Legal News for Weds 7/23 - Trump NCUA Firings Illegal, Big Cocoa vs. Child Labor Suits, NJ Detention Ban, 32 Year Old Mail Fraud Case and Data Centers as Modern Pyramids
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This Day in Legal History: Grant Dies
On July 23, 1885, Ulysses S. Grant—former president and Union general—died of throat cancer at age 63. While honored as a national hero, Grant spent his final years in financial ruin due to a high-profile fraud scandal. He had invested heavily in a Wall Street brokerage firm, Grant & Ward, run in part by his son and the scheming financier Ferdinand Ward. Ward operated what would now be recognized as a Ponzi scheme, using incoming investments to pay off earlier clients and falsely promising high returns. When the scheme collapsed in 1884, Grant lost virtually everything, and the public was stunned to see a former president facing poverty.
Rather than accept charity, Grant chose to write his memoirs as a final act of financial restoration. He completed them just days before his death, and their publication by Mark Twain’s publishing house ultimately secured his family’s financial future. Meanwhile, Ferdinand Ward was arrested, tried, and convicted of grand larceny in 1885. He served six years in prison, and his case became one of the most publicized white-collar crime prosecutions of the 19th century.
Legally, the case underscored the absence of federal oversight in securities and investment practices during the Gilded Age. There were no federal securities laws or regulatory agencies at the time, and prosecution of fraud fell to local authorities using traditional theft statutes. The scandal later became a reference point in discussions around the need for more structured investor protections, eventually influencing the rationale for the Securities Act of 1933 and the Securities Exchange Act of 1934. Grant’s financial downfall, despite his stature, revealed the vulnerability of even prominent individuals to unchecked financial fraud.
A federal judge ruled that President Trump unlawfully removed two Democratic members of the National Credit Union Administration (NCUA) board. U.S. District Judge Amir Ali held that the firings of Todd Harper and Tanya Otsuka in April violated congressional protections that limit when board members can be dismissed. The decision orders both officials reinstated. At the time of their removal, only one board member remained—Republican Chairman Kyle Hauptman—leaving a regulatory gap in oversight of the $2.3 trillion credit union sector.
Harper, initially appointed by Trump in 2019 and later elevated to chairman by President Biden, was serving a term set to expire in 2027. Otsuka was confirmed in 2023 with a term ending in 2029. Both argued their dismissals were unprecedented in the NCUA’s nearly 50-year history. The Trump administration defended the firings by asserting broad presidential authority to remove such officials at will, a position echoed in other disputes over the limits of executive power at independent agencies. The ruling reinforces the legal principle that certain regulatory positions are protected from politically motivated removals.
US judge rules Trump illegally fired two Democratic members of credit union agency | Reuters
The U.S. Court of Appeals for the D.C. Circuit dismissed a class action lawsuit brought by eight Malian citizens against Hershey, Nestlé, and five other major cocoa companies. The plaintiffs alleged they were trafficked as children and forced to work under brutal conditions on cocoa farms in Ivory Coast. They sought to hold the companies liable under U.S. laws against human trafficking and forced labor. However, the court ruled 3-0 that the complaint failed to plausibly connect the plaintiffs' forced labor to cocoa specifically sourced by the defendants.
Judge Justin Walker wrote that while the companies purchase a large share of Ivorian cocoa, the complaint did not establish that the cocoa harvested by the plaintiffs ended up in the defendants' supply chains. The court emphasized that a general connection to a region is insufficient to meet legal standards for liability under trafficking laws. The trial court had previously ruled in favor of the companies in 2022.
The plaintiffs' attorney, Terry Collingsworth, criticized the ruling, arguing that global corporations are effectively shielded from accountability by the opacity of their supply chains. He said his clients are considering further legal action. This decision follows a March 2024 ruling by the same court that dismissed similar claims against tech companies over child labor in cobalt mining in the Democratic Republic of the Congo.
Hershey, Nestle, other cocoa companies defeat appeal of child slavery lawsuit | Reuters
The U.S. Court of Appeals for the Third Circuit ruled that New Jersey cannot enforce its 2021 law banning new contracts for immigrant detention facilities. The court sided with CoreCivic, a major private prison operator, which had sued the state over the law's potential to block the renewal of its contract for a 300-bed detention center near Newark Airport. In a 2-1 decision, the panel held that New Jersey's ban unconstitutionally interferes with federal immigration enforcement, which relies heavily on private detention centers.
Writing for the majority, Judge Stephanos Bibas stated that states cannot obstruct the federal government’s operational choices, including its use of private contractors. The ruling emphasized that immigration enforcement is a federal domain, and state laws cannot disrupt its execution. Judge Thomas Ambro dissented, arguing the law only regulated state and local government actions, not the federal government directly.
The case has national implications, as the federal government under both Republican and Democratic administrations has defended its authority to contract with private facilities for immigration detention. Critics, including New Jersey's attorney general and immigrant rights groups, argue that privatized detention presents serious health and safety risks and prioritizes profit over human rights. The ruling follows similar court decisions, including a 2022 case blocking California’s comparable law while upholding a narrower Illinois statute.
US court blocks New Jersey ban on immigrant detention in CoreCivic lawsuit | Reuters
A federal judge in Manhattan formally dismissed a mail fraud case that had been effectively resolved over three decades ago but never officially closed. The defendant, Yousef Elyaho, was charged in 1991 with one count of conspiracy to commit mail fraud. In 1993, he entered a deferred prosecution agreement, and his bond was released, meaning the case should have been dismissed if he complied with the agreement. However, due to an apparent administrative oversight, the case remained open on the docket for 32 years.
No legal action occurred until 1999, when the case was oddly marked as reassigned to “Judge Unassigned,” and then sat idle for another 26 years. It was only in 2025 that the case came to the attention of U.S. District Judge Ronnie Abrams, who officially closed it. Assistant U.S. Attorney Frank Balsamello acknowledged in a court filing that the government had intended to dismiss the case back in 1993.
This unusual situation highlights how clerical errors can leave cases unresolved, despite defendants meeting their legal obligations. The judge’s action brings formal closure to a prosecution that, in practice, ended decades ago.
US ends a mail fraud case, 32 years late | Reuters
And in a piece I wrote for Forbes this week:
I draw a comparison between ancient Egypt’s pyramid-building and the current surge in data center construction across the United States. In both cases, monumental building serves more as a symbol of legitimacy and power than as a practical investment in public welfare. Pharaohs once drained resources to erect ever-larger pyramids, eventually destabilizing their own society. Today, states offer enormous tax incentives to attract data centers—facilities that often generate minimal long-term employment while consuming huge amounts of electricity and water.
In the piece, I focus on how these data centers, like the pyramids, have become political symbols. They are marketed as engines of innovation and economic growth but often leave the public footing the bill for infrastructure costs and strained utilities. For example, Pennsylvania passed a $75 million tax exemption for data centers, and similar policies have ballooned to over $1 billion in Texas. Meanwhile, the promised economic benefits frequently fail to materialize.
I argue that this race to build tech infrastructure, without considering long-term sustainability or community impact, mirrors a historical pathology: spectacle overtaking substance. These facilities may one day be ruins of a different kind—monuments not to progress, but to political ambition and misaligned priorities.
The Pharaohs Built Pyramids—We Build Data Centers
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