed the “nub” of the plaintiffs’ complaint-the well-pleaded, nonconclusory factual allegation of parallel behavior-to determine whether it gave rise to a “plausible suggestion of conspiracy.” Id., at 565-566. Acknowledging that parallel conduct was consistent with an unlawful agreement, the Court nevertheless concludedthat it did not plausibly suggest an illicit accord because it was not only compatible with, but indeed was more likelyexplained by, lawful, unchoreographed free-market behavior. Id., at 567. Because the well-pleaded fact of parallelconduct, accepted as true, did not plausibly suggest anunlawful agreement, the Court held the plaintiffs’ complaint must be dismissed. Id., at 570.

B Under Twombly‘s construction of Rule 8, we conclude that respondent’s complaint has not “nudged [his] claims” of invidious discrimination “across the line from conceivable to plausible.” Ibid. We begin our analysis by identifying the allegations inthe complaint that are not entitled to the assumption oftruth. Respondent pleads that petitioners “knew of, condoned, and willfully and maliciously agreed to subject [him]” to harsh conditions of confinement “as a matter ofpolicy, solely on account of [his] religion, race, and/or national origin and for no legitimate penological interest.”Complaint ?96, App. to Pet. for Cert. 173a-174a. The complaint alleges that Ashcroft was the “principal architect” of this invidious policy, id., ?10, at 157a, and that Mueller was “instrumental” in adopting and executing it, id., ?11, at 157a. These bare assertions, much like the pleading of conspiracy in Twombly, amount to nothing more than a “formulaic recitation of the elements” of a constitutional discrimination claim, 550 U. S., at 555, namely, that petitioners adopted a policy “‘because of,’ notmerely ‘in spite of,’ its adverse effects upon an identifiablegroup.” Feeney, 442 U. S., at 279. As such, the allegations are conclusory and not entitled to be assumed true. Twombly, supra, 550 U. S., at 554-555. To be clear, we do not reject these bald allegations on the ground that theyare unrealistic or nonsensical. We do not so characterize them any more than the Court in Twombly rejected theplaintiffs’ express allegation of a “‘contract, combination orconspiracy to prevent competitive entry,'” id., at 551, because it thought that claim too chimerical to be maintained. It is the conclusory nature of respondent’s allegations, rather than their extravagantly fanciful nature, thatdisentitles them to the presumption of truth.

We next consider the factual allegations in respondent’scomplaint to determine if they plausibly suggest an entitlement to relief. The complaint alleges that “the [FBI],under the direction of Defendant MUELLER, arrested and detained thousands of Arab Muslim men . . . as part of its investigation of the events of September 11.” Complaint ?47, App. to Pet. for Cert. 164a. It further claims that “[t]he policy of holding post-September-11th detainees in highly restrictive conditions of confinement until theywere ‘cleared’ by the FBI was approved by Defendants ASHCROFT and MUELLER in discussions in the weeks after September 11, 2001.” Id., ?69, at 168a. Taken as true, these allegations are consistent with petitioners’ purposefully designating detainees “of high interest”because of their race, religion, or national origin. But given more likely explanations, they do not plausibly establish this purpose. 18 ASHCROFT v. IQBAL Opinion of the Court

The September 11 attacks were perpetrated by 19 ArabMuslim hijackers who counted themselves members ingood standing of al Qaeda, an Islamic fundamentalist group. Al Qaeda was headed by another Arab Muslim-Osama bin Laden-and composed in large part of his ArabMuslim disciples. It should come as no surprise that a legitimate policy directing law enforcement to arrest and detain individuals because of their suspected link to the attacks would produce a disparate, incidental impact onArab Muslims, even though the purpose of the policy wasto target neither Arabs nor Muslims. On the facts respondent alleges the arrests Mueller oversaw were likely lawful and justified by his nondiscriminatory intent to detain aliens who were illegally present in the United States and who had potential connections to those who committed terrorist acts. As between that “obvious alternative explanation” for the arrests, Twombly, supra, at 567, and the purposeful, invidious discrimination respondent asks us toinfer, discrimination is not a plausible conclusion.

But even if the complaint’s well-pleaded facts give riseto a plausible inference that respondent’s arrest was the result of unconstitutional discrimination, that inference alone would not entitle respondent to relief. It is important to recall that respondent’s complaint challenges neither the constitutionality of his arrest nor his initialdetention in the MDC. Respondent’s constitutional claims against petitioners rest solely on their ostensible “policy of holding post-September-11th detainees” in the ADMAXSHU once they were categorized as “of high interest.”Complaint ?69, App. to Pet. for Cert. 168a. To prevail on that theory, the complaint must contain facts plausiblyshowing that petitioners purposefully adopted a policy ofclassifying post-September-11 detainees as “of high interest” because of their race, religion, or national origin.

This the complaint fails to do. Though respondentalleges that various other defendants, who are not before us, may have labeled him a person of “of high interest” for impermissible reasons, his only factual allegation against petitioners accuses them of adopting a policy approving “restrictive conditions of confinement” for post-September11 detainees until they were “‘cleared’ by the FBI.” Ibid. Accepting the truth of that allegation, the complaint doesnot show, or even intimate, that petitioners purposefully housed detainees in the ADMAX SHU due to their race, religion, or national origin. All it plausibly suggests isthat the Nation’s top law enforcement officers, in theaftermath of a devastating terrorist attack, sought to keepsuspected terrorists in the most secure conditions available until the suspects could be cleared of terrorist activity. Respondent does not argue, nor can he, that such a motive would violate petitioners’ constitutional obligations. He would need to allege more by way of factual content to “nudg[e]” his claim of purposeful discrimination”across the line from conceivable to plausible.” Twombly, 550 U. S., at 570.

To be sure, respondent can attempt to draw certain contrasts between the pleadings the Court considered in Twombly and the pleadings at issue here. In Twombly, the complaint alleged general wrongdoing that extendedover a period of years, id., at 551, whereas here the complaint alleges discrete wrongs-for instance, beatings-by lower level Government actors. The allegations here, iftrue, and if condoned by petitioners, could be the basis forsome inference of wrongful intent on petitioners’ part. Despite these distinctions, respondent’s pleadings do notsuffice to state a claim. Unlike in Twombly, where the doctrine of respondeat superior could bind the corporatedefendant, here, as we have noted, petitioners cannot beheld liable unless they themselves acted on account of aconstitutionally protected characteristic. Yet respondent’scomplaint does not contain any factual allegation sufficient to plausibly suggest petitioners’ discriminatory state of mind. His pleadings thus do not meet the standard necessary to comply with Rule 8.

It is important to note, however, that we express no opinion concerning the sufficiency of respondent’s complaint against the defendants who are not before us.Respondent’s account of his prison ordeal alleges seriousofficial misconduct that we need not address here. Our decision is limited to the determination that respondent’scomplaint does not entitle him to relief from petitioners.

Stopping Obamacare: What The President’s Call To The Blogs of the Hard Left Tells Us

Tuesday, July 21, 2009  |  posted by Hugh Hewitt

The president’s decision to appeal for help to the hard-left edge of the blogosphere tells us his health care plans are faltering in the Senate where hopefully risky, radical and increasingly widely unpopular schemes go to die, even when one party has 60 votes.

In another attempt to save his radical attempt to remake American medicine from sinking under the weight of common sense and objections on cost and other grounds, President Obama conducted a conference call with bloggers from the leftosphere. So much for any pretense that the hard-left scheme to move the country to Canada-style single payor has anything to do with common-sense, reasonable reform of aspects of a generally-admirable health care system. The president went to his hard-edged shock troops –a political strategic reserve– and asked them to rush and bully the Hill. No doubt they will, but will Democratic senators and an increasing number of House members looking at a difficult re-election landscape a mere 15 months down the road be pushed into political suicide by the posters at Daily Kos?

One of the lefty bloggers did a great job of asking the most important and serious question on the table right now. It was Jonathan Singer of MyDD who asked the $64,000 question about using a parliamentary device called reconciliation to jam the radical rewrite of the health law through the Senate with only 50 votes. Just yesterday on my program, Politico’s Mike Allen relayed the view within the MSM that the 50-vote reconciliation process was dead as an option for health care legislation. Here’s the exchange:

Jonathan Singer: Well thank you for taking the time to speak with us, Mr. President. Given the timeline and the fact that it seems like bills may not be through both the House and Senate by the August recess, is there a point at which you would say to the Senate, “Sixty votes doesn’t seem like it’s going to happen. Use the reconciliation process. Lower the threshold so the Republicans cannot delay the process.” I know that’s not optimal. But is there a point at which you would say that to the Senate?

President Obama: Keep in mind that the way we had structured the reconciliation issue several months ago, we moved forward on the basis of the assumption that we can get a bill through the regular order and the regular process by October. If I think that that is not possible, then we are going to look at all of our options, including reconciliation.

So at least the GOP and moderate Democrats in the Senate are on notice that their colleagues will be pushed to use the jam down.

David Brooks already counts three phases in the already distinct “liberal suicide march” underway (and he doesn’t even include the quick step cap-and-tax-and-tax-and-tax bill):

We’re only in the early stages of the liberal suicide march, but there already have been three phases. First, there was the stimulus package. You would have thought that a stimulus package would be designed to fight unemployment and stimulate the economy during a recession. But Congressional Democrats used it as a pretext to pay for $787 billion worth of pet programs with borrowed money. Only 11 percent of the money will be spent by the end of the fiscal year -a triumph of ideology over pragmatism.

Then there is the budget. Instead of allaying moderate anxieties about the deficits, the budget is expected to increase the government debt by $11 trillion between 2009 and 2019.

Finally, there is health care. Every clich? Ann Coulter throws at the Democrats is gloriously fulfilled by the Democratic health care bills. The bills do almost nothing to control health care inflation. They are modeled on the Massachusetts health reform law that is currently coming apart at the seams precisely because it doesn’t control costs. They do little to reward efficient providers and reform inefficient ones.

Brooks is right about the left’s lurch for everything on the top shelf of its best bar, and its refusal to water down any of the brands. His scant hope in the Blue Dogs as a restraining force is also reasonable as this caucus is more of a press release than a political entity.

The only check on the left’s ambitions for the next 15 months until a hopefully sobered-up American rebalances D.C. for going forward is the U.S. Senate and the hope that at least 51 senators are alert enough to understand that Obamamania will pass even as his numbers fall, but that the damage to the country –and their own political futures– from the radicals’ rush to rip health care to the ground and rebuild it in a brave new era image will last and last, and that it has got to be stopped in the Senate.

The Senate’s switchboard is 202-224-3121. Call your home state senators and tell them to stop the health care bill and start over. Tell them no massive deficit additions, no government option/public plan, and no rationing. Tell them no bill in ’09 and a reasonable one in 2010 if at all.

After you have talked to your home state senators –no matter how far to the left or how hopeless the effort– ring up the offices of key Democratic senators looking at tough re-election campaigns like Blanche Lincoln in Arkansas and Michael Bennet in Colorado. Throw in Chris Dodd from Connecticut as well. Though it would take a small miracle to peel him away from this wreck of a bill, Dodd’s in big trouble in Connecticut and a wave of callers vowing to contribute to Rob Simmons if this bill passes could have some effect. Similarly a call to Delaware’s Ted Kaufman (warming the seat for young Biden) might help a bit, as may a call to Harry Reid’s office. Both are going to want to help the president, but there’s got to be a limit to how much political pain they’ll absorb for a plan that won’t work to do anything but arm the GOP with a powerful issue in 2010. Indiana’s Evan Bayh, Pennsylvania’s Arlen Specter and New York’s Kristen Gillibrand are three more whose offices could use a call relaying your intention to contribute to their opponents if they support the health care foolishness. Both of North Dakota’s senators Byron Dorgan and Kent Conrad may be open to opposing the bill, and especially Dorgan who is up for re-election in 2010.

The president’s plan would be dead already except for the reconciliation trickery, but Chicago rules say win anyway you can, even if the win is toxic to the centrists in your party. It will take 51 votes in the Senate to make sure Obamacare stays a hair-brained scheme on a professor’s chalk board and not a rationing nightmare for elderly Americans and a giant tax burden for everyone else.

If you haven’t done so already, sign the petition opposing Obamacare and get your family friends and colleagues to do so as well.

“The Defector” by Daniel Silva

Monday, July 20, 2009  |  posted by Hugh Hewitt

The Defector is Daniel Silva’s new thriller in the Gabriel Allon series. Silva was my guest on tonight’s show.

The Defector

The transcript of our conversation is here, and the podcast here.

The list of Silva’s appearances on his book tour is here. The first two are tomorrow in NYC.

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