Friday, January 8, 2010
The dismissal of claims brought against a law firm was ordered by the New York Appellate Division for the First Judicial Department:
This case involves professional services surrounding the design and implementation of a tax driven, sophisticated, individual private pension plan costing millions of dollars. The parties had various professionals in the form of accountants and lawyers representing them. Plaintiff describes himself, not as a member of the consuming public, but as a sophisticated entity, to wit: "a commodities trader on the New York Mercantile Exchange" who "operated [his] business as a sole proprietor." Therefore, this transaction was "not the modest' type of transaction the statute was primarily intended to reach" (id. [internal citations omitted]). Plaintiff also recognizes that "the target market of the Pendulum Plan' was for businesses, (such as mine) with a stable cash flow and minimal number of ancillary employees" rather than the consuming public in general.
Moreover, as plaintiff admits in his affidavit, it was not the form of the Pendulum Plan in general that ran afoul of IRS regulations, but rather the operation of plaintiff's particular plan that used life insurance as a tax shelter "in amounts that greatly exceeded both IRS imposed limits and the terms of the plan document prepared by Bryan Cave and approved by the IRS." As it was the operation of plaintiff's particular plan that caused the problems with the IRS, this is essentially a private dispute among the parties relating to advice that plaintiff received and his particular plan structure, rather than conduct affecting the consuming public at large.
The court found that claims of unjust enrichment, legal malpractice and negligence were not established:
The allegations do not support the claims for unjust enrichment against Bryan Cave and Smith and Hartstein. Whatever benefits they may have received were too attenuated from the conduct alleged and from their relationships with plaintiff. The claim is also not viable as against Bankers, and Thornhill as Banker's agent, because the express terms of plaintiff's valid insurance contracts govern Bankers' obligations to plaintiff.
The motion court should have dismissed the legal malpractice claims against Bryan Cave and Smith because no attorney-client relationship existed in 2002. The motion court was correct that the tax opinion letter was insufficient to support an attorney- client relationship, considering the letter stated it was for ECI solely and contained disclaimers cautioning readers to procure tax advice tailored to their specific plan. The motion court was also correct that the limited power of attorney was insufficient to show an attorney-client relationship as that document could also have authorized nonattorneys to act on behalf of plaintiff. The limited power of attorney only authorized Bryan Cave to represent "Robert A. Dennenberg, a Sole Proprietorship Defined Benefit Pension Plan" before the IRS and only for "Form 5307," which was the application submitted to the IRS for it to determine whether to approve the Plan. Plaintiff does not contend that Bryan Cave was negligent in submitting the Form 5307.
However, the motion court improperly relied on plaintiff's entirely conclusory allegations that plaintiff retained the services of Bryan Cave in 2001 to support the legal malpractice claim. Plaintiff points to no communications with Bryan Cave for legal advice about implementation of the Plan. Plaintiff offers no objective facts or actions to show the existence of an attorney-client relationship or the parties' mutual agreement that Bryan Cave would perform ongoing legal services for plaintiff.
In a last ditch attempt to hold Bryan Cave responsible, plaintiff claims Bryan Cave was negligent in defending him during his 2004 audit before the IRS, until October 25, 2005 when plaintiff retained new counsel. However, plaintiff points to no damage relating to Bryan Cave's alleged negligence during the audit period. Rather, according to plaintiff's allegations, all of plaintiff's injury stems from the implementation of the Plan, not from any actions the attorneys took during the audit period. Accordingly, the court should have dismissed the cause of action for legal malpractice. (citations and headers omitted)
Saturday, January 2, 2010
Monday, December 21, 2009
Friday, December 18, 2009
Posted by Jeff Lipshaw
I was an Avatar skeptic, but having read the reviews this morning and watched the trailer (available through the link), I'm going to see it. What about avatar lawyers? As part of my business lawyering judgment project, and I've been surveying the literature on artificial intelligence and the law. Could a computer (or an avatar lawyer) ever make a difficult judgment? I want quickly to summarize the field (over-simply, no doubt) and make one central observation. I think the answer to that question is "yes," but it's probably not the kind of "yes" that makes us comfortable. [See Update below on my incorrect use of Avatar Lawyer. If it makes you feel better, think "Robo-Lawyer."
First, let me pose a prototypical problem at the magnitude of difficulty (or complexity) I want to address (this is an excerpt from an in-process piece):
A small manufacturing firm makes plastic electrical connectors. It sells five million of them a year to the automotive industry at a price of fifty cents a unit. The firm's gross revenues are thus $2.5 million. The form purchase order from the automobile manufacturer provides that the supplier is responsible for all losses, including consequential damages, arising from any defect. If the connectors turned out to be defective, their replacement would require two hours of time from a service mechanics (roughly $100). The automobile manufacturer refuses to modify the form warranty provision. Should the firm sell the connectors?
Note the number of business and legal issues this hypothetical presents. It requires a lawyer (human or avatar) to understand the default rules under Section 2-207 of the Uniform Commercial Code, the negotiated alternatives to that statute, to predict possible legal outcomes and weigh the legal risks against a business opportunity with a known payoff, taking into account risk averseness and cognitive biases.
We now need to sort through different kinds of reasoning and their amenability to being replicable in a computer (our avatar lawyer). There's a certain aspect to this that is purely deductive, and capable of being programmed, even by a dolt like me. When I've taught UCC 2-207, I've used a flow chart to chart the deductive system it incorporates. From a given set of assumptions, using another set of rules of inference, the program tells you whether you have a contract and on what specific terms. (See flow chart left.) Embedded within the flow chart, however, are questions the answers to which are "yes" or "no", but the reasoning to which involves something other than deduction. For example, the deductive system requires an assessment at Step 8 whether the terms in the expression of acceptance are "different from" or "additional to" those in the offer. That assessment is not deductive. It may be analogical - we look at other instances of terms being different or additional and decide whether our case is closer to the ones in which the answer was "yes" than to ones in which the answer was "no." Or we could say, perhaps, that the assessment is inductive. Here we are going to look at all the past cases interpreting "different from" and derive a general rule that distinguishes "yes" cases from "no" cases. (Kant referred to this, by the way, as "reflective judgment." I will get to why it's a judgment in a moment.) The other piece of the inductive process would be to take the rule thus derived and determine whether our case falls within the rule. (That's what Kant referred to as "determinant judgment.") We see the principle of "garbage in - garbage out" at work here; if the analogical or inductive reasoning along the way is poor, the deductive process of the flow chart isn't going to be very helpful.
More below the fold.
Thursday, November 19, 2009
Posted by Alan Childress
Rating law schools by the number of "SuperLawyers" as alum is not a ranking of any kind. It is flat wrong for anyone to treat this seriously. It is a publicity stunt by a commercial enterprise. Surely law school deans will have the good sense and ethical mettle to ignore this charade.
Well, no. In addition to actually addressing the "ranking," the dean at Northwestern has gone so far as to rewrite its [non]methodology to suit his school's purported image, combining it with the top 14 by USNews and adjusting for class size. Story here, with a twist: the writer's editorial view that essentially all's fair in war and rankings. Well, no -- again.
As John Steele has written on several occasions, how can we teach ethics to law students if we are not acting ethically as regards to ratings and reputation? Actually he said it better: "I think that law schools are teaching by example that cooking the books is what lawyers do."
Update: combining the top 50 of USNews with the metric of number of alum over age 45 who have attended at least two Jazzfests, Tulane is the #1 law school in the country!
Update 2: Brian Leiter on the specious methodology used by SuperLawyers Inc.
Update 3: Jeff Lipshaw on the hoax here.
Update 4: our prior post on Attorney Man and lawyer portrayals in comics.
An applicant for admission to the New York Bar sought an order vacating the denial or reargument. The Appellate Division for the Third Judicial Department denied the relief, concluding that the procedures regulating the admissions process were satisfied and that the (anonymous) applicant had not established the character and general fitness for admission.
This appears to involve an application that we had previously discussed, where the applicant had accumulated student loans since 1983 and now owes approximately $480,000, including interest: "His recalcitrance in dealing with the lenders has been and continues to be incompatible with a lawyer's duties and responsibilities as a member of the Bar." (Mike Frisch)
Monday, November 16, 2009
Posted by Alan Childress
Like cloning and karaoke. And now the invention of the Laptop Steering Wheel Desk. Amazon has it on sale at a great price, though one that may not internalize all the societal costs of the product. No worries!... It warns you: "For safety reasons, never use this product while driving." Most of the reviews are positive, like:
I loved my Laptop Steering Wheel Desk so much I got one for my 90yr old mother. She is an avid crossword puzzle fan and now she can work on them while she is driving back and forth from bingo at the senior center. One cautionary note be careful of those jerks that stop at yellow lights, my poor mother rear ended one and the airbag drove the desk back into her stomach which ruptured her spleen, well after a short down time I'm glad to say she is back on the road and cranking out those NY Times crosswords once again. Thanks Laptop Steering Wheel Desk you have made my mothers life more complete.
A commenter did not like the review above, saying, "Your mother should be paying attention to the road instead of her crossword puzzles. Those puzzles can wait, not her life or someone else's on the road." Maybe the commenter is right, but really tomato, tomahto. It's all just a normative opinion.
But one reviewer gave it five stars: "This has been a total lifesaver. It allows me to prop my sheet music against the wheel, allowing me to play the guitar with both hands while driving." To which a different commenter replies: "I think you and your guitar are a threat to the safety of others on the road."
My son hates it when I say that a certain intersection or product is an accident waiting to happen. (Hey I teach torts.) And so I now say that it is a mishap anticipating its own occurrence, just to annoy him.
Just in time for Christmas! Maybe I will get that for everyone instead of the GR8 TaT2 Maker. That's a "home tattoo parlor" for those of you who do not speak fluent license plate yet. For ages 6-12 (somehow outgrown by, and inapt for, the teens).
Hat Tip to discourse.net.
Saturday, November 14, 2009
Does Popular Intellectualism Overlap With Academic Dilettantism? And What Does It Imply for the Future of Teaching Lawyers?
Posted by Jeff Lipshaw
I'm stealing some thunder because we get our Sunday supplements to the New York Times on Saturday morning, so I can't presently link to the online version of the Book Review (do your best with the link I've given you). The cover review is Steven Pinker (left) on Malcolm Gladwell's (right) new book, What the Dog Saw, which is an anthology of his New Yorker articles. It's interesting because Pinker is an academic with some reputation as a public (or popular) intellectual; Gladwell is a journalist who popularizes otherwise arcane academic or intellectual topics, particularly in mathematics, statistics, and the social sciences. (Maybe they are bonded by their views on hair.)
Pinker's primary critique of Gladwell is simply that when he gets very far below the surface, he also gets it wrong. There's some pretty good logic to this: if the non-expert misses the point of what the expert is saying about the particular problem, the non-expert is likely to propose a solution to the problem that is either wrong or naive. One example Pinker points out is Gladwell's treatment of the predictive value of certain data for success in professions like teaching. I liked the way Pinker put the point on a subject I've thought and written about a lot: the extent to which all judgments come down to a irreducible leap from what is known to what is not. I think that's Gladwell's "blink" moment as well. But Pinker rightly observes that does not mean that you give up on data or expertise. Says Pinker, "[G]iven the technology you have, there is an optimal threshold for a decision, which depends on the relative costs of missing a target and issuing a false alarm." There's still great mystery in the science and philosophy of that instance of decision, but the right answer is not to consign all decision-making to a dartboard. Gladwell seems to be suggesting you throw the predictive data out because it might be wrong ("teaching ought to be open to anyone with a pulse and a college degree"). [Ed. note: smart ass remark about current state of many faculties deleted.]
If you don't read the Editor's "Up Front," at page 4, however, you'll miss Pinker's equally well-taken critique of academic expertise. He observes that academic experts (I would offer "often" but not "always") lack perspective. "They suffer from 'the curse of knowledge': the inability to imagine what it's like not to know something that they know. That makes them underestimate the sophistication of readers and write in motherese rather than explaining concepts from the ground up." (Motherese, I just learned, is an academic term for the way parents talk to children, including heightened pitch, exaggerated intonation, and increased repetition of words and clauses. The best example I can remember offhand of witnessing misplaced motherese is when during his opening statement, a pompous opposing trial lawyer, explaining the problem with an industrial boiler, said (and I quote), "for you ladies on the jury, think of the boiler as a teapot.")
I think there are two interesting implications here, one about academic interdisciplinarity, on which I posted a week ago, and one on the future of law schools, which is presently a hot topic, having been addressed by Gerding, Ribstein, Gerding again, and others. As to the first, the Pinker-Gladwell exchange suggests a continuum with polar extremes of narrow and deep academic specialization, at one end, and broad and shallow familiarity, at the other. Both Pinker and Gladwell move toward the center of the continuum, albeit, I'd argue, from the opposite poles (Pinker trying to explain language and thought from an academic standpoint; Gladwell trying to do the same from a popular standpoint). I think there's another place in the continuum, and that's where there's an attempt at intermediation between one narrow but deep academic specialty and another, in the hope or expectation that there is useful intellectual grist somewhere in the middle. For example, I go back to Goedel's Proof. Is it no more than a spectacular advance in symbolic logic, or does it have explanatory power in epistemology? David Chalmers's view is that consciousness is an inherent part of the physical universe, down to particles (I'm not sure if that's fair, but it's close). Roger Penrose thinks there's an explanation of consciousness somewhere in quantum theory. And we haven't even gotten to the subject of "law and . . . "! Louis Menand's comment once again comes to mind: "The academic profession in some areas is not reproducing itself so much as cloning itself. If it were easier and cheaper to get in and out of the doctoral motel, the disciplines would have a chance to get oxygenated by people who are much less invested in their paradigms."
As to law schools training lawyers, and particularly for those of us thinking about how to educate transactional lawyers (not to mention jump-starting the development of wise judgment abilities for all lawyers), Larry Ribstein's comments strike at this same issue. What does Larry hold up as the current state of affairs? Pretty fairly, in my mind, that law schools teach "how to litigate and give individualized advice." (Compare what business school teaches.) So how do you teach a business lawyer? Larry's on to something: "a convergence of legal education with technology and business training;" "use disciplines such as history, psychology and economics to get potentially profitable insights into contracts and litigation;" "learn to speak the languages of the other disciplines in their firms, and these other disciplines will have to learn some law." Joe Tomain at Cincinnati offers a CLE program to Ohio lawyers in "law and leadership" that draws on works in the humanities and history (e.g., Plato's Republic, Sophocles's Antigone; The Prince by Machiavelli); every time I mention something like that to the managing partner of a law firm, he or she immediately responds enthusiastically.
But, to quote the Ghostbusters, who ya gonna call to teach this stuff? It has to be somebody working that line between Pinker and Gladwell - not talking in motherese, but also not shying away from dipping into other disciplines in which he or she is not "narrow but deep."
Thursday, October 1, 2009
The New York Appellate Division for the Third Judicial Department has denied the admission application of a person who passed the bar exam in 2005. According to the court, the applicant had "engaged in a pattern of inappropriate and offensive behavior at work and in law school [not described in the opinion] extending from 1990 until recently." The applicant also exhibited a lack of candor in the New Jersey admissions process, where admission was withheld for a year pending evidence of "personal reform and current good character."
The court here allowed renewal of the character and fitness inquiry after a year. Unfortunately, the absence of any description of the conduct at issue gives little guidance to future applicants. (Mike Frisch)
Tuesday, September 8, 2009
Posted by Jeff Lipshaw
I installed the new version of the Mac operating system, OSX 10.6, or Snow Leopard, last Friday. It's advertised as being mainly an improvement under the hood, so the changes aren't apparent to mere users like me, although I'm told that things are loading faster. That may be true. So far pretty much so good.
Apple surprised everybody by bringing it out sooner than expected. Be prepared for glitches in non-Apple programs. I have a neat little program called One Password that remembers all my passwords and fills them in for me - I had to download a Beta version.
Printer drivers are fun as well. I have a nice little HP LaserJet 1020 in my office, and it won't work in Snow Leopard. It is completely unsupported for Mac by either Apple or HP, and the recommendation of the guy on the phone at Apple Care was to downgrade back to Leopard if I wanted to use the printer. I found a work around online, which you can find if you click through the links in the quote in the "Legitimus" post. Be forewarned - this involves going into Terminal, which is the Mac equivalent of doing DOS commands.
UPDATE: Oh, I forgot anti-virus. There are those who say not to bother, but even if there's no virus threat to the Mac, it does identify what you are passing along. Personally, I am paranoid - I have two Time Machine backups, one at home and one in the office. You will likely need to upgrade your AV program. I had to.
Friday, August 21, 2009
Posted by Jeff Lipshaw
I was reading the Wall Street Journal's Weekend Journal this morning, and the De Gustibus columnist, Eric Felten, waxes on about the USNWR ranking of universities and liberal arts colleges. I was struck by this observation early on: "However predictable the listing has become, and however arbitrary the methodology, U.S. News remains the standard arbiter of such things as whether Cornell is more prestigious than Johns Hopkins. (Last year it was Cornell, but this year it's Johns Hopkins, which slipped ahead to grab the coveted #14 slot.) No one takes such distinctions seriously—like an 89.7-point wine rating, college rankings are a vain attempt to give clear-cut answers to subjective questions."
The second part of this sentence is so obviously true, and the first part is so obviously false, at least in the world of lawyers and law schools, it gave me pause to reflect. Felten's take is that the rankings are really about getting ahead, and what going to Harvard or Princeton means if you want to end up writing comedy scripts in Hollywood or doing buy-out deals on Wall Street. I was prepared to mock this, but on further review, maybe there's something to it.
We had our "welcome back" faculty luncheon yesterday, and somehow I got on the subject of ambition with a colleague who is a career-long (and very successful) academic. This was to the effect (as to me) that you can take the boy out of the Type-A environment, but you can't take the Type-A out of the boy. That is, if I were the same chronological age as my faculty peers - at least in chronological seniority - being ambitious might well be the usual hallmark of starting a career, establishing one's place in the world, developing prestige and reputation, getting tenure, saving for the kids' college education, etc. - and thus not particularly remarkable. So when one is in one's second or third career, what does it mean to be ambitious?
Yes, I think the rankings do have something to do with our subjective views of getting ahead, and I do think there's something about the legal profession that makes OUR rankings so powerful. I used the phrase "progressing up the food chain" with my colleague, and in what industries or professions is the food chain as quantitative as the legal profession? I can still remember my first introduction to the National Law Journal Law Firm 100, sitting there in 1977 as a clueless 2L in an interview room at Stanford with a partner from Kelley, Drye & Warren telling me that this was "need-to-know" stuff as I was thinking about my career.
Here's my thesis. Felten is right in saying that nobody takes undergraduate rankings seriously because the relationship between getting ahead and one's undergraduate degree is fairly attenuated, except in rare cases. That appears to be the case, generally, with med schools as well. Our son just started med school at what would be considered an elite school, but the universal reaction among doctors was that where one went to med school simply didn't make a difference (one's residency may be a different matter). Business schools have their rankings, but MBAs and the companies who hire them don't seem quite as pathological as we do. There are thousands of undergraduate universities and colleges, and, for the latter, ranking is a mere bagatelle.
My observation, however, over 30 years of a career, is there's a lot of self-selection in the process of becoming a lawyer, and even more in becoming a big law firm lawyer or a law professor. I suspect the first element of that self-selection is a particular orientation to progressing up the food chain (says one who knows). There ain't that much to distinguish us; for all that we are white, black, Asian, Muslim, Jewish, whatever, we aren't all that diverse when we get too far below the derma. (I remember that being my instant reaction upon walking into the room at the first law firm partners meeting I attended after returning from five years in the business world.) There are only dozens and not thousands of law schools. Law firms (and even, I think, government agencies employing lawyers), at least compared to all forms of business organization, are relatively uniform in organizational structure. In other words, it's easy to see a well-defined food chain in the relatively small, homogeneous, and closed legal community.
Hence, as I was saying to my friend and colleague, having returned from our summer in Michigan, where I was productive in the way law professors should be productive over the summer, albeit in our lovely house in our lovely resort town, returning to my responsibilities over the academic year in a city (Boston) in which many would give their eyeteeth to live and work, doing a job (teaching) I love to do, and concluding that this particular life was (or should be) idyllic; nevertheless, I find myself having to confront from time to time my own visceral reactions to the food chain - that is, higher (whatever that means) is better than lower. And why, at my age and status in life, should I care? In the words of Pogo, perhaps "we have met the enemy and he is us."*
* Ten bonus points if you know why the picture is relevant.
Monday, August 3, 2009
...I'm just saying. And what is Liam Neeson trying to hide???
My father, who died two months ago today and will be missed greatly, never talked about World War II. He could not watch Saving Private Ryan. I was aware through relatives that part of his duties, for the Army Air Corps, was to clean up the concentration camps after Germany surrendered. The only hint I got of that, from him, was one day when we were watching some TV show and some Holocaust denier said it never happened. My dad told the TV, words he never used at any other time in my hearing, "Bullshit."
The Holocaust museum shooter, James von Brunn, had a website with two huge screed themes: the Holocaust is a lie, and Obama has never produced his "real" birth certificate. Said the NY Daily News, "It was unclear if something specific triggered his museum rampage - but the attack followed Obama's denunciation of Holocaust deniers."
Sometimes there are simply not two sides to facts. The Holocaust happened, and Obama is American. That some people cannot see the obvious intellectual connection between denial of those two realities is really sad. And for people like von Brunn, it is not just analogy. The overlap is 100%.
And in related news, or at least countervailing internet rumor, someone has reportedly filed a 30-page ethics complaint with the California bar against the birther attorney [/dentist/real estate agent] Orly Taitz. As one commenter to a blog on that said, "If filing obviously forged evidence just to get in "on the record" somewhere to lend it credibility, calling for violent overthrow of the government and soliciting members of the armed forces to participate in it etc. don't get you disbarred, WHAT EVER COULD?!?! How can a lawyer (or a dentist) get disbarred?" Readers of our blog can answer that last one: "not paying your student loans." And the commenter did not mention all the more technical violations alleged in the complaint, such as confronting two U.S. Supreme Court justices ex parte. For all you recent bar takers worried about your results, keep in mind that she passed one. Anyway, this is being reported, incorrectly I think, as if the California bar itself has filed a complaint against her, but I have no evidence of that. (And I doubt it given the way the petition is worded. And this site agrees and links its PDF.) On the other hand, maybe she needs to prove that did not happen by producing a signed and certified copy of an official form of some long variety, which disproves the opposite of it, preferably one with tiny footprints on it.
Finally, here is a site to make your own fake Kenyan birth certificate, with a template helpfully provided. (I am looking forward to receiving emails promising me 250,000 pounds if I help smuggle the true one out of the continent.) But I have already made one for Jeff. One can only hope that his new citizenship will improve his long distance running.
Saturday, June 20, 2009
Posted by Jeff Lipshaw
My life partner now of thirty years, Alene, knows me too well. She just finished David Hackett Fischer's (left) massive biography, Champlain's Dream, and walked into the office to show me Fischer's last couple of pages, and in particular this:
Champlain argued that a leader must be prévoyant, a word that has no exact equivalent in modern English. His idea of prévoyance was different from foresight in its common meaning. It is not a power to foresee the future. To the contrary, prevoyance was the ability to prepare for the unexpected in a world of danger and uncertainty. It was about learning to make sound judgments on the basis of imperfect knowledge. Mainly it is about taking a broad view in projects of large purpose, and about thinking for the long run.
What is really cool about this, for one thing, is the accessibility of the source materials. I was curious about what Champlain actually said on the subject, and Fischer's annotations take you back to the online resources of the Champlain Society in Toronto, where in a couple clicks, you arrive at the very page where Champlain used the word preuoyant in the original French.
There's more than a micro and a macro nugget of wisdom for lawyers and regulators here. The micro has to do with a theme we talked about last week at the AALS Mid-Year Conference on the basic business associations course, and on which I previously blogged:
As to the conception of business law and lawyering, I noted that the data of the world doesn't just organize itself; there is a relationship between the observer and the observed in which the observer brings something to the party. The predominant approach within the academy is to be, as Ronald Gilson observed, entomologists studying the beetles, and Usha had it right: entomologists telling the beetles how to BE beetles. It means academic conceptions of the law and its role are retrospective, objective, litigious, and analytical, while the practice conceptions of transactional law are forward-looking, subjective, transactional, and strategic/tactical. Moreover, what academic business law usually leaves out is the integration of doctrine, and the law itself, into the business (or Flog) game, which means dealing with (a) the exercise of good judgment, and (b) the limits of the law as means to the ends of the game.
Champlain seems to have had the same thing in mind for mariners: you have to be a master of the detail (pricking the charts, knowing longitude and latitude, selecting food, understanding the construction of the ship, etc., etc., etc.,) but "[b]esides what is said above, a good sea-captain ought not to forget anything necessary [to be done] in a sea-fight, in which he may often find himself engaged. He should be brave, foreseeing [preuoyant], prudent, governed by good sound judgment, taking every advantage he can think of, whether for attack or defence, and if possible keep windward of his enemy."
That exercise of judgment is a subtle trick, because Champlain makes it clear that the "wise and cautious mariner ought not to trust too fully to his own judgment" on important decisions, but to "take counsel with those whom he recognizes as the most sagacious, and particularly with old navigators . . . for it is not often that one head holds everything, and, as the saying goes, experience is better than knowledge." At the same time, there is a place for individual mettle, for when there is real danger "you must display manly courage," use a "steady voice," and "dispel fear from the most cowardly bosoms."
The macro has to do with foresight or prévoyance itself, and how it applies to big crises like the present financial meltdown. Not to press the point too repeatedly (well, okay, if I must), but as I have just argued in a newly posted piece on the epistemology of the financial crisis, and on which topic David Zaring has some sage comments, politicians and regulators, like generals, are usually fighting the last war. Sarbanes-Oxley, as well as the "money-loosening" that followed the bursting of the Internet bubble are examples. Why it is so hard (despite the couple of lucky or prescient souls who saw it coming, but then again, I've hit long shots at the race track too) to regulate systemic risk looking forward rather than backward? The gist of the metaphor is that it's awfully hard to prescribe the medicine when you are still trying to figure out what the disease is!
Thursday, June 18, 2009
Posted by Jeff Lipshaw
At the end of April, I attended a fascinating day-long symposium organized by fellow blogger Dave Hoffman and two of his colleagues at Temple, Jonathan Lipson and Peter Huang, on issues of complexity arising in the current financial crisis. One of the questions that kept occurring to me was the context of the complexity issue - what exactly were we trying to fix, if anything? My analogy was this: if law is a "science," and something about the financial crisis (whether complexity or something else) reflects a disease, then what is the relationship between what we know about the disease and the regulatory medicine we would want to prescribe? I liken financial boom-and-bust to bipolar disorder - is there a regulatory equivalent of lithium that we are assured will tamp down the peaks and valleys? And even if there is, do we want to prescribe it? Maybe we like the booms enough to bear the busts! There's a good chance Tchaikovsky and Van Gogh were bipolar - would we have their art if they had been medicated?
Anyway, when I get to thinking, I usually get to writing (particularly when ensconsed in our Michigan house). This seemed like grist for the mill on one piece of a longer work on the difficulties in forward-looking judgment, namely, the difference between looking backward and assessing causation as a matter of attributing blame, and understanding what is going on as a descriptive matter sufficient to make a good forward-looking decision in real time under conditions of significant uncertainty. The result is The Epistemology of the Financial Crisis: Complexity, Causation, Law, and Judgment, which I've just posted on SSRN. (I apologize for the use of the word "epistemology" but I like it.) Here is the abstract:
The focus on complexity as a problem of the financial meltdown of 2008-09 suggests that crisis is in part epistemological: we now know enough about financial and economic systems to be threatened by their complexity, but not enough to relieve our fears and anxieties about them. What marks the current crisis is anxiety that the financial world has evolved to the point that there are hidden structures, like concentrated "too big to fail" institutions and mechanisms, or like credit default swaps, that have widespread and adverse downsides. I propose an analogy between medicine and law in the sense of "regulatory technology." If bubbles are the disease, then the analogy is to bipolar syndrome - exuberance, or even a little hypomania is okay on the upswing, but true mania is bad, as is the resulting swing to depression. Good regulation, then, would be something like lithium, which keeps us on an even keel. The question is really whether we understand the forces well enough to regulate them. Regulation is a function of prediction; prediction is a function of observed regularity; observed regularities invoke the problem of causation; causation raises the issue whether the process being analyzed is reducible. Complexity in itself relative; what seemed inordinately complex to ordinary people, much less deep thinkers, in 1787 or 1887 might not seem at all complex to us now. What we are dealing with instead is a crisis of confidence in those who purport to be experts in what we cannot fathom merely through common sense. The conundrum, of course, is that if it takes an expert to see the problem caused by complexity, how are we, possessing merely common sense, supposed to do anything but rely on their judgment? The epistemological crisis arises from our own judgments to rely on, believe in, trust, or have faith in, that judgment.
Saturday, May 30, 2009
Congrats and further best wishes to Jeff and Alene Lipshaw, who are now celebrating their 30th wedding anniversary (?!!) in Santorini, Greece. I know they are having a good time. And we are happy for them! [Alan Childress]
UPDATE: Thanks, Alan - this is this year's alternative to the Law & Society confab in Denver. Damn! And who's the dorky guy with the beautiful woman? [Jeff Lipshaw]
Thursday, May 28, 2009
Posted by Jeff Lipshaw
I have nothing to say about the nomination, and very little reaction, other than this seems to be a perfectly fine nomination of a perfectly fine judge who has the temerity not to have a consistent set of beliefs that manage to satisfy every interest group on all poles of every issue.
Our family did, however, get a good yuck out of the Type I diabetes issue, as Judge Sotomayor appears to be the first Type I diabetic to be nominated to the Court, as summarized here in the New York Times. For the uninformed, Type I diabetes mellitus (also known as juvenile diabetes) is an autoimmune disease in which the body's antibodies attack and kill (permanently) the insulin producing cells in the islets of Langerhans in the pancreas. Insulin is what allows the body to process glucose. Type I diabetes is a permanent condition (presently) requiring the intradermal injections of insulin for the patient to survive (hence, "insulin dependent"). It is different from Type II diabetes in which pancreatic function is decreased but not killed off. There appears to be a genetic predisposition to auto-immune diseases (like psoriasis or rheumatoid arthritis or Type I diabetes), and it's thought that a virus triggers the disease. There is presently no cure.
One out of every six hundred people is Type I diabetic. If you have a diabetic sibling, you have a 5% chance of being diabetic. We have three children, ages 25, 22, and 20. All three have Type I diabetes. My daughter has lived with it for sixteen years. All three of my children are healthy and successful (presently one in the MFA program in theater at Columbia, one entering med school at Michigan in the fall, one finishing his sophomore year at Stanford). Other notable Type I diabetes included Jay Cutler, the new quarterback of the Chicago Bears, and Mary Tyler Moore.
The idea that Type I diabetes is a political issue is just ludicrous. Justice Scalia seems to be a tad overweight (possibly a candidate for Type II!), and we know very little about the thyroid issues, or atherosclerotic condition of the other justices. Do any of the male justices have male urinary syndrome that might cause them to go running for the loo during an argument (in which case FloMax will help)? I'm thinking that restless leg syndrome might be a problem too.
I do appreciate the chance to say that with care and discipline Type I diabetes is a chronic disease that families can manage very, very well, and there isn't a single thing in the world that a Type I diabetic can't do. But feel free to make a contribution to the Juvenile Diabetes Research Foundation.
UPDATE: My wife reminds me there's something a Type 1 diabetic can't do, and that's go into combat. I'm okay with that.
Monday, May 11, 2009
Posted by Alan Childress
So obviously the methodology is more valid than that of U.S. News & World Reports, which ignores consumer satisfaction and instead surveys the ... competitors' chair of their hiring committee??? What kind of statistical method is that? Who are the ad wizards behind that sort of academic ranking? Maybe there's a reason you never see the infamous Coke-Pepsi taste test done by asking the head of Pepsi's personnel department what she thinks about drinking a Coke. (She is against it. She candidly ranks Coke's taste as way lower than that of the radioactive barium milkshake they give you to gulp just before you take abdominal xrays. Pepsi now ranked as number one soft drink.)
Wednesday, February 18, 2009
The controversy generated by the District of Columbia Bar's attack on Avvo continues. Carolyn Elefant has questioned whether her mandatory bar dues should be spent pursuing litigation that she opposes. An Avvo -related web page has posted the following threatening letter from the Bar's counsel. I wonder, as did Carolyn, whether the Bar should be trying to shut down the flow of accurate and publicly-available information and whether my dues should fund that effort.
I have been a dues-paying member of this Bar for 34 years and was a bar employee for over 17 years. It has been my experience that the Bar is run by and for the insiders (consisting of the large firms who wish to share in the leadership and the entrenched Bar executives). If you do not subscribe to the views of and show fealty toward the leadership, you simply do not exist. Any of my attempts to bring an issue or an injustice to the Bar's attention (such as the forced removal of a member of the Board on Professional Responsibility for the crime of focusing on the public interest) have met with stony indifference at best and "how dare you" at worst.
I remain a member because I must but am constantly reminded of the wit and wisdom of Groucho Marx.
See this related post from Simple Justice. (Mike Frisch)
Tuesday, January 6, 2009
Posted by Jeff Lipshaw
Two colleagues walked into my office yesterday and told me they had thought of me when reading the Michael Lewis/David Einhorn essay that purports to explain exactly what went wrong with the financial markets in the Sunday New York Times. David Zaring and Frank Pasquale have weighed in on the Lewis/Einhorn piece (Zaring = "kneejerk/post-hoc moralizing"; Pasquale = "smart commentary"); like Fred Tung, I think I have to go with David's balloon-popping of the "I-Told-You-So" School, and thank David as well for reminding me to go back to Joe Nocera's article about Nassim Taleb and the "Value at Risk" algorithm in the Sunday NYT Magazine. (The problem, for me, with Sunday Magazine articles is that part of our paper gets delivered on Saturday, and the magazine gets stored in a hermetically-sealed container for twenty-four hours so that I have a pristine crossword puzzle to do on Sunday morning. I jump right to the crossword (do not read The Ethicist or William Safire, do not pass GO)).
It's not enough to say "see, I was right" because some lucky bastard always manages to take the long shot bet. My prime example of this is Edward Yardeni. He's still in business, despite having predicted the end of the world as a result of the Y2K crisis. The link is to a CNET article dated January 4, 2000 when it appeared that, indeed, the world had not collapsed, not the U.S., which had spent trillions, and not even Italy, which showed up on most people's charts as completely unprepared for the turn of the clock! I love this - here's what it looks like when you've bet the farm on doomsday, and doomsday doesn't happen:
In a statement posted Sunday on his own Web site, Yardeni.com, one of the more outspoken doomsayers on the Y2K problem, said he is "impressed and pleased by the smooth transition into 2000 so far." He also said the risk of disruptions to global supply chains, which was his No. 1 concern, now seems less likely to occur.
He also said that if no "significant" problems occur by the end of this month, he will admit he was wrong about a Y2K global downturn.
In the statement, Yardeni credited the IT community for a successful century date change as well as Y2K preparedness efforts by John Koskinen, the U.S. government's leading Y2K man.
Of course, this doesn't account for Italy. (Per the CIA in October, 1999: "Russia, Ukraine, China and Indonesia are among the major countries most likely to experience significant Y2K-related failures. Countries in Western Europe are generally better prepared, although we see the chance of some significant failures in countries such as Italy.") But who cares when you've made a bundle in consulting and appearance fees.
The lead-in to Nocera's piece, a quote from Peter Bernstein's introduction to his work on risk, Against the Gods, capsules this nicely:
The story that I have to tell is marked all the way through by a persistent tension between those who assert that the best decisions are based on quantification and numbers, determined by the patterns of the past, and those who base their decisions on more subjective degrees of belief about the uncertain future. This is a controversy that has never been resolved.
Books are starting (again) to stack up on my desk, but they all seem to tie back into my thesis about the irreducibility of judgment (and rule-following). Take Harold Schulweis' book, Conscience: The Duty to Obey and the Duty to Disobey. It's an argument, drawn on several Jewish sources (e.g. Abraham's argument with God about saving Sodom and Gomorrah), that our own conscience can override what seems to be God's dictate. How can that be? And if it's so (and, by the way, it seems that way to me!), how do you decide when to obey and when not to obey? If you are allowed to argue with God, then you probably ought to be able to argue with the results of the Value at Risk algorithm. But when God or the entire financial community are telling you X, it's really hard to do Y! Then when you do Y, and it turns out you were right, were you wise or insane but lucky?
I'm also reading Mark Turner's Cognitive Dimensions of Social Science. Turner (pictured above) is a leading theoretician in cognitive science. This is fascinating stuff - he's taking apart Clifford Geertz's iconic article "Deep Play" on the Balinese cockfight, not from an anthropological standpoint, but the standpoint of trying to theorize how human beings evolve new meanings. The key here is culturally developed categories (how our minds classify data) and metaphor or analogies that disturb them. Moreover, we blend meanings from separate "influencing spaces" into a new meaning. The hypothesis is that the so-called "double-scope blend" in which two wholly separate influencing spaces determine a new meaning is the critical evolutionary development that makes us human. I think of it this way. My dog associates my putting on my coat with going for a walk. My understanding is that is a single-scope blend of meaning. A double-scope blend, on the other hand, is the metonymy (or is it synecdoche) of, say, the cockfight. Natural cockfights and Balinese social structures don't have much to do with each other until they are blended to have a new meaning in which the victorious chicken says something about its owner. (Think about your affiliation with your favorite sports team.) Modern humans do double-scope blends; no other creatures do. (That sounds like a testable hypothesis to me, by the way.)
In short, if the sensory data of the world takes on meaning to a human being through a process of blending - of metaphor and analogy - what does that say about the tension Bernstein identifies? And is being right in your prediction of the future any evidence of the superiority of the mental processes that produced it?
Monday, December 22, 2008
Fifth Circuit Upholds $14M Judgment Against N.O. Prosecutors' Office For Brady Violation In Capital Case: A Million For Every Year In Prison, And A Deathbed Confession By The ADA Just Before Execution
Posted by Alan Childress
This eye-catching summary [and link to Friday's opinion on the U.S. Fifth Circuit website] by Robert McKnight, appellate practitioner and publisher of the Fifth Circuit Civil News and its daily updates:
Thompson v. Connick, No. 07-30443 (5th Cir. Dec. 19, 2008) (King, Stewart and Prado): A jury awarded $14M in compensatory damages on finding, in a case under 42 U.S.C. § 1983, that the district attorney's office in New Orleans precipitated, by deliberate indifference to its obligation to train employees on their obligations under Brady v. Maryland, a failure to provide exculpatory blood-typing evidence from an armed robbery for which the plaintiff was convicted in April 1985. The same prosecutors accurately predicted that the April 1985 conviction would dissuade Thompson from testifying on his own behalf (in order to avoid impeachment with the conviction) in his trial a month later for a different armed robbery that ended in a murder. Thompson was convicted in the second trial and was sentenced to death. "Eighteen years later -- and one month before [Thompson's] scheduled execution -- Thompson's investigators uncovered the exculpatory evidence that indisputably cleared [him] of the armed robbery charge." The murder conviction was also set aside, on the ground that the prosecutors' misconduct deprived Thompson of his right to testify at that trial. When retried for the murder, Thompson was acquitted. The district court added about $1M in attorney's to the jury verdict, and denied the defendants' post-judgment motions. Holding: Affirmed for the most part. Among other holdings in a 48-page opinion, the Court held that Thompson's claim was not time-barred, that sufficient evidence supported the jury's verdict, that the withholding of evidence was not the unanticipated action of a single rogue prosecutor, that the jury instructions (and an answer to a jury question) on deliberate indifference were adequate, that the damages were not excessive, and that the fee award (which was half of what Thompson's counsel asked for) was not an abuse of discretion.
The only reversal was on the district court's erroneously naming of several individual defendants in the judgment, including former DA Harry Connick (yes, the father of the crooner). One eye-popping fact repeated from page 2 of Judge Prado's opinion is well worth adding to the list within Andy Perlman's excellent summary of our faith in the death penalty system:
Eighteen years later—and one month before his scheduled
execution—Thompson’s investigators uncovered the exculpatory evidence that
indisputably cleared Thompson of the armed robbery charge. Thompson was
then retried for the murder and found not guilty.
The Times-Picayune news story on the case also reports that "Thompson's defense team learned that the prosecutor, an assistant to former District Attorney Harry Connick, confessed while dying of cancer that he had suppressed the lab report." Luckily, and before that, "a month before his last scheduled execution date, an investigator found a piece of microfiche containing a 1985 lab report that indicated he could not have committed an attempted armed robbery for which he had been convicted before his trial in Liuzza's slaying." After this research find, a friend of the deceased ADA reported to defense attorneys the ADA's confession and executed an exculpatory affidavit, about five years late.
Update 2: McKnight tells me that the dying ADA's friend and former coworker eventually received a public reprimand for his own failure to properly report the confession (he should have reported it timely to the court, not years later and just to the DA and defense counsel). Actually it was a barroom, not deathbed, confession. And the ADA had not himself properly reported the Brady violation at all before he died in 1994, so my characterization of it as a deathbed confession [as if he really fixed the situation he created] was unduly charitable. Here is the 2005 discipline opinion on the friend, by the Louisiana Supreme Court.