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Atlanta, GA – The Department of Justice (The Trump DOJ) under President Donald Trump must have been directed by the POTUS to do anything to work against the business of Oakland Mayor Libby Schaaf in the wake of her latest defiance of the horrible ICE Raids set to happen this weekend. How else to explain why the DOJ would weigh into the City of Oakland’s lawsuit against the Raiders legally-flawed attempt to leave Oakland for Las Vegas?
But The Trump DOJ did, and in so doing, entered an opinion that, when compared to legal precedent, comes off as completely stupid.
The Trump DOJ claim is this: “The United States files this statement to explain that tax revenues lost by governmental entities are not recoverable under the Clayton Act as injury to “business or property.” Such expansive recovery would be contrary to the language of the statute and to precedent, and could lead to anticompetitive effects from over-deterrence. The United States believes its participation in the scheduled hearing for pending motions would be useful to the Court and respectfully requests the opportunity to make an oral argument.”
Obviously, The Trump DOJ failed to conduct even a junior level of analysis of legal precedent in its opinion, let alone actually took a good read of The Clayton Anti-Trust Act itself. Had it done so, as this blogger did, The Trump DOJ would have quickly learned that the courts have constantly recognized that cities and municipal governments could claim tax revenue losses as the result of alleged violations of the Clayton Anti-Trust Act – it just had to prove them.
First, The Clayton Anti-Trust Act reads: Any person who shall be injured in his business or property by reason of anything forbidden in the antitrust laws may sue therefor . . . and shall recover threefold the damages by him sustained, and the cost of suit, including a reasonable attorney’s fee.15 U.S.C. § 15.
Second, courts explain that the Racketeer-Influenced Corrupt Organizations Act (RICO) is like the Clayton Act in that both hold punishments for corporations that violate anti-trust law and reads: “Any person injured in his business or property by reason of a violation of section 1962 of this chapter may sue therefor in any appropriate United States district court and shall recover threefold the damages he sustains and the cost of the suit, including a reasonable attorney’s fee.”
Thus, a RICO case pointing to losses in tax revenue collection can be used as evidence where The Clayton Act is concerned.
City of Miami v. Wells Fargo Is Instructional
In the “motion to dismiss” opinion brief for the City of Miami’s lawsuit against Wells Fargo Bank and Bank of America (where Miami claimed that it lost tax revenue due to the banks redlining actions) the court wrote:
“The impact of the Banks redlining can readily be identified at a citywide or neighborhood level, so even if there were not “something very close to a 1:1 relationship,” the City has plausibly explained how it will calculate damages in a reasonably precise way…the City has adequately pled proximate cause when it comes to its tax-base injury because the Banks’ redlining and reverse-redlining practices bear some direct relation to the City’s fiscal injuries. There is a logical and direct bond between discriminatory lending as a pattern and practice applied to neighborhoods throughout the City and the reduction in property values.”
The motion to dismiss was rejected, and the case remanded for trial.
There are many examples of cities successfully claiming lost tax revenues due to violations of the Clayton Anti-Trust Act. The Trump DOJ has not shown any true and reasoned research. For example, the The Trump DOJ focuses on the Hemi Case, or Hemi Group, LLC v. City of New York, LLC, 559 U.S. 1 (2010). Pl. Opp. At 10. In so doing, the Trump DOJ perhaps deliberately ignored that the case allowed for the recognition of a cities loss of tax revenues.
When the Supreme Court ruled against the City of New York in the Hemi case, it was not because there was not a connection between illegal corporate actions of Hemi Group LLC and lost tax revenue, only that the City of New York did not adequately prove there was tax revenue lost in that case by any action other than alleged failure of residents to pay taxes. The Raiders case is entirely different.
As SCOTUSBLOG noted “Twenty states joined an amicus brief in support of the City, arguing that state and local governments depend on civil RICO suits as a critical, albeit limited, tool to remedy tax evasion and fight public corruption.”
In the case of the planned Oakland Raiders stadium, there were obvious economic impacts to be gained by its construction and operation, and all produce tax revenues that were lost.. In the case of the Raiders Oakland Coliseum Stadium Plan that Mark Davis asked me to create, Oakland and Alameda County were set to gain as much (and under some scenarios more) than $115 million in annual tax revenue from the completed and operationals Oakland Coliseum Stadium and Coliseum City Development.
However, the Oakland Raiders did not work in good faith with the City of Oakland, and in the process violated the NFL Relocation Bylaws, which the Missouri Supreme Court has found to be a true contract, and not a policy directive, as the Rams and the NFL had asserted.
Even NFL Commissioner Roger Goodell said the Oakland Raiders deserve some of the blame for the fact that they do not have a Raiders Stadium deal in Oakland:
But, that aside, for the Trump DOJ to wade into this matter is, in itself, questionable. There’s no legally pathbreaking reason for the Trump DOJ to stick its figurative nose into this business. The only plausible reason has to be connected to President Trump’s animus for Oakland Mayor Libby Schaaf’s opposition to his stomach-turning immigration actions. Even then, the Trump DOJ’s effort was plainly intellectually piss-poor, to say the least.