Friday, September 5, 2008

The Fortune Cookie

A case decided yesterday by the Mississippi Supreme Court serves as a reminder to me of why I became a lawyer: to participate in a trial where you uncover a truly great piece of evidence with which to cast severe doubt on the justness of the cause of the other side. The case arose out of what appeared to be a rather minor fender bender. The defendant was backing out of a space and hit plaintiff's car as she was pumping gas. Plaintiff, who was employed in a casino, appears to have viewed the accident as a jackpot. She stopped working and sued, alleging excruciating pain that had caused temporary and total disability.

As the case progressed, the defense conducted several days of videotaped surveillance and hit their jackpot: a videotape of the plaintiff riding several roller coasters at Six Flags, New Orleans. Plaintiff then asserted that she had been rather miraculously cured by a recent series of epidural steroid injections. She recast her claim to concede that she was fully cured as of the date of the video and sought to exclude it from evidence. The trial court granted her motion and the jury returned a plaintiff's verdict limited to medical bills and lost wages. The trial court added some additional amounts.

The court here held that the exclusion of the videotape was reversible error. A reasonable juror could have disbelieved plaintiff's trial testimony regarding the nature and extent of her injuries and suffering after viewing the tape. Plaintiff's trial narrative was tailored to keep the video away from the jury.

The park has been closed since Hurricane Katrina. (Mike Frisch)

September 5, 2008 in Law & Society | Permalink | Comments (3) | TrackBack (0)

Temper Temper

An attorney who had made false oral and written statements to a judge in connection with a criminal matter was suspended for three years by the Pennsylvania Supreme Court. The attorney had a history of bipolar disorder and cocaine addiction. He had a spotty history of responding to treatment and had lied to his treating doctor about his cocaine problem.

A witness who testified on behalf of the attorney "described [him] as a person who has a temper and engaged in erratic conduct." After the disciplinary hearing, the lawyer proved that the testimony was accurate--he "made audible comments concerning Disciplinary Counsel...such as 'if you hear bones breaking, it's going to be [hers].' " He also called the prosecutor "the most obnoxious f***ing person I know" and a "f***ing slime ball." He later apologized. The Disciplinary Board had proposed a two-year suspension, and called the above insults "petulant and childish behavior..." 

I had a similar experience with the spouse of a lawyer that I prosecuted. As we went to the sixth floor elevators after the argument in the court of appeals, the spouse wished that the elevator would break and send me to my death. Wishing did not make it happen. (Mike Frisch)

September 5, 2008 in Bar Discipline & Process | Permalink | Comments (1) | TrackBack (0)

Grossly Impaired Judgment

The Pennsylvania Supreme Court accepted a consent disposition of a two-year suspension where the attorney had pusued a medical malpractice action "despite [his] knowledge that he had no basis to do so other than a conversation with [a doctor] who did not have the necessary expertise under the medical circumstances of the case." He had filed certificates of merit required in such cases that contained false statements and provided post hac statements of the merits to defense counsel after the claim had been dismissed without disclosing that they had been prepared after the lawsuit was dismissed. The court had imposed a $15,000 sanction against the lawyer and his firm. He also had mishandled a prisoner civil rights claim.

As mitigation, the lawyer contended that "he was severely addicted to marijuana and cocaine and his judgment was grossly impaired." He further contends that he stopped his drug usage in July 2007. (Mike Frisch)

September 5, 2008 in Bar Discipline & Process | Permalink | Comments (0) | TrackBack (0)

"I Don't Eat Apples, Your Honor"

A District Committee of the Virginia State Bar imposed a reprimand with terms on an attorney for misconduct in a trial held in the District of Columbia Superior Court. The attorney had represented the plaintiff in a discrimination case tried before a jury and had "persistently violated established rules of procedure" and "accused the Court of bias in favor of the defendant and...persisted in making the accusation, throughout the trial and in her closing argument to the jury." The reprimand recites numerous instances from the trial transcript, with one highlight being the response to the judge's  comment that the lawyer was being given "a free bite of the apple." The rejoinder: "I don't eat apples, Your Honor."

Note: the jury had found for the plaintiff. The judge set aside that verdict, concluding that the jury had felt unduly sympathetic to the plaintiff because of counsel's conduct. At retrial, the jury found for the defendant. This matter reminds me of a comment made by the prosecutor (played by Ted Danson) to the defense lawyer (played by William Hurt) in the classic movie Body Heat: "Ned, I've underestimated you. You use your incompetence as a weapon." (Mike Frisch)

September 5, 2008 in Bar Discipline & Process | Permalink | Comments (0) | TrackBack (0)

Thursday, September 4, 2008

"Impending Financial Doom"

The North Dakota Supreme Court issued a bar discipline opinion yesterday suspending a lawyer for six months. The lawyer (McCray) had accepted employment with a California corporation that performed credit repair services for its clients. The corporation had sought a North Dakota lawyer because "[it] was one of the few states that allows trade names to be used for a law firm and...has no credit repair organizations act." The lawyer became the sole shareholder of the North Dakota corporation that was created and was paid a salary to  work with an out-of-state services provider (Bellwether, Inc.) to perform the credit-repair related services.

A bar complaint was filed by a Georgia dentist (McKenzie) who had attended a seminar and retained the corporation to assist her. She was concerned about the quality of the services in letters generated on her behalf:

The information contained in the letters was not factual and McKenzie was "absolutely horrified" when she saw the letters. McKenzie thought she was paying for letters to credit reporting agencies written by attorneys on Bradley Ross Law, P.C., letterhead. She did not deny that the accounts mentioned in the letters were accurate. Furthermore, McKenzie, who has a doctorate degree, was upset that the letters purportedly sent by her contained misspellings and poor grammar. Although the record does not indicate that McCray made a knowing decision about which form letters to send on McKenzie's behalf, the hearing panel found "McCray knowingly authorized the use of form letters which contained false information in that the letters were purportedly written and mailed by the client, contained inaccurate information about the client, and claimed that the client did not recognize the accounts on the credit report."

The court sustained a number of charges of misconduct including violations in the charged fees:

McCray testified he spent between 10 and 40 hours per week working for Bradley Ross Law, P.C. Assuming for the sake of argument McCray worked 40 hours per week during the 10 months or approximately 45 weeks McKenzie was a client, he would have spent 1,800 hours servicing approximately 9,450 clients, including McKenzie. According to our calculations, this results in .19 hours, or less than 12 minutes, McCray spent working for each client during the 10-month period. We agree with the hearing panel that this is an insufficient amount of time to adequately represent McKenzie along with his other clients.

We also agree that "little in the way of meaningful legal work" was performed for McKenzie. It appears the vast majority of the work performed consisted of simply inundating credit reporting agencies with dispute letters written in the consumer's name to trigger the obligation of those agencies under the Credit Repair Organizations Act, 15 U.S.C., § 1679 et seq., to respond to all consumer disputes within 30 days and remove any legitimately challenged item that cannot be verified within the 30-day period. See Federal Trade Comm'n v. Gill, 265 F.3d 944, 952 (9th Cir. 2001); 15 U.S.C. § 1681i. The persons who prepared and mailed the dispute letters were located in Indiana. Moreover, the panel's finding that Bradley Ross Law, P.C., did not until recently verify that work was performed for clients each month they were billed is supported by McCray's own testimony.

Other violations involved false statements to third parties, improper solicitation of legal employment through client-generating seminars, dishonesty, assisting the unauthorized practice of law and sharing fees with non-lawyers.

A concurring and dissenting opinion expressed concern about the solicitation misconduct as broadly applied to educational seminars:

Enforcement of our anti-solicitation rules within constitutional bounds permits lawyers to present educationally oriented classes, seminars and speeches to and for current and potential clients. Violation of 7.3 occurs when the seminar "serves no discernible purpose other than the attraction of clients." Lawyers with questions of whether particular educational or solicitation activities are permitted can request and rely on ethics opinions from the State Bar Association of North Dakota pursuant to N.D.R. Lawyer Discipl. 1.2(B). Here, however, I agree with the Majority that McCray's client solicitations exceeded the limits permitted by a constitutional application of our rules.

Also from that opinion:

Both the hearing panel and the Majority fixated on the fact McCray generated millions of dollars and paid ninety-five percent of that sum to Bellwether or an affiliate...That a lawyer spends ninety-five percent of his or her gross income with one contract vendor may speak of the lawyer's impending financial doom. But it does not speak of per se unethical conduct. To have such a rule would improperly, unwisely and, perhaps, unconstitutionally bring discipline on lawyers paying significant costs associated with starting a law practice, on lawyers engaging in heavy but authorized advertising to grow a practice, or on lawyers purchasing an existing law practice.

The concurring/dissenting opinion also was not impressed with the "simple math" method of the majority to determine the fee issues:

The expansive factual findings made by the majority and by the hearing panel are suspect because we have only McKenzie's case file and the testimony of McKenzie, McCray and a former member of Inquiry Committee West. We have neither the testimony of, nor the case files for, any of McCray's other 9,449 clients. We therefore must exercise care about the sweeping conclusions being applied to all of McCray's clients based on the very small pool of evidence in this case.

Thus, it is argued, the court improperly concluded that there was a basis in the evidence for a finding that the lawyer had rendered little or no meaningful work on the client's behalf. (Mike Frisch)

September 4, 2008 in Bar Discipline & Process | Permalink | Comments (1) | TrackBack (0)

Overdraft Notice Draws Scrutiny

The Maryland Court of Appeals declined to impose a 60-day suspension sought by Bar Counsel and imposed reprimand in a matter where the attorney had used an escrow account for personal reasons but had not misused client funds. The lawyer also had been dilatory in responding to Bar Counsel. The court concluded:

There are several mitigating factors in this case. Bar Counsel made clear that there was no allegation of misappropriation or commingling of client funds. Respondent's misuse of his escrow account occured at a time when he was intending to close his practice. Although respondent failed to make timely responses to Bar Counsel's requests for information, the hearing judge found that he ultimately "responded thoroughly and openly" and that he was mentally depressed and was not functioning normally.

The court sustained Bar Counsel's exceptions to certain legal conclusions of the trial court that (1) the misuse of the escrow account did not violate ethics rules and (2) there is no time limit for responding to Bar Counsel. The court found that the duty obligates the attorney to provide a reasonably prompt response.

Practice note: the escrow matter came to Bar Counsel's attention as a result of an overdraft notice entirely unrelated to the misuse of entrusted funds. As in many jurisdictions, all trust account overdrafts are reported by the bank to Maryland Bar Counsel. (Mike Frisch)

September 4, 2008 in Bar Discipline & Process | Permalink | Comments (0) | TrackBack (0)

A Sanction Less than Disbarment

The New York Appellate Division for the Second Judicial Department suspended an attorney for three years for misconduct in several matters. The attorney had had a number of prior brushes with the disciplinary system over the course of a 55 year career with numerous cautions and admonitions. Among the charges in the present matter was failure to supervise lawyer employees:

Charge five alleges that the respondent delegated certain responsibilities to other lawyers employed by his law firm during his representation of Tucker, but did not regularly meet with the lawyers assigned to Tucker's case and was not aware when the hospital records were requested and what steps were taken to identify the operating surgeon and have him served. It is further alleged that, in the exercise of reasonable management or supervisory authority, the respondent knew or should have known of the need to timely obtain the hospital record, identify the operating surgeon, and have him served prior to expiration of the statute of limitations. After settlement of the action, the respondent failed to have the lawyers in his office communicate with Tucker and file the necessary papers with the Surrogate's Court to timely complete the settlement. By reason of the foregoing, the respondent is alleged to have violated Code of Professional Responsibility DR 1-104(c) (22 NYCRR 1200.5[c]), DR 1-104(d)(2) (22 NYCRR 1200.5), and DR 1-102(a)(7) (22 NYCRR 1200.3[a][7]).

The court sustained this charge as well as neglect, escrow violations and outher misconduct. There was some compelling mitigation evidence:

The respondent submits, as mitigation, the following factors or considerations: his 50 years of practice as an attorney servicing innumerable clients, many of whom would not otherwise have obtained legal representation; the terminal illness and eventual demise of his wife, who had acted as an office manager for his practice; that his daughter, Marna Berkman, whose four young children, particularly a child afflicted with a serious brain injury, was required to spend significant periods of time out of the office; the lack of venality on the respondent's part; the respondent's sincere remorse and contrition; the decision in January 2007 to make Marna Berkman a managing partner in his practice, now The Berkman Law Office, LLC; the recent administrative reforms implemented in his practice (a complete overhaul including new staff, new computer equipment and software, annual reviews for all cases) to prevent cases from getting "lost" in court or in the office; and the career-ending effect any sanction, greater than a public censure, will most likely have on the respondent's life in view of his advanced age, not to mention the devastating effect on the firm given the respondent's role in the firm.

The court considered this mitigation evidence as well as the record of prior discipline in determining to impose a lesser sanction than disbarment. (Mike Frisch)

September 4, 2008 in Bar Discipline & Process | Permalink | Comments (0) | TrackBack (0)

Trust Account Misuse And Other Misconduct Merits Suspension

An attorney was indefinitely suspended for at least one year by the Minnesota Supreme Court for misconduct that included a conflict of interest and misuse of his client trust account to shield his assets from the Internal Revenue Service. The conflict of interest involved his securing an affidavit from one client in which she admitted that she had perjured herself. The lawyer filed affidavit was filed in order to seek reconsideration of an adverse ruling against another client. the affiant was charged with perjury as a result and was represented by the lawyer at trial, where she was convicted. he had engaged in other misconduct that included the use of his trust account as a check-cashing service that put entrusted funds at risk.

The lawyer had previously been reprimanded by North Dakota and the Eighth Circuit.  The court here concluded that "[a]lthough his conduct did not lead to known financial losses for his clients, client funds were exposed to the claims of [his] creditors when he used his trust account to shelter his own funds from the IRS." The conflict of interest "resulted in significant nonfinancial harm to [the client]." (Mike Frisch)

September 4, 2008 in Bar Discipline & Process | Permalink | Comments (0) | TrackBack (0)

Too Late To Sue

The District of Columbia Court of Appeals affirmed the dismissal of a legal malpractice action, concluding that the suit was initiated well after the three-year statute of limitations had expired. The lawyer had filed suit in federal court alleging denial of the client's disability benefits. The suit was dismissed, the client discharged the lawyer and new counsel filed a motion for reconsideration. The motion was denied and no appeal was taken.

When the malpractice suit was initiated, the lawyer moved to dismiss, contending that the statute had begun to run when the district court entered its dismissal order. The court here agreed with the trial court's determination that the malpractice action had accrued when the lawyer missed a contractual deadline for commencing an action against the employer. The client became aware of this more than three years prior to filing suit against the lawyer. The motion for reconsideration did not operate to toll the statute of limitations. (Mike Frisch)

September 4, 2008 in Clients | Permalink | Comments (0) | TrackBack (0)

Appearance of Impropriety

The New York Commission on Judicial Discipline accepted the resignation of a town court justicein the face of charges (linked to the page of the commission's report) of presiding in a number of matters despite a personal connection to a litigant. The non-attorney justice is a social studies teacher and hostess. One of the charges related to the justice's conduct on her first day on the bench, dismissing dog control violation charges against a brother-in-law. (Mike Frisch)

September 4, 2008 in Judicial Ethics and the Courts | Permalink | Comments (0) | TrackBack (0)

Wednesday, September 3, 2008

Well Over The Line

Also from the September 2008 online edition of the California Bar Journal:

In [a] drunk driving case, Kopp represented a defendant, Christopher Jauregui, who was on probation in a felony robbery case. Jauregui was arrested for driving under the influence, but provided the name and birth date of a passenger, Cesar Casteneda, who was a longtime friend. Casteneda’s license subsequently was suspended. Jauregui was charged, under Casteneda’s name, with three misdemeanor driving under the influence counts.

Neither the court nor Jauregui’s probation officer were aware that the charges were filed under Casteneda’s name.

At a meeting with both men, Kopp advised them that if the case could be delayed a year, until the statute of limitations expired, he would then inform the district attorney that it was filed against the wrong person. At that time, he believed, the case against Casteneda would be dismissed and he thought it likely that the DA would not pursue the charges against Jauregui “assuming it was ever discovered that Jauregui was the actual person arrested,” according to the stipulation.

Kopp represented both men. Ultimately, after several appearances by Kopp and other attorneys in his firm, Geragos and Geragos, the court was informed that Casteneda was charged erroneously. Jauregui was charged with DUI and his case was referred to a new attorney.

At all times, Kopp was the lead attorney in the case and the other attorneys who appeared on his behalf took their instructions from him. However, according to the stipulation, Kopp would have testified that he discussed his strategy with Paul Geragos, the firm’s founding partner, and that Geragos approved.

Although Jauregui eventually pleaded no contest to one count of misdemeanor DUI, he and Casteneda were later charged with felony conspiracy to obstruct justice. Jauregui also was charged with false personation and dissuading a witness from reporting a crime, both felonies, and Casteneda was charged with one felony count of compounding a non-capital felony. Both men pleaded no contest to misdemeanor obstruction of justice.

This fact pattern might make for a good issue-spotting professional responsibility exam question. Criminal charges were considered and not pursued against the attorney. He was placed on probation for two years with a non-probated 30 day suspension.

Here is a link to the web page of the lawyer and his firm. (Mike Frisch)

September 3, 2008 in Bar Discipline & Process | Permalink | Comments (0) | TrackBack (0)

Resignation Revoked, Disbarment Imposed

The California Bar Journal reports that a lawyer who had resigned with no charges pending was summarily disbarred when he pled guilty to a crime shortly thereafter:

In May 2002, Galaz resigned from the State Bar with no charges pending. The resignation was accepted by the Supreme Court. However, within weeks, he pleaded guilty to one count of mail fraud in federal court in Washington, D.C. As a result of the conviction, the bar placed Galaz on interim suspension and the Supreme Court vacated its order accepting his resignation.

Because the crime was a felony that involved moral turpitude, it meets the requirements for summary disbarment. 

(Mike Frisch)

September 3, 2008 in Bar Discipline & Process | Permalink | Comments (0) | TrackBack (0)

Conversion Charge Sustained

The Illinois Review Board overturned a hearing panel's recommendation to dismiss all charges against a former Jenner & Block lawyer who later left active law practice to become an agent for athletes, writers and directors. The board concluded that the accused attorney had converted $15,000 held in trust, rejecting claims that he had was improperly found to have defaulted on the charge and that the conduct could not be deemed to involve conversion because a court had found that the escrowed funds belonged to the client's ex-husband and his attorney rather than the client herself:

It is not at all clear that the circuit court finding in the citation case would have a res judicata effect in a disciplinary case. However, even if it did, Odom’s argument misses the point. There is no indication that the money at issue belonged to Odom or that any court determined that it did. The circuit court order on which Odom relies demonstrates that the money did not belong to him. The court found that the money belonged to persons other than Odom. Odom was supposed to be holding the money for the benefit of Rodriguez or her creditors.

Despite its separate common law meaning, see In re Thebus, 108 Ill. 2d 255, 483 N.E.2d 1258, 91 Ill. Dec. 623 (1985), for purposes of disciplinary cases, conversion occurs whenever an attorney is supposed to be holding money on behalf of another and the balance of the account into which the lawyer has deposited the funds falls below the amount entrusted to the lawyer.

The board proposes that the lawyer be suspended for nine months. (Mike Frisch)

September 3, 2008 in Bar Discipline & Process | Permalink | Comments (0) | TrackBack (0)

Duty To Supervise

The Maryland Court of Appeals has indefinitely suspended the two managing partners of a Pennsylvania based law firm for failing to supervise a junior attorney assigned to an overwhelming number of cases involving automoblie warranty and "lemon law" issues. The lawyers had established a Maryland office and hired the inexperienced attorney, failing to provide adequate support and supervision. The attorneys may seek reinstatement after 90 days. The failure to supervise had resulted in the dismissal of 47 cases.

One particularly interesting aspect of this case is that neither of the disciplined lawyers has ever been admitted to practice in Maryland. Both are admitted in Pennsylvania and New York. One is admitted in Massachusetts; the other in New Jersey. They did not contest the jurisdiction of the Maryland court. As the order involves a period of suspension, each jurisdiction must now determine whether identical reciprocal discipline is appropriate. The resolution of that issue likely will have a much greater impact on the future of these lawyers than the Maryland action.

The court describes the firm's Maryland office as a "beachhead office" and determined the appropriate level of sanction "[w]hen matters ultimately went to Hades in a handbasket."  So far as I was able to determine, the court did not cite any Seinfeld episodes in support of the result, although the one where George parks the cars and ruins the Woody Allen movie comes readily to mind.

This case is potentially significant in evaluating the nature and extent of the ethical duty to supervise new lawyers. (Mike Frisch)

September 3, 2008 in Bar Discipline & Process | Permalink | Comments (0) | TrackBack (0)

Tuesday, September 2, 2008

All's Well That Ends

Last October, I posted (and criticized) a decision of the D.C. Court of Appeals that had remanded to the Board on Professional Responsibility a disbarment recommendation based on the disbarment of the lawyer in Maryland. I felt that the court was wrong to conclude that disbarment was not justified based on the findings of serious dishonesty by the Maryland Court of Appeals. Further, it was my view that the court had put the D.C. disciplinary system in the impossible position of attempting to make mitigation findings in a matter in which no proceedings had been conducted in the District of Columbia.

Apparently, the lawyer has come around to my view--he has consented to disbarment and the Board has approved the consent. (Mike Frisch)

September 2, 2008 in Bar Discipline & Process | Permalink | Comments (0) | TrackBack (0)

Statute Of Repose

The North Carolina Court of Appeal today held that a claim of legal malpractice was barred by the statute of repose against a lawyer who had dismissed his client's accident claim and concealed the dismisal through a series of false representations. The statute of repose provides:

        [A] cause of action for malpractice arising out of the performance of or failure to perform professional services shall be deemed to accrue at the time of the occurrence of thelast act of the defendant giving rise to the cause of action. . . . [I]n no event shall an action be commenced more than four years from the last act of the defendant giving rise to the cause of action[.]

The court held:

In the instant case, the facts show that on 21 October 1997, McLaurin voluntarily dismissed without prejudice plaintiff's claims arising from the 1992 accident. Rule 41(a) of the North Carolina Rules of Civil Procedure requires that any new action after a voluntary dismissal be refiled within one year after the dismissal. N.C. Gen. Stat. § 1A-1, Rule 41(a) (2007). Thus, the last opportunity for McLaurin to act on plaintiff's claim occurred on 21 October 1998. Plaintiff brought his professional malpractice action against McLaurin on 9 May 2006, nearly seven years after McLaurin's last act. Thus, plaintiff's professional negligence claim was barred by the statute of repose, and the trial court did not err in dismissing plaintiff's claim.
    We note that the actions of McLaurin, as alleged in plaintiff's complaint, are particularly egregious. However, it is for the legislature, and not the courts, to establish statutes of limitations, statutes of repose, and any exceptions to those rules. It is not the role of the courts to create exceptions to the laws established by the legislature where the intent of the legislature is made manifestly clear on the face of the statute.

The court further held that a claim of fraudulent concealment was properly brought against the individual lawyer but not his law firm. (Mike Frisch)

September 2, 2008 in Clients | Permalink | Comments (0) | TrackBack (1)

Insider Trading On Client Confidences Charged

The Illinois ARDC has filed a complaint alleging that an attorney had received confidential information from a client of his law firm, used that information to purchase stock and made false statements to conceal the conduct. The complaint alleges:

7. On May 1, 2006, Leland G. Hansen, another partner in the McAndrews firm, sent an e-mail message to all of the firm’s attorneys entitled "Confidential Conflict Check." In the e-mail message, Hansen requested that the firm’s attorneys provide him any information that might suggest that a conflict would arise if the firm were to represent AMS in connection with its potential acquisition of Laserscope. Respondent received that e-mail message shortly after it was sent.

8. Also on May 1, 2006, Hansen sent a separate e-mail message to all of the firm’s attorneys inquiring as to whether they could identify other matters in which the firm conducted due diligence for a client during an acquisition, including in matters relating to medical device companies. Respondent received to that e-mail message shortly thereafter, and he responded by indicating that he had previously worked on similar matters.

9. The information contained in the e-mail messages described in paragraphs seven and eight, above, was material, nonpublic information pertaining to AMS and Laserscope.

10. Between May 1, 2006 and May 15, 2006, Respondent bought 14,000 shares of Laserscope at approximately $20 per share. He held 13,000 of the shares in a personal brokerage account, and 1,000 of the shares in a brokerage account titled in the names of his parents, both of whom were deceased as of May 2006.

11. Respondent determined to purchase the Laserscope shares referred to in paragraph 10, above, based on the material, nonpublic information contained in the e-mail messages referred to in paragraphs seven and eight, above.

12. Prior to June 5, 2006, neither AMS nor Laserscope made any information concerning AMS’ potential acquisition of Laserscope public.

13. On June 5, 2006, AMS publicly announced that it had reached an agreement with Laserscope by which AMS would acquire Laserscope at a price of $31.00 per share of common stock. On that day, Laserscope’s common stock price closed at $30.65, a 43% increase from its price of $21.41 on June 4, 2006.

14. On June 8, 2006, Respondent sold all of the shares of Laserscope he had acquired between May 1, 2006 and May 15, 2006. As a result, on the basis of the material, nonpublic information referred to in paragraphs seven and eight, above, Respondent realized a profit from the sale of the shares in the amount of $134,970.

The complaint further alleges false statements to outside counsel retained to investigate stock purchases prior to the public announcement. (Mike Frisch)

September 2, 2008 in Bar Discipline & Process | Permalink | Comments (0) | TrackBack (0)

Monday, September 1, 2008

If Yale is #1 in U.S. News, Is It the Best Law School?

[by Bill Henderson, crossposted to ELS Blog]

In a provocative post entitled "Is the End Near for Yale's Dominance", Brian Leiter reports one insider's assessment that Yale may lose three or four additional faculty members.  If that happens, surely Harvard, with its recent lateral hiring sprees, will be the best law school in the country--right? Brian thinks that predictions of Yale's decline are premature.  I agee.  But in the process Brian implicitly highlights an interesting problem: what exactly does it mean to be the "best" law school? 

Here are the vexing facts:  on a per capital basis, Yale places more people in academia and Supreme Court clerkships than any other law school;  Yale's acceptance rate is 7.3% versus 11.8% for Harvard; yet, over the last decade, the average U.S. News academic reputation score for the two schools are exactly--yes, exactly--equal: 4.840 for Harvard, 4.840 for Yale. 

Is it possible that Yale is #1 because, well, Yale is #1 -- and has been every year since USN began publication?  Brian refers to U.S. News "small school bias".  He is right.  Because of Yale's massive endowment and small student size, it enjoys a per-pupil expenditure that is roughly 1/3 its total tuition price.  According to a simulation model of the 2008 U.S. News rankings, which Andy Morriss and I recently constructed, Harvard would not overtake Yale even if: 

  • Harvard's median LSAT climbed to 180 and its median UGPA hit 4.0;
  • Harvard's academic and lawyer-judge reputation scores were both a perfect 5.0;
  • Harvard's acceptance rate plunged to less than 5%.

In fact, even with these changes, Yale would still have a nice leadership cushion.  [Note:  Similar anomalous math was noted by Ted Seto in his classic essay, Understanding the U.S. News Law School Rankings, SMU L Rev (2007).]

Yet, Yale's dominance keeps things simple.  Applicants signal their elite status by enrolling at Yale.  Judges, in turn, derive prestige by hiring Yale graduates, even though they mockingly complain that Yale clerks know very little law.  And faculty favor Yale graduates because it validates our own sense of eliteness and institutional upward movement.  We can rationalize Yale's dominance in terms of scholarship, but the real endgame is the allocation of positional goods.  It is so easy to get too caught up on the hamster wheel of envy and prestige without realizing that the energy expended does not necessarily produce anything of lasting social value.

Of course, each of us is free to determine our own merit criteria. I think  the "best" law school is the one where faculty are willing to make inordinate personal sacrifices for the benefit of the collective enterprise--and where aspiring lawyers leave the law school skilled, confident, ethical, and ensconced in a powerful professional network that opens doors and values public service.  In turn, alumnus are sufficiently grateful for the transformative experience they received that they are willing to underwrite the law school's mission and subsidize this opportunity for future generations.  This vision requires a greater focus on internal rather than external metrics.  For us human beings, that is no easy trick.

September 1, 2008 in Teaching & Curriculum | Permalink | Comments (3) | TrackBack (0)