Saturday, August 2, 2008
"Why Barack Obama Rejects Ludacris' Song." That teaser headline on Yahoo! News leading to this article. Though I also give stupid points to the headline just below it: "Civil War Discovery Could Be 'Holy Grail.' " [Alan Childress]
UPDATE: Another Yahoo! news story reports on the sale of a baseball card for $1,620,000 (or now the equivalent of 927 Euros). The auction buyer was actually happy that his bid was accepted. “I call this the holy grail of baseball cards,” he said. ["You chose ... poorly," the knight in Indiana Jones's grail movie might say.] Now I find that I am actually upset that the other inappropriately holy grail, a signed surrender at Appomattox, is valued at $500,000, a third of a baseball card. Damn; if only Bob E. Lee had played baseball!
Posted by Alan Childress
Mike Frisch has been following the ebbs and flows of the judicial bias accusations against members of the highest court of West Virginia (e.g., here; and see LEF's post here). In particular, last week Mike posted here on the recent decision by one justice not to recuse himself in a case involving a major contributor. And I previously posted on a NY Times' column's similar worry about elected Ohio and Louisiana judges.
Now Marcia Coyle of The National Law Journal, also published on Law.com here (dated Aug. 4), writes about an interesting petition for writ of certiorari to the U.S. Supreme Court filed in one non-recusal case (that matter discussed here), arguing that a lack of due process violates the U.S. Constitution. The article is called High Court Review Sought on Judicial Recusals: W. Va. case triggers key ethical query. One quote:
"[T]here will be rare cases where campaign expenditures by a litigant create a constitutionally unacceptable appearance of impropriety. This is such a case," contends former Solicitor General Theodore B. Olson, co-chairman of the appellate and constitutional law group in the Washington office of Los Angeles' Gibson, Dunn & Crutcher.
The case necessarily raises the question of the reach and limits of "a key high court precedent -- argued and won by [Ted] Olson in 1986 -- [which] held that due process requires recusal only when a judge has a 'direct, personal, substantial, pecuniary interest' in the case before him. Aetna Life Insurance v. Lavoie, 475 U.S. 813."
This justice's July 28, 2008 concurrence (the pdf is in full), and having him participate on the merits, suggests that such a line was not crossed. The really-vitriolic dissents are here and here. For example, one notes, "I am one judge voting on this case who can say that I owe nothing to Mr. Blankenship [defendant's CEO and the major contributor noted above] one way or another -- he did nothing to hurt or hinder my election. He did not fund my campaign, nor am I a social friend of his." The other says, in all bold not reproduced here: "The point is that the majority went out of its way to make findings that fit its intended result rather than the justice of the cause." The majority opinion, in full pdf, is here. (One might assume that the substantive law dispute among the justices is on some exciting area of law, but actually it turns mainly on the proper standard of appellate review to apply to enforcement of forum selection clauses, a dry but often-crucial topic.)
The further question is whether the U.S. Supreme Court wants to get into the ethics issue as a matter of federal constitutional law. I am guessing it does not. I believe that the justices will use the argument that such extreme cases are "rare" -- turning it around -- to avoid granting cert. Rare and messy.
Posted by Alan Childress
This site purports to have an engine that, by running your URL and a keyword, reveals how high various search engines rank your website. I thought about this when I realized Monday how invisible we seemed after some early searches on the new Cuil search website.
On this ranker, using our URL and "profession," we are 11th on Google but not in the top 100 on Yahoo!, MSN, AltaVista, Ask.com, and others. We do better on Google (third) when the keyword is "legal profession," but not much better elsewhere. And not at all using "legal ethics." (?!) We are only 27th on Google when the keyword is "Lipshaw." Hmm. I find it hard to believe, and ultimately traumatizing, that there are 26 other websites that are more Lipshaw-infused.
Here is a different site with its own search engine ranker. We also do not fare so well on this one, except on Excite. [This ranker asks for email, so I suspect it is all about selling you services to improve blog traffic; I ran it without email. It also spelled existence wrong in its intro.] Better luck to you and your website with this test. Info on ranking algorithms is found at SearchEngineWatch. Apparently we need to use the word ethics a lot more. Or Lipshaw.
The Pennsylvania Supreme Court accepted the resignation and ordered the disbarment on consent of an attorney who was a shareholder of a Philadelphia law firm. The attorney was the subject of a petition for discipline (appended to the court's order) that alleged he had received reimbursement from the firm for "at least" 69 airplane trips that he had not taken. The scheme involved the cooperation of a travel agency. The resignation constitutes an acknowledgment of the charges in the petition. (Mike Frisch)
Temporarily Access This Blog By Using Firefox or Other Browser, As TypePad and IE Are Like the First Half of Step Brothers Right Now
Until some techno glitch is cleared up -- minor, because I doubt that Miscrosoft's Internet "Explorer" program is a common way to locate websites and blogs, given the dominance of Netscape and other browsers (especially for you Prodigy users) -- you may only be able to read this if you happened to use Mozilla's Firefox, Opera, Safari, etc. That will be true of many other TyepPad-based blogs as well. They promise to take alka seltzer and clear it up soon, but that's the scoop. It is not your computer and it is not our site. N.B. This problem fortunately will not affect John McCain, nor will it be accessed by the billions of potential readers in China for which we were already blocked by the government of the People's Republic. [Alan Childress]
That is the goal--not only to service the firm's U.S. clients in a UK office but to expand an independent client base--and apparently it's starting to be the result, of Skadden Arps's London ofiice. Here is a recent story in UK's TheLawyer.com (the online version of the City's legal paper The Lawyer), an article called The world is Skadden’s playground as European arm flexes US muscle.
The upshot seems to be that established UK law firms claim that Skadden will never have the volume and depth of UK clients as do more traditional English solicitor firms, but maybe the firm's M&A wing does not really care as long as it's in the major deals: "Skadden wants to be involved in the biggest global deals, which are inevitably cross-border and reliant on major banks. In this arena the firm is already king. The London team is being kept busy, for example, by the UK side of Anheuser-Busch’s defence against a hostile bid by Stella Artois owner InBev." For Skadden, I guess, it is both a defence and a defense.
I found this, as suggested to his students, by Miami/UK's John Flood while I was tooling around on the "public" blog of his abbreviated Global Lawyering class (at the U. of Miami's summer abroad program that just ended). It has links to pieces on China, global crime, global cities, and our own Bill Henderson's posts on the bimodal salary spikes and the Cravath model. I hope John does not mind that I have linked to the class website, as it is really interesting though brief. John's more consistently maintained blog is at Random Academic Thoughts (RATs), but I hope he will keep his other running courses -- especially the longer ones -- just as public and share the links with us. I suspect some of our U.S. law-prof readers, at least, have considered developing a full semester course in Global Lawyering (as John has too) and could use John's input (OK, steal John's intellect). That will have to do until we can get John back in the U.S. for another stint at teaching U.S. students, unless his UK gig has some distance-learning facilities. Anyway, thanks, John, for a great year at the University of Miami, not only for that school but for all of us able to follow the adventure along with you on your RATs site.
Friday, August 1, 2008
The D.C. Board on Professional Responsibility has recomended disbarment of an attorney who had resigned in California and been convicted of bankruptcy fraud in federal court. The Board concluded that disbarment was required as the crime inherently involves moral turpitude. It rejected a suggestion filed by the attorney that his plea to the crimes "under certain assurances which did not materialize" was a "courtesy" to the California Bar and the Governor because his counsel had been appointed to represent Charles Rathbun in a high-profile criminal matter. (Mike Frisch)
Only the innocent need apply, well, the colorably innocent at least. Andrew Bluestone's blog reports today on a Second Circuit case, applying New York law, which reaffirms and applies this [majority] rule on the element of causation when the "case within the case" was a criminal representation. The court notes that this is true even for representation out of court where the underlying matter is criminal. [Alan Childress]
David Hricik at LEF highlights this important case in the Fifth Circuit and says it is one to watch--the story is likely not over. I second that, fwiw. Judge Dennis in dissent argues (correctly, to my mind) that the particular forum selection clause this lawyer had in the retainer agreement was overreaching, in light of the dynamics and obligations of the attorney-client relationship. The panel majority enforces the clause and dismisses.
I would add that ethics rules prohibiting the seeking of waiver of legal malpractice liability, long recognized in every jurisdiction (compare medical doctors!), should also make it wrong to impose burdensome conditions on a client-plaintiff who wants to sue. Whether this clause rises to that level is obviously a judgment call, but there can be no blanket rule that any forum selection clause in a retainer agreement is enforceable (nor does the majority suggest such a sweeping rule).
Posted by Alan Childress
I already have enough trouble watching the pharmaceutical commercials that fill nightly news programs. First, that fact alone makes me uncomfortable that I am watching the news at all, because I realize it means someone has spent acres of money figuring out the demographic of the sick and dying, and by definition I am it while watching. Based on the same logic that made me decide never to drive to the airport ("the risk of death is higher driving to the airport than blah blah blah"), I now commit to stop watching the nightly news in an effort at immortality, or at least to stay regular.
Second, I have a lot of trouble figuring out what the drugs are even for. Oh, I know that is because of lawyers: the pharmy companies don't have to disclose all sorts of side effects if they never make any medical claims, so they give dreamy brand-imprinting commercials with no discernible symptom they are trying to fix. But that means I have to use all my powers of deduction and all sorts of fleeting visual clues, like watching a David Mamet screenplay, to be able to hazard a guess as to what's going on. I know I could just ignore them, but too many years of television and formal education make that psychologically impossible for me. I am a hooked audience for such mysteries and I dutifully try to locate the cheese.
But I understand why drug companies might prefer an unintelligible Pan's Labyrinth ad to one that says the side effects. The ones that do disclose? I cannot believe anyone would take that drug after hearing what it might do to you. No cure is worth that, I always reason. Even one for social anxiety disorder lists flatulence as a possible result, so I worry that someone will take it and finally go to that group party they have been avoiding, only to -- in one public moment -- become a social laughingstock never to leave the house again (ah, I get it, unless they take another drug). The only explanation for the existence and utility of such ads is that I am not the target audience, since I am risk averse (hence the no-to-the-airport policy). These ads are for risk lovers, who hear the ad and want to defy the odds, to gamble. I will spray the Nasonex up my nose rather than just blowing my nose, and see if I can be one of the special people who does not get headaches, dryness, wetness, bleeding, or a sudden cough. Fun times.
Now I see that Wal-Mart has a TV commercial that is itself "sponsored by Huggies." I have had enough. Wal-Mart is such an entity unto itself that its ads have ads. It is like a Greek city-state now. I cannot watch a perfectly fine Wal-Mart commercial -- apparently now a TV show in its own right -- without it being interrupted by the crass commercialism of a commercial for Huggies. What kind of ADHD demographic are they targeting for that? Hey you got Huggies ad in my Wal-Mart ad, no you got Wal-Mart ad in my Huggies one. I prefer to stay on point with one ad per ad. I don't want to have to figure out who is running this ad any more than I want to figure out what the drug is for. Oh, no, do they have a [legal] drug to stop seeing the world as Andy Rooney would? I will take it, whatever the side effects! Or find myself missing the nightly news because I started dinner at 4:45 (and, worse, maybe need a Huggies Convertible).
A claim of legal malpractice raised sufficient issues of fact to survive a motion for summary judgment, according to a decision of the New York Appellate Division for the Third Judicial Department. The plaintiff had been injured while working in a hotel and had mistakenly believed that the hotel was her employer. In fact, she was employed by a cleaning service that contracted with the hotel. She retained counsel (the defendant in the legal malpractice case), who allegedly had failed to discover the actual employment situation. By the time plaintiff had secured new counsel and discovered the mistaken assumption, the statute of limitations for third party claims had expired. The court noted that there was evidence that the attorney made no effort to review documents that would have shed light on the identity of the actual employer. (Mike Frisch)
An attorney was suspended for two years with the suspension stayed in favor of probation for misconduct described in the summary from the California Bar Journal:
Clark pleaded no contest to four counts of violating the Insurance Code. As part of his sentence, he was ordered to make restitution to the State Compensation Insurance Fund totaling $82,555.18.
Clark started a successful trucking business in 1985. By the time he was completing law school 14 years later, he spent little time on the business, which was run by his then-girlfriend, his father and a yard supervisor.
Although the company primarily employed independent contractor drivers, it began to switch to full-time employees and Clark gave responsibility for the change to his girlfriend.
The company was required to submit quarterly reports for workers’ compensation insurance purposes, indicating whether it had employees on the payroll. The information was used by the fund to set appropriate insurance premium rates. Companies with no employees enjoy lower rates.
Several reports were submitted that indicated the company had no employees; Clark’s girlfriend said she had not completed the switch from contract drivers although she in fact had hired full-time employees. Once she told Clark the company had driver employees, he sent a check to the Insurance Fund for more than $28,000.
Clark became a successful deputy district attorney in Riverside County and believed the trucking company was in good hands. In fact, it was mismanaged and went out of business.
Criminal charges eventually were filed against Clark based on the incorrect quarterly reports. He was placed on administrative leave and started his own law practice.
The State Bar Court found that his actions did not involve moral turpitude.
In mitigation, Clark cooperated with the bar’s investigation, showed remorse and made restitution, he submitted letters attesting to his good character and, although he was a rising star in the DA’s office, he lost his career there.
The summary reports that the attorney must demonstrate his rehabilitation and take the MPRE within one year. (Mike Frisch)
The California Bar Journal reports that the Bar's Board of Governors has voted in favor of the posting of disciplinary charges against bar members. The answer of the accused to the charges also will be available on line:
After an exhaustive debate, the board of governors voted 18-4 last month to post on the State Bar Web site disciplinary charges filed against California lawyers. The board turned back an attempt to postpone any action pending further study and rejected opposition to online postings by the majority of those who contacted the bar about the proposal.
The postings, which will be placed on a lawyer’s profile page, will be phased in, beginning with any lawyer newly charged, and will eventually include notices for every California lawyer with a pending disciplinary proceeding — about 700 bar members. The lawyer’s answer to the charges also will be posted.
There are at least two benefits to the posting of charges, which occurs in only Illinois so far as I am aware. First, it provides more information to the public (and potential clients) about ethical issues concerning the accused lawyer. Second, it provides that information at an earlier stage of the proceedings. (Mike Frisch)
Thursday, July 31, 2008
The case involves a shareholder challenge to Basell's acquisition of Lyondell Corporation, a major specialty chemical manufacturer. This is of no small interest to me, having been the general counsel of a publicly-held specialty chemical company that first sold its publicly-held subsidiary (in a deal reminiscent of McMullin v. Beran for you Delaware corporate law wonks), and then merged with another company (as the target) in a stock-for-stock deal, both of which invoked Delaware law on the fiduciary obligations of the directors in transactions involving change of control. I'm also interested as a result of my more theoretical musings about judgment in Law's Illusion.
In a nutshell, the court denied summary judgment, claiming an insufficient record to establish no genuine issue of material fact, on two issues: (1) whether the Lyondell directors breached their fiduciary obligations (a) to maximize shareholder value in the sale context under Revlon, and (b) not to impose undue "lock-up" restrictions so as foreclose competing bids, under Unocal and Omnicare, and (2) whether the 102(b)(7) exculpatory provision on damages operated to bar claims against the directors. On issue (1), the court observed that the deal went down very fast, with almost no market test, and with a full panoply of deal protection clauses favoring the buyer, even though the offer price was at a 50% premium to market. On issue (2), the court left open the possibility that the board's [in]action constituted a lack of good faith, invoking the duty of loyalty rather than the duty of care, and hence removing the claim from the exculpatory provision of 102(b)(7).
Here are some quick reactions:
1. It looks to me like the Lyondell board and its advisers, although acting very, very quickly, did everything they should or could have done, short of playing chicken with the buyer as they walked out the door to seek competing bids. The opinion doesn't say Basell's CEO threatened to walk away from the deal if Lyondell shopped it, but there's just about everything but that.
2. The court says the board's review is to be reasonable not perfect, and there are instances in which, indeed, the board may conclude an offer is what is called "pre-emptive" or "take-out." The court concludes there is no evidence that the board members were self-serving or otherwise conflicted. The court agrees that the price was fair. And finally the court, at the very end, says that, well, this case is really more about our summary judgment standards than our corporate law.
3. I'm not sure why Basell didn't give a little more. For example, the agreement (you have to read it or the proxy statement to find this) had a "force-the-vote" provision, meaning that there had to be a shareholder vote on the Basell proposal even if there was a superior offer and the Lyondell board withdrew its recommendation. The court is probably right in saying that is "belt-and-suspenders." Moreover, at the end of the day, it's Basell or the insurers who are going to pay if the plaintiffs recover anything - it's hard to imagine the directors having to come out of pocket (I'm assuming this will be Side A coverage with no deductible) when there's no evidence they benefited themselves by the transaction (contra WorldCom or Adelphia).
4. This is a place where the strictures of Delaware law truly put even good faith managers and directors between a rock and a hard place. The court acknowledges the testimony of one Lyondell director who said he was worried about getting sued if the board somehow let this offer go by without submitting it to the shareholders! I recognize, in theory, that you don't know to a certainty that there wasn't another couple bucks a share out there, but I have a hard time seeing what the plaintiff is going to say between the denial of the s.j. motion and trial that isn't in the nature of the worst kind of second-guessing.
5. I have a hard time seeing how this becomes a duty of loyalty case under Stone v. Ritter for purposes of 102(b)(7), when the court has granted summary judgment on other claims, rejecting any notion that the directors were disloyal. This is the "somehow lack of care is so extreme that it constitutes bad faith which is disloyal" bootstrap. Correct me if I'm wrong, but doesn't this case present precisely the Smith v. Van Gorkom factual scenario that 102(b)(7) was intended to address!
So . . . . [inhale deeply] My question to all the corporate law professors out there is this: You understand the facts. You understand the risks. You are sitting there advising the board at H-Hour. Do you really tell Lyondell's board it is duty-bound not to take this deal under this agreement, and watch a $48 offer on a $30 stock evaporate? What would you do?
[posted by Bill Henderson]
A reporter for the ABA Journal has contacted me for a story on uptick in transfer students. She has dug up a lot of information on this topic. Although she has heard a lot of rumors that some law schools directly solicit rising 1Ls from other law schools, at this point they are all rumors from lots of law school administrators.
If any reader has any concrete evidence of direct solicitation of transfer students, the reporter, Leslie Gordon, would love to hear from you. (It would be great if you would cc me, as I would love to see the evidence as well.) Thanks.
The Supreme Court of New Jersey held that the Appellate Division had erred in granting judgment nov to the defendant in a claim of religious-based hostile work environment brought by a Jewish police officer. The trial jury had found the hostile work environment but awarded no damages; both sides had appealed to the Appellate Division. The court here concluded that the standard of proof for such a claim was the same as for a claim of race or gender hostile work environment. The plaintiff had presented "sufficient evidence...[he had] suffered severe or pervasive harassment." (Mike Frisch)
Posted by Alan Childress
Three technological ideas to ponder:
1. The interesting IT Security post Blurred Out: 51 Things You Aren't Allowed to See on Google Maps has all the usual suspects (the White House's rooftop security devices, bomber bases, nuclear plants), some that make sense once explained (Stony Brook University, the Boring house in Pennsylvania,the city of North Oaks MN), and some odd ones (downtown Sydney, William Hurt's house, Playland Amusement Park in Rye NY). Commenters list plenty other examples and explanations. [HatTip to EE, which also links a lyric-search and CD-cover website.]
2. I am a big fan of GPS units and the security and confidence they bring. They are so cheap now, and easy to use. Even "basic" units one can buy at Wal-Mart or Amazon do all you may need (e.g., some are cheaper because they exclude Canada and Alaska, though they incorrectly and insultingly call it "continental US only" as if Alaska is an island). Most units have a Go Home button or setting, and that is convenient from anywhere to get back on track. But consider setting the home address to a neighbor's house (or the police station) just in case your car is stolen or a valet professional gets inappropriately curious (recall a great scene in Entourage). I feel confident that you can find your way home from the next street over if that's how you set its default.
3. Let's all quit pretending that Zillow has any basis in reality. Any search of the web reveals error rates that would be unacceptable if it were to be taken seriously. In my case it does not even have the correct house at my address, not even close, but it dutifully values my house (without any information about bedrooms and baths even if it were the right house) anyway at some fixed number. I think the monkey-dart picking stocks experiment could also double for a more accurate valuation system on the web. Meanwhile, I have set my GPS "home" as this house down the street. If my car or GPS is ever stolen, and the thief has initiative and follow-through, I expect to see that house devalued more on Zillow.
The Fifth Circuit addressed the removal and jurisdictional issue yesterday, and held for the malpractice plaintiff against his defendants, the Duane Morris law firm and its attorney Richard Redano. This is in an opinion [here in pdf] authored by Judge Jerry Smith. The "case within the case" dealt with trademark rights to "Testmasters." The Fifth Ciruit's holding is nicely summarized by the Fifth Circuit Civil News, per Robert McKnight, in an email this morning:
After Redano represented Singh in unsuccessful trademark litigation, Singh sued Redano in Texas state court for legal malpractice. Redano removed on the ground that Singh would have to prove causation by establishing that he should have prevailed in the trademark dispute, and so resolution of trademark issues was necessary to the malpractice claim. The district court agreed, denied Singh's motion to remand, and then dismissed his claim [based on a pending summary judgment motion on the merits].
Holding: Vacated and dismissed for lack of subject matter jurisdiction. "[M]erely because the alleged malpractice occurred in a prior federal trademark suit .... does not confer subject matter jurisdiction under § 1331 or § 1338(a)." The test in a situation such as this is whether "(1) resolving a federal issue is necessary to resolution of the state-law claim; (2) the federal issue is actually disputed; (3) the federal issue is substantial; and (4) federal jurisdiction will not disturb the balance of federal and state judicial responsibilities." Redano could not establish items (3) or (4).
The California-based TestMasters site says, "Our company offers services under the name TestMasters everywhere except Texas. In Texas our company offers services under the name ScorePerfect." The URL of testmasters.com takes you to this Texas-based company. I am likely confused. [Alan Childress]
The Wisconsin Supreme Court decided a reciprocal discipline case involving the interplay of disciplinary orders against an attorney also admitted in Minnesota. The court held that reciprocal and original matters should not be joined, that a sanction imposed by Minnesota was a fresh order of discipline that merited a reciprocal sanction and that the attorney's constitutional challenge was baseless:
As for Attorney Crandall's constitutional arguments that this court lacks authority or jurisdiction to "punish" him for misconduct that occurred in Minnesota, they are based on an improper understanding of this court's constitutional obligation to regulate the practice of law in Wisconsin and of the nature of professional discipline. The Wisconsin Constitution vests the judicial authority of the state in a unified court system, Wis. Const. art VII, § 2, and gives this court superintending and administrative authority over all courts in the state.
As we have noted in prior cases, because attorneys are an important part of the administration of justice in the courts of this state and because the constitutional grants of authority obligate this court to ensure that courts function efficiently and effectively to provide for the due administration of justice, this court has the inherent and exclusive authority and power to regulate and discipline members of the bar in this state.(citations omitted) Thus, our imposition of discipline for professional misconduct that allegedly occurred in another state does not accord extraterritorial effect to Wisconsin's Rules of Professional Conduct for Attorneys. See SCR ch. 20. Rather, imposing reciprocal discipline is a means (1) to ensure that attorneys who have been granted the privilege to practice law in this state comport themselves in this state in a manner that promotes the efficient administration of the law, and (2) to protect the citizens of this state who require the assistance of a competent and trustworthy attorney.
Moreover, the imposition of professional discipline related to the practice of law in this state is of a different nature than punishing an individual in
Wisconsin for a criminal act wholly committed in another state. The imposition of discipline does not have as its purpose to punish the respondent attorney, but rather to protect the public, the courts and the legal profession in Wisconsin from incompetent and unfit attorneys.
The District of Columbia Bar's Legal Ethics Committee recently issued an opinion on charging interest on advanced expenses. The committee summarized its conclusion as follows:
A lawyer who uses the firm’s line of credit to advance to a client the costs of the representation will incur interest charges from the bank in doing so. The lawyer may pass these costs along to the client, so long as the client has been fully informed in advance of these charges, the client has agreed to pay them, the costs are reasonable, and the lawyer maintains a separate accounting of the interest charges incurred for that client. Finally, the costs of the line of credit must be directly attributable to the representation of that client; in other words, the lawyer may not pass on to individual clients the costs of maintaining a line of credit used to fund the firm’s general overhead expenses.