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Alabama’s Uber failures showcase big brother bureaucracy over consumer opportunity

September 08, 2014, 10:42 AM

First it was Birmingham that refused to accommodate Uber, the popular app-driven transportation service, and then the Tuscaloosa Police Department began enforcing the city’s transportation regulations against drivers working with the company.

While the Birmingham City Council has managed to bungle a badly needed economic opportunity for the city, the Tuscaloosa Police Department is simply enforcing the regulations as they read them and highlighting the need for Tuscaloosa to revisit the issue.

Birmingham and cities throughout Alabama need jobs of any stripe. Not only do Uber and companies like them create employment, but they offer even more value by providing a tech-savvy convenience to move about Alabama’s cities. Many of the state’s cities are less walking-friendly than larger metropolitan counterparts around the nation. These transportation innovation companies sound like the kind of business opportunities politicians would be begging to have.

Instead, the message from Birmingham and Tuscaloosa is that Alabamians need to be protected from the likes of Uber. They claim that public safety is at stake.

Uber and similar app-based transportation services function by contracting with drivers in cities where they operate. Uber, for example, manages a web-based interface that connects passengers and contract drivers. Some of the contract drivers are simply interested in picking up some part-time cash.

That is where city governments start to have conniptions. For many politicians, bureaucracy must be preserved. After all, there is paperwork that needs to be filled out, inspections to be performed, background checks to conduct. Without layers of government, some city leaders apparently feel that Alabamians would not be able to make reasonable decisions.

Never mind the fact that Uber already requires proper insurance, a valid driver’s license and passage of DMV and background checks. City leaders feel that they must protect the taxi industry public from the growing transportation menace.

Since I discovered Uber, I have not taken a taxi in a city where they operate. Safety is a big reason why. My family or I could get into a taxi with precious little information about the fare, route or driver. On the other hand, I could take Uber, where the ride is tracked and information about the driver and passenger is retained. Not only am I able to access my account and see a record of all my trips, but the service radically improves my chances of recovering items I might accidentally leave behind in the car. Most importantly, I am able to focus on getting my family or myself out of the car safely rather than fiddling with a cash transaction.

If private citizens are able to get into a car with a complete stranger at any time, why are they incapable of making that same decision when it comes to a private transportation service?

Alabama’s cities should find ways to expand employment opportunities and choices for consumers, rather than maintaining an unyielding devotion to a one-size-fits-all regulation, especially in a situation where there is no clear and immediate danger to the public.

Taxis should have same opportunities as companies like Uber, but Alabamians, not city bureaucracies, should be able to decide which type of transportation meets their needs, ensures their safety and is more reliable.

Survey: Ky. against Internet tax

September 05, 2014, 4:57 PM

From the Bowling Green Daily News:

States rely on taxpayers to report their online purchases and remit the taxes that are due, but few do. Online retailers that have a physical presence in the state where a purchase is made usually collect and remit the tax, as is the case with Kentucky. The National Taxpayers Union and R Street Institute conducted a poll among several states, including Kentucky, to gauge how state taxpayers felt about legislation that could be passed someday to change the current sales tax laws.

“When we looked at all the demographic background … we found pretty consistently across the board not just opposition, but double-digit opposition,” said Andrew Moylan, executive director of R Street Institute.

Letter to Senate on USA FREEDOM Act

September 05, 2014, 11:31 AM



Majority Leader Harry Reid
Minority Leader Mitch McConnell
U.S. Senate

Chairman Patrick J. Leahy
Ranking Member Charles E. Grassley
U.S. Senate Committee on the Judiciary

Chairman Dianne Feinstein
Vice Chairman Saxby Chambliss
U.S. Senate Select Committee on Intelligence

Chairman Thomas R. Carper
Ranking Member Tom Coburn
U.S. Senate Committee on Homeland Security and Governmental Affairs

Dear Majority Leader Reid, Minority Leader McConnell, Chairmen Leahy, Feinstein, and Carper, Ranking Members Grassley and Coburn, and Vice Chairman Chambliss:

As Congress begins its next work session, the undersigned civil liberties, human rights, and other public interest organizations are writing to urge the Senate to quickly pass the USA FREEDOM Act (S. 2685) without adding new data retention requirements, and without further consideration of the gravely concerning Cybersecurity Information Sharing Act of 2014 (CISA, S. 2588).

On July 30, 2014, many of the undersigned groups sent a letter to Congressional leadership voicing a unified statement of support for the new version of the USA FREEDOM Act (S. 2685). Though further reform will still be needed, it is an important first step to reining in the National Security Agency’s (NSA) overbroad surveillance authorities.

As that letter explained, S. 2685 in its current form would provide significant transparency and privacy safeguards while preserving the tools intelligence agencies need to protect national security. The bill would prohibit “bulk” and limit large-scale data collection under the USA PATRIOT Act Section 215, the FISA pen register authority, and National Security Letter authorities. The bill would also enhance public reporting of surveillance orders by the private sector and the government, and reform the FISA Court to provide more accountability and transparency, including by appointing a special panel of civil liberties and privacy advocates to the court. Additionally, this version of the USA FREEDOM Act would permit the new call detail records (CDRs) authority under Section 215 to be used only for counterterrorism purposes, and avoid implicitly codifying controversial “about searches” under Section 702 of the FISA Amendments Act that implicate the privacy of millions of Americans. Based on these important improvements, a wide range of major technology companies and public interest groups spanning the political spectrum is eager for Congress to pass this legislation swiftly and without weakening the bill.

However, as we made clear in both our July 30 letter and our previous letter of June 18, the broad consensus in support of the USA FREEDOM Act among companies and advocacy groups would be severely disrupted if any new mandatory data retention requirement were added to the bill. Data retention requirements pose significant threats not only to privacy and civil liberties, but also to data security, as stories of data breaches at major corporations like Target, Neiman Marcus, UPS, and major banks demonstrate.

There is no evidence that such a mandate is necessary to protect national security. Rather, as Attorney General Eric Holder and Director of National Intelligence James Clapper made clear in a letter earlier this week, and as NSA Deputy Director Richard Ledgett testified before the Senate Select Committee on Intelligence in June, the NSA does not need a new data retention requirement to maintain its current level of effectiveness.

At the same hearing, Verizon Vice President and Assistant General Counsel Michael Woods stated unequivocally that Verizon would strongly oppose a new data retention requirement because it would be burdensome to business and pose a significant threat to Americans data and privacy. We agree, and reiterate our strong opposition to the inclusion of any such mandate in the USA FREEDOM Act, which we urge the Senate to pass without delay. Ironically, just as Congress is struggling to pass meaningful surveillance reform to rein in the NSA, the Senate Select Committee on Intelligence has approved a problematic bill that would give the NSA even more access to Americans’ data: the Cybersecurity Information Sharing Act (S. 2588). Dozens of members of the advocacy community have joined in three coalition letters to the Senate and to the president opposing that bill, which would authorize companies to share with the Department of Homeland Security broadly defined “cyberthreat indicators” from the communications of their users and subscribers. That information would be immediately and automatically disseminated to the NSA and a host of other government agencies. The companies would not be required to affirmatively look for and remove personally identifiable information that is not relevant to the threat before the information is shared. Among other problems, CISA also authorizes companies to monitor their customers’ activities on their networks and employ a range of dangerous countermeasures that could affect innocent Internet users.

Despite the serious privacy problems with CISA, especially in comparison with the last, more privacy protective, cybersecurity information sharing bill considered by the Senate, the Cybersecurity Act of 2012 (S. 3414), its proponents are urging that the Senate take it up in the limited time that remains after this August recess. Instead, the Senate should make passing the USA FREEDOM Act (S. 2685) a key legislative priority for September. Passing effective and comprehensive surveillance reform is necessary not only to protect our privacy, but also to restore the trust of Internet users around the world who rely on, and are relied upon by, the U.S. Internet industry. The USA FREEDOM Act, as reintroduced last month, would substantially advance both of those goals, whereas CISA would undermine them.

We therefore urge the Senate to swiftly pass the USA FREEDOM Act (S. 2685) without any amendments that would weaken its protections or create any new data retention mandates, and without taking up the Cybersecurity Information Sharing Act (S.2588) in its current form. The Senate cannot seriously consider controversial information-sharing legislation such as CISA without first completing the pressing unfinished business of passing meaningful surveillance reform.


Advocacy for Principled Action in Government
American Association of Law Libraries
American Booksellers Foundation for Free Expression
American Civil Liberties Union
American Library Association
Arab American Institute
Association of Research Libraries
Bill of Rights Defense Committee
Brennan Center for Justice
Campaign for Digital Fourth Amendment Rights
Center for Democracy & Technology
Citizen Outreach
Competitive Enterprise Institute
The Constitution Project
Constitutional Alliance
Council on American Islamic Relations
Defending Dissent Foundation
DownsizeDC.org, Inc.
Electronic Frontier Foundation
Freedom of the Press Foundation
Free Press Action Fund
Government Accountability Project
Hon. Bob Barr, Former Congressman
Human Rights Watch
Liberty Coalition
Media Alliance
National Coalition Against Censorship
National Security Counselors
New America’s Open Technology Institute
PEN American Center
Project on Government Oversight
Public Knowledge
Republican Liberty Caucus
R Street
The Rutherford Institute
Student Net Alliance

It doesn’t take much to imagine that campaign cash is buying influence in the courtroom

September 04, 2014, 10:42 AM

Imagine for a minute that a corporation with an effective monopoly in the State of Alabama became the target of litigation initiated by a state prosecutor. Not only does the corporation use their cash to fight the litigation in court and by lobbying legislators, but they also go after the prosecutor politically in the middle of the legal proceedings.

In an attempt to find a more favorable prosecutor, the corporation funnels $1 million to the prosecutor’s political opponent through a series of vaguely named political action committees (PACs) managed by a former felon.

Why not make it even more interesting? What if the transfers and the amount of money were legal under state law and the manager received a pardon a few months after his conviction?

While the hypothetical might seem like the latest legal fiction thriller, it happens to be reality in Alabama politics. The state prosecutor is none other than Attorney General Luther Strange, the business is the Poarch Band of Creek Indians that operates casinos in Alabama, and the A, T, and Speed PACs the tribe funds are managed by former state Sen. John Teague.

Saying that gambling is a controversial issue in Alabama is an understatement, but the fact that the litigation involves gambling does not change the hypothetical situation above.

Nobody believes that the Poarch Creek money is funding Strange’s opponent for any reason other than their legal battles. Even if the Poarch Band of Creek Indians and Teague are operating within the law, the scenario still seems off. In Alabama, where we have elected judges and prosecutors, should we permit litigants to make political contributions in support or opposition to officials within the legal system when they have pending litigation involving them?

Contributing to public officials in the legal system to generally shape the legal climate is common in Alabama. For example, trial lawyers and the business community have waged political war for decades in an effort to influence Alabama’s legal system. Political fights over general legal philosophy are a different matter altogether than using campaign cash in response to unfavorable legal proceedings.

Preventing political contributions in a direct conflict situation is already recognized under Alabama law. Utilities regulated by the Public Service Commission (PSC) are prohibited from making political contributions to candidates for the commission.

If anything, elected state prosecutors and judges have more discretion and individual autonomy over decisions impacting litigants than PSC members have over regulated entities. There are some general ethics rules for attorneys and recusal issues for judges, but none of them squarely take the issue head on.

The very presence of elected public officials in the legal system carries with it politics, campaigns and financial contributions. The question for Alabamians is whether we want to make legal changes that keep those campaign conflicts out of the courtroom.

NEJM irresponsibly damns e-cigarettes as gateway to cocaine, based on mouse nicotine studies

September 04, 2014, 10:33 AM

The New England Journal of Medicine yesterday published an incendiary anti-e-cigarette article that tags nicotine as a gateway to cocaine use… in mice. It’s another sad day for tobacco truth.

The authors are Drs. Denise and Eric Kandel, the latter a Nobel Prize-winner for his work on the physiological basis of memory storage in nerves. Since 1975, Dr. Denise Kandel has aggressively promoted a gateway theory that adolescent use of legal drugs like alcohol and tobacco causes use of illegal drugs, starting with marijuana and progressing to cocaine and heroin. The theory is highly contested among addiction research and policy experts because it is not supported by human studies.

The NEJM presents the Kandels’ laboratory data on how nicotine and cocaine affect the mouse brain at the cellular and molecular level. Their experiments involved force-feeding nicotine to and injecting cocaine into mice. Post-mortem studies on the rodent brains led the authors to conclude that nicotine/tobacco causes cocaine use.

Following a nine-page technical discussion of their research that made no mention of e-cigarettes, the authors inserted a concluding three paragraphs claiming that smoking, vaping and even passive smoke are gateways to cocaine.

In a crass attempt to heighten interest in the publication, the Kandels and the NEJM offered the media a press release with an attention-grabbing e-cigarette-bashing headline and inflammatory quotes that exceed and distort the authors’ scientific work.

Shame on all parties for allowing marketing to trump the truth.

Poll: Kentucky voters reject Internet sales tax law

September 04, 2014, 9:37 AM

FRANKFORT, Ky. (Sept. 4, 2014) — When it comes to a federal law allowing out-of-state tax collectors to reach into the pockets of Kentucky’s online merchants, by a 55 percent to 34 percent margin, Bluegrass State voters have a resounding and simple answer: No way! That’s just one of several findings from a statewide poll released today by National Taxpayers Union and the R Street Institute.

In the survey of likely 2014 general election voters in Kentucky, strong majorities across many ideological and partisan persuasions also indicated their belief that the Internet should remain as free from regulation and taxation as possible (by an astounding 58-point margin). One of the most lopsided results concerned federal legislation in Congress called the “Marketplace Fairness Act.” When told (factually) the plan “would allow tax enforcement agents from one state to collect taxes from online retailers based in a different state,” 71 percent of respondents were opposed, with just 22 percent in favor.

“It’s no surprise that Kentucky voters are opposed to legislation that would effectively force e-retailers across the state to serve as tax collectors for other jurisdictions, like New York and California,” said Andrew Moylan, executive director of the R Street Institute. “Moreover, our polling finds that the belief that the Internet should exist to benefit Kentuckians, not other states’ bottom lines, is not a partisan issue.”

“Our poll is designed to explore the specific – and sophisticated – opinions of Kentucky voters on this critical issue,” said Pete Sepp, president of National Taxpayers Union. “Kentucky politicians of all persuasions and philosophies should take note of the results, and understand that supporting proposals like the Marketplace Fairness Act puts them out of step with the majority of their constituents; that’s why Sens. McConnell and Paul should be applauded for standing with Kentucky voters on this critical issue.”

A statewide survey of 400 likely voters in Kentucky was conducted June 2-3, 2014 by live telephone interviewing. Thirty percent of the interviews were conducted using a cell phone sample. The margin of error is ±4.9% at the 95% confidence level.

For the full list of NTU-R Street state-level polls on Internet sales tax laws, visit: rstreet.org/donttax.

Letter to U.S. Senate on permanent Internet tax moratorium

September 03, 2014, 1:58 PM



Dear Senators,

On behalf of the undersigned, we encourage you to pass a clean permanent extension of the Internet Tax Moratorium, and commend the House of Representatives on passage of H.R. 3086, the Permanent Internet Tax Freedom Act (PITFA).

Sens. John Thune, R-S.D., and Ron Wyden, D-Ore., have introduced S. 1432, the Internet Tax Freedom Forever Act (ITFFA), which mirrors the House language. Both ITFFA and PITFA reauthorize and make permanent legislation that has been U.S. national policy since 1998. The clean Internet access tax moratorium overwhelmingly passed the House, and similarly a clean ITFFA will easily pass the Senate, and again protect unfettered access to Internet connections.

Americans would be overjoyed to see Congress agree, and pass, legislation that protects consumers from increased costs when accessing and using the Internet, and protects them from discriminatory or duplicative taxation of Internet commerce.

Taxes on communications services are already punitive and discriminatory. The average sales tax rate on voice services is 17 percent, and 12 percent on video services, while the average general sales tax rate is 7 percent. A clean ITFFA would at the very least prevent this targeted tax on Internet access. Excessive taxes will hinder continued growth in the digital space. The FCC’s National Broadband Plan states that the largest barrier to consumer adoption and expanded use of Internet-based services is cost. Allowing the Internet access tax moratorium to lapse would certainly lead to higher tax rates on consumers and thus reduce the rate of adoption and innovation. The Internet is our greatest gateway to innovation and education, higher taxes on Internet access undermines American economic competitiveness and growth.

We encourage the Senate to act now to permanently extend the Moratorium on Internet Access Taxes.

Grover Norquist
Americans for Tax Reform

Katie McAuliffe
Digital Liberty

Morgan Reed
Executive Director
ACT | The App Association

Phil Kerpen
American Commitment

Mac Zimmerman
Director of Policy
Americans for Prosperity

Steve Pociask
American Consumer Institute
Center for Citizen Research

Lisa B. Nelson
American Legislative Exchange Council

Diana Waterman
Annapolis, MD Center-Right Coalition

Chuck Muth
Citizen Outreach
Mt. Reagan, Nevada

Eunie Smith
Eagle Forum of Alabama

Norman Singleton
VP of Policy
Campaign for Liberty

Brian Garst
Director of Government Affairs
Center for Freedom and Prosperity

Timothy Lee
Senior Vice President of Legal and Public Affairs
Center for Individual Freedoms

Clyde Wayne Crews
Vice President for Policy
Competitive Enterprise Institute

Ryan Radia
Associate Director of Technology Studies
Competitive Enterprise Institute

Thomas A. Schatz
Council for Citizens Against Government Waste

Wayne Brough
Chief Economist and Vice President of Research

George Landrith
Frontiers of Freedom

William Estrada
Director of Federal Relations
Home School Legal Defense Association

Andrew Langer
Institute for Liberty

Seton Motley
Less Government

Bartlett Cleland
Managing Director

Mike Wendy

Brandon Arnold
Executive Vice President
National Taxpayers Union

Steve DelBianco
Executive Director

Scott Cleland
Chairman, NetCompetition
President of Precursor LLC

Christopher P. Finney, Esq.
Finney Law Firm, LLC
Cincinnati, Ohio

Richard Watson
Florida Center-Right Coalition

Stephen P. Gordon
Forward Focus Media, LLC
Atlanta, Georgia

Louie Hunter
Georgia Center Right Coalition

William Keli’i Akina, Ph.D.
Grassroot Institute of Hawai’i

Darcie L. Johnston
Johnston Consulting, Inc.
Montpelier, Vermont

Marty Connors
M.J. Connors Consulting
Government Relations
Birmingham, Alabama

Jack Boyle
Co-Founder & President
Put Growth First

Charlie Gerow
Quantum Communications
Harrisburg, Pennsylvania

Mike Stenhouse
Rhode Island Center for Freedom & Prosperity

John Colyandro
Executive Direction
Texas Conservative Coalition
Research Institute

Paul Gessing
Rio Grande Foundation

Lorenzo Montanari
Executive Director
Property Rights Alliance

Andrew Moylan
Executive Director and Senior Fellow
R Street Institute

David Williams
Taxpayers Protection Alliance
Campaign for Liberty

Jason Pye
United Liberty

Cameron Smith

August 29, 2014, 11:23 AM

Cameron Smith is the principle of  Smith Strategies LLC, a regular columnist for the Alabama Media Group and a senior fellow with the R Street Institute.

Prior to founding Smith Strategies, Cameron was vice president and general counsel of the Alabama Policy Institute, where he managed all policy, legal and communications operations.

Previously, Cameron had a number of posts in both the U.S. House and U.S. Senate. He was legislative counsel for Sen. Jeff Sessions, R-Ala., on the Senate Judiciary Committee. He ran the House Intellectual Property Caucus and was counsel to Rep. Tom Feeney, R-Fla. He also served as counsel to Rep. Geoff Davis, R-Ky., where his primary legislative project was the REINS Act, which would provide significantly more accountability for Congress regarding the impacts of federal regulation.

Cameron is a graduate of Washington and Lee University and the University of Alabama School of Law. He is a member of the Tennessee and Alabama bars. He resides with his wife, Justine, and their three sons in Vestavia Hills, Ala.

Email: csmith@rstreet.org

Slowing the rise of the oceans

August 29, 2014, 10:28 AM

From Al Gore to the leadership of groups like the Union of Concerned Scientists, environmentalists long have warned that global disaster is certain unless we do something about rising sea levels. The “something” that most on the left want is to remake our energy economy and increase government control over energy use in order to cut down on human emissions of greenhouse gases that cause the thermal expansion of ocean water and the melting of polar ice sheets.

A look at the facts reveals a less alarming, although still disconcerting, environmental picture. When it comes to combating and adapting to rising sea levels, many of the factors most within our control are not directly associated with the climate.

The environmentalists deserve some credit. It is beyond dispute that greenhouse gas emissions are the most important factor behind the global rise in sea levels. Releasing carbon dioxide and other greenhouse gases into the atmosphere, largely from burning fossil fuels, traps heat from the sun. Over the past two decades, global sea levels have been rising at a rate of slightly more than 0.11 inches per year.

But projections about the future extent of the trend remain too imprecise to be of practical use to policy-makers. The United Nations’ Intergovernmental Panel on Climate Change predicts that the “most likely” case is that global sea levels will rise between one and four feet over the next century. A continuation of the trend of the last 20 years (roughly twice the average rate most scientists believe seas rose over the 20th century) would result in total sea-level rise near the low end of the IPCC projections.

Although many models indicate the rate will accelerate, whether it does, and by how much, will make an enormous difference. A one-foot rise would be reasonably easy to deal with in many places, while four feet could be catastrophic. And complex climate models have a dismal record of predicting the future.

It’s also important to note that greenhouse gas emissions are not the only factor in climate change, and that climate change is not the only cause of rising sea levels. In North America, relative sea levels are changing not only because of rising waters, but also because of sinking landmass. The East Coast has been slowing sinking for thousands of years. The intersection of these two phenomena, rising seas and sinking landmass, could make sea-level rise doubly destructive in certain parts of the country.

For instance, along the Gulf Coast of Louisiana, sea-level rise appears to be happening at nearly a dozen times the global rate: nearly an inch a year. The reasons are complicated, but relate to tectonic shifts in the ocean floor. The consequences could be disastrous. Much of southern Louisiana may be inundated in the next century, and parts of Texas may not be that far behind. And, if the projections are right, controlling greenhouse gas emissions would do almost nothing to change things.

Development has made an already severe natural problem worse. A century-long project to control the Mississippi-Missouri River system and prevent flooding has reduced the amount of silt the river carries. This results in “silt starvation” that is slowly eating away at the land in the Mississippi Delta.

Also contributing to this kind of erosion have been the heavily subsidized National Flood Insurance Program and local economic incentives to build in river valleys and along the coasts. Other causes are more bizarre. The nutria or “river rat,” a South American critter that fur farmers brought to the United States in the 1940s, has no natural predators here and feasts on the plant life of coastal marshes. Along the Chesapeake Bay and other areas, river rats eat so many plants that the land is left bare and gets washed away.

For the regions most likely to face dramatic impacts from rising sea levels in the near future, no amount of emissions control will make a major difference. In fact, for some, the only solution may be to relocate people and property away from the coast.

At a minimum, in our most densely populated hurricane-prone areas, like the New York/New Jersey and Miami metropolitan areas, large investments in “structural mitigation,” seawalls and the like, is almost certainly going to be necessary to protect lives and property. Spending several billion dollars to protect Manhattan from rising seas and hurricane-driven storm surges will almost certainly offer a very good return on investment, even if 21st-century weather patterns aren’t significantly different from those of the last century. A vigorous nutria control and eradication effort is also in order, as are local zoning standards that take potential sea-level rise into account.

In many cases, however, government would do best by simply getting out of the way. Subsidies for flood insurance, which Congress recently voted to extend, need to be eliminated, as do all other federal and state programs that provide implicit and explicit subsidies to build in low-lying areas. A comprehensive review of Army Corps of Engineers river control projects, with an eye to reducing silt-starvation, is long overdue.

Climate change presents its own set of challenges on the global level, and we will need ways to respond to that, as well. Some changes to energy policy are likely justified. But the favorite policies of many environmentalists—heavy-handed regulation of carbon dioxide emissions and subsidies for trendy alternative energy sources like wind and solar power—are not effective ways to help the areas of this country most threatened by rising seas and falling coasts. Policymakers can deal with sea-level rise. But they don’t have to follow the environmental left’s playbook to do it.

Cameron Smith

August 28, 2014, 3:57 PM

Cameron Smith is the principle of  Smith Strategies LLC, a regular columnist for the Alabama Media Group and a senior fellow with the R Street Institute.

Prior to founding Smith Strategies, Cameron was vice president and general counsel of the Alabama Policy Institute, where he managed all policy, legal and communications operations.

Previously, Cameron had a number of posts in both the U.S. House and U.S. Senate. He was legislative counsel for Sen. Jeff Sessions, R-Ala., on the Senate Judiciary Committee. He ran the House Intellectual Property Caucus and was counsel to Rep. Tom Feeney, R-Fla. He also served as counsel to Rep. Geoff Davis, R-Ky., where his primary legislative project was the REINS Act, which would provide significantly more accountability for Congress regarding the impacts of federal regulation.

Cameron is a graduate of Washington and Lee University and the University of Alabama School of Law. He is a member of the Tennessee and Alabama bars. He resides with his wife, Justine, and their three sons in Vestavia Hills, Ala.

Email: csmith@rstreet.org

Ian Adams

August 28, 2014, 3:16 PM

Ian Adams is senior fellow and California director of the R Street Institute.

Most recently, Ian was the Jesse M. Unruh Assembly Fellow with the office of state Assemblyman Curt Hagman, R-Chino Hills, while Hagman served vice chairman of the California Assembly Insurance Committee. In this role, Ian was responsible for appraising legislative and regulatory concepts, providing vote recommendations for bills in committee and on the Assembly floor and performing a host of other public affairs duties.

Previously, while still enrolled at the University of Oregon School of Law, Ian was a legal extern with the office of state Rep. Bruce Hanna, R-Roseburg, who was then co-speaker of the Oregon House of Representatives. Ian’s prior experiences include serving as a law clerk for the Personal Insurance Federation of California and as an intern in the office of former Gov. Arnold Schwarzenegger.  He also works pro bono as registered in-house counsel with Transitional Living & Community Support.

Ian is a 2009 graduate of Seattle University, with bachelor’s degrees in history and philosophy and received his law degree from the University of Oregon in 2013.

Phone: 916.751.5269

Email: iadams@rstreet.org


In the CDC-FDA e-cigarette study, ‘probably not’ is the new ‘yes’

August 28, 2014, 1:38 PM

Assume that you conducted a survey in which you posed two multiple-choice questions:

“Do you think you will smoke a cigarette in the next year?”

“If one of your best friends were to offer you a cigarette, would you smoke it?”

Respondents could choose from these answers:

Definitely yes

Probably yes

Probably not

Definitely not

You’d add up the “definitely yes” and “probably yes” responses to tally those intending to smoke; and you’d total the negative responses to gauge how many are unlikely to smoke.

This would be a straightforward and uncomplicated task, unless you were a CDC or FDA analyst, milking the National Youth Tobacco Survey for scary numbers.

On Aug. 25, the CDC issued its latest sky-is-falling press release, suggesting that e-cigarettes are driving teenagers to smoke. The release focused on a study coauthored by CDC and FDA researchers whose core finding was:

Among non-smoking youth who had ever used e-cigarettes, 43.9 percent said they intended to smoke conventional cigarettes within the next year, compared with 21.5 percent of those who had never used e-cigarettes.

To reach this conclusion, the CDC-FDA redefined “probably not” to mean “yes, I will.” Adolescents who answered “probably not to either of the two questions were classified as intending to smoke.

The feds used 2013 data that is not yet public, but using the 2012 NYTS, I can show you how much the distorted definition matters.

This table shows the numbers of never and ever users of e-cigarettes who intended to smoke, using the CDC-FDA definition (i.e., “probably not” means “yes, I will”). The percentages in parentheses are weighted to reflect the population of the survey.

  Never Users of E-cigarettes Ever Users of E-cigarettes No intention to smoke 13,312   (76%) 70   (41%) Intention to smoke 4,360   (24%) 80   (59%) All 17,672 (100%) 150 (100%)


Using conventional definitions, I produced the chart below. Any two yes responses defined intention to smoke, any two no responses were no intention, and mixed responses were just that, mixed. These are my results:

  Never Users of E-cigarettes Ever Users of E-cigarettes No intention to smoke 17,103 (97%) 128 (81%) Mixed intention      422 (2%) 13 (11%) Intention to smoke      147 (1%)    9 (8%) All 17,672 (100%) 150 (100%)

This paints a completely different picture of the e-cigarette situation. The appearance that adolescents who have ever used an e-cigarette (even one puff) might be more likely to intend to smoke is based on the responses of just nine survey participants.

Carl Phillips has extensive comments on at the CASAA blog here and here.

This is not the first time that a highly questionable definition has been used to fabricate a highly speculative gateway claim. I assure you that this is probably not the last bogus CDC analysis of youth e-cigarette use.

Can Prop 103 handle driverless cars?

August 27, 2014, 8:00 AM

Earlier this year, Google announced the introduction of a completely driverless car. On this blog, Eli Lehrer took time to discuss the insurance implications of such a development. Among other things, he posited that, as drivers become less involved in the decisions made by their car, the associated risks of operating the vehicle will go down.

It stands to reason that a reduction in the risk presented by a driver’s behavior may lead to a reduction in the amount that a driver will pay for auto insurance – provided that the current model of individual vehicle ownership and auto insurance coverage persists.

Insurance products designed to cover autonomous vehicles will likely need to parallel whatever evolutionary course of technological development autonomous vehicles take.

In the near-term, the autonomous vehicles taking to the roads will likely be incremental in their approach to reducing driver involvement. For the sake of continuity alone, those vehicles will look and operate more like the Lexus SUVs driving around Mountain View today than they will the grinning ovoid pods touted on Google’s blog. Early adapters of autonomous vehicles will still enjoy the presence of steering wheels and pedals that will allow them to maintain control over the vehicle.

In California, it is an open question as to whether and how early autonomous vehicle adapters will enjoy auto insurance rates that reflect the reduced risk their limited involvement will represent.

The current system for determining rates and premiums for auto insurance policies is dictated in code by 1988′s Proposition 103. California Insurance Code Section 1861.02(e) lays out with great specificity a list of rating factors that insurers are obligated to use as they develop auto insurance rates. The list of rating factors is divided between mandatory and optional factors. Today, there are three mandatory factors and 16 optional factors. Additional rating factors may be adopted via regulation by the insurance commissioner, so long as those factors have a “substantial relationship to the risk of loss.”

What is significant about Prop 103′s mandatory rating factors is that they have very little relationship to the risk of loss presented by the operator of an autonomous vehicle. Consider, in decreasing order of importance, what the three rating factors are now:

  1. The insured’s driving safety record.
  2. The number of miles he or she drives annually.
  3. The number of years of driving experience the insured has had.

As operator influence over the course and speed of a vehicle wanes, so too will the importance of an operator’s driving record and the number of years of experience they have sitting in their vehicle. Of Prop 103′s three mandatory rating factors, only the number of miles annually driven will bear directly on the risk presented by autonomous vehicle operation.

Because of Prop 103′s rigid control of rating practices, absurd scenarios involving autonomous vehicle insurance policies are not hard to imagine. For instance, an autonomous vehicle operator with a poor conventional driving history who operates her Google car very little could pay more for her insurance than another adopter with a better history who operates his autonomous vehicle a great deal. Both drivers would present the same risk, but old rules would make one pay more, unnecessarily.

To avoid absurdity, policy makers, regulators and stakeholders will have to craft a new system that can accommodate the risks presented by autonomous vehicles. And yet, while it seems inevitable that some changes will be needed, changing Prop 103 is not a straightforward task. On the one hand, a legislative fix would require a two-thirds vote of the Legislature on a measure that courts could deem “furthers the purposes” of Prop 103. On the other hand, interested parties could qualify an initiative and work to convince 50.1 percent of Californians of the merits of their new system.

In either case, the sooner that all parties can agree upon a system and an approach, the better.

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Delaware becomes first state to include digital accounts in estate law

August 26, 2014, 4:08 PM

Say you have an iTunes library that’s the envy of the most obsessive music collectors. Or a Facebook account with thousands of friends who obsessively share and “like” anything you post. Or a Twitter account that can drive media discourse due to its massive number of followers.

And then, you die.

What happens to these very real forms of digital and (in some cases) social capital?

Believe it or not, under the status quo, your heirs could (and probably would) be completely shut out of any inheritance of these things. In fact, given that Facebook and Twitter’s current terms of use explicitly foreclose people logging into accounts they don’t own, any attempt to claim a dead relative’s social media account could very well lead to the destruction of that social media account, along with whatever was built into it.

Even worse, iTunes has no mechanism by which ownership can be transferred to an heir, which in the real world is like having one’s record collection go up in flames the instant he or she dies. Something clearly needs to be done to remedy these problems.

Fortunately, in at least one state, something has. This month, Delaware enacted the Fiduciary Access to Digital Assets and Digital Accounts Act, which permits people to leave instructions in their wills for social media and email accounts, blogs, iTunes and cloud storage lockers like Dropbox to be passed onto their heirs. And if Suzanne Brown Walsh of the Uniform Law Commission has her way, similar laws will be enacted in all 50 states.

On the one hand, the fact that such a law passed apparently without resistance is welcome news. On the other hand, the fact that a law like this is only now being pushed, despite the fact that iTunes and cloud computing are both years old, is a troubling sign of how slow the law is to change in an era when planned obsolescence sometimes happens in mere months, rather than years. It also is emblematic of a failure by lawmakers to view digital assets as real in the same sense as actual physical ones, despite the fact that they often mimic physical assets.

Just as iTunes is, in principle, no different from a collection of compact discs, blogs can easily be thought of as collections of correspondence and/or private diaries that, in an older era, might have been passed down in actual physical form. Emails are clearly analogous with letters. Cloud computing of the type practiced by Dropbox may as well be considered the equivalent of a safety deposit box, and no one would contest the right of loved ones to inherit those.

While most of the digital goods under consideration look and act like physical goods of times past, there is another element to the issue that makes it especially puzzling that it has taken so long to address this issue. That is, unlike physical goods, which can depreciate with the effects of time, it’s taken for granted that the Internet is forever. The existence of the Wayback Machine, as well as numerous other means by which archived materials can be recovered from digital netherspace (that is, if it even needs to be recovered at all) speak very well to this sense of agelessness. If a person’s perishable physical assets can be passed down, then surely goods that can last forever without aging or depreciating should be covered the same way.

Whatever the reason that it has taken so long to update the law, hopefully the rest of the nation will look to Delaware as an example. And hopefully in future, the law can change in response to technological shifts at the speed of email, rather than lagging behind it like some imitation of the Pony Express.

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Justice Department confirms Lois Lerner emails still exist, proving that IRS officials are a pack of liars

August 26, 2014, 2:53 PM

Well, look at that. The Justice Department has confirmed to the conservative watchdog group Judicial Watch that the emails of several IRS officials, including those of Lois Lerner, still exist, despite claims that they’d been lost due to hard-drive crashes and destroyed backup tapes:

Judicial Watch President Tom Fitton said Justice Department lawyers informed him that the federal government keeps a back-up copy of every email and record in the event of a government-wide catastrophe.

The back-up system includes the IRS emails, too.

“So, the emails may inconvenient to access, but they are not gone with the [broken] hard drive,” Judicial Watch spokeswoman Jill Farrell told the Washington Examiner.

Judicial Watch is now seeking the release of the emails, which Justice Department lawyers say would be hard to find because of the significant size of the backup system.

Yeah, Judicial Watch is probably the least of the Justice Department and IRS’s concerns. The House Oversight and Government Reform and House Ways and Means committees, both of which are investigating the IRS’ targeting of conservative groups, aren’t going to care how difficult of a task it will be to recover these emails.

There’s also IRS Commissioner John Koskinen, who has been uncooperative with congressional committees and investigators. He claimed that the emails had been lost due to technical problems, and there was nothing that could be done to recover them. And, then, the IRS official in charge document compliance revealed that the backup tapes on which Lerner’s emails are stored could still be around. Koskinen confirmed that fact a day or two later.

Needless to say, House committees investigating the IRS scandal could have a field day with this. One would imagine that Koskinen will, once again, be forced to go to the Hill for hearings over the issues, where he’ll be subject to more harsh testimony, perhaps even more assertions that he lied under oath in his previous visit. And the thing is, both Koskinen and the IRS deserve every bit of scrutiny they’ve received and what will undoubtedly continue to come their way.

Ten great policy panels to vote for at SXSW

August 26, 2014, 12:44 PM

I recently wrote a short post highlighting the four panels we put forward for the 2015 SXSW Interactive conference, including the one I’ll be on (along with folks from the Electronic Frontier Foundation, the Center for Democracy and Technology and Internews). Here at R Street, we think this is a great way to bring free-market ideas to one of the biggest annual gatherings of technologists, activists, and entrepreneurs.

To determine its final program, SXSW relies in part on a public voting process to sort through the thousands of submissions it gets each year. Now through Sept. 6, you can vote for all the panel ideas you like. To participate, just go to panelpicker.sxsw.com.

There are a lot of other great organizations putting together policy-focused events for next year. Here are some of the best:

  1. Putting Policymakers to Work for You
    Featuring: Grover Norquist, Americans for Tax Reform; Michael Petricone, Consumer Electronics Association; Adrian Fenty, Perkins Cole; Julie Samuels, Engine Advocacy
  2. Legal Hackers: A Global Movement to Reform the Law
    Featuring: Jameson Dempsey, Kelley Drye & Warren; Amy Wan, Patch of Land; Phil Weiss, Fridman Law Group; Dan Lear, Avvo Inc.
  3. Government Surveillance: How You Can Change It
    Featuring: Harley Geiger, CDT; Rep. Zoe Lofgren, U.S. House; Christian Dawson, Internet Infrastructure Coalition; Ben Young, Peer 1 Hosting
  4. Disruptive Innovators Under Attack
    Featuring: Gary Shapiro, CEA; Robert Scoble, Rackspace; Kevin O’Malley, TechTalk
  5. Keeping America Competitive: Tech Policy in 2015
    Featuring: Sen. Jerry Moran, U.S. Senate
  6. Public Policy and Ridesharing: Lyfting Communities
    Featuring: Rep. Blake Farenthold, U.S. House; Sara Weir, National Down Syndrome Society; Chris Massey, Lyft; J.T. Griffin, Mothers Against Drunk Driving
  7. Privacy Matters: Baking Privacy Into Your Apps
    Featuring: Gautam Hans, CDT; Jon Callas, Silent Circle; Deepti Rohatgi, Lookout
  8. Operation Choke Point and Alternative Currencies
    Featuring: Mark Calabria, Cato Institute; Perianne Boring, Chamber of Digital Commerce; Ashe Schow, Washington Examiner; Cathy Reisenwitz, Sex and the State
  9. Friend or Foe? How the Government Impacts Startups
    Featuring: Rep. Darrell Issa, U.S. House; Rep. Jared Polis, U.S. House; Virginia Lam, Aereo; Rachel Wolbers, TwinLogic Strategies
  10. How Public Policy Protects Patents and Startups
    Featuring: Rep. Peter DeFazio, U.S. House; Vishal Amin, U.S. House; Tim Sparapani, Application Developers Alliance; Kate Doersken, Ditto.com
  11. Bonus: The Changing Privacy Landscape
    Featuring: Nuala O’Connor, CDT; Lee Rainie, Pew Research Center
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How big government and cronyism are slowing the growth of solar in the south

August 26, 2014, 12:01 PM

An Aug. 9 article in the Los Angeles Times explored why states in the U.S. South that get plenty of sunlight — such as Virginia, South Carolina and, of course, the Sunshine State itself, Florida — are not embracing solar.

The answer the article found was not the lack of demand. In fact, there is a lot of demand for the energy source. Rather, governments in these states have made it extremely difficult for solar companies to do business through regulations and taxes. Which industry is supporting these taxes and regulations? The utility industry, which largely generates power by conventional and dirtier fuels such as coal and natural gas, and largely enjoys a state-protected monopoly on service.

The first thing that needs to be understood is how a utility’s business model works. While some states allow nominal competition among utilities, the way it works in most of the country is that a utility goes to the state government and essentially gets a monopoly to build and sell electric services within a particular area of the state. In exchange for letting state utility regulators set utility rates, utilities are guaranteed a profit on every kilowatt hour of electricity they sell.

The very recent rise and proliferation of solar companies, new ways of financing solar installation, continued generous federal subsidies for renewables and the falling price of solar panels combine to make rooftop solar a viable option for more and more homeowners across the country. The growth of rooftop solar and increased energy efficiency are threatening the old utility business model. Not only are rooftop solar customers using less energy from the grid, but they’re able to sell excess power back to the grid at favorable rates through net metering laws which have been in place on the federal level since 2005. These factors have traditional utilities up in arms and they have been trying to kill new solar projects, especially in the Southeast, which has lots of sunshine. This has set up a political battle royale between heavily monopolized crony utilities and federally subsidized crony solar companies.

One of the weapons traditional utilities have used against solar companies is to threaten lawsuits against companies who offer to lease solar panels and systems to homeowners. South Carolina until this month was one of the states that outlawed companies who lease solar panels and systems as energy providers who compete with the official monopolies. Florida, Georgia and North Carolina still outlaw solar leasing and/or power purchase agreements (PPAs), which essentially keeps solar a privilege of the more well to do. In the rest of the Southeast, the regulatory status is still unclear, because most states have not explicitly legalized the practice. (Texas is the only state in the South where solar leasing/PPAs are explicitly legal.)

Some southern states also make it difficult to install solar systems by assessing taxes and fees on solar that don’t exist in other places. States in the region also make the solar installation process difficult with burdensome laws and a heavily complicated permitting process. These obstacles have combined to place the Southeast far behind regions of the country like New England, which isn’t exactly known for its sunny skies, in solar-electricity production.

What southern states need to do is simply open up a free market in energy in order to take advantage of the solar boom. State legislatures should repeal bans on solar leasing and PPAs. This will make solar affordable for middle-class homeowners instead of merely a privilege for the wealthy. States also need to repeal any and all special taxes and fees on solar panels and equipment and make solar panels and systems on residential properties property tax exempt. Across the South, lawmakers should streamline the permitting process to install solar panels and systems in ways similar to what California has recently done.

The South could and should take the lead in energy deregulation. Currently, no southern states except for Texas has deregulated electricity. Not only has Texas experienced lower rates since it deregulated in 2002, but a variety of renewable have come to take appeal to Texans who are now able to choose their energy provider. Considering the near obsolescence of the old utility business model, states should consider deregulating their electric grid as well.

The ideal free-market energy program would be to end all energy subsidies, whether for so-called “green” energy or conventional fossil fuels. But until the federal government moves forward on that front, southern states can and should open up their own energy markets to allow consumers to switch to solar energy. The South can and should be an example of promoting both free markets and a cleaner environment. With free-market energy, it can have both.

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Sherlock Holmes and the case of the broken copyright law

August 25, 2014, 8:00 AM

Arthur Conan Doyle’s famous fictional detective Sherlock Holmes is fond of saying that one must never alter facts to suit theories, instead of theories to suit facts. Given this, Holmes might have had quite a few problems with the lawsuit involving the Conan Doyle Estate that was resolved this June.

The case originated with an author named Leslie Klinger, who wanted to publish his own book of Holmes stories, and involved a dispute over whether the Holmes character had, in fact, entered the public domain or whether the Conan Doyle Estate could still claim rights to the character.

As far as twisting facts to suit theories, the Conan Doyle Estate practically taught a master class in the business. The Hollywood Reporter describes their argument and the reception it received:

On appeal, the Doyle camp attempted to raise an argument that had been unsuccessful at the district court: that Sherlock Holmes is a ‘complex’ character, that his background and attributes had been created over time, and that to deny copyright on the whole Sherlock Holmes character would be tantamount to giving the famous detective ‘multiple personalities.’

On Monday, after dispensing with the Doyle estate’s other argument that the controversy wasn’t ripe enough to be adjudicated, 7th Circuit Judge Richard Posner rejected that assessment. ‘We cannot find any basis in statute or case law for extending a copyright beyond its expiration,’ writes Judge Posner. ‘When a story falls into the public domain, story elements — including characters covered by the expired copyright — become fair game for follow-on authors, as held in Silverman v. CBS Inc.’

Judge Posner explicitly cited the example of William Shakespeare, who famously adapted stories taken from other sources (“The Tempest” is Shakespeare’s only completely original work), and defended the idea that allowing multiple interpretations of stories/characters will also encourage creativity. Posner handed the decision of which interpretation of a given character is truly the best to the market. He steadfastly refused to treat the Conan Doyle Estate’s request as anything but what it truly is – an appeal for nearly perpetual copyright. Under their theory of the law, Holmes would be under copyright for no less than 135 years.

It is fortunate that Judge Posner saw through the Doyle family’s attempt to keep a character whose legacy they have been profiting from for more than a century (while mostly allowing the character himself to languish, unused) under proverbial lock and key. What is less fortunate is that so many other powerful actors in American politics seem to want a similar degree of punitive power. The Walt Disney Corp., for instance, lobbies frantically to keep the cartoon “Steamboat Willy” (the first cartoon featuring Mickey Mouse) out of the public domain, presumably out of fear of losing creative control of their treasured mascot.

Make no mistake, there is a role for copyright to play in creative works. However, the current regime serves neither the artists it is supposed to protect nor the entrepreneurs who live in fear of lawsuits. Rather, the system is, at best, an outdated relic of the pre-digital age. At worst, it is a system rigged solely to benefit middlemen with influential lobbyists, instead of producing an environment where the creative can be assured control of their work, but the innovative can also be assured of the freedom to build on others’ achievements.

One of the more silly loopholes to survive to the modern day in copyright law is the fact that terrestrial radio stations are not required to pay royalties to the artists whose work they play. The theory underlying this exemption originally was that terrestrial radio stations were a form of free advertising, which was doubtlessly true at a time when radio was the primary means of exposure to new music. These days, this standard serves only to allow broadcasters to profit off others’ work. What’s more, broadcasters themselves seem aware that this “free advertising” logic is silly, given that they reject it when used as a rationale to lower their retransmission consent fees. If radio stations can only survive by freeloading off others’ creativity, their business model needs to change.

Moreover, it’s absurd that it took Rep. George Holding’s introduction of the RESPECT Act to call attention to the fact that artists who are still alive, such as Aretha Franklin, aren’t entitled to copyright on works of theirs performed prior to 1972. Even the most staunch opponent of copyright would probably agree that an icon like Franklin deserves to profit from all her contributions to the arts, and that simply cutting off protection at a certain year is arbitrary and silly.

So we have a system that, on the one hand, protects the obsolete business models of broadcasters at the expense of artists. What about the other side? Here, abuses abound.

To begin with, copyright damages desperately need to be reformed. Consider this alarming paragraph from a San Francisco Chronicle article in 2010:

Did you ever imagine you could be held liable for copyright infringement for storing your music collection on your hard drive, downloading photos from the Internet or forwarding news articles to your friends?

If you did not get the copyright owner’s permission for these actions, you could be violating the law. It sounds absurd, but copyright owners have the right to control reproductions of their works and claim statutory damages even when a use does not harm the market for their works.

Besides these absurd restrictions on entirely harmless activities, the actual amount of money applied in damages for copyright lawsuits can reach blasphemous proportions. One file sharer was ordered to pay $2 million for illegally downloading 24 songs. That’s higher than many wrongful death lawsuits.

The problem here is simple: on this point, copyright law hasn’t been updated since the 1960s, when infringement was usually for widescale commercial purposes. In the same way that treating terrestrial radio as “free advertising” harkens back to a mindset from that era, treating piracy as anything but free advertising is economically and technologically backwards, at least for the music industry. According to a study from the BI Norwegian School of Management, pirates are 10 times more likely to buy music digitally. Another study by Columbia University found that peer-to-peer users purchase 30 percent more music than non-filesharers.

At least some actors within the entertainment industry seem to recognize this, which is why the creators of “Game of Thrones” rightfully responded to news their show is the most pirated on the Internet by being flattered.

Who benefits from these backward rules? Only industries with a pathological aversion to change, such as the film industry, which despite its constant alarmist rhetoric about piracy, is doing quite well, a couple bad summers notwithstanding. That industry’s reaction to the VCR, as well as its support of the totalitarian SOPA/PIPA legislation, should have shown the lengths to which it will go in order to avoid having to adapt. But in a world where freer copyright law gives us Shakespeare, and modern copyright law gives us Transformers 2, there is little doubt from whence the better art comes.

Some language in the final paragraph of this post was altered to reflect the film industry’s recent global financial performance.

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Lessons from Napa’s ‘winequake’

August 25, 2014, 7:22 AM

In the early hours Sunday morning, Northern California shook with the largest earthquake it has experienced since 1989. The South Napa Earthquake, as it is being referred to by the U.S. Geological Survey, was a magnitude 6.0 event that was felt as far as 150 miles from the epicenter. USGS estimates that within that radius “15,000 people experienced severe shaking, 106,000 people felt very strong shaking, 176,000 felt strong shaking, and 738,000 felt moderate shaking.”

Preliminary damage reports have prompted the declaration of a state of emergency by Gov. Jerry Brown. Dozens of people have been injured and electrical service has been interrupted in much of the area. In spite of the severity, given the quake’s location, much of the post-event coverage posted online has focused on piles of shattered wine bottles…

Unfortunately for those private homeowners with extensive wine collections, loss of their favorite vintage may not be covered by insurance. Damage caused by earth movement, like damage caused by flooding, is often excluded from standard homeowners coverage. Thus, in the case of the South Napa Earthquake, for those wine connoisseurs with only homeowners insurance, their wine likely will be an uncovered loss. Those more fortunate or prudent might have had their collection insured under a separate “all-peril,” itemized, floater policy.

In the end, earthquake coverage is a sensible proposition for the millions of Californians who live daily with heightened earthquake risk. It is easy to forget that five of the 10 most costly earthquakes to strike the U.S. took place in California. Yet, only a fraction of Californians own an earthquake policy.

The single largest writer of earthquake coverage in California is the California Earthquake Authority (CEA). The CEA is a publicly managed, privately funded, state residual market entity that was created after the Northridge earthquake to provide the coverage necessary to maintain the viability of the homeowners’ insurance market, since California mandates that companies that sell homeowners insurance also sell earthquake coverage.

Whether motivated by cost consciousness or obliviousness to the risk, according to Glenn Pomeroy, the CEA’s CEO, California’s current state of earthquake coverage is “not a rosy picture.” Only 11 percent of Californians with homeowners insurance have an earthquake policy, down from a high of 30 percent two decades ago.

The CEA provides a number of policies that range broadly in price and coverage options so that Californians of all walks of life can ensure their property is covered.

On the lower end, the CEA offers a base-limits policy. This product is designed to provide basic protection against earthquake damage. The policy will pay to repair or replace a dwelling – subject to a deductible – but it excludes some items from coverage such as pools, patios, fences, driveways and detached garages. Only covered, structural damage counts toward meeting the deductible. The base-limits CEA policy pays up to $5,000 to repair or replace personal property and provides $1,500 for any additional living expenses incurred if the home is uninhabitable while being repaired.

More recently, the CEA began offering a new “Homeowners Choice” product, which offers additional selections in coverage and more immediate policy benefits. The product allows a consumer to put together a more customized policy that allows for separate deductibles for the dwelling and the personal property within. Significantly, this policy offers insureds a choice of a 15% or 10% deductible for each coverage. Other coverages include $1,500 in coverage—subject to no deductible—for emergency repairs to protect the covered property from further damage, secure the residence premises, or restore habitability of the dwelling.

Many CEA participating insurers offer CEA’s higher coverage limits to their policyholders. For an additional premium, up to $100,000 in personal property coverage and $25,000 for Additional Living Expenses/Loss of Use coverage is available.

Homeowners in Napa with CEA policies who are currently picking through the remains of their wine collection might take heart. Provided their loss is substantial enough, unlike their neighbors with no such policies, they may be covered.

For other Californians, this could be a teachable moment on earthquake under-insurance. A lesson that they can put into practice immediately, since the CEA does not limit buying or selling CEA products in any way after an earthquake. For policy information, contact a participating insurer today.

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Mouth cancer facts

August 22, 2014, 10:58 AM

Baseball star Curt Schilling says he has mouth cancer that was caused by chewing tobacco. His announcement has generated considerable interest in mouth cancer, its frequency and causes.

What is mouth cancer?

Mouth cancer typically appears in the lining of the mouth; it may start as an ulcer or red area that is discovered in a dental or medical exam. The phrase is often used incorrectly to include cancers of the throat.

Schilling did not disclose the location of his cancer, but he did say that he found a lump in his neck. This indicates that the tumor had spread to a lymph node, a condition that more likely suggests a tumor of the throat, rather than the mouth.

How common is mouth cancer?

It is very rare. Mouth cancer occurs with higher frequency in people who have the risk factors I describe below, but it is possible for someone with no risk factors to develop this disease. As I described previously, among 100,000 men age 40 and over, perhaps three or four with no risk factors will develop mouth/throat cancer each year; only one or two of those cases will be mouth cancer.

What causes mouth cancer?

The most common cause of mouth cancer is smoking, which can increase risk tenfold; smokers who drink alcohol have even higher odds. Alcohol abuse raises the odds about fourfold.

Another recognized risk factor is infection with human papillomavirus, a sexually transmitted disease discussed previously. HPV is considered by some experts to be a significant cause of mouth cancer, but precise estimates of risk elevation are not available.

Schilling attributes his cancer to chewing tobacco. There are numerous studies of the risks related to smokeless tobacco. The odds of developing mouth cancer if you use chewing tobacco or moist snuff are about the same as if you didn’t smoke, drink or have HPV. In other words, one or two users out of 100,000 will develop mouth cancer.

Smoking and drinking can produce a cancer anywhere in the mouth, esophagus, voicebox and lungs. HPV is generally linked to cancers of the throat. In contrast, the most common location, by far, for mouth cancer in a smokeless tobacco user is at or very close to where the tobacco is placed, normally between the cheek and gum.

While rare, every case of mouth cancer is unfortunate and potentially avoidable. Have your dentist or physician perform a thorough head and neck exam every year.