Appellate Ruling Allows Betting
On Who Will Win Elections
A federal appeals court in Washington, D.C., cleared away legal obstacles last week to gamblers betting on next month’s election.
The court ruled that the Commodity Futures Trading Commission overstepped its authority by trying to block betting on the 2024 election.
The government agency that regulates the stock market argued betting could undermine the integrity of elections.
The ruling allows customers of prediction exchange platform Kalshi to bet on which political party will control the House and Senate after the election next month.
The appellate court, which upheld a lower court decision, said the betting was regrettable but still allowed under federal law.
“We are incredibly honored to bring safe, regulated, and trusted election markets to the U.S.,” Kalshi chief executive officer Tarek Mansour said in a statement. “This week is the dawn of a new era for financial markets.”
Kalshi is one of several exchanges handling hundreds of millions of dollars in private or public bets on who will win the election. Until now, the bets were managed through offshore markets or through exchanges that concealed their election gambling.
Kalshi is the first fully regulated election betting market. It allows bets as high as $100 million.
The exchange trades financial products through what it calls event contracts, which are the same as wagers on whether some future event will happen. In addition to elections, the contracts allow wagers on the number of SpaceX launches this year and which movies will be nominated to receive Oscar awards.
The CFTC said Kalshi’s wagers could be manipulated by crafty traders, which also could affect election outcomes. The agency argued in court last month that it could be turned into an “election cop” if the bets are legalized.
CFTC attorney Robert A. Schwartz said Kalshi eventually plans to allow bets on who will win presidential elections.
"If that happens, the harm to the public is going to be profound,” Schwartz told the appeals court.
He was joined in the warnings by Sen. Jeff Merkley, D-Ore., who said in a press release, "When big bets are cast on elections and dark money can smear candidates, you have the perfect combination of factors to destroy the integrity of our elections."
The court said there is no federal law that would support their objections.
“Ensuring the integrity of elections and avoiding improper interference and misinformation are undoubtedly paramount public interests, and a substantiated risk of distorting the electoral process would amount to irreparable harm,” wrote Judge Patricia Millett of the U.S. Court of Appeals for the District of Columbia Circuit. “The problem is that the Commission has given this court no concrete basis to conclude that event contracts would likely be a vehicle for such harms.”
The ruling left open a possibility the CFTC could succeed in another complaint, but only if it could demonstrate how the public is hurt by election betting.
A new ruling in favor of the CFTC “is not out of reach,” the three-judge panel’s decision said.
For more information, contact The Legal Forum (www.legal-forum.net) at email: tramstack@gmail.com or phone: 202-479-7240.
Democrats and Republicans Trade Insults
Over Legal Proceedings Against Rivals
Democrats and Republicans are accusing their rivals this week of using legal proceedings to undercut the credibility of top political candidates heading into next month’s election rather than to serve the interests of justice.
In one example, Donald Trump accused special counsel Jack Smith of trying to use a court filing in the former president’s election interference case to weaken his reelection campaign.
The filing is a rework of the indictment against Trump that alleges he illegally tried to overturn the 2020 presidential election that gave the victory to Joe Biden.
Trump lied to the public, election officials, and the vice president to hold on to power after losing the election, prosecutors alleged in the 165-page filing.
"When the defendant lost the 2020 presidential election, he resorted to crimes to try to stay in office," the filing said. "With private co-conspirators, the defendant launched a series of increasingly desperate plans to overturn the legitimate election results in seven states that he had lost."
When his lawsuits to change the election results failed, he turned to violence by trying to incite his supporters to storm the Capitol on Jan. 6, 2021, the new indictment says.
"The defendant also knew that he had only one last hope to prevent Biden's certification as President: the large and angry crowd standing in front of him. So for more than an hour, the defendant delivered a speech designed to inflame his supporters and motivate them to march to the Capitol," Smith wrote.
Trump called the revised indictment a "politically motivated manifesto."
Smith resubmitted the indictment to comply with a Supreme Court ruling that said presidents were immune from prosecution for their “official acts” but not their unofficial acts.
In another example, Democrats are firing back over a House Oversight and Accountability Committee subpoena that seeks information on any connections vice presidential candidate Tim Walz might have with the Chinese Communist Party.
Walz taught in China in 1989 and has led about a dozen high school field trips there. He has been a critic of China’s human rights policies.
Committee Chairman James Comer, R-Ky., is seeking information from the Department of Homeland Security about Walz's China ties. It is based on internal communications raising concerns about Walz’s friendly relations with the Chinese.
The subpoena gives Homeland Security director Alejandro Mayorkas until Monday to turn over the requested information to the committee.
Rep. Jamie Raskin, D-Md., the committee’s ranking member, said in a statement, “What do you know, it’s the eve of the vice-presidential debate, and Chairman Comer has apparently been assigned another flotsam and jetsam errand from the GOP’s political smear barrel.
He said the subpoena represented “classic boomerang ‘bombshell’ accusations.”
For more information, contact The Legal Forum (www.legal-forum.net) at email: tramstack@gmail.com or phone: 202-479-7240.
Supreme Court to Hear Nuclear Energy Case
To Decide Where Wastes Can Be Stored
The Supreme Court agreed last week to review a plan for storing as much as 40,000 tons of radioactive nuclear plant waste at a temporary site in west Texas.
The case is likely to provide a pivotal decision on how to handle the nation’s nuclear waste.
A lower court ruled the Nuclear Regulatory Commission lacked authority to grant licenses for temporary storage of the waste.
The Fifth U.S. Circuit Court of Appeals said only Congress could decide where to put it after fueling nuclear generators. So far, the waste has been stored mostly on-site at power plants.
The Nuclear Regulatory Commission granted the Texas license to government contractor Interim Storage Partners LLC.
Congress has authorized a single national storage site at Yucca Mountain in Nevada but the plan stalled in the face of local opposition. The mountain would offer a relatively inexpensive way of storing the waste but Nevada residents say the safety risks from the radioactivity mean they do not want it in their state.
The closest nuclear waste storage sites near Washington, D.C., are at Calvert Cliffs in Maryland and Surry in Virginia.
Meanwhile, the Government Accountability Office reported in September 2021 that the U.S. government had spent about $9 billion on radioactive waste storage over more than 40 years with the bill rising annually as nuclear power continues to provide electricity for the nation’s grid.
“Experts told us a variety of actions are needed to move ahead, including authorization of a new effort to determine where a disposal facility should be located and the development of a management strategy,” the GAO reported.
Much like Nevada residents, people living near the proposed site outside Andrews, Texas, sought assistance from their state’s attorney general to oppose the temporary facility in the oil-rich Permian Basin.
Texas’ attorney general and environmentalists relied during their arguments before the New Orleans-based Fifth Circuit on a precedent from a 2022 Supreme Court ruling that defined the scope of administrative agency authority.
The Supreme Court said Congress must specifically describe the authority it is giving agencies before they can regulate issues of major national significance.
The Nuclear Regulatory Commission argued that it has authority to handle nuclear waste dating back to the 1954 Atomic Energy Act. The authority has consistently been upheld in other court decisions and by presidential administrations, the agency’s attorneys said.
The Fifth Circuit said disposing of nuclear waste is a “major question” that Congress must explicitly authorize for the Nuclear Regulatory Commission.
Congress has not yet done it, the appellate court said. As a result, the Nuclear Regulatory Commission’s license for Interim Storage Partners is invalid.
The cases are U.S. Nuclear Regulatory Commission et al. v. State of Texas et al. and Interim Storage Partners LLC v. Texas et al., both in the U.S. Supreme Court.
For more information, contact The Legal Forum (www.legal-forum.net) at email: tramstack@gmail.com or phone: 202-479-7240.
D.C. Council Limits Eviction Protections
For Residents in Affordable Housing
The District of Columbia Council approved emergency legislation last week that removes pandemic-era apartment eviction protections in an effort to save landlords from catastrophic losses.
Some of Washington’s affordable housing complexes are nearing bankruptcy after being prevented from evicting tenants who have not paid their full rent.
As the COVID-19 pandemic led to layoffs and personal finance crises, the D.C. Council approved the Emergency Rental Assistance Program, which subsidized rent payments of affordable housing tenants and created procedural barriers for landlords in evicting them.
The legislation last week rolls back much of the Emergency Rental Assistance Program.
Tenants will no longer be able to self-certify their eligibility for the program.
In addition, judges no longer will be allowed to repeatedly delay eviction proceedings if a tenant has an Emergency Rental Assistance Program application pending. Instead, judges would be limited to granting one delay but only if tenants can show they are enduring an emergency.
Unpaid rent owed to affordable housing landlords has increased from $11 million in 2020 to $100 million this year, according to figures from the mayor’s office. About 14 percent of Washington’s residents live in rent-controlled apartments classified as affordable housing.
If the upward trend continues to $147 million next year, a city administration analysis shows some apartment buildings will face foreclosure, meaning low-income residents who live in the affordable housing units will be forced out with few alternatives.
Landlords complained to the city council they already are struggling to pay their own bills as well as maintain their properties according to local housing codes.
“While this is a first step in rebalancing the affordable housing ecosystem, we hope that people now recognize the consequences of non rent payment and the impact on the maintenance, safety, security and production of rental housing in the District,” Mayor Muriel Bowser said in a statement.
The D.C. Council is using money from the city’s Housing Production Trust Fund to help affordable housing landlords avoid foreclosure.
Bowser acknowledged that a permanent fix for low-income housing remains elusive.
“One of the biggest things that we have to do is we have to send a signal to the private sector that invests with us that D.C. is a great bet,” Bowser said. “And what the private sector is saying about us now is that people don’t pay rent here — we’re not a safe bet. So we have to balance our system.”
For more information, contact The Legal Forum (www.legal-forum.net) at email: tramstack@gmail.com or phone: 202-479-7240.
Crowell & Moring Will Not Get Refund
For Rent Paid During COVID Shutdown
Law firm Crowell & Moring lost out last week in its lawsuit to recover $30 million it paid in rent on its downtown Washington, D.C., office while most of its employees worked from home during the worst of the COVID-19 pandemic.
The firm cited the mayor’s COVID-related public safety orders severely limiting law firms and other non-essential businesses from working in office buildings to slow the spread of the virus.
Crowell & Moring argued in D.C. Superior Court that its lease grants rent abatements when the firm loses “use and enjoyment” of its office at 1001 Pennsylvania Ave. NW and access of its workers is interrupted.
It wants a refund for rent it paid landlord TREA 1001 Pennsylvania Avenue Trust from April 2020 and May 2021.
The firm said its use of the building was “curtailed, interfered with and interrupted” while 95 percent of its staff worked remotely.
The landlord was represented by Seyfarth Shaw LLP, which argued that the decision not to use its Washington, D.C., office was made by Crowell & Moring’s top management, not by The TREA 1001 Pennsylvania Avenue Trust.
Judge Donald Tunnage agreed with Seyfarth Shaw, saying in his decision, "There are no set of facts, nor is there a contention from the plaintiff, that any portion of the premises was physically unavailable to it.”
In addition, Crowell's landlord never denied “prompt access” to the office space, Tunnage said.
A Seyfarth Shaw statement after the court decision said, "The lease provided for a narrow right of abatement, and the undisputed facts showed that Crowell & Moring did not satisfy its requirements."
The case is Crowell & Moring LLP v. The TREA 1001 Pennsylvania Avenue Trust in the Superior Court of the District of Columbia.
For more information, contact The Legal Forum (www.legal-forum.net) at email: tramstack@gmail.com or phone: 202-479-7240.