Is Elon Musk Trying to Protect Alex Jones's X Accounts?

There's a fascinating development in the Alex Jones Chapter 7 case.  Jones ended up in bankruptcy to try to avoid paying on the defamation judgment the Sandy Hook victims' families won against him. His case converted to a Chapter 7, and a trustee has been liquidating his assets. Among the assets the trustee is trying to sell are Jones's social media accounts in X (formerly Twitter). 

X has since filed an objection to the sale claiming that the X accounts are not the property of Jones, but are instead owned by X, which merely issued Jones a non-transferable license.  Now this "limited" objection is only about the "accounts" proper, not the content Jones posted on X. X claims that it is objecting because of it has an interest in preventing the transfer of accounts because of its concern about making sure that users are who they say they are.

X's professed concern about fake accounts is risible. X does not generally verify its users when it onboards them. Nor does X appear monitor in any way to determine if an account has in fact been transferred. Instead, X is a platform that is lousy with fake accounts and bots. So what's this really about?

As far as I can tell, the X objection to the sale is about Elon Musk wanting to ensure that Alex Jones can continue to use his Twitter handles and retain his followers and make it very difficult for anyone to delete or edit Jones's old posts.

Can Trump Fire the Fed Chair? Some Legal Realism

Fed Chair Jerome Powell has tersely indicated that he won't resign if asked by the President and that he cannot be fired or demoted. Peter Conti-Brown, who is a keen observer of Fed issues, has a nice summary of the state of the law. The basic idea is that as a formal legal matter, members of the Federal Reserve Board are removable by the president "for cause," such as inefficiency, neglect of office, and malfeasance. It's less clear if the President can demote the Chair to a mere Board member and, if so, what would be the standard for demotion, but it would seem strange that the greater cannot include the lesser. 

But here's the thing:  none of the legal rules matter. 

Unfair and Abusive Automatic CD Rollovers

Earlier this month the FTC finalized its “Click-to-Cancel” Rule to make it easier for consumers to get out of recurring subscriptions and memberships. The rule was promulgated under the FTC’s power to prohibit unfair and deceptive acts and practices in commerce, but the FTC’s jurisdiction under that power does not extend to banks, and banks have an auto-renew product that is in some instances much more problematic than automatic subscription renewals. What I’m talking about are automatic CD rollovers, which are sometimes done in an unfair and abusive way to rollover unsuspecting depositors into way-below-market-rate CD terms.

OCC Preemption Brief Regarding the Illinois Interchange Statute

Earlier this year Illinois passed a law that provides that “

an issuer, a payment card network, an acquirer bank, or a processor may not receive or charge a merchant any interchange fee on the tax amount or gratuity of an electronic payment transaction if the merchant 

informs the acquirer bank or its designee of the tax or gratuity amount as part of the authorization or settlement process for the electronic payment transaction.

” The statute defines interchange fees as "a fee established, charged, or received by a payment card network for the purpose of compensating the issuer for its involvement in an electronic payment transaction." In other words, no interchange fees may be levied on taxes or tips.

 

Compliance with the statute would be an administrative and technological hot mess for card networks. Not surprisingly, the banking industry has challenged the law, and the OCC has weighed in with an amicus brief.  I’m not going to address the policy merits of the Illinois statute here. Instead, my interest is the National Bank Act preemption analysis in the OCC’s brief. Although I think the OCC gets the preemption analysis correct in the end, it makes a concerning claim on the way. 

 

If You're Gonna File in Texas, You Gotta Have Your Votes in Hand

J&J’s at it again with a third talc bankruptcy filing, this time in SDTX.  To paraphrase Marx, the first time was tragedy, the second time farce, and now the third time is fubar. 

Why fubar? tl;dr is that J&J's betting the case on the purported authority of a small Mississippi plaintiffs' firm to unilaterally change the votes of its joint clients from "no" to "yes". 😮🤯

Elon's Brazilian Corporate Law Surprise

Elon Musk has just learned that Brazil doesn't give a lot of credence to the fictions of corporate asset partitioning:  affiliated companies can be liable for each other's involuntary obligations.  This shouldn't be a surprise; Mariana Pargendler's work has made clear that Brazil's got a very different approach to corporate law than the US. In particular, limited liability isn't so strongly fetishized. Now if we only had some sort of legal doctrine in the US that ignored limited liability...