Even During a Pandemic, Fear-Mongering About the Debt Has Predictably Reared Its Ignorant Head

NEIL H. BUCHANAN

UF Levin College of Law professor and economist Neil H. Buchanan explains why we should not be concerned about increasing the federal government’s debt, despite what some journalists are suggesting. Buchanan points out that sometimes—such as during a pandemic or other crisis—the federal government should borrow more to prevent a downward economic spiral.

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Investor Recovery Fund v. Hopkins

Docket: 46247

Opinion Date: April 20, 2020

Judge: Brody

Areas of Law: Civil Procedure, Securities Law

Investor Recovery Fund, LLC was the assignee of six claims held by individual investors who lost their investments in the Hopkins Northwest Fund, LLC (the fund). Randall Hopkins and Brian Murphy were the principals of the fund, and together they owned and managed Hopkins Financial Services, Inc. (Hopkins Financial). The individual investors formed Investor Recovery for the purposes of asserting a collective claim against Hopkins Financial and the fund’s principals individually (collectively, Hopkins Associates). The fund declared a moratorium on redemptions in 2008, preventing investors from taking their money out of the fund. The individual investors lost their investments when the fund declared bankruptcy six years later. Investor Recovery sued Hopkins Associates, asserting claims of fraud by nondisclosure. The district court granted the principals’ motion for a directed verdict after seven days of trial, concluding that Investor Recovery did not prove that the individual investors’ losses were causally connected to the principals’ alleged nondisclosures. The Idaho Supreme Court addressed the applicable standard of review when considering a directed verdict in a fraud by nondisclosure case. Finding the district court used the wrong standard in entering directed verdict in favor of Hopkins Associates, the Supreme Court reversed the district court’s directed verdict, vacated the judgment, and remanded the case for further proceedings.