Short Circuit: A roundup of recent federal court decisions

An eggregrious price fixing scheme, a tear gas accident, and a post-SWAT raid code inspection.

Please enjoy the latest edition of Short Circuit, a weekly feature from the Institute for Justice.

It would be a great victory for good food and good sense if two bills recently filed in the California and Arizona legislatures were passed into law, says IJ Reporting and Communications Associate Matt Powers. The bills would legalize mobile vending and food trucks, respectively, barring cities from imposing anticompetitive regulations while permitting local officials to address real health and safety issues. Read more here.

• Regulators erred, says the D.C. Circuit, in applying a Dodd-Frank rule requiring "securitizers" of asset-backed securities to retain 5 percent of the credit risk (so as to ensure they have skin in the game) to plaintiffs, who transfer such securities in the course of their business but do not originate or hold a stake in them. Thus, they cannot "retain" an interest, nor can the agencies require them to "obtain" one. Chevron deference does not apply because there is no ambiguity in the statute.
• Several egg producers adopt measures to improve living conditions for hens. But wait! Are the measures, which reduce output, just a pretext to raise prices? Several food companies: Indeed, it's an illegal price-fixing scheme that cost us $111 mil. District court: The food companies can and do buy from other producers. Case dismissed. Third Circuit: Reversed.
• Paraplegic man files 385 lawsuits in 306 days against Austin, Tex.-area businesses for failing to accommodate his accessibility needs. At a hearing, it emerges that his attorney provided him with a list of businesses to attempt to patronize and that he could not identify a single business he had sued and then revisited. Fifth Circuit: He can't pursue damages; no need to reconsider a contempt order against his attorney.
• A student suspended from university for sexual misconduct can sue the school for systematically discriminating against men in its adjudication process, says the Sixth Circuit. He can also sue a member of the university hearing panel (who served as investigator, prosecutor, and judge) for failing to act as a neutral arbiter by, for instance, claiming at the hearing that "I'll bet you do this all the time" and withholding the report detailing the evidence against him.
• Allegation: Officer orders Clarkston, Mich. pedestrian suspected of being suspicious to stop. The man continues walking and then runs after he's told he'll be cuffed. Thinking he made good his escape, the man lies down in a backyard; the officer catches up, punches him 15 to 20 times in the head. Sixth Circuit (over a dissent): Despite pleading guilty to pot possession and resisting arrest, the man can sue the officer for using excessive force.
• Toddler plays on stanchion in Chicago coffee shop while his parents focus their attention elsewhere. It upends; his finger must be amputated. Was the shop at fault? The Seventh Circuit says no; the parents' presence abrogated any duty of care Starbucks may have owed the child.
• Allegation: St. Louis SWAT team raids home. An hour later, a city building inspector demands that a resident, who is still cuffed, sign a consent-to-search form—or his family will be put out on the street and the home condemned. District court: The family can't sue the police. But they can sue the inspector and the city. Eighth Circuit: The family can't sue the inspector.
• A San Francisco law forbidding landlords from converting their rental properties into condos for 10 years, if they buy out two or more tenants in the same building first, satisfies rational basis review, says the Ninth Circuit.
• Jury: Tulsa, Okla. jail officer sexually assaulted underage inmate numerous times over several months. Tenth Circuit: The sheriff, by choosing to hold female juveniles in adult jail in an isolated area (in 23-hour a day confinement) with no surveillance cameras and often just one guard on duty, was deliberately indifferent to the risk. No need to reconsider the jury's $25k award.
• In wake of fatal Tulsa, Okla. police shooting, man posts messages to the police department's online complaint form asserting that officers and their families will be killed. Tenth Circuit: The messages were true threats and so not protected by the First Amendment.
• Displeased that flight attendants have ceased serving him alcohol and have asked him to stop touching them, passenger yells abuse, profanities for an hour and a half. He's convicted of intimidating flight attendants. Does the law violate his free speech rights? It does not, says the Tenth Circuit.
• To subdue agitated inmate in Draper, Utah prison recreation yard, officers drop tear gas. Yikes! The prison's ventilation intake is in the yard; gas gets pumped into the prison. Tenth Circuit: Qualified immunity.
• Tennessee state forensic scientists have a financial incentive to secure DUI convictions, says a Tennessee appeals court, as the $250 fee imposed on guilty motorists pays their salaries (and some of their positions were nearly cut in a recent budget crunch). Which violates due process.
• Former Florida felons who wish to have their voting rights restored must apply to a state board, which has unfettered discretion to reinstate them—or not. Plaintiffs: There is some evidence the board looks more favorably on white applicants and applicants who espouse conservative political views. District court: The state can permanently ban felons from voting, but if it allows for re-enfranchisement, the First Amendment says the restoration process can't be arbitrary (see, among other things, Citizens United). (H/t: Garrett Epps.)

In 2016, South Carolina legislators banned online eye exams, a safe and salutary innovation that makes obtaining prescriptions for corrective lenses more convenient and affordable. Written by lobbyists for optometrists, the law is not intended to protect the public; rather it's meant to protect optometrists from competition—which violates the state's constitution. So Opternative, an internet startup, teamed up with IJ to challenge the law. Last month, however, a state trial court ruled that the law—which was specifically enacted to outlaw Opternative—does not harm the company, and so the suit cannot proceed. We will appeal. Read more here.