Grunt, Shrug, Blank Stare, “Guilty!”: Where Algorithms Might Deliver Better Law and Justice

A Courtroom Lacking Due Process

On Wednesday (Nov. 19), I showed up in Courtroom 4 of the Coney Island Traffic Violations Bureau for my hearing.

I walked in confidently and checked in with the clerk.  The judge entered the courtroom and put out her nameplate: “Judge Evelyn Waltrous.”

She called my ticket.  Going first, Officer Bruno gave his testimony, reading from a pre-written script into some type of recording device describing why I had received a ticket.

I asked the officer one question: “Was there a sign on the traffic signal?”

I then turned to Judge Waltrous and noted that the intersection was improperly signed.  I gave her a copy of the photo of the intersection and the pages of the federal and state law that undergirded my position.

The judge parried in annoyance – “this is a federal regulation.”

I responded – “As you know,  New York has adopted the federal regulation as its own law, so its also state law.”

She said, “I find you guilty” without asking any additional questions.

I asked, “Why?” and looked at her for a response.

Grunt.

Shrug.

Blank Stare.

She repeated “guilty.”

No explanation provided.

Background: My Left Turn

Lets go back to April.  Right after making a left on Avenue J from East 14th Street, I saw a police car pull up behind me.

Oh crap.

A fresh faced rookie officer, Officer Bruno explained that because the intersection was very busy and the site of some prior lessons, there was no longer turns allowed onto Avenue J on weekdays.  He said that I had missed signs that had recently been put up on the corners.

Due to the fact that the street was completely empty due to it being Passover and Good Friday, he apologized and said he had no discretion.

This is a picture of the intersection from the viewpoint of an approaching car.  Note the No Turns signs are at the corners along with the parking signs, but there are no signs on the traffic light.

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Something felt wrong about this.   Aren’t these signs usually on the traffic light so a driver can see them more easily?  That was my recollection.

An Airtight Argument

 I plead not guilty and was assigned a date for a hearing.

In preparing, I found that there is a 800 page “Manual on Uniform Traffic Control Devices” that governs signs and signals used on streets and highways in the US.

Page 61 of the Manual squarely addressed the intersection at which I received the ticket:

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My initial instinct was right.  The red rectangle says that a No Turns signs should be placed adjacent to the traffic signal face.  That is, it’s not sufficient to have signs placed on the corners as they were at this intersection.

I turned to the New York Department of Transportation website which confirmed that the New York State Vehicle and Traffic Law automatically adopted the Manual as the law of New York State.

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So, jubilation.  In 15 years of law, I have never seen something so black and white. The intersection was inappropriately signed according to New York State law, so the ticket would be thrown out.

Municipal Administrative Law Hearings : Lawless and Arbitrary, Unaccountable Judges

So what happened to my open and shut case?

On a certain level, traffic courts are kangaroo courts meant to generate money for the municipality. Indeed, a New York Task Force looking at the traffic courts in NY found the judges were pressured to maintain a 65% conviction rate.

This is not unique to New York.  Indeed, there is startling analysis on the systematic harassment of the citizenry in particular the poor and minorities by these administrative processes.  Many of these were written during Ferguson.  See this analysis from the Washington Post.  (I am not comparing my situation to that; not even close.  I am very lucky.  But others surely in New York before this same judge fall into the same trap and cannot afford to.)

But this went even beyond.  My hearing was the very definition of lawless and arbitrary, the product of some other country than ours.  First, this was a black and white legal issue.  Second, the judge made a lawless decision and refused to explain herself.

Still puzzling was that judges, as a rule, hate getting overturned, so why would she give a decision so recklessly wrong.  That left me troubled as I sat on the subway to my office in Manhattan.

As I read the appeal form, I understood better.

I faced a $138 fine (and two points).  In order to appeal, I had to pay a $10 appeal fee as well as a $50 fee to get a transcript of the hearing.  I also had to pre-pay the $138 fine. See Appeal form:

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And the appeal was by a body within the same agency, with the same incentives to find a conviction and the same lack of accountability to the outside world.  What kind of dope would put out a $60 sunk cost for the possibility of getting the $138 fine back.  So, not appealing, means at best a $60 loss, and at worst $198 (or a probability adjusted cost of about $150 assuming the 65% conviction rate).

Or I could just fold my hand, cut losses, and pay the $138.

The system has been set up so its not rational to appeal regardless of the misconduct on the trial level.  That is, there is no due process.  (Btw, the second option on the form above where you concede liability but fight the penalty is a meaningless fig leaf crafted as a way to maintain the illusion of due process despite the illegal $50 transcription fee necessary to fight liability.  Conceding liability is the whole ball game here, as these are simple violations where penalties follow liability like clockwork.)

Coming back to my case, the judge knew that in all likelihood that she would not even be called on it; and even if she did the higher ups would approve as her mandate was to come up with a conviction and move money into the government coffers.

This means an imperial judge.  Someone who can ignore the law and then:

GRUNT, SHRUG, STARE BLANKLY, “GUILTY”

Replacing Judges With Transparent Data And Algorithms

This is the most effective scam.  I spent 15 years practicing law and litigating at the DOJ and at one of the world’s best law firms and I am confounded. Everyone else is going to walk away; and it’s rational to do so.

This is the perfect legal level at which we could use algorithms and code to dispense better judgment.  The issues (matching facts to rules) should be simple and data and transparency would clean things up fast.  A perfect place for Balaji’s leviathan:

In conjunction, to push this solution, you need a litigation campaign that overcomes the individual financial incentives to litigate.  Ultimately by shedding light on such absurdities, it would undermine public confidence in these unconstitutional administrative law procedures that exist and stain across our country.  This is work that would have real impact on people’s lives.

P.S. A Lack of Judicial Temperament

I figured these things are usually not isolated, so I looked around and came up with this troubling set of allegations made against Judge Evelyn Waltrous.   It concerned that a Second Circuit appeal upholding the case of a gay, Jewish colleague judge who had sued her and others for discrimination.  Sadly, the plaintiff tried to commit suicide soon after this case.

Read this and ponder that unaccountable “power corrupts” and that the Judge is still on the bench fifteen years after such incidents.  Read this and also consider whether almost anything would be a step forward in terms of judicial integrity, demeanor, and confidence, not least of which is a transparent algorithm.

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Uber Valuation

The valuation is defensible:

$2 billion in rides, $400 million in net revenues, so valued at 45X revenues, in line with valuations of AirBNB, Dropbox, etc.

Even if you think that’s a bad comparison because there is a general bubble out there, it’s doubling every 6 months (so 400% growth every year), so the valuation seems defensible on its own terms.  i.e., if you hold valuation stable, in a year, revenues would be $1.6 billion and it would be trading at a mere 11X revenues.

It could be a bust investment — but in vc the game is that most of your investments will be bust, salvaged by the few winners — but doesn’t seem to be a crazy investment.  My guess is that the Fidelity types led the investment because they have lower return expectations than a late-stage VC shop.
Let’s all get back to work building our companies.

 

How to Scale?

Uber, from BusinessWeek interview with Travis Kalanick:

In April you announced Uber Rush, a package delivery service in Manhattan. Are you considering expanding it?

That is going really well. It’s super-young, only a month or two old. It’s almost like I’m talking about an infant. But the growth of Uber Rush in New York is far greater than what the original Uber service was in San Francisco at the same age. There are still some things we want to do on product and operations. We want to get that playbook down. We did a year of Uber in San Francisco before we went to a second city. You get those processes down, then you really get started.

Fragility and Finite Games

The concepts of anti-fragility (Nassim Taleb) and infinite games (James Carse) seem related.  Your choices should ensure the continuity of play, rather than “winning” at expense of continuity of play.  Because the future is so unpredictable and object change, aiming only to win, might end up making you more fragile.   Some quotes from Carse:

“There are at least two kinds of games. One could be called finite, the other infinite. A finite game is played for the purpose of winning, an infinite game for the purpose of continuing the play.”

“Finite players play within boundaries; infinite players play with boundaries.”

“Finite players are serious; infinite players are playful.”

“Finite players win titles; infinite players have nothing but their names.”

“Infinite players do not oppose the actions of others, but initiate actions of their own in such a way that others will play by initiating their own.”

The Right To Be Forgotten

I’ve noted before that “short memories” and “starting over” may have some fundamental connection to humanity at least how it has developed to date by quoting the following Nietzsche quote:

“Without forgetting it is quite impossible to live at all.”

We have under-thought this in many ways.  See here, herehere, and here.

In many areas, when people fail to proactively think through policy, the courts get ahead of them.  In that vein, the European Court of Justice issued a huge decision yesterday saying:

“If, following a search made on the basis of a person’s name, the list of results displays a link to a web page which contains information on the person in question, that data subject may approach the operator directly and, where the operator does not grant his request, bring the matter before the competent authorities in order to obtain, under certain conditions, the removal of that link from the list of results…”

“An Internet search engine operator is responsible for the processing that it carries out of personal data which appear on web pages published by third parties,”

 

BPMF

A classic Andreessen post.  Although he acknowledges it raises many more questions that it does not answer, it’s very useful as to defining what questions are most important as a priority:

Product/market fit means being in a good market with a product that can satisfy that market.

You can always feel when product/market fit isn’t happening. The customers aren’t quite getting value out of the product, word of mouth isn’t spreading, usage isn’t growing that fast, press reviews are kind of “blah”, the sales cycle takes too long, and lots of deals never close.

And you can always feel product/market fit when it’s happening. The customers are buying the product just as fast as you can make it — or usage is growing just as fast as you can add more servers. Money from customers is piling up in your company checking account. You’re hiring sales and customer support staff as fast as you can. Reporters are calling because they’ve heard about your hot new thing and they want to talk to you about it. You start getting entrepreneur of the year awards from Harvard Business School. Investment bankers are staking out your house. You could eat free for a year at Buck’s.

Lots of startups fail before product/market fit ever happens.

My contention, in fact, is that they fail because they never get to product/market fit.

Carried a step further, I believe that the life of any startup can be divided into two parts: before product/market fit (call this “BPMF”) and after product/market fit (“APMF”).

When you are BPMF, focus obsessively on getting to product/market fit.

Do whatever is required to get to product/market fit. Including changing out people, rewriting your product, moving into a different market, telling customers no when you don’t want to, telling customers yes when you don’t want to, raising that fourth round of highly dilutive venture capital — whatever is required.

When you get right down to it, you can ignore almost everything else.

I’m not suggesting that you do ignore everything else — just that judging from what I’ve seen in successful startups, you can.

 

Full copy of the post is archived here by a Stanford EE class.

Formula, Not Spreadsheets

Andreessen Tweet Stream: 4/16/14

1/A few common fallacies about valuation of public and private technology companies:

2/First, ask any MBA how to value tech companies, she’ll say “discounted cash flow, just like any other company”

3/Problem: For new & rapidly growing tech co’s, up to 100% of value is in terminal value 10+ years out, so DCF framework collapses.

4/You can run as many DCF spreadsheets as you want and may get nothing that will help you make good tech investment decisions.

5/Related to fact that tech co’s don’t have stable products like soup or brick companies; future cash flows will come from future products.

6/Instead, smart tech investor thinks about: A future product roadmap/opp’y, B bottoms-up market size & growth, C talent and skill of team.

7/Essentially you are valuing things that have not yet happened, and the likelihood of the CEO and team being able to make them happen.

8/Finance people find this appalling, but investors who do this well can make a lot of money, but spreadsheet investing is often disastrous.

9/Doesn’t mean cash flow doesn’t matter, in fact opposite: this is the path to find tech companies that will generate tons of future cash.

10/Corollary: For tech companies, current cash flow is usually useless for forecasting future cash flow–lagging not leading indicator.

11/This trips up value investors (Prem Watsa!) all the time; tech companies with high cash flows often about to fall off a cliff.

12/Because current cash flows are based on past products not future products. And profitability often breeds complacence and bureaucracy.

13/Always, always, always, the substance is what matters: WHO and WHAT. WHO’s building the products, and WHAT products are they building.

14/Brand will not save you, marketing will not save you, channels will not save you, account control will not save you. It’s the products.

15/Which goes right back to the start: Who are the people, what are the products, and how big is the market. That’s the formula.

Turning The Tide

From Barron’s:

THE GAME CHANGERS on the supply side are the three new types of oil production that have not been counted as part of the oil supply until recently: deepwater oil, shale oil, and oil sands. Each of these sources of oil has been estimated at more than 300 billion barrels, totaling more than one trillion barrels in all. That’s a huge addition to previously estimated reserves of some 1.5 trillion barrels. According to Citigroup energy analyst Eric Lee, a good proportion of the extra trillion barrels could be recoverable at $75 a barrel or less. In fact, he notes that a $75 cost estimate could even be on the high side, as production costs for shale and even deepwater can continue to fall over time.

Business 2.0 2001

Instant Cliques
February 06, 2001
Business 2.0

Jessica M. Scully

Eight years after moving to San Francisco, Alexandria Ducheneaux still sometimes feels socially isolated. “You go to a bar, and everybody is in their own social circles,” says the 30-year-old acupuncturist. “Everybody in the city goes out for lunch on [their] own,” she says. “You look around and you never know anybody.”

Ducheneaux is one of more than 1,000 people who have joinedfreefor, a Website that offers to help people meet one another nationwide. Neither a dating service nor just a virtual community, freefor helps people with similar interests living in the same area link up via the Web, then meet in person for lunch, hiking, biking, book reading, or other activities.

Four friends from Harvard Law School hatched the idea after scattering to separate internship assignments in New York, San Francisco, and Washington, D.C. They thought they could use the Internet to meet new people and help those people meet one another. “A group of us who founded the company were thinking about how rich Internet action was, but as that increased the real-world connection decreased,” says Shahed Amanullah, freefor’s CEO.

His words echo research conducted during the past several years linking time spent on the Web to a decline in face-to-face “real-life” interactions. About a quarter of people who spend five or more hours per week online say they spent less time with family and friends as a result, according to a study by the Stanford Institute for the Quantitative Study of Society.

The situation could get worse, Amanullah says, as Web shopping further erodes people’s chances for serendipitous interactions at book stores, libraries, even grocery stores. So the company’s founders say they simply want to move these chance meetings online as well.

New freefor members fill out a questionnaire on the site regarding their hobbies, interests, and experience level at each. Once registered, they can suggest an activity–say, a game of tennis or a hike. Then the site matches all members likely to be interested in that activity, and emails them a link to a password-protected page where they can post messages to one another to work out details.

Amanullah stresses that freefor is not a dating service; activities require a minimum of three people. And unlike patrons of dating sites, freefor users can’t search for partners based on age, gender, or physical characteristics. “If you’re going to see a movie, and you have the same interests, what does it matter if there’s an 80-year-old grandmother and a teenager?” he says.

Still, who’s to stop romance from crossing a member’s mind? Wendy Lingo of San Jose, Calif., was searching for a beau when she first signed up. But even though the 31-year-old corporate accounts manager met her current boyfriend in a park, she says she still uses freefor to network and to meet new friends. The best thing about freefor, she says, is that it’s a casual, stress-free way to meet people. No photos or vital statistics are required.

Daniel Cravens of Albany, Calif., says freefor events help him indulge his interest in the arts, politics, and history. The 32-year-old lawyer, who recently graduated from Boalt Hall at the University of California at Berkeley, says the “real world” can be a lonely place. “In school, there’s kind of an assumption that everyone’s willing to talk with you,” he says. But in San Francisco’s financial district, where he works, “I don’t necessarily feel that I can be at lunch and just start talking to people sitting at the table next to me.”

Despite raves from users, freefor has a long way to go before reaching a critical mass of members nationwide. The site has been operating only since August, and events have been lunches, mostly in and around San Francisco, the company’s launch pad. The site’s creators are in talks with Internet service providers, wireless companies, and several other large organizations to see if they’ll pay to make the service available to their employees or customers, Amanullah says.

So, if that tennis racket has been sitting idle in your closet, or if you’ve been dying to discuss your favorite sci-fi novel with someone, log on. A whole new social life could be freefor the clicking.

Evolution to FreeFor

Fast Forward: Buddy Listings
by Anthony Zurcher
Washington Post
October 13, 2000

“If your golfing buddy just moved across country or you can’t find anyone to go to the movies with, maybe you should look to your computer instead. That is, by using it, go online and find people with similar interests. Many sites try to do this, but Freefor is one of the more flexible and user-friendly. After joining, you answer a handful of personality questions and sign up for activities that interest you–sports, books, dining and so on. Then, whenever someone with a similar personality organizes an event in your area, you’re automatically invited; you can also plan events of your own. Throughout, personal information is kept confidential; users communicate only through the site instead of via direct e-mail or phone. Note that Freefor emphasizes group social life over pairing off; it’s not a dating service and sets up only more-than-two-person events.”