The Faculty Lounge

The Debt Limit and the Fourteenth Amendment

The idea has begun to be floated that the debt limit is unconstitutional.  The basic argument, according to this news account, is rooted in section 4 of the 14th Amendment, which requires that all outstanding public debt plus pension liabilities must be paid.  The provision reads: "The validity of the public debt of the United States, authorized by law, including debts incurred for payment of pensions ..., shall not be questioned."   Here is Garrett Epps' imagination of a speech by the President that presents Epps' idea of the meaning of this provision. 

First, some definitional clarity is in order.  The public debt authorized by law is the debt that has been issued and is outstanding and is within the statutory debt limit.  The "debts incurred for payment of pensions" is somewhat less clear.  It is reasonable to think that this phrase means the vested rights that have been acquired under current law for old-age pensions under Social Security, military pensions, and other federal pensions.  But it does not mean the liabilities that are to be expected if and when future possible beneficiaries of such pensions become vested.  Between the two categories -- public debt and pensions -- these are big numbers.  But a refusal to raise the debt limit might not make it impossible for the nation to continue to meet these obligations.  What it would mean is that all current revenue of the United States must first be devoted to paying the interest (and principal, when due) of the public debt and to continue to meet the vested rights of pensioners.  Money left over can be spent on everything else.  That would mean Draconian cuts -- in everything: Defense, EPA, Education Department, Labor Department, Justice Department, Medicare, Medicaid,  welfare assistance of every stripe and kind, and the boondoogles of the budget.  To the extent that current revenues are insufficient to meet the combined obligations of the public debt and vested pensions, perhaps the Epps argument is correct.  But the 14th Amendment's public debt clause is not a license to continue to borrow above the statutory debt limit in order to continue paying for things that are not within the categories of vested pensions and public debt. 

Of course, this situation creates another interesting conflict.  The Impoundment Control Act denies to the President the ability to refuse to spend appropriated funds.  But if the debt limit is not raised and current revenues are used to fulfill the obligations of the public debt clause, the President is forced to refuse to spend appropriated funds for other things because he has no statutory authority to borrow from the Chinese to get the money to spend these appropriated funds.  Or, the President might contend that he is obliged to honor the Impoundment Control Act and violate the debt ceiling.  One or the other of these statutes cannot be enforced under these hypothesized conditions. 

A refusal to raise the debt limit does have constitutional consequences, but the public debt clause is not a grant of unlimited power to the President to borrow.  A refusal to raise the debt limit, coupled with a refusal to cut current spending to levels that approximate current income, produces more political consequences than constitutional consequences.    

2012 Official Guide to ABA-Approved Law Schools

The 2012 ABA/LSAC Official Guide to ABA-Approved Law Schools is out.  Well, sort of.  The paper version probably won't be available until tomorrow.  Oddly enough, the ABA website lists a publication date of January 1, 2011; presumably the publication date is July 1.

In any event, the online version now has PDFs of pages from the 2012 edition. 

The changes are interesting.  The ABA public letter about LaVerne says that,

• if Laverne does not appeal the Council's denial of full approval by July 14, its provisional approval will automatically lapse, but
• if La Verne appeals, the Council's denial would be stayed pending action on the appeal. 

The online version does not include La Verne, but the paper edition might.  The last page of the entry for Kentucky is page 399, while the first page of the entry for Lewis & Clark is page 404, which leaves room for an entry for La Verne.  If When La Verne appeals, it should be easy enough to add it to the online version.

Oddly, Cal-Irvine, which was given preliminary approval, is also omitted from the online version, and, perhaps the paper version:   there are no missing page numbers between the last page of Cal-Hastings, 159, and the first page for UCLA, 160.

The pages for both Charlotte and Elon have been updated to remove the "Provisional" tag.

Call For Papers -- Hate and Political Discourse

CALL FOR PAPERS Deadline: March 15, 2012

“Hate and Political Discourse”

Journal of Hate Studies

Volume X, No. 1 (2012/13)

Guest Editor: Robert L. Tsai, J.D. Professor of Law, American University, Washington College of Law

About the Theme

Often shielded by constitutional rules and nurtured by political discourse, hate has a mercurial existence in the popular imagination. In the “arena of angry minds,” as Richard Hofstadter called American political life, political actors sometimes choose to condemn hatred, distance themselves from it, appeal to its existence, or foment it.

Even when subjugation, discrimination, or violence is not the goal, the politics of hate can pay off. Rather than seeking its total eradication, many democracies assume the permanence of hate and seek to minimize its excesses or to punish and prohibit specific expressions. Are such assumptions well-founded, and such strategies wise?

Some of the social groups marked through the techniques of hatred have changed over time, as the political dividends for resorting to strategies of hate have shifted, while other groups seem to be consistent targets of hate. Technological advances offer new tools to combat hatemongering even as they can make demagogues more effective.

What are the structural conditions that allow hate to thrive or might permit its isolation? How might inroads be made in the law or politics of inclusion, especially in countries with strong commitments to rhetorical freedom and popular sovereignty?

Call for Submissions

The Journal of Hate Studies welcomes original papers treating the theme, “Hate and Political Discourse,” from a wide range of disciplines, including history, law, philosophy, political science, sociology, criminal justice, social psychology, economics, anthropology, geography, journalism, communications, rhetoric, literature, educational studies, and cultural studies.

We especially encourage original treatments of the following topics:

• Hate and popular sovereignty • How hate can foster alternative communities and movements • Cultural foundations of hate • Historical changes in rhetorical strategies • Political parties and hate • Necessary political conditions for hate • Empirical approaches to the problem of hate • The role of hate in nation-building • How literature, rhetoric, journalism or other forms of communication can fuel or

discourage hate 

• • •

Geographical differences in how hatred is sustained or combated Comparative approaches and cross-cultural challenges New technologies in combating or fomenting hatred in the realm of political discourse

We anticipate hosting an invitational Symposium in Fall 2012, either at American University or Gonzaga University, in conjunction with the publication of this Volume. Authors published in this Volume would be invited to present their work at the Symposium.

About the Journal

The Journal of Hate Studies is a peer-reviewed publication of the Gonzaga University Institute for Hate Studies. The Journal of Hate Studies is an international scholarly journal promoting the sharing of interdisciplinary ideas and research relating to the study of what hate is, where it comes from, and how to combat it. It presents cutting-edge essays, theory, and research that deepen the understanding of the development and expression of hate.

Guidelines for Submissions

Submissions are typically expected to be between 5,000 and 10,000 words. Submissions may be made in either of the following ways.

• As an attachment sent by email to hatestudies@gonzaga.edu • Through the Journal’s online site

(http://journals.gonzaga.edu/index.php/johs/information/authors) Submissions should be made in MS Word format. Please do not submit PDFs.

Submissions should be presented in APA format, with endnotes rather than footnotes. However, legal scholarship may be presented in Bluebook or ALWD.

More information about submission guidelines, the Journal of Hate Studies, and the Gonzaga University Institute for Hate Studies can be found at http://gonzaga.edu/hatestudies

For Questions or Communications

Robert L. Tsai, J.D. Guest Editor Professor, American University Washington College of Law rtsai@wcl.american.edu 202.274.4370

John Shuford, J.D., Ph.D. Director, Gonzaga University Institute for Hate Studies hatestudies@gonzaga.edu 509.313.3665

 

Download a copy of the announcement here:  Download Call for Papers.JournalHateStudies (FINAL 06-29-11)

Posner on Foley (on Blobs)

Eric Posner reviews Elizabeth Price Foley’s The Law of Life and Death (HUP) in The New Republic.

An excerpt:

In eighty years or so, the average American goes from blob to person to blob. The middle phase of this continuum jangles with the bells and whistles of personhood—rights, interests, human dignity, legal protections, the works. The blobs are, at one end, an invisible bunch of cells and, at the other, a mass of putrefying flesh material. The blob-person and person-blob transitions give ethicists, legislators, and judges a great deal of trouble. How does the law keep up as the initial blob advances to human being, and then the human being degrades to blobness? 

 

Obama Administration Appeals Bankruptcy Ruling Finding DOMA Unconstitutional

Two weeks ago, the Bankruptcy Court for the Central District of California ruled that the Defense of Marriage Act was unconstitutional.  The case involved two men who were legally married in California (in that small window of legality back in 2008).  The U.S. Trustee said they couldn't file as a married couple because of DOMA, but the Bankruptcy Court found, in a resoundingly strongly worded opinion, that DOMA violated their equal protection rights as guaranteed by the Fifth Amendment.

There were many amazing things about the opinion.  First, it was signed by 20 of the 24 bankruptcy judges from the Central District, including the Chief Judge.  Second, it relied heavily on Attorney General Eric Holder's memo stating that the DOJ was not going to defend the constitutionality of DOMA.  Third, it found DOMA unconstitutional under heightened and rational basis review.  Fourth, it talked about discrimination based on sexual orientation and gender.  In sum, it was an amazing opinion for those who have been saying for a long time that DOMA is patently unconstitutional.  And, with the Obama administration publicly stating that it is no longer defending the constitutionality of DOMA, the decision was safe....

Until earlier this week, when the administration threw its previous statement completely out the window and appealed the decision of the Bankruptcy Court.  The U.S. Trustee, controlled by the Department of Justice, which is headed by Attorney General Holder, decided that the United States must defend the constitutionality of a statute that the administration has said is unconstitutional.  Moreover, the Trustee is appealing a decision that explicitly relies on the Trustee's overseer's rationale in finding the law unconstitutional.

The Trustee has some logic behind the appeal.  In the appeal, the Trustee explained: "Although Attorney General and the President have concluded that Section 3 of DOMA, as applied to legally married same sex couples is subject to heightened scrutiny and is unconstitutional under that standard, the President has instructed that Executive Departments and agencies continue to comply with Section 3 unless and until it is repealed by Congress or there is a definitive ruling by the Judicial Branch that Section 3 is unconstitutional."

The Trustee is evidently pointing to the following language from General Holder's letter: "Notwithstanding this determination, the President has informed me that Section 3 will continue to be enforced by the Executive Branch.   To that end, the President has instructed Executive agencies to continue to comply with Section 3 of DOMA, consistent with the Executive’s obligation to take care that the laws be faithfully executed, unless and until Congress repeals Section 3 or the judicial branch renders a definitive verdict against the law’s constitutionality.   This course of action respects the actions of the prior Congress that enacted DOMA, and it recognizes the judiciary as the final arbiter of the constitutional claims raised."

I think it's quite clear that the Trustee has misread the Holder letter.  Although it's true the Holder letter states that Executive Branch officials shall continue to enforce DOMA, the letter also clearly states the the Department of Justice, which the Trustee's office is a part of, will "advise courts in other pending DOMA litigation of the President's and my conclusions that a heightened standard should apply, that Section 3 is unconstitutional under that standard."  Moreover, "the Department will cease defense of Section 3."  The letter is setting up a distinction between executing the law, which the Executive Branch will continue to do, and defending the law, which it will no longer do.

By appealing, the Trustee is not simply executing the law but is defending the law.  This is a direct contradiction of Holder's letter which says the Department will not defend the law.  There are only two conclusions then: one, the Trustee is taking action beyond its authority as a member of the Department of Justice or two, President Obama, consistent with his completely non-sensical and clearly politically-calculated position on gay marriage, is going back on the Holder letter from earlier this year.

I sure hope it's the former.

Cross-posted from Feminist Law Professors.

Tamanaha, Bainbridge On Too Many Lawyers

Thoughts from Brian Tamanaha and Steve Bainbridge on what “The Lawyer Surplus” means for law schools

Update: And Ribstein

 

 

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Sad News In Raleigh, NC

Several sad items in this news story: (1) Lorenzo Charles was killed; (2) he ended his career as a tour bus driver; and (3) people take bus tours of Raleigh, NC.  SI and USA Today.

For whatever reason, I really loved that team of “Cardiac Kids” – I practically cry every time I watch this footage of Jim Valvano running around the court looking for someone to hug.

Image Source: SI

 

 

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Upcoming Call For Submissions On Matters Of Incarceration

Those writing about a criminal punishment-related topic this summer mayt want to consider participating in the ABA-AALS joint conference "Reducing Our Reliance on Incarceration," October 27-28 in D.C. In addition to the formal speakers, there will be an opportunity to present works-in-progress in a roundtable format, scheduled for the first afternoon of the conference, Oct. 27th. A call for Submissions will be released later this summer but you can contact Giovanna Shay at gshay[at]law[dot]wne[dot]edu for more info.

Courthouse Trivia

Ok, so my judge house trivia question -- of Chief Justice Marshall's house in Richmond -- was solved quickly.  How about a courthouse trivia question, then.  This'll be a little harder, I think.  What's the courthouse pictured at right?  One hint -- it was built around 1840 -- and played a role in the Civil War.  Pretty impressive structure even today, no?

I think it's fair to say this one's tougher than the Marshall House.  But if Calvin, Steve, or Jason get this one quickly, I've got a couple of substantially harder ones in the wings -- like name that Confederate monument or name that Freedom Riders' bus station.  

Update: Well, Anon2 and Anon obviously figured this one out pretty quickly.  It is the Petersburg, VA, courthouse.  Here's a link to an extraordinary picture of the courthouse just after the siege of Petersburg ended in April 1865.  What I find particularly interesting is that the granite pillars out front of the courthouse were there in 1865.  Amazing how much has stayed the same over the past century and a half.

The “French Proposal” (Or, More Fun With SPVs)

I’ve decided I like that name much better than either “EU Brady Bonds” or “The Vienna Initiative.”

Via Tracy Alloway at Alphaville comes the text of the Greek rollover plan.  You can download the file here:   Download FBFProposal

A few highlights:

- ECB and Euro Area Central Banks hold €25bn out of the €85.5bn of GGBs maturing by 2014

-An estimated “significant percentage – up to 80%” -- of existing GGB holders would be willing to participate in the proposal

- The European Union and the International Monetary Fund would continue to provide new debt financing to Greece

-During July 2011-June 2014, Participants have the option to either:

(1) Invest a minimum of 70% of the principal amount of proceeds received in new GGBs,

• With a maturity at issue of 30 years; and

• A full principal guarantee by an SPV collateralised by zero-coupon bonds purchased from one or more AAA-rated sovereigns, supranational institutions or European agencies;
• Bearing interest at a rate of 5.5% plus the yearly Greek GDP growth capped at 2.5% and floored at 0% per annum

OR

(2) Invest a minimum of 90% of the Received Amounts in new GGBs:

• with a maturity at issue of 5 years; and
• Bearing interest at a rate of 5.5%. 

Correct me if I’m missing something, but given recent Greek 5-year yields, I don’t see Option 2 as being particularly attractive to most investors.

I’ll be back with more when I get some time to digest, but a few other quick thoughts:

-       There is plenty of skepticism out there as to whether “the French Proposal” accomplishes anything other than avoiding a Greek default, such as, oh I don’t know, reducing their debt load. See, for example, this statement from Unicredit credit strategist Tim Brunne.

-       Having said that, some observers have commented that the new investment seems a pretty rational one from an investor perspective, having both a growth index and a guarantee, as well as a long maturity

-       Meanwhile, in case you wondered what Greeks think of the new proposed austerity measures:

Police have fired tear gas in running battles with stone-throwing youths in Athens, where a 48-hour general strike is being held against a parliamentary vote on tough austerity measures.

Thousands of protesters have gathered outside parliament in the capital where public transport has ground to a halt.

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Too Many Law Schools?

Over at Above the Law, Elie Mystal asked:  "Trendspotting: Will Law School Start Decreasing The Supply of Unemployable New Lawyers?"  Mystal reports on a few law schools who have cut the size of the Fall 2011 entering classes.

As shown in the chart below, for the last ten entering classes, LSAC statistics show a generally steady rise in ABA matriculants despite a 17% fall in the number of ABA applicants from  2004 (100,600) to 2008 (83,400). 

If entering law students go up while the number of applicants go down, then ABA law schools have to take a higher proportion of applicants.  The distribution of LSAT scores is relatively constant from year-to-year (see, Figure 2, Smoothed-percentage frequency of LSAT scores from 2003–2004 through 2009–2010, in LSAT Performance with Regional, Gender, and Racial/Ethnic Breakdowns: 2003–2004 Through 2009–2010 Testing Years (LSAC TR 10-03).  As a result, law schools must take students with lower LSAT scores than they might otherwise admit.  The result should be that Bar scores, and thus Bar passage rates, should go fall.

 

From 2001 through 2003, the percentage of applicants admitted fell, and average MBE scores three years later (2004 through 2007) rose.  Similarly, from 2005 through 2007, the percentage of applicants admitted rose, and average MBE scores three years later (2008 through 2010) fell.

The pattern does not hold true for testing years 2006 through 2008.  The percentage of applicants admitted rose from 2003 through 2005), but average MBE scores rose over the period, and dramatically so in 2008.  Also, the percentage of applicants admitted in 2001 and 2007 was about the same--55%--but the average MBE scores for 2010, 141.7, is higher than that for 2004, 139.6.

The problem with MBE scores is that the average also varies with the percentage of repeaters.  For example, February MBE scores are lower than July scores, but February takers include a much larger percentage of repeaters.

Violent Video Games and the Limits of Law

In the violent video game case, Brown v. Entertainment Merchants Ass'n, the majority thought that video games differed only in degree, not kind, from such violent fare as Grimm’s Fairy Tales or Dostoyevsky’s Crime and Punishment. Justice Alito and Justice Breyer, in separate dissents, noted the many ways in which the interactive video experience produces a difference of kind. For example, many games use gesture control, so to murder someone virtually with an axe the game-player must use the chopping motion of the axe murderer. Soon, video games will employ sensory and tactile devices to give the game player the feeling of gore splattering upon them as they split heads and torsos. Nothing is too base for video game makers, observed Justice Alito. Amen. But this is the end result of a culture that has abandoned all non-legal restraints upon behavior. Either we use law to restrain disgusting behavior (and thus create legal precedent that can and will be used to suppress whatever some future government finds unappealing or inconvenient) or we eschew such a dangerous precedent, rally ‘round the First Amendment, and leave the impression that the gross appetites of video game makers and users are morally acceptable. Of course, the equation between constitutional right and moral validity is totally bogus, but in a culture that has jettisoned any pretense of an exogenous morality it is understandable that this category error will occur.

Where Are All These Bar Candidates Coming From?

The New York Times has an article, The Lawyer Surplus, State by State,about a recent post on the Economic Modeling Specialists, Inc. (emsi) blog, Data Spotlight: New Lawyers Glutting the Market, that shows that, for calendar year 2009, the number of persons who passed the Bar in each State, as well as nationwide, far outstripped the Bureau of Labor Statistics estimates of annual openings for lawyers for 2010 through 2015. Nationwide the number of passers is more than twice the number of openings (26,329 openings vs. 53,508 passers).

Two things struck me about the emsi data. First, it looked at Bar passers, as opposed to Bar takers. According to the 2009 Bar statistics from the National Conference of Bar Examiners (which emsi said they used), excluding Bar candidates in U.S. possessions, a total of 53,508 persons passed a Bar in some state, but 77,377 persons took a Bar in some jurisdiction, or almost three times the number of openings.

Second, the emsi data also shows 44,159 "completers"(persons getting a J.D.?) for 2009. Assuming that all "completers" took a Bar examination in 2009, where did the other 33,218 takers come from? According to the NCBE's 2009 statistics:

• 19, 349 were repeaters (see First-Time Exam Takers and Repeaters in 2009)
• 5,723 did not study law in the U.S (see "Persons Taking and Passing the 2009 Bar Examination by Source of Legal Education") and
• 58 "read" the law (same).

That leaves 8,088 takers not accounted for. Some might have been prior-year completers, but some of the 2009 completers did not take a 2009 exam. Call that a wash. My own guess is that these are lawyers who already admitted to the Bar in some US jurisdiction, but who had not practiced long enough to be admitted on motion (without taking a Bar exam)--in most states, at least five years. Comprehensive Guide to Bar Admission Requirements, Chart 10.

Note, even comparing openings to completers, the numbers are not good. Nationally, there were openings for only 59% of the completers. Sounds like a lot of solo practitioners and a lot of others looking for a more steady paycheck, even if not in a law "opening". Only ten states had more openings than completers: Alaska (which has no law school); Arizona; Colorado; Idaho; Nevada; New Jersey; New Mexico; North Carolina; and Utah. North Carolina had the most unfilled openings.

Hat tip to Paul Caron.

Update: A couple of commenters have suggested that contiguous states often schedule Bar exams so that candidates can take the Bar in each state in the same "administration," particularly the Summer exams.

Judge House Trivia

I'm out of town these days, on a research trip, so it's time for a trivia question.  Here's a house of a famous jurist.  Am I making this too easy by saying that it's in Richmond, Virginia?

Red Cocktails! (With Vampires And Fairies)

Hmm . . . whether to blog about the Greek debt rollover or alcohol and television? . . .  Alcohol and television win for the moment.  Who knew that a Google search for “red cocktails” would turn up dozens of hits, including an entire Food & Wine slide show, that includes the Sherry Cocktail (above right?)? 

Why, you might ask, would someone need such information?  HEL-LO!  The True Blood season premiere was Sunday night, which required red, and festive, food and drink.  I made the above-mentioned sherry cocktail and a very tasty Raspberry Smash from Bon Appétit.  Photos of both are below.

A few thoughts on the show, sufficiently lacking in spoilers that I am not putting it below the fold.  First, Jason’s biceps are even larger this season than last.  And he’s not any smarter.  Jason fans appear pleased. 

Second, shape shifters are just boring.  Even fairies are more interesting than shape shifters. 

 

 

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Teaching Evaluations and Student Voices

I have just received my teaching evaluations for last year and was struck by the number of people who commented about my Cyberlaw course that they really enjoyed the course, the material, the structure and format of classes etc.  BUT they didn't like the fact that I spend so long asking students for their opinions (some said "philosophical opinions") about various issues.  These students said that they wanted me to spend more time telling them "what the law is" and not waste time on student opinions of what the law should be.  In one case, the student comment even said that it is a waste of time discussing students' opinions because they are irrelevant and don't matter.

I am kind of dismayed to think that students think their opinions about the law don't matter, particularly in a course like cyberlaw which isn't so much about doctrine as about applying existing legal ideas in new contexts and deciding whether the existing law is appropriate or whether new law needs to be developed.  And of course there is a lot of critiquing attempts by legislatures and judges to develop appropriate new laws in certain fields.

Where do students get the idea that their opinions don't matter?  I don't think it's in my course because I tell them repeatedly that their opinions do matter and that when I grade the exam I'm not looking for the "right" answer, but rather for a well reasoned and supported opinion on how to address a particular (usually novel) situation.  I also include optional essay/policy questions in my exam precisely to give students a chance to voice their opinions and the students know from the beginning of the semester that they have the option to answer those questions.

Am I missing something or are we somewhere somehow telling students that they should shut up and study and not think about the law they're learning in a critical way?  I hope not.

(And on a lighter note I should also celebrate the fact that for the first year in a long time a student also commented on my wardrobe.  I have been feeling left out in recent years because everyone else gets comments on their wardrobe and I never do.  I must just be too bland...)

 

My Second Least Favorite Part of This Job - Recommendations

The worst part of the job is grading, hands down.  I really can't think of anyone disagreeing with that point.

To me, the second worst part of this job is writing recommendations.  Don't get me wrong - I want to do everything I can to help my students get jobs.  I am honored to be asked to write recommendations and take the task very seriously.  But I find writing them as a whole incredibly hard work.

Some individual letters are actually pretty easy.  The student who is truly spectacular and who I know well because she's been my research assistant or I've worked with him outside of class on some project -- that's an easy recommendation to write.  It takes time, and I want it to be perfectly crafted to get across everything I know, but it's not that hard to do that.

It's when you get to other students that the difficulty kicks in.  The basic challenge is this: I want to praise the student and give her a worthwhile recommendation but I don't want to a) diffuse the worth of my truly excellent students' recommendations or b) damn with faint praise.

Maybe others have mastered this, but I find this an absurdly hard line to walk.  Any tips or thoughts?

 

Hugo Black Courthouse

Mark Brandon reminded me when I was talking with him about building renaming last summer that the new courthouse in Birmingham is named after a former Klansman.... Hugo Black.  For rather obvious resasons, we dot not care much about that part of Justice Black's history at this point.  And therein lies a story about the issues related to building renaming -- or in this case building naming in the first place.

I have an essay in a symposium built around Thomas Russell's article on the dormitory that was named after UT Austin law professor William Simkins back in the 1950s on UT's campus.  You may recall that it was renamed last summer and now the South Texas Law Review has published Tom's article and commentary by a couple of people -- including my friend Leslie Harris of Emory's history department, Lee Daniels of the NAACP, Dean José  Roberto Juárez of the University of Denver,  and me. 

My essay, "The Law and Morality of Building Renaming," uses Simkins Hall as the jumping off point for considering the law related to renaming.  Vanderbilt's lawsuit with the United Daughters of the Confederacy is probably the most important case on this topic, though there usually isn't a whole lot of law on this, because so many namings have been gratuitous.  More important than the law is the morality of all this.  I suggest that we should look to the circumstances of naming in the first instance -- including who had a part in naming and what was the purpose of the naming initially -- then that we should assess what, if anything, the name means today, and also look to what the relevant community thinks about the name now.  While this is sort of an applied ethics, I try to incorporate the facts surrounding naming and current meaning into our calculations.  This draws heavily upon analogies to the Ten Commandment cases, obviously.  Perhaps this tilts too much in favor of keeping names; however, as I point out in the conclusion, there is a danger that in removing a name we forget about the past.

Comics, Copyright and Estate Taxation

The heirs of Jacky Kirby -- an artist behind figures such as Captain America, the Fantastic Four and X-Men -- are entangled in a legal dispute with Marvel Comics, as the New York Times reports here.  Mr. Kirby's heirs have sought to terminate copyright licenses allegedly granted by Mr. Kirby during his lifetime to Marvel Comics.  Marvel Comics counters that Mr. Kirby produced "works for hire," and that the heirs thus have no rights in the intellectual property behind these massively successful comic characters.  

One blogger has a good summary of the case here.  The full court docket is here.

It does not appear that Marvel paid Mr. Kirby any royalties during his lifetime.  (See here.) But if the court finds that the heirs indeed have the ability to terminate prior copyright licenses, Marvel will need to pony up some serious cash in order to continue using Mr. Kirby's intellectual property.   The heirs might need to turn around and pay a portion of that money to the federal government.  If the Kirby heirs do, in fact, possess termination rights with respect to Mr. Kirby's intellectual property, then the value of those termination rights should have been included in Mr. Kirby's gross estate for estate tax purposes. Even though Mr. Kirby died in 1994, there is no reason to think that the IRS would be prohibited (by a statute of limitations or otherwise) from attempting to collect.  The tax bill could be in the tens of millions.  

For the tax heads among us, Mitchell Gans and I break down the tax analysis here.  

image source: Jack Kirby Museum

Yogurt, Incendiary Devices, And That Small CDS Issue

Regular Lounge readers know that the Greece crisis has been a frequent topic for us – those posts are collected here.  The news of the moment, however, relates to Greek CDS contracts and whether the recently proposed “voluntary rollover” will trigger the restructuring provision.  That determination will be made by ISDA’s Credit Derivatives Determinations Committee, which consists of: 8 global dealer voting members, 2 regional dealer voting members for the relevant region, 5 global non-dealer voting members, and certain non-voting consultative dealer and non-dealer members.  This Allen & Overy memo contains more detail on the five regional ISDA Determinations Committees. According to A & O, each Determinations Committee must reach at least 80 per cent consensus in order to pass the most important decisions.

And this is an important decision – though, not exactly, I think, for the reasons suggested in most press reports.  More on that later. 

For now, these articles in the FT, Greek Crisis Puts Future of CDS in Doubt, and the NY Times, Derivatives Cloud the Possible Fallout From a Greek Default, give some sense of the issues and what is at stake. The FT piece quotes Gary Jenkins, head of fixed income at Evolution Securities, who sums up the issue: “This is an incredibly important decision. If there is no credit event, it could destroy the sovereign CDS market as people might decide it is no longer worth buying protection.” 

According to Financial News, France has advocated a simple rollover of Greek debt, where bondholders just receive payment for their bonds and buy new ones, which would not appear to trigger the CDS provisions, because it does not affect all bondholders. David Geen, ISDA general counsel says: “A rollover of Greek debt should not trigger an event if the money is repaid and reinvested. If it is not repaid, it could trigger a credit event as that would be a failure to pay.” Proposals to extend the bonds’ maturity could also trigger a credit event, as could Germany’s hair-cut plan, says Geen, depending on how it is executed.

Now, back to that earlier point.  Many of the press reports don’t make much sense of the situation to me.  They appear filled with inconsistencies and numbers that don’t fully add up.  That could just be because they are unclear (though that is not normally the case with the FT).  But I suspect it’s because there is more to this story than meets the eye.  

Just a theory. 

Which I will test out on you shortly. 

You know it's big news when Jon Stewart has not one, but two, specials on Greece over just a few days.