Actual Malice In Orange County V. Mcgraw Hill

ACTUAL MALICE IN ORANGE COUNTY By David Arthur Walters “I am ready to concede that the rule of adherence to precedent, though it ought not to be abandoned, ought to be in some degree relaxed. I think that when a rule, after it has been duly tested by experience, has been found to be inconsistent with the sense of justice or with the social welfare, there should be less hesitation in frank avowal and full abandonment.” The Nature of the Judicial Process, Benjamin N. Cardozo THE COUNTY OF ORANGE V MCGRAW HILL According to the much maligned credit rating agencies who stand accused of grossly overrating pools of subprime mortgages that were bound to go stagnant and perhaps wind up being dumped on the taxpayer as toxic waste, the U.S. District Court’s Order in the case of County of Orange v. McGraw Hill Companies, 245 B.R. 151 (1999), a suit originally brought for breach of contract and professional negligence, lends some credence to the notion that credit rating agencies have a Constitutional right to breach contracts and engage in professional negligence with impunity providing that “actual malice,” i.e. knowledge of falsity or reckless disregard of the truth, is not somehow implied by the Court. The Court’s Order appertained to McGraw Hill’s motion for summary judgment in its favor against Orange County. That is, McGraw Hill wanted

the judge to throw out the case on the basis that there were no questions or genuine issues of material fact that would lead a jury to decide against it, meaning that the matter should not even be tried. Orange County had hired McGraw Hill’s Standard and Poor’s to rate its bonds, and in its suit alleged that not only had S&P breached its contracts with the County but had negligently performed its rating services, overrating the bonds, knowingly and recklessly ignoring the fact that the 1993 and 1994 bonds were unsound, giving rise to tort or noncontractual wrong liability by virtue of the fact that the high ratings permitted the County’s Treasurer, Robert Citron, and his assistant, Matthew Raabe, to misrepresent the safety of the County’s portfolio to County auditors, which allowed them to make risky and imprudent bets on interest rates. If only S&P had disclosed the facts and risks it was well aware of, claimed the County’s lawyers, the County would have taken action to avoid the heavy losses that it had suffered. But S&P claimed it was protected under the ‘actual malice’ standard set forth in the groundbreaking defamation case, New York Times v. Sullivan, 376 U.S. 254 (1964), where a police commissioner thought he was defamed by a paid editorial. Prior to that decision, the Supreme Court gave little truck to the perverse notion that defamation was protected in any way by the First Amendment – exactly what defamation of public officials has to do with flattering a government agency’s Investment Pool with high ratings we shall address later.

S&P contended that the County’s suit was an “unprecedented assault on speech by the source of the very information complained of,” and said the suit was extraordinary because the Securities and Exchange Commission “specifically found the County made affirmative misrepresentations to rating agencies,” noting that Mr. Citron had pleaded guilt to “public deception” and that his assistant Mr. Raabe had been “convicted of felonies.” The culprits named had not personally enriched themselves at County expense, but had participated in an investment scheme allegedly promoted by Merrill Lynch, involving interest rate bets that would hopefully allow them to produce more than enough interest income to meet the County’s budgetary requirement for same – 12% of the County’s revenues, in comparison to an average 3% for other counties, was the norm for interest income for Orange County. They employed funds from the Orange County Investment Pool to invest in derivatives and high-yield bonds, and they borrowed funds and used the borrowings to borrow even more money. The strategy included reverse purchase agreements, the purchasing of securities with an agreement to resell them at a high price at some future date, a device that is in effect a loan of a security for a specific rate of return. In sum, they were borrowing billions of dollars, $2 for every $1 in the Pool, to bet that interest rates would remain low or go down, a strategy sophisticated traders call “borrowing short to go long.” Starting with $7.6 billion in the Pool, they ran it up to $20.6 billion in

1994. At one point they had to hide $80 million in interest in an inappropriate account because, if they had paid it over to the government entities participating in the Pool, the participants would know they were gambling. Unfortunately for Orange County, the Federal Reserve Bank was not in on the scheme, and interest rates were raised. As the value of County’s securities fell, the County could not meet calls for more collateral, so it took a highly unusual move for a county, and filed Chapter 9 bankruptcy on December 6, 1994. The charges brought against the malefactors were related to the inappropriate transfers of funds between government entities and filing of false reports. Mr. Citron, a Democrat whom voters both Democrat and Republican had kept in office for 24 years because they were more than pleased with his fiscal performance, entered into a plea agreement. He was fined $100,000, and sentenced to 5 years probation and 1,000 hours of community service – he served in a prison commissary for 9 months while under house arrest. During the plea bargaining, his lawyer said Mr. Citron had been suffering from dementia for years. Mr. Citron’s testimony indicated he did not know a derivative from a hole in the ground. He blamed his assistant, Mr. Raabe, and Merrill Lynch for the fiasco, claiming that Merrill Lynch had told him the investments were perfectly safe. Mr. Raabe was convicted of five felony counts by a jury, paid a fine of $10,000 and was sentenced to 3 years in prison by Judge Everett Dickey, who said he wanted to send a message to public officials, that they will go to prison for misconduct. Mr. Raabe

was the only one who served time in prison. He served 41 days before he was released pending his appeal. The conviction was overturned on appeal; the district attorney dropped the charges and refunded the $10,000 fine. Mr. Raabe passed the buck along and claimed that former county budget director Ronald S. Rubino had masterminded the scheme. Mr. Rubino was convicted of one charge of falsifying documents in a plea deal that followed a trial where the jury was deadlocked 9:3 in favor of his acquittal. The charge was reduced to a misdemeanor and he was sentenced to 100 hours of community service and 2 years unsupervised probation. Now the Court in our Orange County case believed that all this damning personal information, although it might be considered by a jury, did not obviate the possibility that there might be a genuine issue of material fact at stake; to wit, a reasonable jury might conclude from circumstantial evidence that S&P knew of the falsity of its ratings for the 1994 debt; however, the same could not be said of the 1993 debt, so the Court granted summary judgment in favor of S&P on 1993 debt but refused to grant it on the 1994 debt: “The County contends S&P learned, during the analysis of the County’s proposed 1993 and 1994 offerings, that County Treasurer Robert Citron was ‘engaged in a harrowing investment strategy, using massive amounts of leverage and exotic derivative securities to bet the public funds under his control on inherently unpredictable interest rates.’ The County

states S&P was, by its own admission, uncomfortable with the Treasurer’s investment strategy…. The County points out S&P’s chief economist was predicting in March 1994 that interest rates would rise, thus the County contends S&P knew the County’s investment strategy, which depended heavily on interest rates remaining low, was in trouble.” Further, “The County presents evidence, in the form of depositions and declarations, that S&P was aware Mr. Citron’s investment practices became increasingly risky in 1994.” Moreover, “The County submits handwritten notes taken by S&P personnel during a May 9, 1994 conference” showing that calls for collateral were rising along with losses, and that disclosure of the situation would lead to “disaster.” As for the 1993 offerings, the Court held that “a reasonable jury could not conclude by the necessary standard that S&P knew of a high degree of probably falsity when it rated the County’s 1993 debt…. (T)he evidence shows the County’s track record for repaying its debt had been good to that point. Citron’s strategy, however reckless in hindsight, was earning high yields…. Interest rates had not yet risen to the point where assigning a top rating…rose to a level of ‘high degree of awareness of…probable falsity.’” McGraw Hill wound up settling the case in 1999 for a measly $140,000 – other defendants, including brokerage, accounting and law firms, in the Orange County bankruptcy fiasco would up paying $860.7 million. The Merrill Lynch, of course, admitted no wrongdoing and said it merely wanted to defray legal expenses when it agreed to pay a settlement of $400

million. As for the paltry $140,000, perhaps the presence of the “actual malice” standard, a concept normally applied in defamation cases brought by public figures, where success is usually rewarded with paltry sums such as $1, had diminished the County’s chances of a substantial award in this case of flattery. PRESS PRIVILEGE Of course we are not surprised that credit rating agency lawyers enjoy citing the upholding of the “actual malice” standard in the Orange County case. For instance, “the court in County of Orange v. McGraw Hill Cos., Inc., 245 B.R. 151, 156 n.4 (C.D. Cal. 1999), applied ‘actual malice,’ the heightened pleading standard of the First Amendment, to claims against S&P, concluding that ‘Standard & Poor’s ratings are [protected] speech.’ (‘Constitutional Analysis of the Staff Outline Of Key Issues For A Legislative Framework For The Oversight And Regulation Of Credit Rating Agencies,’ Prepared by Cahill Gordon & Reindel LLP on behalf of Standard & Poor’s, a division of The McGraw-Hill Companies, Inc.) Naturally the credit rating agencies would fain cite select legal opinions that would provide them with a “press shield” that would protect them from being penalized for irresponsible behavior that could and finally did lead to catastrophic consequences to the general public. Whether such armor would protect any wandering knight who cares to identify himself as a member of the press is a good question, especially with the advent of Internet blogjournalism. Any attempt to define a bona fide press,

i.e. a press legally responsible for the maintenance of certain standards in order to enjoy certain privileges and immunities, would be tantamount to licensure and censorship, no doubt contrary to the notion of a free press. The U.S. Supreme Court has not definitively determined that the institutional press generally enjoys any greater privileges than anyone else, although the press was accorded special mention in the Constitution inasmuch as the revolutionary press was the chief disseminator of anti-British or unpatriotic political speech at the time, much of it, by the way, prejudicial, spurious and scurrilous. In any case, an ethical First Amendment should not give a publisher a right to break contracts and otherwise trample on everyone else’s rights with impunity. The U.S. Supreme Court said as much in Cohen v Cowles Media Co., 501 U.S. 663, holding that “the publisher of a newspaper has no special immunity from the application of general laws. He has no special privilege to invade the rights and liberties of others.” That judicial opinion was cited by the District Court in Orange County v. McGraw Hill in support of its opinion that McGraw Hill could not claim a special privilege to breach its contract or negligently perform its rating service because it said it was a publisher entitled to the application of the “actual malice” doctrine. The Court noted well that the U.S. Supreme Court had held that publishers are not automatically entitled to First Amendment protection, for the First Amendment was written to guarantee freedom of expression by anyone who cares to express

themselves, hence publishers do not enjoy any special immunity to use that freedom to invade the rights and liberties of others. Wherefore the Court had stated in a March 18, 1997 Order that “the question is not whether the defendant is a publisher but whether the cause of action impacts expression.” That is, what impact would a decision in a case have on the constitutional right to free speech? We might well reason that speech is speech, and that a publisher is anyone who publishes a statement. The First Amendment does not seem to expressly provide anyone with a right to publish defamatory statements, that is, statements that are false and are injurious to the reputation of their subject. However, the highest court in the land, employing its inherent Constitutional power to interpret the Constitution and its Amendments as the majority of the Court sees fit, created the 1964 doctrine of ‘actual malice’ which generally grants publishers Constitutional immunity for speaking freely about certain public persons even if the statements are factually false and are injurious to those persons, providing that the speech is not knowingly or recklessly made by its publisher, something the publisher would no doubt deny until doomsday if so accused. In the Orange County case, the Court followed suit and said that, to give publishers some breathing space so it is not unduly hampered, “the First Amendment requires, in respect to statements about public figures, that a publisher will not incur liability for a false statement unless the statement was made with ‘actual malice’, i.e. “with knowledge that the

statement was false or with reckless disregard for whether or not it was true.” With all due respect to the Court, the First Amendment says no such thing; it states: “Congress shall make no law respecting an establishment of religion, or prohibiting the free exercise thereof; or abridging the freedom of speech, or of the press; or the right of the people peaceably to assemble, and to petition the Government for a redress of grievances.” The constitutional clause does not state that “Congress shall make no law…abridging the freedom of speech, or of the press…but since it would be unconscionable in this context for that freedom to expressly include slander and libel, judges shall make a preferential law that allows for the defamation of the character of public figures, whether or not they are public officials and including sizeable commercial organizations, provided that the slandered or libeled party cannot prove that the defamatory statements were made with knowledge of their untruth or with a reckless disregard of the truth, in which case such statements would be treated as if they were actually maliciously conceived even if malice aforethought is impossible to prove, and furthermore, when the cause of action is not the defamation of a public figure but rather an injury to someone due to the flattery of a public figure, the same privilege shall be accorded to untruths in order to provide truth with some erroneous breathing space, figuratively speaking, et cetera.” ACTUAL MALICE

If only the credit rating agencies were registered investment advisors they would be subject to stringent securities regulations over expert advisors and might be held liable for negligent and misleading advice couched as mere opinion. All three of the major credit rating agencies are registered with the Securities and Exchange Commission under the Investment Advisers Act of 1940, which prohibits fraud, imposes fiduciary duties on advisers, requires that advisers maintain certain books and records, and allows the SEC to examine all registered advisers to assure compliance with the Act. But the officially designated raters believe their status as “nationally recognized statistical rating organizations” exempts them from such regulations. Indeed, the legal application of the Investment Advisers Act to the credit rating agencies is doubtful. To be designated as NRSROs, the agencies agree to voluntarily register, yet they argue they are not covered by the Act, and claim that any information they provide to the SEC is only provided on a voluntary basis, and not pursuant to the requirements of the Act. That Act, in defining investment advisers, contains an exception for publishers [15 U.S.C. § 80b-2(a)(11)(D)] exempting publishers of “any bona fide newspaper, news magazine or business or financial publication of general and regular circulation” from coverage of the Act. The credit rating agencies are at least arguably entitled to that particular exception to the Investment Advisers Act, and the courts seem to be buying their argument in respect to the Act. Such an exception from liability provides an incentive to negligence and deception for those whose main

concern is with making a profit by any legal means. If the exception holds true, could the so-called bona fide publisher be held accountable notwithstanding the Investment Advisers Act? When confronted by lawsuits, they contend their ratings are mere opinions protected by the First Amendment, and invoke the “actual malice” standard. “Actual malice” is a term ordinarily applied to defamation cases when public figures are impugned. Orange County did not sue McGraw Hill for defamation, which would be understandable if the McGraw Hill’s rating agency had underrated and thus disparaged the County’s creditworthiness. Rather, the County’s creditworthiness had been gross overrated. We are not aware of a case where an individual has sued a publisher for flattery. Of course, flattery can sometimes do a great deal of public harm, and has even brought down kingdoms. “Although these issues traditionally arise in libel or defamation actions, the actual malice standard applies to other causes of action when the plaintiff seeks compensatory damages from allegedly false statements,” the Court declared. “Actual malice” is chiefly applied in defamation cases brought by public figures where there may have been no malicious intent in the mind of the speaker yet his statements may still be treated as if he intended ill provided that he knew they were false or had recklessly disregarded the truth. Since that might be almost as difficult to prove as malicious intent, critics say it gives “breathing room to lies,” “refuge to falsifying scoundrels” “scoop-minded

incompetents” and “lazy reporters and editors.” The Supreme Court in New York Times v. Sullivan had considered precedents and concluded that there must be ample room for error in order for truth to flourish hence it came up with the actual malice standard. We observe here that New York Times v. Sullivan had nothing to do with the flattery of a government agency by overstating its creditworthiness, but rather involved a suit for libeling a government official. Mr. L. B. Sullivan brought a civil libel action against the four individual petitioners, who were Negroes and Alabama clergymen, and against petitioner the New York Times Company. Mr. Sullivan, who was one of the three elected Commissioners of the City of Montgomery, Alabama, testified that he was Commissioner of Public Affairs, and that his duties were supervision of the Police Department, Fire Department, Department of Cemetery and Department of Scales. He claimed, recounted the Court, that he had been “libeled by an advertisement in corporate petitioner's newspaper, the text of which appeared over the names of the four individual petitioners and many others. The advertisement included statements, some of which were false, about police action allegedly directed against students who participated in a civil rights demonstration and against a leader of the civil rights movement; respondent claimed the statements referred to him because his duties included supervision of the police department.” The trial judge instructed the jury that such statements were libelous per se:

“The trial judge instructed the jury that such statements were libelous per se, legal injury being implied without proof of actual damages, and that, for the purpose of compensatory damages, malice was presumed, so that such damages could be awarded against petitioners if the statements were found to have been published by them and to have related to respondent. As to punitive damages, the judge instructed that mere negligence was not evidence of actual malice, and would not justify an award of punitive damages; he refused to instruct that actual intent to harm or recklessness had to be found before punitive damages could be awarded, or that a verdict for respondent should differentiate between compensatory and punitive damages. The jury found for respondent, and the State Supreme Court affirmed.” However, the Supreme Court disagreed with the “state action below” i.e. the state court’s ruling, in regards to the presumption of malicious intention to obtain compensatory damages. “The present advertisement, as an expression of grievance and protest on one of the major public issues of our time, would seem clearly to qualify for the constitutional protection. The question is whether it forfeits that protection by the falsity of some of its factual statements and by its alleged defamation of respondent.” The Court held that The New York Times was protected by the First Amendment when it published the editorial advertisement. “HELD: A State cannot, under the First and Fourteenth Amendments, award damages to a public official for

defamatory falsehood relating to his official conduct unless he proves "actual malice" -- that the statement was made with knowledge of its falsity or with reckless disregard of whether it was true or false.” The presence of actual malice is a question of law rather than fact. "The question whether the evidence in the record in a defamation case is sufficient to support a finding of actual malice is a question of law." Milkovich v. Lorain Journal Co., 497 U.S. 1, 17 (1990) (quoting Harte-Hanks Communications, Inc. v. Connaughton, 491 U.S. 657, 685 (1989)” Turning to the Connaughton case, we find: “A showing of ‘highly unreasonable conduct constituting an extreme departure from the standards of investigation and reporting ordinarily adhered to by responsible publishers’ cannot alone support a verdict in favor of a public figure plaintiff in a libel action. Rather, such a plaintiff must prove by clear and convincing evidence that the defendant published the false and defamatory material with actual malice, i.e., with knowledge of falsity or with a reckless disregard for the truth…. A reviewing court in a public figure libel case must "exercise independent judgment and determine whether the record establishes actual malice with convincing clarity" to ensure that the verdict is consistent with the constitutional standard set out in New York Times Co. v. Sullivan, 376 U. S. 254, and subsequent decisions.” So it was with ample precedents in mind that the court in the Orange County case stated: “The Court has ruled on multiple occasions that the actual

malice standard applies to any professional negligence claim concerning S&P’s protected speech.” “This Court has previously held the First Amendment protects S&P’s preparation and publication of its ratings.” “Actual malice is a subjective standard…. A ‘reckless disregard’ for the truth…requires more than a departure from reasonably prudent conduct…. Failure to investigate before publishing, even when a reasonably prudent person would have done so, does not establish reckless disregard.” As we have seen, the “actual malice” standard applies only to public figures, at least for now. If it were applied to everyone, as if the First Amendment gave people an absolute right to free speech, the Great Slanderer might preside over the land. In Dun & Bradstreet vs. Greenmoss Builders, 472 U.S. 749, the Supreme Court had held that an individual’s credit report was not a matter of public concern because it was made available to only five subscribers. Orange County, on the other hand, is a public figure, figuratively speaking, and the Orange County debt was a matter of public concern – the County alleged that S&P’s actions contributed to the largest bankruptcy, until that time, in history. Hence the “actual malice” standard would apply to the publisher S&P in the Orange County case unless some special circumstance applied; e.g., if S&P had waived its First Amendment protection in the contracts. The County claimed that S&P’s contractual commitment to perform services in a competent and reasonable manner was a special circumstance that in effect waived a First Amendment protection, but

the court, relying on precedent, held that a waiver of a constitutional right cannot be implied, it must be voluntary, knowing and intelligent. S&P claimed that “it did not assume a duty to render an accurate rating. Rather, S&P stated that the only service it contracted to provide was the rating for potential publications, which is protected expression, so the County’s contract claim is subject to the actual malice standard.” The Court agreed, after stating that “there is no claim or showing S&P undertook a separate duty to provide a competent rating, the only element of the County’s breach of contract claim is the providing of the rating itself.” And it held that the actual malice standard applied to the County’s tort claim of S&P’s professional negligence. That left the question of whether or not S&P’s ratings were statements made with knowledge that they were false or with reckless disregard for whether or not they were true. And as we have seen, the Court held that a jury in possession of the facts might have thought so in respect to the 1994 debt. CONCLUSION Orange County’s recovery from bankruptcy in a mere 18 months was remarkable considering the complexity of its plight and the depth of its debt. Controls have been instituted since then to protect it from the like misadventure, but still pundits posed the perennial question, Could such a thing happen again? Of course it could, and it did happen a mere fifteen years later, on a colossal scale. Lightning may not strike in precisely the same place again, but Wall

Street’s continued reckless behavior and a general philosophy of getting something from nothing by overcharging everyone for everything induced it to strike several of the greatest financial houses and nearly bring the entire country if not the world to ruin. The Reign of Greed, symbolized in old by the Golden Bull, now turned black to conceal its dark deeds, runs rampant between brief periods of doing small penance for trampling on the rights and liberties of everyone who gets underfoot, and its paths, no matter how perverse, get an automatic AAA rating by the government’s official raters as long as faith in the stampeding sacred Bull perseveres, until the masses wind up getting gored in yet another bloody, irrational run, and realize that the religion was bullshit from the get-go. A handful or two of lesser figures are prosecuted as a matter of course. Few malfeasors do any hard time; the bit-playing transgressors were hardly at the root of the evil done, anyway, and even imagined they were doing good deeds – when wrong is done long enough, wrong seems right. The worst offenders of all, the deviant masterminds whose high crimes and misdemeanors are legalized by routine bribery, go scot-free, and business-as-usual perseveres. Yes, examples are perfunctorily made, and scapegoats are sacrificed at the public altar, but all for nothing. Yes, laws have been forged to protect people, but they are seldom enforced by the executive, so why bother with legislative reform, why

need more laws be made? Let business-as-usual continue, let the plunder pile up unto the high heavens until immortality itself might be purchased. As for ethics, the malefactors’ lawyers say that whatever is legal is ethical, and if someone does not like the rules, let them change the rules, that is, if they have enough money to outbid the vested interests and power elite who have the greatest to gain by conserving the status quo and the most to lose by any radical reform or revolution. The people turn to their regulators to rein in greed, to better organized it for everyone’s benefit, only to discover that the regulators empowered by their legislators to curb misconduct are not really their regulators, nor are the legislators theirs, but the legislature as well as the regulatory bodies belong, lock, stock and barrel, to the greediest people of all. In fine, the legislator has become little more than the political cabinet of big business, and the executive its political C.E.O. Whether or not the presiding officer is white or black or both, or Democrat or Republican or Independent, or male or female or hermaphroditic, does not really matter as long as campaign promises and ideological principles are comprises, as long as the oath of office itself perpetuates hypocrisy. Now the securities regulator answers to the legislature and the official credit rating agencies answer to the securities regulator. There has been a big uproar in the legislature about the collusion of the credit rating agencies in rating financial trash as investment grade securities, and the executive has promised CHANGE, but the uproar and promises are merely

rhetoric, as we can see in the changes proposed thus far. Where are “We the People” to turn when “We the People” means the vested interests and power elite who pretend to represent everyone else but are in the main self-interested? May we find relief from the favoritism of the legislative and the legislative branches in the judiciary? Alexander Hamilton opined that the courts “were designed to be an intermediate body between the people and the legislature” but not superior to the legislature, for “the power of the people is superior to both.” (Federalist 78) As we have seen in the Orange County case, the credit rating agency lawyers have managed to persuade courts that their ratings are newsworthy information, that as publishers of ratings they can underrate and overrate public figures at will and aid and abet in the doing of enormous harm with impunity provided they can conceal and manipulate enough facts to convince a judge that whatever evidence they have not managed to conceal should not go to a jury because it does not meet the court’s subjective standard of “actual malice,” that the rater knew the rating was false or recklessly disregarded the truth when preparing it. And, absurd as this might seem, a court was persuaded that reckless disregard for the truth…requires more than a departure from reasonably prudent conduct, that a failure to investigate before publishing, even when a reasonably prudent person would have done so, does not establish reckless disregard!

A cynical bystander might think that the judiciary is in cahoots with the legislative and executive branches, that the independence of the three branches, together with the “press” said to be the fourth branch, is in fact a spurious notion if not merely rhetoric to justify politics as usual. If the judiciary were truly independent instead of being merely a government service, that is, if it were a political entity with its own inherent powers under the Constitution, then we might expect it to act as Alexander Hamilton presumed it should, as an impartial counterweight to the partiality of the legislature and police power – we believe that “impartiality,” in the “equitable” sense of justice, is as “political” as any other faction concerned with the distribution of power, which as an absolute is the object of worship by several religions. As every lawyer will discover if he does exhaustive research or has his or her paralegals do it, the lower courts have issued opinions in some cases that are adverse to the credit rating agencies. No two cases are identical, and many weaknesses can be found in the favorable opinions. The U.S. Supreme Court has not yet decided a case on point, and no doubt one or more of the slew of cases now being argued in the lower courts will be appealed to the highest court in the land. Recent surveys indicate that the public is divided on free speech issues, and the majority believes that reckless or negligent speech should not be protected by the First Amendment. The times along with public opinion changes notwithstanding the legal precedents, and judges are accordingly moved to fashion a more fitting precedent, perhaps

using our great fulcrum for controversy, the Constitution, as justification. In its infinite wisdom, the Court might, for instance, somehow wiggle around previous precedents if not write a new one, and exclude credit rating agencies from First Amendment Protection, at least as along as their ratings are officially sanctioned by the government and embedded in so many investment laws. Moreover, it might re-examine and rewrite the “actual malice” standard if not do away with it altogether. In any case, we must, with the aid of our truly independent lawyers, take back that portion of government which has been stolen from the People, lest the revolution within the American Revolution fail altogether. “On the subject of the liberty of the press,” indited Alexander Hamilton, “as much has been said, I cannot forbear adding a remark or two. In the first place, I observe that there is not a syllable concerning it in the constitution of this state, and in the next, I contend that whatever has been said about it in that of any other state, amounts to nothing. What signifies a declaration that ‘the liberty of the press shall be inviolably preserved’? What is the liberty of the press? Who can give it any definition which would not leave the utmost latitude for evasion? I hold it to be impracticable; and from this, I infer, that its scrutiny, whatever fine declarations may be inserted in any constitution respecting it, must altogether depend on public opinion, and the general spirit of the people and of the government. And here, after all, as intimated

upon another occasion, must we seek for the only solid basis of all our rights.” (The Federalist No. 84) Miami Beach October 1, 2009