It’s a Crowded Field

The editors of the Wall Street Journal say that the Martin Act, a New York state law governing stock sale operations, is the “worst law in America”:

Passed in 1921 to stop “boiler-room” stock-sale operations, the Martin Act lets prosecutors call almost anything fraud, and there’s no requirement to prove evil intent in civil cases. Yet proving scienter, or the intent or knowledge of wrongdoing, has been a staple requirement of British and American law for centuries lest innocent mistakes be prosecuted as intentional frauds. The Martin Act thus gives prosecutors a huge legal advantage against defendants, though for decades it was used sparingly.

That changed in the early 2000s when then New York Attorney General Eliot Spitzer wielded the Martin Act to bludgeon settlements out of big Wall Street firms without going to court. The law does particular damage because New York is America’s financial capital and nearly every company sooner or later does business there. Note how Mr. Spitzer’s equally unconstrained successor, Eric Schneiderman, is leveraging the Martin Act to investigate Exxon for purportedly misleading the public about climate change.

I’m not sure how they make that assessment other than that the Martin Act bugs them. Wouldn’t it be closer to the mark that New York has the worst prosecutors in the United States?

“Worst law” is a pretty crowded field. What about the present Massachusetts law banning women from driving automobiles unless their husbands are walking in front of the car with a red flag? Or the prohibition of long bingo games in North Carolina? How about the laws requiring occupational licensing for hair braiding in many states?

Feel free to contribute your own candidates for worst law.