September 22, 2007
In an Exercise of Great Bravery, Foolhardiness, or Hubris, Stanford Law School Tries to Explain Thinking Like a Lawyer to the Other Grad Students
Posted by Jeff Lipshaw
Alene came back from helping son James settle into his freshman year at Stanford with a clipping from the Stanford Daily about a new course being offered by the law school to graduate students generally.
The course, entitled "Thinking Like a Lawyer," consists of a sampling of twelve law profs, including Dean Larry Kramer (left),* Mark Kelman, Robert Weisberg, and Pamela Karlan. Particularly in view of some reading and writing I'm doing now, I thought Larry Kramer's quote was interesting: "We think that our discipline has a sort of core. . . There's a mix of core principles and a way of thinking about them. If you understand that and you're out in the world confronting what's weird about the law, it'll seem less weird."
I'm in the midst of looking at analogical reasoning. One of the most complete recent exposition of legal analogical reasoning was Cass Sunstein's Harvard Law Review article. But that kind of analogical reasoning (like Edward Levi's canonical book) deals with propositional analogies, and expressly sets aside what I think is a deeper question about the role of pre-conceptual and non-proposition analogy and metaphor. It's hard not to come to the conclusion that the underlying thinking tools are pretty much the same across the board - deductive, inductive, abductive, and analogical reasoning - but the categories by which we sort and filter the world's complexity are in large part culturally derived.
Well, more on this in future drafts of Aboutness, Thingness....
* Full disclosure: The Stanford Law School dean's office has an endowed commode, known as the Jeffrey M. Lipshaw Toilet, in honor of my contributions to the school over the years. This honor in no way influenced my treatment of the subject matter of this post.
Reviewing the MAC Stories
Posted by Jeff Lipshaw
Both the Wall Street Journal and the New York Times ran stories today about KKR's backing out of its deal to acquire Harman Corporation, stereo maker and significant audio component supplier to the automotive industry. The focus of both stories was the "material adverse change," or MAC, clause, found in one form or another in almost every significant merger or acquisition agreement. In a nutshell, most deals have a delay between signing the agreement and the closing, either to get regulatory approvals or to obtain necessary third party consents. The representations and warranties characterize the business at the time of the agreement (and they are generally "brought down" to the closing date by a certificate of an officer of the target to that effect), but there is generally a condition to closing that says the buyer is not obliged to close if there has been a material adverse change in the business since the signing of the agreement. There is some negotiating around this - the question for the seller being how much can you limit it expressly to the four corners of the Business with a capital "B" and insure that it has a high hurdle, and the question for the buyer being how much can you turn it into an option if anything in the world in or out of the business changes its prospects at all.
The neat thing was that friends from practice and academia turned up in the articles. I thought the WSJ article captured the foregoing essence of a MAC better than the NYT, and Gerald Nowak, above left, a partner at Kirkland & Ellis, who used to do work for us when I was at Great Lakes was quoted about the legal standard. The NYT, on the other hand, quoted Steve Davidoff (Wayne State, right) from our sister blog, M&A Law Prof, and was stronger on the deal context. Apparently all KKR has at stake is a $225 million walkaway fee on an $8 Billion deal. So in making the decision to walk away, it knows, even if its claim on the MAC is thin, its liability is capped, and there will be a discount for litigation risk and certainty. And Harman, on the other hand, knew that in the worst case it was giving an option on the company for up to $225 million.
I think the WSJ Deal Journal appropriately notes that the more significant sanction here is reputational.
Ohio Supremes Support Pro Bono
The Ohio Supreme Court recently issued a statement calling on its bar to provide and report pro bono services. The court noted the increasing needs for legal service for those who cannot afford representation.
September 21, 2007
The Michigan Judicial Tenure Commission recommended a censure of a judge who raised a bond previously set in a case after it had been brought to her attention that the defendant's son had called her an "asshole" out of her presence but within earshot of a police officer. The judge also had set bonds in two other cases for punitive purposes and allowed another proceeding to be conducted in an "undignified" manner.
The commission filed charges in an unrelated matter alleging that another judge violated judicial canons in that the judge displayed "unnecessarily harsh demeanor, interrupted witnesses excessively, made inappropriate sarcastic remarks and unjustified threats of contempt." (Mike Frisch)
Ex-Priest May Sit For Bar Exam
The Iowa Supreme Court rejected the recommendation of its Board of Law Examiners to deny an applicant permission to sit for the Iowa bar exam. The applicant had been an ordained priest who had "used spankings, tickling, push-ups and sit-ups as disciplinary techniques" on young people under his supervision. The incidents took place on trips taken with teenagers. He also received foot and neck massages. The information was disclosed to the bar examiners.The court concluded that the incidents, which had occurred over 17 years ago, did not establish lack of moral fitness when viewed in historical context. There was a dissent of a single justice.
In an unrelated matter, the court revoked the license of an attorney convicted of predatory sex crimes against minors. (Mike Frisch)
Unearned Fee Ordered Returned
A recent decision of the Michigan Attorney Discipline Board concludes that a lawyer engaged in ethical misconduct by charging a $4,000 "non-refundable" fee in a domestic relations case and refusing to refund the unearned portion when discharged shortly thereafter. The opinion collects the cases on this issue from around the country and concludes that the Michigan "law and ethics opinions in this area have afforded something less than coherent guidance." Thus, the attorney was ordered to return the unearned fee and no sanction was imposed. (Mike Frisch)
The Costs Of Bar Discipline
The Montana Supreme Court censured an attorney earlier this year and ordered the attorney to pay the costs of the disciplinary case. Several months later, the Office of Disciplinary Counsel (ODC) submitted its bill. The lawyer balked at the amount (slightly over $10,000) and raised several challenges, including a contention that the delay by ODC waived the costs requirement. The court disagreed and issued an opinion holding that costs ordered in bar cases are subject to the provision the the rules of disciplinary enforcement rather than civil rules. The court "did not intend the [bar rules] to tie ODC's hands in limiting what resources could be assigned to evaluate and prosecute complaints." A challenge to travel expenses bordered on frivolous. A remand was ordered to evaluate some aspects of the claim for costs. (Mike Frisch)
Failure To Submit Transcript Results In Revocation Of Court Reporter License
The Oklahoma Supreme Court revoked the license of a shorthand reporter who failed to submit the transcript of a preliminary hearing and did not respond to or participate in the ensuing licensing proceeding. The underlying facts: a lawyer represented two of three defendant's at the preliminary hearing. He left the courtroom during testimony concerning the non-client (a decision one might justifiably question). He states that his clients' informed him that he had missed crucial testimony and now alleges that the "testimony taken...weighs significantly upon the lawfulness of the arrest and search... [the attorney] is convinced that his clients' freedom hinges on the testimony offered...." (Mike Frisch)
September 20, 2007
The Normal Penalty
The Ohio Supreme Court permanently disbarred a former attorney for continuing to practice law after his suspension in 2002. He also had accepted new cases and failed to honor a promise to return fees paid after his suspension. Noting a finding of remorse, the court nonetheless concluded that the sanction for such misconduct is the disciplinary equivalent of shunning. (Mike Frisch)
The Last Lecture
Posted by Jeff Lipshaw
Jeff Zaslow has a moving story in today's Wall Street Journal about the "last lecture" of Prof. Randy Pausch at Carnegie-Mellon, who is forty-six years old, has three small children, and has terminal pancreatic cancer. I can't imagine what courage and zest for life he must have. What a way to see it tested.
Zaslow introduces the story as a particularly poignant and non-academic example of something gaining some currency: the "'Last Lecture' series in which top professors are asked to think deeply about what matters to them and to give hypothetical final talks. For the audience, the question to be mulled is this: What wisdom would we impart to the world if we knew it was our last chance?"
This strikes a familiar chord, and perhaps more so if one has spent most of one's life chasing lucre instead of knowledge. With a sigh, the Type-A lawyer or business person reflects, "you know, nobody ever says on their deathbed, 'I wish I had spent more time in the office.'"
What would you say in your last fifty minute lecture?
September 19, 2007
The Right To Sue For Fees
A client retained an attorney (Levy) for a 1/3 contingent fee to sue his prior lawyers for malpractice. After the case was lost on summary judgment, there was an appeal that reinstated the case. The client then hired new counsel (the "GSR" firm) for the malpractice action. The new firm agreed to pay the Levy 30% of its fee.
The malpractice case was dismissed and the client hired a new lawyer (number four if you are counting) to sue the GSR firm for malpractice in its handling of the malpractice case. That case settled for $125,000.
Levy sued for his fees. The trial court dismissed the fee complaint, holding that Levy had waived his right to quantum meruit compensation by agreeing to accept a portion of the GSR's firm's fee. On appeal, the New York First Department reversed, holding that the contingency agreement between the client and Levy controlled. "[i]n disputes between attorneys, the discharged attorney may elect to receive compensation based on quantum meruit or on a contingency basis, whereas as against a former client, the discharged attorney is entitled to quantum meruit only..." Levy may pursue his fee claim to recover the fair and reasonable value of his services in the first case. (Mike Frisch)
Accurate But Misleading Letter Violates Ethics Rules
The line between a technically accurate but incomplete representation to an opposing party and an omission of fact that amounts to dishonest conduct can be a difficult one to draw. A recent bar case from Massachusetts illustrates the point. The lawyer represented a divorcing wife. The husband agreed to permit a cash advance from marital assets to allow the wife to purchase a new home. The client had a romantic relationship with another man who agreed to purchase the home in his name and then sell the property to her. The lawyer wrote a letter to opposing counsel that did not disclose the arrangement, at the specific request of the client.
Bar Counsel filed charges, which were rejected by a hearing committee based on findings that the letter contained no affirmative false statements and that the lawyer had acted in good faith. On appeal, the Board of Bar Overseers rejected the finding of no misconduct and ordered an admonition. The letter was "deliberately misleading...obviously calculated to lead the husband's attorney to believe that the advance was for a routine, arms-length transaction..." Further, the client's request to not disclose was a mitigating factor, not a defense. (Mike Frisch)
September 18, 2007
Major Malpractice Settlement
The Legal Times has an article in this week's edition reporting a $19 million malpractice settlement agreed to by Perkins Coie. According to the article, the lawyers had negligently provided confidential documents to opposing counsel in the underlying case. There is a quote from D.C. Bar Counsel that suggests that it investigates any allegation of ethics violations brought to its attention. Excuse my cynicism, but I won't hold my breath waiting for disciplinary charges as a result of a complicated legal malpractice case against a major firm that settled prior to trial. (Mike Frisch)
Improper Use Of Trust Account
An attorney whose "business and personal accounts had previously been garnished for taxes" deposited checks representing funds that belonged to him into his trust account "in an attempt to avoid seizure of his funds by tax authorities." He stipulated that the conduct involved dishonesty and commingling, among other violations, and agreed to a 60 day suspension. The proposed sanction was adopted by the Wisconsin Supreme Court. (Mike Frisch)
NOBC Summary Of New York Ad Case
The National Organization of Bar Counsel has a summary of the district court decision in the New York attorney advertising matter with a link to the web page of the firm at issue. (Mike Frisch)
Minnesota Court Splits Over Suppression as Remedy For Rule 4.2 Violation In Criminal Case
After his arrest on murder charges, a defendant gave a series of three statements to police. The last statement was obtained after a public defender had been appointed and over her vehement objection. The statements were admitted into evidence at trial over defense objection and the defendant was convicted.
On appeal, the Minnesota Supreme Court held that the prosecutor had violated Rule 4.2 in permitting the interviews after counsel was appointed but that "the state's conduct was not so egregious as to warrant suppression of the resulting statements under the facts of the case." The court concluded that, in a criminal matter, the government attorney may not direct any communication with a represented defendant about the subject of the representation unless there is consent of the lawyer, the communication is authorized by law, or there is a court order. "Tacit consent" of defense counsel does not suffice. Because the client had repeatedly sought to speak to police after counsel was appointed, there was an insufficient showing of bad faith to order suppression of the statements.
Three justices dissented, and would find that suppression was proper based on both Rule 4.2 and the violation of the right to counsel: "If there was any urgency here, it was one the police created because the police wanted to talk to [the defendant] without counsel present... the police adopted a clear strategy to undermine [the defendant's] relationship with his counsel, even before counsel was appointed."
Finally, the dissenters do not accept as explanation the majority's view that "poor communication" between prosecutor and defense counsel and the prosecutor's "frustration" with defense counsel led to the ethical violation: "[The prosecutor's] frustration does not mitigate a violation of the rule; rather, counsel's failure to seek a court order aggravates the misconduct." (Mike Frisch)
September 17, 2007
Close Corporations Conflicts
The Alabama Office of General Counsel recently issued an ethics opinion in response to a question posed by the general counsel to a closely held corporation. The entity is owned by two husbands and wives--the relationship is "now completely deteriorated and [the two sets of spouses] are incompatible." The opinion states that the general counsel may continue to represent one set of spouses in matters that are "are not in any way related" to the corporate matters.
Consistent with Rule 1.13, "[the attorney] can represent the corporate entity only at the request and instructions of a majority of the board of directors, which...ha[s] been obtained in the instant case." (Mike Frisch)
Multiple Misrepresentations Merit Suspension
The Wisconsin Supreme Court recently imposed discipline on an attorney who had made multiple misrepresentations regarding the status of seven probate matters. The attorney had stipulated to the misconduct but not the level of discipline. The court adopted the referree's proposed sanction of an eighteen month suspension, rejecting the attorney's request for either a non-suspensory or probated sanction. The court noted the favorable endorsements of a number of clients, but found that the pattern of falsifications required an actual suspension of significant length. The attorney also was required to pay the costs of the bar proceeding. (Mike Frisch)
UC Irvine Debacle - Can We Follow the Money?
I just saw Scott Moss's analysis of the UC Irvine dean hiring-firing debacle, and something jumped out at me, but I wasn't able to nail it down in a quick surf through Google. This is not by way of justification, but my speculating on how a PR mess of this magnitude (and the missed judgment calls) comes to pass.
ABA Standard 201(a), which Scott doesn't cite, is about the money. I am too recently removing from the domain of lucre not to think about it first off. "The present and anticipated financial resources of a law school shall be adequate to sustain a sound program of legal education and accomplish its mission." I suspect the current contretemps at Ave Maria Law School in Ann Arbor is about the money - its major benefactor is Tom Monaghan, and what he wants has some impact on the school.
Here's what I'm wondering. I wasn't able to find UC Irvine's accreditation application on the internet, and I don't know if it is a public document. No doubt the promoter of any school has to show pro forma financial statements, and part of that would have to be private sources of funding. And I have no doubt that UC Irvine, despite its public status, will need an endowment. (Again, a quick Google search shows that one of Dean Edley's first priorities back in 2004 was beefing up Boalt's then $80 million endowment to a level comparable with other top public and private law schools.) As much or more than being a scholar or caring for the faculty, a dean, and particularly a dean of a startup school, needs to raise money. Was there a concern that a high profile liberal couldn't raise money (given that there are no alumni to tap) in conservative Orange County? Did someone who had already made a commitment threaten to pull money off the table? This is all speculation on my part, but that's what I'd suspect.
The Nevada Supreme Court has unveiled a program for listening to oral argument on the web. The first case argued involved proposed judicial discipline in the much reported matter involving Judge Elizabeth Halverson. The link to the argument is here. (Mike Frisch)