Nov 162007

I’ve been watching the Liberty Dollar for a couple of years now, but have only mentioned them here in passing because I never quite “got” it. If you don’t know what it is, I’m not really in a very good position to explain it to you other then it’s an alternative currency that is (supposedly) 100% backed by actual precious metal (silver and gold). Well, their offices were raided earlier this week and all of the coins, silver and gold was confiscated along with all of their business records. They are now suggesting that anyone with an outstanding order join a class action lawsuit against the federal government because the government stole the coins. Um… what?!? Allow me to reframe this argument, removing the confusing spectre of an alternative currency….

I sell you a car via the internet. The car is here in Morgan Hill, CA and you are wherever you are. You mail or PayPal me the money for the car, and arrange for a third party that you’ve hired to come pick up the car tomorrow. When your driver arrives I inform him that the car was impounded over night because the police think I might be a drug dealer (even though I’m not a drug dealer). So, if you want your car, you need to file a lawsuit against the police department. What? You want a refund? Sorry I can’t do that. You’ll need to sue the police.

Does that make any sense to you? Because it doesn’t to me. But that’s what they’re saying. The problem here is that they entered into a contract with their customers. A third party violating their rights has no bearing on that contract. They are still 100% responsible for upholding their end of the contract even if that third party is the government. The fact that they were so quick to put out this whole class action concept seems, to me, to be further proof that the whole thing was a scam from day one.

  13 Responses to “Why The Liberty Dollar Class Action Suit Is A Non-Starter”

  1. […] Read the rest of this great post here […]

  2. you’re an ass hole and a government boot licker. Why don’t you back up your fellow man instead of making excuses for the fascist action of the government stealing money, records, computers and who knows what else?

  3. Thanx for that intelligent and insightful comment. It adds so much to the conversation 😕 and means so much coming fro man anonymous poster.

    For the record, I’ve done nothing to “back up” the government in this post (or elsewhere). I’m just pointing out that it doesn’t make sense to me that people should be trying to sue the government, because the current law, as I understand it, doesn’t allow such a suit. If you have something to indicate otherwise I’d love to see it.

    As far as backing up “my fellow man”, how is holding out false hope backing them up? Everyone who is holding paper or digital Liberty Dollars has lost the metal backing them. That’s unfortunate, but most probably feel it’s a worthwhile loss. Wasting everyone’s time with a lawsuit that’s destined for failure just seems ridiculous.

  4. The FEDs said the Liberty dollar was not a coin which is what legal tender is, yet they still stole it. They had no right, as the Liberty Dollar is not currency even though it’s backed by gold and silver.

    If this weren’t damning enough, the U.S. Mint’s own press release consistently refers to the Liberty Dollar round shiny things as “medallions”, reserving the word “coin” to refer to U.S. Government coins.

    Furthermore, private mints have a prominent and interesting history in this country, especially during the California gold rush, when many created round shiny things in clear imitation of official government coins and even continued to operate alongside the U.S. Mint’s San Francisco branch when it opened.

  5. Which all sounds like grounds for the folx at Liberty Dollar to sue the government over the seizure. Something they’re very much looking forward to doing. But I fail to see how that gives LDs clients grounds to sue. It wasn’t the government that harmed them (if they were harmed), but LD (by not living up to their contract).

  6. Of course the government has harmed them and everyone is guilty by the government until proven innocent. The government has illegally interfered with this company and it’s clients and that alone changes the entire dynamic.

  7. See, that’s my point. The government has NOT interfered with LD’s clients, only with LD. The clients are free to own and use Liberty Dollars as they wish, the government has done nothing against them (in this regard).

    There are no grounds for the suit just as there are no grounds for the California medical marijuana users in California to sue over the impounding of pot from the dispensaries here. Just as there would be no grounds for you to sue if you’d bought the car in my example above.

    LD is responsible for filling the orders that it took. Period. If they fail to do so, then it is they who have harmed their clients, regardless of the reason they are unable to do so.

  8. They are not free to own and use liberty dollar as they wish because the government has stolen the silver backing their barter dollars making the liberty dollar worthless. How can you not think that harms the clients of liberty dollar?

  9. No, they are free to own and use liberty dollars however they wish. The government is doing nothing to prevent them from doing so. They have neither confiscated LDs from individuals nor outlawed their exchange.

    People may be less willing to accept LDs now because the company is no longer backing them, but that’s a result of the company’s refusal to live up to the promises it made.

    I have to return to the analogy. If I promise to sell you something, you pay me for it, then I claim it was stolen would you not demand a refund? Would you instead go after the thief? And do you think the courts would back you on going on after the thief? Because I’ve never heard of such a lawsuit.

    My argument has nothing to do with whether or not the government (or LD) is right or wrong. My point is that the lawsuit will be thrown out of court because under current law the people holding LD scrip (or having outstanding orders) have no legal standing to sue the government.

  10. I understand your analogy perfectly, but this situation is different being that the state intervened illegally with the normal course of capitalistic business. Yes I would demand a refund if it was stolen, but if it was stolen by the government then I would sue the government for it. We’re not talking about it being stolen by some thugs, we’re talking about the value of the LD being stolen by the government. Why do the people have no legal standing to sue the government? Is the government above the law and untouchable?

  11. I think your analogy does not apply to the Liberty Dollar situation for many reasons.

    If a car dealer sells a car and later says he cannot deliver it because it was stolen, then you have a case against the dealer because the dealer is responsible for the car until it is delivered. In the Liberty Dollar situation, however, there was no intent to deliver all the gold and silver that backs the paper. Certificate holders had the option of redeeming certificates for metal, but very few did. So, that gold and silver was the property of the paper certificate holders and Liberty was essentially storing it for them. It did not belong to Liberty.

    If someone breaks into Liberty Dollar and steals the gold and silver, then I think you could go after Liberty for losing your property, if you could prove they did not provided adequate security, or I think you could press criminal charges against the thief and sue to regain your property, too. But, if the thief is the Government, there is no security adequate to protect your property from Government seizure, so I do not think you could sue Liberty for not providing adequate security against the Government.

    Liberty was not charged with dealing drugs or any crime other than a violation of U.S. currency laws, and Liberty was very clear about the product they were offering. Any buyer of Liberty’s products was taking the same risk of Government seizure of the gold or silver backing their certificates, whether the gold or silver was stored by Liberty or by the buyer. As it was, the gold and silver was stored by Liberty, but it doesn’t change the essential risk taken by the certificate holder.

    Consider this scenario. Suppose you put your wife’s diamond necklace worth $100,000 in a safe deposit box at Bank of America. Suppose the Government comes in and charges Bank of America with violating securities laws and confiscates the contents of everything in the bank, all the safe deposit boxes. Who do you sue to get the necklace back? I’m sure you would sue everyone, including the Government, because the necklace is your property and it doesn’t have anything to do with the branch manager passing off counterfeit money.

    Current law provides that if a business is engaged in criminal activity, its assets may be seized, but it seems to me the question here is, who’s assets were the gold and silver, Liberty’s or the certificate holders? I’m not aware of any charges being brought against the certificate holders. So, the Government might be justified in seizing Liberty’s assets if they plan to bring charges against Liberty in a timely manner, but they are not justifying in seizing the gold and silver backing the certificates unless they are also planning to charge the certificate holders with a crime.

    Also, it makes no sense to say that the Government did not interfere with the certificate holder’s ability to continue to use the certificates. The value of the certificates depends on the gold and silver backing. No backing, no value!!!

  12. I have to agree with Paul Rye.

    Actually to use your analogy with the car, if you purchase the car and have the title transfered then you own the car. If the car is stolen or seized and you are not in a contract with the person holing the car they are no longer liable. They are not the owner of the car and a bank could not seize it to repay a debt. The US government on the other hand can and will do what ever it wants. We gave it that power, but along with all the other assets it is holding it is holding the silver and gold backing the warehouse receipt that the individual owner owns. So unless the bearer of the note is going to be charged as well, it is their metal in the warehouse, then the seizure was unlawful and will need to be returned to the owner.

    In the end if that actually happens, well I hope that the silver was insured for all the receipt bearers, because if not then they are going to be out of luck trying to get back property seized but the USG anytime in the near future.

  13. Perhaps Aahz did not understand the previous scenarios because “personal” attachment had not been expressed or acknowledged. Here is a scenario that would hit-home:

    You have contracted and paid for your children to be in the care of a daycare center. At the end of the day, the children are placed on a school bus to be sent home. However, before the bus would be able to leave the parking lot, a “well-known offender” confronts, overpowers, and apprehends the bus driver at gun-point and literally car-jacks the school bus from the property with all of the children on board. Now according to Aahz, he would recommend that the parents should concentrate their efforts of recovering their kidnapped children by confronting the daycare center, and only the daycare center, that they should provide the safe return of all of the children. Meanwhile, the daycare is in an effort to recover the children from the “well-known offender” while begging for additional help from the parents. (I don’t know about you, but I believe that I would be wasting my time and risking complete loss by following the advice of Aahz.)

    I understand that human life cannot be compared with precious metal, but why should there be a difference when contract rights are in question? In relation to my scenario, it would make perfect sense to go after the government instead of NORFED (Liberty Dollar), because the responsibility of property is no longer in the hands of Liberty Dollar. When the government had confiscated other people’s property from Liberty Dollar, they became the offender of rights.

    On the flip-side, if you, Aahz, were in a verbal agreement (verbal contract) to be entrusted with an article of someone else’s property and at gun-point your house was robbed and completely cleaned out, which includes the taking of the entrusted article of property, would you gladly reimburse your loss and do nothing to recover the stolen article? Because you did say, “A third party violating their rights has no bearing on that contract. They are still 100% responsible for upholding their end of the contract even if that third party is the government.” According to you, it would make more sense to just reimburse the loss instead of asking for help to recover and return the article of property. Liberty Dollar is doing what they feel is “best.” After all, how can you refund anything when you are completely cleaned out and left for broke and desolate? (Does this make sense now?)

    Aahz, what you fail to realize is that everyone is responsible for keeping their agreement in a contract “and” unless the contract states that asking for the other party’s assistance in recovering their own lost or stolen property in any way that seems fit should never happen, then your statement of, “the whole thing was a scam from day one” would be most fitting and quite plausible. Remember, the right of the customer was offended by the government, not by the Liberty Dollar organization. Put the blame where it belongs and then move forward… amicably!

    I hope this helps!

  14. […] for unfulfilled orders.  This was the very issue I had with Liberty Dollar back in November (see Why The Liberty Dollar Class Action Lawsuit Is A Non Starter).  The lawsuit that has finally been filed a) is not a class action lawsuit, b) does not address […]

  15. Instead of answering the latest comments here I’ve just written a new post titled “Liberty Dollar / Hawaii Dola Lawsuit Finally Filed“.

    I’d love to continue this conversation in the comment section of that post.