M. NEIL BROWNE

EPISODE TRANSCRIPT

[00:00:00] Rob: Hey, this RJ. How are you doing?

[00:00:06] Neil Brown: I'm fine. How are you?

[00:00:08] Rob: Wonderful. Are you ready for us to chat for a little bit?

[00:00:13] Neil: Sure, of course.

[00:00:16] Rob: Can I just have you talk a little bit? I want to make sure that the recording is picking you up real fast.

[00:00:25] Neil: One of the things that I want to say to you was that I hope you won't hesitate to interrupt me because sometimes, depending on what you asked me, I may have a lot to say. A lot to say, maybe not very pertinent to what it is you're after. Don't be concerned about courtesy, that's what I'm trying to say to you.

[00:00:53] Rob: [chuckles] Sounds good, Neil.

[00:00:54] Neil: I'm a professional talker. That means I talk and there are times that I won't because I don't have anything and I think it's pertinent to say. Sometimes, I think there are things that are pertinent to say, but it may not be the mission of your particular project is after.

[00:01:17] Rob: I'm just very excited to talk to you and get your whole perspective on this. Just to recap how this interview will be used, we will be using this interview as part of a longer episode that has other sources, a couple other interviews and some narration in it as well as releasing that interview as a standalone episode in the podcast. Do you have any questions about that?

[00:01:52] Neil: No, I don't. Just keep me informed about when things are available and where I can have access to them.

[00:01:59] Rob: Yes, totally. We'll send it to you when it's out. We don't have a date yet because this is something that Ray and I do in our spare time. We work in film and television a lot. [chuckles] We do this when we can, but we're aiming for April release for this season to give you an idea of where we're going with it. The other thing is, we are recording right now and are you okay with that?

[00:02:29] Neil: Certainly.

[00:02:31] Rob: Perfect. With that said, let's get started. Very easy, first question. What is your name and profession?

[00:02:44] Neil: My name's Neil Brown and I'm several things. I'm a lawyer. I don't practice, I do teach law and I'm also the co-author of three legal textbooks. I also have a PhD in economics. I teach e-commerce and have for five decades.

I also am a writer if you count the various editions, I've written 64 books. Primarily, books about law and economics, but also at least my editor tells me, I have the bestselling critical thinking text in the world. It's in 16 different languages and 12th edition.

I have done a lot of consulting and a lot of court testimony for being an expert witness about the quality of the evidence that somebody has or maybe the extent of which certain other expert witness are really qualified to provide the statistics that they're offering. I do a lot of things.

[00:04:01] Rob: I feel like that's a very interesting background for what we are talking about today, and the reason we reached out to you. What is your connection to the Stambovsky, the Ackley legally-haunted house case? When did you hear first about it and your reaction to that?

[00:04:22] Neil: When you're writing a textbook for college students, you're looking for material that ideally would exemplify or explore the complexities of a particular legal principle, but that's not enough, not for a textbook that students are going to read. You also are looking for anything that is going to titillate the interest of very, very popular culture oriented age cohorts.

When you find some of a case about Madonna or Taylor Swift, you don't use it, you don't put that in a book just because it's about them. If there's some legal principle that is more than just tendentially related to, it becomes a high prospect.

Now, you read a case about a haunted house. There are, I think I counted last night when I was doing some research, there are over 400 cases, just federal cases not state cases. There are 400 cases that mentioned haunted houses. There's a lot of haunted house legal literature.

The primary literature is not so much along the same lines as the case that we're talking about today, the Stambovsky case. Most of the time, what the legal case is there about is, does a haunted house or the owners of a haunted house, do they have liability to people who get hurt as a result of they're being in the haunted house?

For example, just to give you a couple of example of case. You have a man who comes to a commercial enterprise, a haunted house. He get scared and he starts running out of the house. One of the actors who is playing a person that has a gas-operated chainsaw that's on, it's running. This actor who's playing this role, he gets a little excited when the guy takes off running and he chases him with the chainsaw. Then--

[00:07:18] Rob: Sorry to interrupt, but this is like a haunted house, you go to the Halloween?

[00:07:23] Neil: Exactly. Then the person falls down and injures himself and he files a court action and there are literally a couple hundred of those cases. That's not really to say haunted house you're talking about in the Stambovsky case.

[00:07:45] Rob: Do you know of any cases that are like a haunted house that somebody says that there is a haunting? Do you know of any other than the Stambovsky-Ackley case?

[00:08:02] Neil: No, I don't. The New York court system is strange. The first court you go to is the Supreme Court. So, we're accustomed to thinking the Supreme Court is that's the final court in the land. In New York, the actual court of first instance, in other words, the court you go to first is the Supreme Court.

The Supreme Court of New York, who heard the Stambovsky case first dismissed it. They dismissed it in the large part because they said, "Why are you here? We don't understand the cause of action." They searched too in their legal records and they couldn't find any other cases as well. They're basically like, "I don't know. I'm not sure why you're in here." They dismissed it.

It's interesting because the judge who wrote the dismissal opinion said that he thought it didn't seems fair what happened to Stambovsky, but he didn't know of any law against what happened. He didn't know of any previous case law. That really suggested there may not well be other cases like Stambovsky.

Also, too, I should tell you, Stambovsky is a famous case that's almost never cited. I'll be happy to explain why it never cited in the legal literature and it's never cited as precedent. I'll tell you why if you want to know, but the point I wanted to make right now is that Stambovsky's a really famous case because it's in law textbooks. It's in the law textbooks because, come on, a haunted house.

[00:10:01] Rob: Yes, it's a great story.

[00:10:02] Neil: This is interesting, this is adventure. This is, are these people crazy who see ghosts, or is there so much confirming evidence that you're halfway enticed into thinking that there are ghosts?

[00:10:25] Rob: Why isn't it cited more often? You brought that up, so I'd love to hear about that.

[00:10:30] Neil: Yes, it's not cited much at all. In fact, I found it cited in 11 cases and I went back further from the inception of the case. This is going to require something lengthy, and if you want me to break it into parts, just interrupt me. This is the case in the United States, duh, and I say that because if this case were in any other country-- I write a lot of comparative law articles. If this were in any other of the, let's say, European countries, or in Japan, this case would be cited all the time.

Well, why is it not cited in the United States? Well, it's not cited in the United States, because the United States' legal system is a reflection of being in America, and America is, for better or worse, an extremely right-wing country. That doesn't mean it's bad, it just means it is an extremely right-wing country.

What do I mean by that? I mean that property interests have a huge advantage over non-property interests when you go to court in the United States. Traditionally, in the United States law, and in fact, you can see the dissenters used exactly this reason in the case, the two dissenters, the basic rule of life in the marketplace in the United States, unlike in other countries that are developed countries anyway, the basic rule is, well, buyer beware, caveat emptor.

What that means is, look, as a consumer, you're supposed to be a rational, intelligent chooser who does their due diligence, who checks out all of the relevant characteristics of whatever it is you're buying, whether you're talking about hamburger meat, whether you're talking about a house, or whether you're talking about 92 acres in upper New York State. Your job as a consumer is, is to be responsible as an individual and check it out.

If that's the basic rule of law, and it is, the Stambovsky decision is really unusual. It's unusual because the majority of the judges said, "Okay, ordinarily, caveat emptor apply but in a spirit of fairness--" and the way lawyers say that is, "An equity court--" and what that is, is a reference to ancient courts that supplemented legal courts by taking certain kinds of Maxim's of fairness and some rules of fairness, and if you wanted to, you could have your case heard in equity court, or you could have it heard in a court of law.

Almost everybody's abandoned these equity courts now all over the world but when judges want to-- Remember, these judges are humans and they have orientation, some of them more left-wing than others, some are more right-wing than others. When left-wing judges see something like this case, they're going, "That's not fair. She sold him a house, but actually, what she really sold him was a house and a reputation of the house, and because she sold him the reputation as well as the house, she didn't say a damn thing about the reputation, she engaged in what the court called, active concealment. In the interest of fairness, following the principles of equity law, we saw that in this case, caveat emptor doesn't apply."

Well, a case that does that is not going to be cited very much, because in this judicial system in the United States, the seller is given preference, and so the seller is expected to be this super-rational, super-intelligent person who does due diligence. Let me give you an illustration. My wife and I have had 17 houses in six states, so you'd think, "Well, these people, they must know a lot about houses." Well, we know some things about houses, we're highly educated in a formal way, but we don't know anything about the construction business.

Well, Neil Brown and his wife lost $100,000 on a real estate deal. How did we lose that? Well, we lost that because the owner didn't tell us that there was a material that was used as insulation that is so dangerous that many insurance companies won't even insure a house like that. Eventually, when we sold the house, and we tried to sell it, and a wise realtor would come by, they'd go, "Oh, but this is a house that has EIFS." We'd go, "EIFS, what's that?" Then I'd do the legal research, and I found there were 65,000 EIFS cases in South Carolina alone. I didn't know anything about EIFS, I'd never heard of the word in my life, and it costs us $100,000.

Well, in the United States, well, that's on you, Jack. If you're so stupid as to buy a house that has EIFS inside the stucco, and it is a danger in terms of mold, sometimes you actually have to rip off the whole exterior of a house to replace the EIFS. "You didn't know that? What's wrong with you? Are you a functioning adult?" Well, I don't know whether I am or not, but I can tell you one thing, in the United States, courts are not going to be very generous to me when I go into court and ask for damages because a realtor did not explain to me that this house has EIFS.

In my case, I even had a buyer's agent, so he has a fiduciary duty. Well, he violated the fiduciary duty, but the court says to me, "Well, why didn't you notice that he was violating the fiduciary duty? 'Because I didn't know what EIFS was.'" That's just an illustration of why Stambovsky isn't going to get cited very much, because Stambovsky is inconsistent. The ruling is inconsistent with the prevailing legal doctrine which is, individual responsibility.

[00:18:09] Rob: Yes, that's interesting you say that, because, let's say, in this particular case, Helen Ackley had actually written a Reader's Digest story about the home being haunted. She claims, and her daughter claims, we spoke with her daughter, that they actually did casually mentioned to him that it was haunted.

How would that figure into the buyer beware because that seems to me at least that they had notified him as much as they thought they should, because I think everybody here spirits goes, "It's kind of a silly thing," and I think that that's how they mentioned how it was told as if it was kind of tossed-off to him?

[00:19:06] Neil: Yes, well, there's a whole bunch of things to say, I think, in response to that. First, it's not just a silly thing. That house sold-- Let's see, I looked up to see how much that sold for, the last time it sold, $1.8 million. That's $600,000 more than compared to its value in Nyack. Lots of people see having that house as an amazing conversational point, and as an opportunity to explore Poltergeist or whatever.

That house, the value of that house is enhanced, not subtracted from by the fact that it's allegedly a ghost house. The reputation of that house is crucial to its value. Now, she says, and the court records I saw says they recognize that she said that we mentioned it to him. I don't think the court believed her. If the court believed her, then he has no case. The court didn't believe her.

Now, they don't say in the decision why they didn't believe her. I don't know. I think one thing that happens in a situation like that, she has every reason in the world after the fact to say, "Well, we told him." If she had had a diary and she had said, "On this date, we mentioned to him that this is a ghost house."

If she had any kind of evidence only other than just her saying that she remembers telling him, I think this case would've been decided very differently. What happened was, the court referred to her behavior as "active concealment". She had told lots of people, not only Reader's Digest. That house was part of a tour of city houses because there are several ghost houses in that community.

She'd been part of a city tour that was being used as a tourist attraction. Now, remember there's only 7,000 people at the time. Lots of people in Nyack knew about it, probably most people in Nyack knew about it but Stambovsky's in New York City.

You're really asking the question, does Stambovsky have a responsibility to be knowledgeable about Reader's Digest articles? Does Stambovsky have a responsibility to be knowledgeable about local culture and local cultural events in Nyack? American law, again and again, will place the responsibility back on that buyer because they'll say, "Well, he should've known."

[00:22:40] Rob: Interesting. One thing that you mentioned was that it being a haunted house actually increases its value. Jeff Stambovsky's argument initially was that it decreased the value of the--

[00:22:58] Neil: For him it did. In other words, you take your buyers as they are, not as you wish they were. In his particular case, he didn't want anything to do with the house. After he found out, he wanted his down payment back.

He wanted to have nothing to do with that house. However, many people were calling, they wanted the house exactly for the reason that he didn't want the house.

[00:23:33] Rob: Do you think that she should've just sold it to somebody else who wanted it because it was haunted? I guess, just personally?

[00:23:43] Neil: Why not? She could take the money and run. She's got a good thing going there. She has a daughter involved. She has her daughter's suitor involved. You got mostly people who are claiming various kinds of visitations. The only potentially hostile action of any poltergeist in that particular story is the suitor of the daughter.

Ackley has a simple answer to that and that's just the ghost was checking out the quality of the suitor, to see if the suitor was up to the task, is worthy of the daughter. You got stories, you got multiple people. Sell the house.

[00:24:48] Rob: [chuckles] You mentioned that this was all kicked off by Jeff Stambovsky wanting his down payment back and it was pretty late in the process, actually. What initially legal ground did he have to demand his down payment back, if any? Initially, what was Helen Ackley's legal ground to keep the down payment?

[00:25:18] Neil: For one thing, and this is very confusing to me when I was looking at the case more. Down payment is distinguished from earnest money in the legal literature by the following: A down payment is money that's serve as a promise to a lender. That's your down payment. Earnest money is money that you give to the prospective seller as an indication that you're not just saying you want the house, but that you want to reserve the house and you're willing to risk putting up part of your money, it's called earnest money, in order to make sure other people don't buy the house ahead of you.

The strange thing is, again, if you give money to Helen, that's called earnest money, but it seems like in these conversations in the case, they were called down payment. I don't know if there's just some special usage in that part of [chuckles] New York or what. That's certainly is really strange because real estate law in general, uses the distinction that I just gave.

[00:26:52] Rob: In fact, Cynthia who is Helen's daughter, said that the money was earnest money. It sounds like, when you're looking at the case file, that it's being used interchangeably and that seems maybe that's not normal.

[00:27:13] Neil: It is not normal at all. In fact, it would be a very rare lawyer who would be comfortable with anything other than that distinction that I gave you. Now, you said what are the grounds for each of the parties feeling the way they did about the, let's call it what I think it was, which is earnest money. I figured it out, it's 5%, so I don't know if mortgagers or lending money at 5% at the time for a house, I doubt it.

That sounds more like earnest money to me. The question is, what right do you have to have the money back? This is an action in the rescission. That's a contract term meaning we want this contract to be declared no longer valid. We want this contract to in effect never have existed.

Now, when you give somebody earnest money, the standard for what you get your earnest money back or not, is whether the person you gave the earnest money to has behaved in a reasonable and fair fashion. With that degree of flexibility, a court can go about any way it wants to.

Remember, this is something I think people don't appreciate enough about courts, courts are not made up of robots. Courts are made up of people with all the variety of attitudes, value orientations that people have. If you're a plaintiff, let's say, in a civil action, you commonly want a jury because you think that a jury would be more sympathetic to you, to your argument than a judge, because judges have heard it all.

They've heard everything under the sun. A jury is new and you can make all kinds of arguments related to pity that will impress a jury, that a judge would just yawn while listening to it. When you have language like, "You get your money back," if Ackley behaved in a manner that was unreasonable or unfair, well, that gives a lot of latitude for judges to go any way they want, and they do.

We know that who the judge is, what time of day the judge makes the ruling is usually determinative. When you look at criminal cases, if you're a lawyer, you don't want your client to be sentenced any time after three o'clock. When you look at the data, the data are markedly dramatic in saying that judges after three o'clock are thinking about going home and they're not in a good mood. The day is over for them.

[00:31:01] Rob: [laughs]

[00:31:02] Neil: They tend to give harsher sentences for the same crime that if the sentence were at 10:00 AM, when they're fresh, just had some good oranges, they're very likely to give a lesser sentence for identical facts. This has been done in the laboratory. This has been done looking at actual case law over the course of many years.

My point is, judges are humans. There's something in the law called forum shopping. Forum shopping means you try as a lawyer to get your case heard by a forum, that means a location and a judge that is favorable to your kind of cases. For example, if I had a client and it was, let's say, a personal injury case, I would never, ever want the case to be tried in a agricultural region. The reason for that is, is because agricultural cultures are much more oriented toward individual responsibility and they tend to give much lower grants of damages to clients.

If I'm a lawyer and I can get access to, let's say, Pittsburg courts or even Kansas City courts, instead of some community that has only 10,000 people in it, I would do it all day long. That's called forum shopping. I think the community needs to recognize that the law as it is determined is very human. It's not something that where they go to school for a long time and they're very august and deserving respect. They have these rules that are really not motivated by human passions and so forth, that's crazy talk. You must not know anything about judges.

Some judges correctly have image of that hanging judges. Other judges are much more understanding when somebody does something wrong. They're much more compassionate. They tend to look for some kind of a method of handling the case so that there is some punishment, but overwhelmingly, some avenue by which this person can have this whole process erased. Because we think that they were in unfair circumstances. That's what Les Misérables was about.

[00:33:54] Rob: [laughs] Going into the humanness of judges, in fact, the final ruling from the New York Supreme Court, it's pretty tongue-in-cheek, it's pretty funny when you read it. Going into that, what was their ruling? Why use the language that the judge did? What did that final ruling mean?

[00:34:35] Neil: The reason the language is used and there are cases like that in all areas of law, where judges just decide, "Let's have fun with the language." You're writing a decision about a haunted house. Of course, you're going to say, "We want to make a ruling that doesn't haunt us in our later years." You can say that because it's funny and it's not inconsistent with the way you're going to rule. You're playing with words.

Legal decisions are very logocentric, they're very word-oriented. They're just being playful, that's all. There's no hidden agenda behind using that kind of language. What the ruling in the case does is it violates a standard way of thinking about disputes between buyers and sellers. It basically says we're going to take fairness into consideration when we make a decision.

We're not just going to say that the person responsibility to figure out what kind of house is this? What kind of reputation does it have? We're going to say, "Is it really realistic to expect a person to know what's in Reader's Digest and remember what the stories said even if they are familiar with the Reader's Digest? Is it really fair to expect a person from New York to know what's happening in Nyack?" [chuckles]

What the judges are doing here is probably if you moved to a jurisdiction that was perhaps composed of a different ethnic group than the people in Nyack, you would get a different decision. In other words, that plaintiff got really lucky. Just fortunately, they got the three judges that they had because that could've so easily gone in a different direction.

Incidentally, I think that this case just in terms of poltergeist, this case when the judges say, "As a matter of law, this house is haunted." What they mean by that is we're not going to allow a seller to say, "Well, we're just kidding." We're not because she took $3,000 from Reader's Digest. She's also had newspaper interviews and she's had these house tours in the community so she has behaved as if there are poltergeist. Therefore, we're going to hold her to it.

Therefore, as a matter of law, not because we're saying there are poltergeists in the house, but as a matter of law, we're going to base our decision on the fact that she was selling one kind of house to him given what he knew or at least claims to know. She actually had a different house. She had a house and she also had a house that was haunted. Haunted by reputation whether there's poltergeists, we leave it to you.

[00:39:02] Rob: That's interesting. I believe that they also mentioned that Ackley couldn't sell the house because it's occupied by spirits is one line in it. Would that be more just a joking line that they tossed off or what would that mean?

[00:39:22] Neil: Yes, they wanted to use the word spirits.

[laughter]

[00:39:24] Rob: Definitely. They even drop who you're going to call from Ghostbusters in there. I know, isn't it sometimes called the Ghostbusters Ruling?

[00:39:35] Neil: Oh, often. That's what it's known as.

[00:39:39] Rob: I know you've said that it's not cited very often. Did it have any kind of immediate effects on real estate law? Does it still stand to this day?

[00:39:55] Neil: Wait, did it have an effect on real estate law? If a judge wanted to make a decision that the judge knows is not in the rich tradition of American legal habit, and wanted to say, "Oh, I have such deep respect for caveat emptor, but in this particular case, it is so outrageous that I want to, just in this one case now, I'm not going to do it many times, but in this one case, I'm going to say that caveat emptor is put back on the shelf and instead we're going to decide in fairness," and that's the language they're going to use, "in fairness, we want to decide that the plaintiff has a valid complaint against the defendant." It stands as legal precedent, should a judge ever be so inclined to say, "Caveat emptor doesn't apply here."

You have to have some cajones to say that as a judge because you know that American Law is consistent with caveat emptor, so you're really sticking you're really sticking your nose out. One thing judges don't like, and that's to be overturned because when they're overturned, it's basically saying, "What are you smoking, judge? What are you doing?" It's going to be a rare judge who has the strength, the personality, that they're going to take a legal principle like caveat emptor and just say, "Well, in this case, it doesn't apply." That's what they did here.

[00:41:52] Rob: Do you know if this was ever appealed further, tried to be taken to the actual Supreme Court?

[00:41:59] Neil: There's no record. I looked and no, there's no record that it was.

[00:42:05] Rob: What do you think would've happened if they took it to the actual Supreme Court?

[00:42:10] Neil: Tell me the judges and I'll tell you the answer to that question. Do you know what I mean?

[00:42:16] Rob: Yes, definitely.

[00:42:17] Neil: In other words, if you got a traditionalist judge, like Amy Coney Barrett, the person that was just approved to the Supreme Court, and her mentor, Scalia, they decide cases they say on basis of originalism. By originalism they mean what did the original writers of the legislation have in mind? They would probably have overturned it because the tradition is that that person from New York City can't just say, "Well, how was I suppose to know?"

That person from New York City according to American Law and the traditions of interaction between buyer and seller in the United States, that plaintiff was trying to shift responsibility onto the seller when the responsibility was his to find out about this, but other judges would not go in that direction. You wouldn't expect Sotomeyer for example, to overturn this decision.

[00:43:39] Rob: Interesting. Neil, I think I've covered basically all the questions that I had for you. Do you have any last thoughts about this case?

[00:43:55] Neil: I think the significance of the case, at least for me, is it demonstrates the extent to which legal decisions are human decisions, because here you have judges really making a surprise decision. This is like, "Oh my God, they faulted the plaintiff?" Because ordinarily in a situation like this, with most judges, this case is going to be decided differently. If it had been differently, it'll be decided more often because that's consistent with the traditions of American interaction between buyer and seller in the marketplace, and it would just be one more of hundreds of precedents where the seller--

This was very important in this case. Ackley did not say to Stambovsky, "There are no ghosts in this house." If Ackley had said that, this decision would immediately have gone in favor with the plaintiff, but Ackley made no affirmation that was false. It would be very, very difficult to us to charge Ackley with fraud because she made no positive assertion, but in a case like this where she didn't say there are no ghosts, in a situation like this you have a judge making a strange decision, was it right or wrong?

I personally like the decision, but that's because I probably am lot more less winged than the typical judge would be. I don't know about you, but as a consumer, I frequently feel lost. When I buy anything of any large value, I immediately hire people to actually be my knowledge base because I know full well I'm not qualified to do most things, in most areas of life that are complicated. I don't have the training.

Think of when we go grocery shopping, the most simple decisions we make. I don't know that it really helps me to have those labels on the sides of the packages just indicating where it has yellow dye number five, or how much niacin is in the product because I don't know enough about nutrition and I don't know enough about chemistry for that information to even be useful to me. To me, it's just like, "Yes, whatever. I'll take the one that's up high so I don't have to bend over very far."

[00:47:06] Rob: I hear you, Neil. That's why I'm talking to you. I don't really know much about the legalese of everything, and this has been great and super eye-opening about this. There's something that you mentioned that I thought was interesting in there, which was this was an active fraud. Could you talk about the difference between fraud and active concealment and where that line is drawn?

[00:47:36] Neil: That's tough. A lot of it has to do with whether there is a fiduciary duty by the one person in their relationships with the other person. For example, when you go to a financial advisor, there's a lot of controversy in the financial community about the extent to which financial advisors have a fiduciary duty. Meaning that they're supposed to act as if they are you.

If there is a fiduciary duty and it is not honored, that opens up a charge of fraud, but active concealment is different from that. Active concealment means, I actually say I don't have a fiduciary duty when I do have a fiduciary duty. Active concealment requires you to tell an affirmative lie. Fraud can just be you're not obeying the legal responsibilities that are established in statutes for you. There's all kinds of fraud. There are actually four different kinds of fraud and we could really, really get into the week talking about fraud.

[00:49:13] Rob: [laughs]

[00:49:16] Neil: The important difference between the two things is active concealment you have to actually have said, "There are no poltergeists in this house." That didn't happen.

[00:49:38] Rob: That's great.

[00:49:40] Neil: One more thing, I think this is highly relevant. I and others have written law journal articles about what's called the business lie. Just to hammer home the point that I began with, which is that American law is relatively right-wing law. I'm not complimenting and I'm not criticizing. I certainly have an attitude, but my point is that American law is a right-wing law compared to what the law is in other industrialized countries.

When you think about businesses in general when they advertise. The universities, my university has banners all over the place on campus that are not true. "We're number one at this. We're number three at this," and every university campus where I managed to consult, all these banners, the same ones. I can take you in Florida out in, Bumfuck and there'll be two buildings out there, some little community college, and they will have banners. "Number one in value, number one at this."

What's the business lie? The business lie is legal and what's meant by the business lie is, it's so absurd that nobody believe it, so say the judges. In actuality, all kinds of people believe it. If a 17-year-old and his or her parents come to my campus and they see a sign that says, “Third greatest teachers in the United States.” That parent and 17-year-old think that there's some substantial truth to that banner.

Now, a few might be cynical, I would be, but most are like, “Oh wow, look at this.” The PR people say, “Yes, we're the third best in the country?” Well, we're not, but how can they get away with that? Well, they get away with it because of the business lie and the way American courts work, and it's very unique, the way American courts work, as long as you say something that the judges say, “Oh, nobody would believe that.”

For example, these are actual cases. World's greatest pizza. You can advertise that. That's not against the law. World's greatest pizza. You just put the sign out there. The argument of the judges is, “Oh, come on. That's not a problem. Nobody believes that.” You know what, my parents would believe that, and my wife's parents would believe that because-

[00:53:06] Rob: Are you telling me, I'm not drinking the world's greatest cup of coffee right now? Is that what you're telling me?

[00:53:12] Neil: Amazing. It's just amazing.

[laughter]

[00:53:18] Rob: Wow.

[00:53:19] Neil: One of my favorite stories is Lay's potato chip. The New York attorney general filed suit against them for false advertising, basically lying, because they said that Lay's potato chips were a lightest potato chips available. They had that out there on their packages, lightest potato chips available. The New York attorney general filed suit against them for false advertising, calls them in and says in court on the record, “Could you please explain to us the data that shows you are lightest in calories of any potato chips?”

The executives looked at each other, and they they're having a lot of fun, they looked at each other and they go, “What do you mean?” The attorney general said, “Well, you said lightest.” They said, “Yes, it is.” “What's the data?" They go, “Well, everybody can see it.” "Now, what's the data?" “No, it's the lightest.” Finally the attorney general is starting to catch on and he says, “Well, what did you mean by lightest?” They look at the attorney general. They say, “The color, the color.” Can you imagine how they laughed in the chauffeured limousine after they went home?

[00:55:02] Rob: Oh my God.

[00:55:03] Neil: Because, it's like, “Well, what did you think it meant? It means color.” Of course, nobody who saw that thought of color, but they did happen to be really light in color, and they were using that to sell potato chips and that was okay, because, well, nobody believed.

[00:55:27] Rob: Well, Neil, I'm going to ask one last question, and that is, what would it take for a house to be actually legally considered haunted? Like materially found haunted? What would that take?

[00:55:50] Neil: Sure. Well, you have to distinguish between having a reputation it’s haunted or materially haunted. A reputationally haunted, all you need is to have people in the community telling one another stories about various kinds of visitations, various types of sighting, and there's a reputational haunting. People think that it's haunted. Now, as soon as you say materially haunted, things get a lot tougher. The great Randy, a person who was a master illusionist and then halfway through his career started engaging in a different career, and that is debunking the paranormal.

For example, one of the things that he debunked were the Philippine surgeons who did a surgery without making any cuts in the abdomen. They use their hands to do surgery and they had videos of doing surgery with hands. That was one of the first things that he debunked. He had, during the second part of his life, he had a $1 million standing offer for anyone who could conduct a miracle. Some people showed up and they started doing their miracle and then they say, “Oh, well, I don't think I'll do it today.”

The reason is, and it goes to your question, the reason, is Randy always said, and this would be the answer to your question about materially haunted, something is true if you perform the activity and a member of the Stanford physics department and a master illusionist are in the room and they say, “Oh my God, I saw the Poltergeist.” Now, in other words, if you take somebody from the scientific world and somebody from the illusionist world, the master illusionist world, and if they see it as something that is real, then there are ghosts here. Notice that is a really strict standard, really hard to meet, and quite different from reputationally haunted.

[00:58:44] Rob: Yes, definitely. Well, Neil, that's about all that I have time for. I have to get back to my day job, unfortunately.

[laughter]

I could talk about this all day. This is so interesting to me. I want to thank you so so much for coming on and talking to us. I will let you know when it goes live, and we'll probably send you a link ahead of time. We typically do that just to also make sure that our facts are correct and we aren't misrepresenting anything in the podcast. I think this is going to be a really fun episode. We've got me great people. Like I said, we got Cynthia, who is Helen Ackley’s daughter, we have Richard Ellis, who was part of the real estate group that represented the house. It's going to be a good one. This won't make it into the episode, but I'm trying to get Jeff Stambovsky. He's playing a little hard to get, but we’ll see.

[00:59:52] Neil: [laughs] Now, are the older guys still with Cynthia?

[00:59:58] Rob: No, but she-- interestingly enough, her mother is not buried very far from the house and the day of her mom's funeral somebody took a picture of the house and they think that they saw her mother in the picture. Personally, I'm a little skeptical about everything, I'm the kind of guy who likes the facts and everything, but I really want to believe and I really want that. It's a great ending to the story.

[01:00:38] Neil: It is, and I think that we often say, "Seeing is believing." When I see something I believe it, but a lot of times, believing is seeing. That is if you believe that something is going to happen, you sometimes you look very hard and you actually see it, because you want it to be true so badly, and what a great story. It's not going to be boring conversation. Okay. Bye. Bye-Bye.

[silence]

[01:02:24] [END OF AUDIO]