The Faculty Lounge

Heat vs. Light III: A Call for Some Clear Thinking and Clear Talk About Law-Graduate Employment Reporting

When I wrote my most recent post in this series, I thought its subjects—“what [law-graduate] employment and earnings data ought generally to be presented, and whether the way such data are generally understood makes their presentation subject to misinterpretation”—were settled, and peripheral to the broader topic of the series.  (Those keeping score at home will recall that the broader topic of the series is the importance and limitations of Mike Simkovic’s and Frank McIntyre’s recent scholarship on the value and purpose of legal education.  The first post is here; the second and more recent one is here.)  Unfortunately and surprisingly, my previous post has proved much more contentious than I anticipated, spawning dozens of Comments here and at least two posts on other blogs (Mike Simkovic on the Leiter blog here, and Brian Galle on Prawfsblawg here). 

As is so often the case, the contention seems to spring from a few basic but important confusions.   Actual common ground having proved too scarce to hope for, in the interest of mutual comprehension I attempt here to untangle the skeins that the combatants seem to be throwing past one another.  I hope to clarify where and how we disagree, and why I hold the views I do.  If you agree with me, that’s nice too.  If you disagree, I invite you to explain clearly how and why.

Advance warning:  This post is a bit longer than usual (around 2,800 words).  The public discourse on these issues is so mixed up that it takes some doing to untangle it.  I beg your indulgence, and thank those who make it to the end for their dedication and patience.   The heavy lifting begins after the jump.

Coach Smith, R.I.P.

This post may seem strange coming from a life-long Dukie, but I want to note the passing of Dean Smith, the long-time coach of basketball at UNC.

College basketball often seem to reek. One can look at the immense amount of money that is earned, little of which seems to benefit the stars. Corrupting commercial ventures seem to become more important than traditional academic values. What should be a student-centric activity places the financial supporters of the university in the good seats and the students near the rafters or behind the goals.

All of this seemed to be under control when Coach Smith ran the UNC program. His students graduated. He followed the rules and expected all of his staff and players to do likewise. Despite this, (or, I hope, because of it), his teams played the game well. I will not pretend that I was happy when his team beat my Duke team, but I always knew that the contest had been legitimate and that the better team on that day had been victorious.

So, I pause today to remember a great coach, teacher and man. Rest in peace.

Above the (Public Health) Law: Healthcare Worker Deception & Disobedience in a Time of Distrust

Addendum and updates (latest: 4 pm, 10/31) added below

 

A physician shall . . . be honest in all professional interactions, and strive to report physicians . . . engaging in fraud or deception, to appropriate entities.

 

—AMA Principles of Medical Ethics

 

 

This is a troubling series of news reports about deception and defiance on the part of some healthcare workers (HCWs) in response to what they believe to be unscientific, unfair, and unconstitutional public health measures:

(1) Ebola Aide Doc: I'm Not Telling My Team To Tell The Truth

Gavin Macgregor-Skinner, an epidemiologist and Global Projects Manager for the Elizabeth R. Griffin Foundation, who has led teams of doctors to treat Ebola in West Africa, reported that he "can't tell them [his doctors] to tell the truth [to U.S. officials]" on Monday's "CNN Newsroom."

“At the moment these people are so valuable . . . I have to ensure they come back here, they get the rest needed. I can't tell them to tell the truth at the moment because we're seeing so much irrational behavior,” he stated. “I've come back numerous times between the U.S. and West Africa. If I come back now and say ‘I've been in contact with Ebola patients,’ I'm going to be locked in my house for 21 days,” Macgregor-Skinner said as his reason for not being truthful with officials, he added, “when I'm back here in the US, I am visiting US hospitals everyday helping them get prepared for Ebola. You take me out for three weeks, who’s going to replace me and help now US hospitals get ready? Those gaps can't be filled.” 

He argued that teams of doctors and nurses could be trusted with the responsibility of monitoring themselves, stating, “When I bring my team back we are talking each day on video conferencing, FaceTime, Skype, text messaging, supporting each other. As soon as I feel sick I’m going to stay at home and call for help, but I’m not going to go to a Redskins game here in Washington D.C. That's irresponsible, but I need to get back to these hospitals and help them be prepared.

UPDATE: Here is the CNN video of his remarks.

(2) Ebola Doctor 'Lied' About NYC Travels

The city’s first Ebola patient initially lied to authorities about his travels around the city following his return from treating disease victims in Africa, law-enforcement sources said. Dr. Craig Spencer at first told officials that he isolated himself in his Harlem apartment — and didn’t admit he rode the subways, dined out and went bowling until cops looked at his MetroCard the sources said. “He told the authorities that he self-quarantined. Detectives then reviewed his credit-card statement and MetroCard and found that he went over here, over there, up and down and all around,” a source said. Spencer finally ’fessed up when a cop “got on the phone and had to relay questions to him through the Health Department,” a source said. Officials then retraced Spencer’s steps, which included dining at The Meatball Shop in Greenwich Village and bowling at The Gutter in Brooklyn.

 

UPDATE 11PM, 10/30: A spokesperson for the NYC healh department has now disputed the above story, which cites anonymous police officer sources, in a statement provided to CNBC. The spokesperson said: "Dr. Spencer cooperated fully with the Health Department to establish a timeline of his movements in the days following his return to New York from Guinea, providing his MetroCard, credit cards and cellphone." . . . When CNBC asked again if Spencer had at first lied to authorities or otherwise mislead them about his movements in the city, Lewin replied: "Please refer to the statement I just sent. As this states, Dr. Spencer cooperated fully with the Health Department."

(3) Ebola nurse in Maine rejects home quarantine rules [the WaPo headline better captures the gist: After fight with Chris Christie, nurse Kaci Hickox will defy Ebola quarantine in Maine]

Kaci Hickox, the Ebola nurse who was forcibly held in an isolation tent in New Jersey for three days, says she will not obey instructions to remain at home in Maine for 21 days. "I don't plan on sticking to the guidelines," Hickox tells TODAY's Matt Lauer. "I am not going to sit around and be bullied by politicians and forced to stay in my home when I am not a risk to the American public."

Maine health officials have said they expect her to agree to be quarantined at her home for a 21-day period. The Bangor Daily News reports. But Hickox, who agreed to stay home for two days, tells TODAY she will pursue legal action if Maine forces her into continued isolation. "If the restrictions placed on me by the state of Maine are not lifted by Thursday morning, I will go to court to fight for my freedom," she says.

On the evolving Hickox situation, it's unclear whether — as Hickox herself has suggested — she is already under a mandatory home quarantine order, which she is threatening to defy by leaving her house on Thursday morning and (unless it's been lifted) suing, or whether — as her attorneys say — she is currently under no such quarantine order and is free to leave her house at any time (but is choosing to rest for a couple of days). In any case, Maine has clearly said that it is prepared to get a court order to enforce (or impose) a quarantine order.

 

More after the jump...

 

IRS Loses Thousands of Subpoenaed Emails

The IRS has lost thousands of Lois Lerner’s emails—all under a subpoena request—because of a hard drive crash.  For those of us that stopped following the IRS scandal story some time ago, this is a moment for reflection.  Hard drives crash and data is lost.  Not everyone chooses to testify before Congress, even when threatened with contempt.  Congressional committees are often stymied in their quest for the truth, or at least the truth they are looking for.  Taken together, these events are very likely coincidental.  A few years ago I was at an event and was seated at a table with a number of older lawyers.  One of them mentioned that as a young man he worked for a Congressional committee when the Watergate break-in news came out.  As this group of Democrats talked about it the day after the break-in, someone suggested that Nixon might be involved.  They all quickly dismissed the idea, with someone saying that even Nixon wasn’t that stupid.  Though time proved them wrong, I hope that this time it is merely a coincidence.

Law Prof in Newark Mayoral Race

Shavar Jeffries, a member of the faculty at Seton Hall University School of Law, is running for Newark mayor.  His opponent is Ras Baraka, son of poet Amiri Baraka.  Professor Jeffries is a Newark native with deep roots in the city.

The New York Times has coverage here.

UPDATE 5/14/14: Mr. Baraka won the election.  Details here.

What We Might Learn from the Indictment of Dewey & LeBoeuf’s Former Management

As the Capitol Steps liked to remark, everyone loves a skicious vandal.  Schadenfreude sprang up like mushrooms in that springtime many of us are still longing for, first as Dewey & LeBoeuf became the biggest law-firm failure ever; then when stories of secret salary guarantees to the Pigs Who Were More Equal Than Others began to proliferate; then when the firm’s bankruptcy spawned “clawback” claims and widespread settlements with former partners who the Trustee contended had received more than their fair share before they left, or had exposed themselves to “unfinished business” claims by taking work and clients with them to their new firms.  Rumors flew that various unhappy partners had taken their displeasures to the Manhattan District Attorney, who was investigating alleged financial improprieties. 

And now the DA, having extracted guilty pleas and cooperation from half a dozen underlings, has indicted Dewey’s former Chair (managing partner), Steven Davis; his deputies, former Executive Director Stephen DiCarmine and former Chief Financial Officer Joel Sanders; and (somewhat puzzlingly) a 29-year-old former Client Relations Manager named Zachary Warren.  The charges include fraud, theft, falsifying business records and conspiracy. The SEC has filed its own civil complaint, naming Davis, DiCarmine and Sanders as well as former Finance Director Frank Canellas and former Controller Thomas Mullikan.  The New York Times’ coverage, with copies of the indictment and related SEC complaint, can be found here.

The widespread glee at the mighty fallen notwithstanding, we would all do well to remember that this is a genuine human tragedy.  Dewey employed over 1,000 lawyers and thousands more staff when it crashed.  All of them lost their jobs in the midst of the Great Recession.  While the legal press has chronicled the soft landings enjoyed by many of the more senior partners, many more were not so fortunate.

All of which should make us want to ask what we might learn here.  There will be the usual rash of sanctimony in the comments (you may consider your points made, and save them for another day), reducing the situation to the obvious, simplistic and therefore ineffectual admonition not to lie, cheat or steal.  These observations are usually coupled with the much less obvious but theologically entrenched creed that BigLawyers are all just Gordon Gekkos with bar cards, genetically predisposed to or trained from day one for greed, deceit and exploitation of their fellow man, so why is anyone surprised? 

Please.  There are hundreds of large law firms today, populated with well over 100,000 lawyers, that are not in bankruptcy, never will be, and are not (in the words by which one of the Dewey defendants allegedly described his activities to some of the others) cooking their books.  They may be more or less well-managed (a great many less, but that’s for another day), more or less forward-looking and responsive to their environments and clients (same comment), and more or less humane employers and community members, but they are not roiling dens of thieves.

So what was different about Dewey?  I want to suggest that, among the lawyers and law firms that have found themselves on the wrong end of criminal and SEC enforcement complaints, there are some unusual and noteworthy things about Dewey, things that illustrate some trends in this sector of the profession and offer a lesson or two more focused than a bare, if emphatic, rebuke of the deadly sins.

Set aside the regrettable population of those who become garden-variety criminals and happen to be licensed to practice.  Most lawyers who commit crimes and frauds as lawyers fall into two general categories:  Some steal from their clients—many by the simple expedient of taking client funds from their trust accounts, but some of the more ambitious and creative by kiting or otherwise perverting client trust accounts in Ponzi schemes and similar frauds.  Marc Dreier and Scott Rothstein are recent rather spectacular examples.  Others assist their clients in stealing from others—for example former Mayer Brown partner Joseph Collins, who is currently in federal prison for developing and implementing strategies allowing his client Refco to conceal devastating losses and omit them from a series of securities filings.  Neither happens all that much at large firms, not least because there is usually enough infrastructure and oversight to keep most rogue behavior in check.

But Dewey is neither of these.  The allegations of the New York indictment are that the defendants, all (except Warren) senior management of a billion-dollar professional firm, developed and implemented a scheme they portentously dubbed the “Master Plan” to manipulate the firm’s accounting records in order to be able to report to their banks and other lenders at a time when firm performance fell well below projections that were probably unrealistic to start with that they had met loan covenants or deserved additional extensions of credit.  The SEC complaint focuses on the alleged accounting fraud the firm, through its management, employed in violation of the securities laws to float a $150 million private debt offering to various institutional investors that supplemented the firm’s $100 million revolving bank line.  In short, Dewey & LeBoeuf defrauded its own lenders. 

This is an all too common story in the business world, but among law firms—whose members regularly rehearse and dispute the details of such stories in which their clients are involved, and put their shoulders to the shovels that excavate the wreckage—it is unusual.  I have little doubt that it has happened before, but it is nowhere near as common among lawyers’ frauds as fraud on their clients or on those with whom their clients are dealing.  And to the best of my knowledge it hasn’t ever happened with anything approaching the scale or dishonesty alleged here.

It’s often enlightening to look behind the fraud to see what the alleged fraudsters wanted the money for.  And that’s where Dewey stands apart from most other lawyer frauds.  As chronicled in the most detail by James Stewart in the New Yorker, management was so concerned about keeping old and recruiting new rainmakers that they gave many partners extravagant salary guarantees, guarantees that exceeded the revenue necessary to support them.  By definition, then, the firm overpaid many of those partners, and then borrowed to cover the difference between what it had promised them and what they generated.  And then allegedly lied to its lenders for the wherewithal to keep the spiral rising.  Some of the partners apparently knew about some of the salary guarantees, and some knew about more of them than others.  All of the partners knew about the shortfalls when year-end bonus time came, as the firm proved unable to meet most of the guarantees management had made, and then had very little left after other expenses to pay the partners not shrewd, or valuable, or (more to the point) institutionally indifferent enough to have extracted one.  How many of the partners appreciated how directly the borrowed money translated to borrowed time is unclear.  Though many were deeply sophisticated observers and analysts of business and finance, few seem to have known or guessed that someone might be lying to keep their own thing going well after the clock had actually run out. 

So what’s new and what’s different?  In an extended time of flat demand for complex legal services—the first in the experience of almost anyone living today—compounded by downward price pressure on the limited pool of available work from (among other things) increasing commodification of much such work in the eyes (and checkbooks) of increasingly sophisticated and aggressive general-counsel consumers, BigLaw managing partners must struggle harder and harder to live within their means.  As Dave McGowan and I noted several years ago (see here at pages 14-18, 70), and Bill Henderson argued more recently (see, e.g.,  here), many law-firm managers today stubbornly cling to the belief that they can somehow earn their way out of an increasingly competitive market by buying revenue (that is, bidding for lateral partners with portable business) for a price equal to or even greater than the profits that revenue will generate.  For an astonishingly long time, the limited efficacy of this strategy was masked by the inexorably rising tide of client demand, which lifted even the leakiest and most ill-skippered boats, and allowed the lucky to believe they were smart.  But in the current market, if you pay a million dollars for a million dollars in profit, you don’t make it up on volume.

Dewey indulged in the errors of the current age to a greater degree than most.  Management hired more laterals at higher prices, and then found themselves forced to overvalue complaining incumbents equally in order to retain them, compounding the problem.  They did so in an uncritical belief that the conditions that had generally prevailed from 1980-2007 would go on forever—after all, in the experience of the senior lawyers implementing what eventually devolved into the “Master Plan,” they effectively had—and allow them to earn their way out of any hole they could afford to dig.  When the music suddenly stopped, it is alleged that they chose to lie about how many chairs they had—imagining, I would guess, as many who maneuver themselves into this position do, that the band would strike up again momentarily, and no one would ever need to count the chairs.

The pattern is familiar to anyone who studies financial fraud.  Management robbed debt (the firm’s lenders) to pay equity (the partners); as owners themselves, management benefited too, though apparently not disproportionately more than their innocent (or ignorant) colleagues.  Ironically, the beneficiaries of the alleged fraud (Dewey’s partners) were among its victims.  Most of that can be said, to about the same degree, about any Ponzi scheme (though I am not suggesting that the Dewey fraud is a conventional Ponzi scheme, just that it shares the feature that its beneficiaries and its victims overlap significantly).  What is unusual here is that the fraud appears to have happened in a large and highly pedigreed New York law firm, the sort of institution people imagine steeped in prudence and restraint.  And it happened in the service of mismanagement of a kind that, while not at all uncommon among large law firms today, was uncommonly carried beyond the practical limits that constrain most firms by what is alleged to have been sustained and systematic dishonesty amounting to theft.

Bernie

Ranking the Mettle of Olympic Teams

Dan has kindly invited me to step back into the lounge for a bit.

What's on my mind is the Winter Olympics, and rankings.

As a part of Olympic coverage, we see the medal count rankings.  NBC always uses total medal counts. Last night’s NBC ranking had the U.S. at No. 1 with 23 medals. But total medal count treats all medals as equal; if Ecuador had had 24 Bronze medals, it would have led the rankings.

But the mettle of a team is measured by metal, not just counts; Gold medals are better than Silver medals, which are better than Bronze medals. The rankings on the official Sochi website last night ranked Norway No. 1, even though it had only 20 medals.

All Aboard For Stockton

I recently posted elsewhere that the City of Stockton, California had filed a plan of adjustment to which the principal competing creditors--retirees (through their proxy CalPERS) and bondholders had agreed. Implementation of the plan was conditioned on Stockton residents agreeing to raise their taxes. This past Tuesday saw those voters approve an increase in the local sales tax from 8.25% to 9%.

In my draft article, Fairness and Risk in Stockton: Pensions, Bonds, and Taxes -- When Doing Nothing is Doing Well, I observed that Chapter 9 of the Bankruptcy Code fails to include official representation of municipal residents and eligible voters. Both are indirectly represented in the sense that the officials they elected must have decided to seek bankruptcy relief but unlike creditors they lack an official voice once the case begins. Notwithstanding lack of an express statutory role, Bankruptcy Judge Christopher Klein appointed a taxpayer committee in Stockton's case. But, more importantly, California law required a vote by city residents before taxes could be increased.

So, as it turns out, in Stockton taxpayers were able to vote, albeit not directly on the plan. Yet, it remains the case that city residents as such don't have any say over their future. In other words, a city may in the course of its bankruptcy reduce municipal services. Stockton made most of its service reductions before filing but it could have equally done so during the case. City residents as a stakeholder entity have no voice. While they can "vote the rascals out" at the next election, a city whose plan has been confirmed has little leeway going forward. Thus, I recommend that Bankruptcy Courts in future cases take a step beyond what the Code requires and in most cases appoint a "citizens committee" whose mandate would be to represent the interests of service recipients. Like other official committees, the city would bear the reasonable costs and professional expenses of a citizens committee.

Municipal bankruptcy may be the best solution for the financial issues facing many cities but the vital process of plan negotiation should be open to meaningful input from all stakeholders.

Owens Lake Restoration

Recently, I heard the surprising and wonderful news that considerable progress has been made on the restoration of Owens Lake and the Lower Owens River.  Some of you may remember that the plot of the movie Chinatown is based on Los Angeles officials' (and others') wheeling and dealing in the early 1900s to get the rights to divert water from Owens Valley, once a fertile farming area, about two hundred miles to the City of Los Angeles (without revealing their true intentions).  Teachers of Water Law, like myself, undoubtedly have at least seen the story referenced in textbooks or perhaps read the account in Marc Reisner's Cadillac Desert.  The short version is that the lower part of the Owens River and the entirety of Owens Lake, a shallow, saline lake that once supported "[d]ucks . . . by the square mile, millions of them," so that "the roar of their wings . . . could be heard . . . ten miles away . . . ," were completely dried up to support the water needs of Los Angeles, causing immense air quality problems due to the dust blowing out of the dry lake bed.  Marc Reisner, Cadillac Desert 59 (1993) (quoting Beveridge R. Spear).   
The problem fueled calls for area of origin protections in prior appropriation states, the idea being that there should be protections in place for the localities from which water is diverted and that the interests of such areas should at least be part of the calculus of deciding whether to allow a transfer out of the watershed or a new diversion.   The air quality problems caused by the dust from the dry lake bed have been the subject of litigation for decades.   See, e.g., County of Inyo v. City of Los Angeles, 71 Cal. App. 3d 185 (1977).  But significant developments have occurred in the last few months.  After a federal judge dismissed the City of Los Angeles Department of Water and Power's challenge to state air quality regulations in May, see City of Los Angeles v. Great Basin Unified Air Control District (Docket No. 1:12CV1683 AWI SAB, E.D. Cal., May 1, 2013), the Department of Water and Power negotiated a restoration plan with Audubon California, see "A California Lake Becomes a Stopover Spot Again," Audubon Magazine (Sept./Oct. 2013), and significant steps to implement the plan have already occurred according to this recent article in the Los Angeles Times.   All of this goes to show that, even when we cause grave ecological harms, we sometimes get second chances.  

More Boo-Hooing About Municipal Bonds

I've previously noted in my blog that the so-called "gold standard" of general obligation municipal bonds was always a chimera. Cities paid bondholders at the expense of citizens, employees, and retirees not because the law required it but because they were afraid not to. And I argued here that not to cut payouts to bondholders in bankruptcy (at least without the consent of everyone else) violates the Bankruptcy Code.

Now comes along Chicago Fed Bank researches who are shocked, SHOCKED that such may be the case. If you have access to Reuters you can read about it here. They purport to be concerned that not paying general obligation bonds may raise the cost of borrowing for cities whose pension debts are woefully underfunded. Duh. One wonders why bond underwriters and ratings agencies have been collecting hundreds of millions in fees if not to evaluate the creditworthiness of municipalities. Shame on them, not a city's other creditors, if they haven't been doing their jobs.

My L.A. Times Op-Ed: In Defense of the Evidence-Based Nudge

The op-ed, which will appear in tomorrow’s print edition, is online here. It’s co-authored with Christopher Chabris (who happens to be my husband). Here—where I’m writing only for myself—I thought I’d say a bit about what motivated us and elaborate on a few points whose force may have been blunted by the process of condensing our thougts into our allottted 1,000 words.

The news hook for the article was an August memo leaked to Fox News in which the Obama administration announced that it is looking to hire behavioral scientists to help shape policy. Notwithstanding that the explicit model for this initiative is the U.K.’s “Behavioral Insights Team,” formed in 2010 by Conservative Prime Minister David Cameron, in the U.S., some on the right went completely off the rails about the Obama announcement.

A typical reaction was from Fox News’s Monica Crowley, who described the initiative as “really frightening,” “insane,” “outrageous,” “unconstitutional,” “an Orwellian horror show”—and all of the aforementioned mostly because, so far as I can tell, she believes that nudges constitute a form of “psychological warfare” akin to “what our military does to our enemies.” There are certainly legitimate criticisms of nudges to be made by both the right and the left, but that they are a form of Communist mind control is not among them. (For starters, even if nudges did rely on something like subliminal messages, those messages have been shown to have no effect on consumer behavior, much to the chagrin of marketers.)

The impetus for our piece, then, was to disabuse the Crowleys of the world (or at least that portion of them who are open to persuasion on this matter) of that notion, and then to offer some affirmative reasons why conservatives and libertarians should embrace the nudge (its preservation of all options in the choice set; its ability to incentivize personal responsibility; its efficiency), especially relative to its often perfectly viable alternative: the shove. (To that end, the piece was originally intended for a periodical with a right-of-center audience but wound up in the L.A. Times, where some of it may admittedly amount to preaching to the choir.)

In making our case...

On the Mall for the 50th Anniversary of the March on Washington

I just returned from a week-long trip to Washington D.C., the highlight of which was a day on the Mall listening to speeches commemorating the 1963 March on Washington and MLK's "I have a Dream" speech from 50 years ago. I was reminded that a week ago, I suggested to our entering 1L students that one aspect of being a law student is that they will never read (or listen) to the news again in the same way. As I listened to speakers who reflected on the changes in American law and policy over the past 50 years, it was an opportunity to reflect on my role as a legal educator.

If I had been a law professor in 1963 (I was only 8 years-old at the time), would I have marched? Would I have been a freedom rider? Would I have used the law school classroom to encourage students to find their voice in the civil rights debate?

. . . and as I considered these questions, I realized that they are as pertinent today as they were 50 years ago. We may not know which issues of our time will be remembered 50 years from now as a crossroad of social change . . . but we certainly have no shortage of issues facing our country . . . immigration, gun control, campaign finance reform, civilian use of drones, NSA surveillance, fair wages, health care, "stand your ground laws", abortion restrictions . . . and the pending question this week . . . possible US military action in Syria.

As law professors, what is our role in these current debates? Will we march? Will we ride? Will we incite civil debate in our classrooms and in our communities?

If you haven't taken the opportunity to listen to the speeches from Wednesday, August 28th (all easily available on YouTube by searching for "50th Anniversary of the March on Washington"), I highly recommend doing so. Most are 2-10 minutes long and are quite though provoking.

I would be interested in your reactions . . . 

Of Twerkers and Twerkees: An Open Letter to Robin Thicke’s Mother

[This post falls squarely in the “[pop] culture” portion of TFL’s “law, culture, and academia” mandate. Regular programming will resume in due course.]

Hi Gloria. Can I call you Gloria? I understand that you were displeased by the duet performed by your son and Miley Cyrus (as you know, your boy shows up at the 3:00 mark) at the MTV VMA awards Sunday evening.

Specifically, you said:

I was not expecting her to be putting her butt that close to my son. The problem is now I can never unsee it. . . . Him? Loved it! I love that suit, the black and white suit. I don’t understand what Miley Cyrus is trying to do. I just don’t understand. I think she’s misbegotten in this attempt of hers. And I think it was not beneficial.

Gloria, I’m confused about your confusion. I mean, look, the whole obscenity concern trolling thing isn’t my bag. VMA has been doing this for years, and if you wanted to see something else, well, that’s what they have C-SPAN for. But hey, you’re certainly free to know it when you see it. Obscenity, that is.

What I don’t get is why you see it in Cyrus but not in your own son.

To be fair, it’s not just you. All the commenters I’ve seen, from Sean Hannity (“outrageous,” “downright raunchy,” and “inappropriate” for a role model) and Bill O’Reilly (“she’s a troubled young lady” and “out of control”) to Camille Paglia (whose focus is on the philistine rather than the obscene nature of the routine) have reserved their criticism for Cyrus.

A mommy blogger’s open letter to her daughter, warning her not to follow in Cyrus’s footsteps, has gone semi-viral. But not a single Mommy blogger has warned her son against following in your son’s footsteps.

To no one's surprise, Bill O’Reilly blames Cyrus’s twerking on “bad parenting,” and after Miley’s father, country singer Billy Ray Cyrus, defended his daughter, O’Reilly asked whether he should be “shunned.” Even Brooke Shields, who played mom to Cyrus’s Hannah Montana, felt the need to weigh in and demand answers: “I was Hannah Montana’s mother. I do not approve. Where did I go wrong? I just want to know who’s advising her, and why it’s necessary?” (By contrast, Shields remains “shocked” by the controversy over her own performance in the infamous “You wanna know what comes between me and my Calvins? Nothing.” ad campaign, which she shot when she was just fifteen years old (Cyrus is twenty), and which was banned by CBS.)

And yet no one blames you, Gloria, for raising a son whose music and videos are—in addition to being just as "obscene" as Cyrus’s (and just as arguably misappropriating of black culture and glorifying of drugs)—kinda rapey. Following the VMA hoopla, Cyrus's father canceled a scheduled interview with Piers Morgan at the last minute. But free from the burden of having to defend your parenting and your child, you can grant media interviews in which you accept the condolences of a shamed nation and join the #MileyGate pile on. It’s all a little reminiscent of Justin Timberlake, whose image was only barely and very temporarily tarnished by the “wardrobe malfunction” of Janet Jackson (remember her?), which he, too, apparently helped orchestrate. I don’t personally care about either Cyrus’s butt or Janet’s nipple, Gloria. But I am annoyed by the double standard involved in criticizing the female but not the male co-venturers in these manufactured controversies—the twerkers but not the twerkees, if you will—which is why I'm writing. (More after the jump.)

On Being Misinterpreted (Or, Elie Mystal Thinks I’m An Idiot On Account Of Things I Didn’t Say; Now What?)

It’s always fascinating to see what others make of your ideas.  Sometimes your readers find them a window into a world they hadn’t fully explored, which is ineffably gratifying.  Sometimes your readers make them into strange lenses that refract things into exactly what they thought they already knew, which is rather less gratifying.  Three journalists (well, two journalists and a full-time blogger) took a look at my new article, “What’s New About the New Normal: The Evolving Market for New Lawyers in the 21^st Century,” described in my last post.  Karen Sloan of the National Law Journal provided a fair and balanced summary of the paper’s content, but concentrated on the aspects of the analysis predicting that the number of entry-level Law Jobs will remain depressed for the foreseeable future.  Jacob Gershman of the Wall Street Journal provided an equally fair and balanced summary, but focused on the paper’s additional and somewhat counterintuitive conclusion that, because poor job prospects are driving down the number of new law students, there will eventually be fewer law graduates seeking more or less the same number of jobs, which should make life somewhat easier for the fewer graduates on the job market some years from now.  Elie Mystal of Above the Law treated us to one of his breathless, spittle-on-the-corners-of-his-mouth rants, and pronounced me a Don’t-Worry-Be-Happy academic apologist vying with purportedly like minds for the “neatest bit of sophistry in defense of going to law school.”

Poor Elie.  It can’t be three weeks since he indulged in a similar surge of fury at Michael Simkovic and Frank McIntyre of Seton Hall concerning their study on “The Economic Value of a Law Degree,” and savaged the work for errors that even a casual reader would have appreciated simply weren’t there.  (To be clear, I think there is plenty to argue with in the Simkovic-McIntyre analysis; unfortunately, almost none of it could be found in Elie’s landmark post “Another Garbage Study Offering Misleading Statistics On The Value Of A Law Degree.”  This had the perverse effect of deflecting attention from a range of more subtle concerns with the paper, which I doubt was the intended effect of the attempted beat-down.)   Since I am a teacher, I can’t help but notice that there appears to be lesson emerging here:  Read before you rage. 

So let’s see if we can straighten this out for anyone else in danger of confusion.  Anyone who knows anything about my work (and to be clear, Elie Mystal is not to blame if he doesn’t) knows that I have argued explicitly and repeatedly that there currently are far too many seats in far too many law schools given the number of law-related jobs available; that this mismatch has visited tragic and incalculable misery on tens of thousands of aspiring lawyers, and that anyone who tries to assert otherwise is either grievously mistaken or contemptibly dishonest.  Look here and here, for example.

Far from being “sophistry in defense of going to law school,” then, the “New Normal” paper (here) provides detailed empirical support for the propositions just described  (with which, ironically enough, Elie apparently agrees).  The paper shows that the entry-level Law Jobs market is currently poor and has been for the last five years (pages 24-25, 28); that reductions in BigLaw hiring are responsible for a disproportionate amount of that change for the worse (pages 30-35); and that there are strong objective reasons to believe that entry-level BigLaw hiring, and thus the entry-level Law Jobs market in general, will remain depressed below pre-recessionary levels for the foreseeable future (pages 35-54). 

So far, it would appear that Elie and I are in complete agreement.  The paper goes on to reason that if the legal academy shrinks, and the number of law graduates falls while the number of Law Jobs stays more or less the same, then future smaller classes of law grads will have an easier time finding jobs.  Elie doesn’t fight the logic (you can’t); instead, he pronounces the prediction of a shrinking academy “almost certainly wrong” because he believes there is no way that the number of law graduates will fall.  What is the empirical basis for this prognostication?  He says the executive director of the National Association for Law Placement, James Leipold, told him so.  Now, I have no idea what Jim Leipold told Elie Mystal, but I do know the facts.  Here are a few of them:  The largest first-year class in history entered law schools across the country in the fall of 2010; it was about 52,500 people.  The first-year class that started in the fall of 2012 is estimated at about 42,500, a drop of about 20% in two years.  [Update:  LSAC reports an entering class of about 44,500 in 2012, only a 15% drop in two years.  Others estimate the 2012 first-year class at less.  Hat-tip to Paul Campos for pointing this out.]  Last year, over half the accredited law schools in the United States shrank their entering classes by 10% or more.  We don’t have entering class numbers for this fall yet, but there are reports –particularly among the schools that have had the worst placement records in recent years—of 30%, 40% and even 50% reductions in entering class sizes.  The number of applicants to law school has shrunk by a third just between 2010 and 2013, and the number of applicants for the first-year class that will be starting soon is at levels not seen since Ronald Reagan was president.  And remember that, historically, about 10% of each aggregate entering class drops out before graduation.  So the number of new graduates we can expect to see three to five years from now will necessarily be much smaller than it was just three years ago, and it’s still looking for its bottom.  In other words, what Elie thinks is impossible is actually happening already.  By the way, all of this information is prominently presented in my paper.  See pages 54-56. 

So yes, for the much smaller number of law school graduates we’ll be seeing three to five to seven years down the line, I do think it will be easier to get a law-related job, so long as the number of such jobs at worst stays at about the same seriously depressed levels we see today (which I think is a good bet, and probably a little conservative).  But that is true only because there are currently way too many seats in way too many law schools, and only because a lot of people who might have considered applying to law school are already choosing not to do so, and even more in the future will continue to stay away. 

What that means as a practical matter should be obvious:  You need to figure out if you’re one of the many potential law-school applicants who ought to stay away for your own good.  Nothing in my paper (or anything else I've ever written) should be read as suggesting that no matter who you are, things are going to be great for you if you start law school in the next few years. Things will improve only if more people avoid law school unless they are good bets to succeed.  So unless you have a coherent and plausible plan for the use you’re going to make of your law degree that is rationally justified by your LSAT and undergraduate grades, don’t go to law school.  If the only law schools you get into are ones with an acceptance rate north of 50%, don’t go.

If that makes me an idiot, I can live with it.  When all is said and done, though, I do have one thing to thank Elie for.  As Oscar Wilde memorably remarked, the only thing worse than being talked about is not being talked about.  I thank Above the Law for subjecting me to the lesser of the two evils. 

Bernie

California Girls and Rubin Boys: On Being Part of the Club

In recent debates about the relative merits of Janet Yellen versus Larry Summers for the job of Fed Chair, one of the more interesting aspects to me has been the gender issues that very quickly rose to the fore.  Sometimes those issues are explicit, such as when Ezra Klein mentions the “sexist whispering campaign against Janet Yellen,” or when Binyamin Appelbaum and Annie Lowrey in a New York Times headline reference the “gender undertones” of the debate. 

Other times they are more subtle. For example, while not explicitly tied to gender, many point to the “insular” and “clubby” nature of the Obama White House, where influential economic policy positions are held by “a small, close-knit group of men who have known one another since the Clinton administration, if not before.”  Janet Yellen (along with other women, according to this narrative) is “on the outside looking in.” 

I find statements like those of Christina Romer, former chief of the White House Council of Economic Advisers under Obama, even more interesting. Romer elaborates on the difference between formal inclusion and real influence:

“I was always officially where I should be,” Ms. Romer said of her White House experience. “When there was a quick meeting on the phone, or the side meeting, that’s when you felt like maybe business was being done or maybe I was being left out of things.”

Yellen and Summers also have stylistic and ideological differences that can be perceived as gendered.  For example, Yellen (and, according to former Administration officials, other senior female economic policy officials) are further to the left than the Rubinites.  Yellen is considered more focused on unemployment than is Summers, which I suppose could translate somehow into “touchy-feely.” And, Yellen isn’t “tough,” lacks “gravitas,” is too “soft-spoken,” and “passive.”  She may not be able to handle the inevitable tough fights with Congress. Whatever criticisms one might throw at Summers, a lack of toughness isn’t likely to make the list, though it is notable that Ben Bernanke is typically described in terms more similar to those used to describe Yellen than Summers – a soft-spoken consensus builder. 

Naturally, the Obama administration denies that gender would play any role in selection of the fed chair.  The determining factors will instead be the President’s comfort with the candidate, how well he believes he or she will do the job, and how successful the new chair will be in dealing with the market and Wall Street.  (a point to which I’ll return later)

This debate has intrigued me because it bears so many similarities to discussions we have heard about corporate board diversity.  Corporate boards remain, despite some recent progress, overwhelmingly male (and white, though that isn’t particularly relevant to this post).  Moreover, they are frequently characterized as insular, clubby, and cloistered, even by those who are a part of the club and even when that club includes board members that bring racial and gender diversity to the table.  

In later posts I’ll elaborate on these similarities between the Yellen-Summers debate and the dialogue surrounding board diversity.  Be back soon . . .

Seriously Impaired

I noted last week that the intersection of Michigan law and the Bankruptcy Code provided some interesting questions about the scope of the Supremacy Clause, the Tenth Amendment, and federalism generally. On a more lighthearted note, the Wall Street Journal reported today that the bonds issued for construction of the Great Platte River Road Archway Monument (which featured briefly in Jack Nicholson's About Schmidt) would get $50,000 on a $20 million tab. That's .0025%. But it's worse than that: The initial issue was for $60 million, which was voluntarily written down by the bondholders to $20 million in 2002. Talk about haircuts!

But on a positive note, "'Not many bonds were sold locally,' Joel Johnson, the foundation board’s chairman, told Bankruptcy Beat."

Detroit bondholders beware: Matters could be worse. Much worse.

In or Out? Detroit and Bankruptcy

Since I'm still working on my piece drawing on the Stockton, California's bankruptcy, I was a bit peeved that Kevyn Orr put Detroit into Chapter 9 in mid-July. Couldn't he have waited another month? On the other hand, maybe Detroit isn't in bankruptcy after all. By now most folks have read that a Michigan Circuit Court judge ruled that the Governor's authorization to file violated the Michigan constitution. On Monday The New York Times reported that Bankruptcy Judge Steven Rhodes will consider the Michigan constitutional issue today. For a good analysis of why the state court judge is wrong read Adam Levitin's post at Credit Slips here.

All this debate about the Supremacy Clause vs. the Tenth Amendment and state pension law vs. federal bankruptcy law convinced me to post a (very) working draft of my paper on SSRN (abstract here). While focused primarily on Stockton, my ultimate conclusion is that state law priorities are unenforceable in bankruptcy. However, following bankruptcy priorities instead of state law ones may violate the requirement that a plan be in the "best interests" of creditors (since some would have done better outside of bankruptcy) thus rendering any non-consensual plan unconfirmable. (Warning: only two-thirds of the argument to back up my contentions currently shows up. Stay tuned for the rest.)

In any event, a fine kettle of fish--which, however, should drive all parties to agree on something. In other words, Chapter 9 as a penalty default system.

Apple Loses E-Book Antitrust Litigation

Cross-posted from Madisonian.net ...

The District Court for the Southern District of New York today handed down its decision in the ongoing Apple e-book antitrust litigation holding that Apple violated antitrust law in its participation in (one might say orchestration of) a scheme to raise retail prices of e-books in 2009-2010 when it launched its iBookstore with the iPad. Story and judgment available here. And for anyone interested in the structure of the e-book industry, the recitation of the facts re how the industry works and how Apple sought to change the original model dominated by Amazon is very instructive and reads not unlike a Greek drama. It’s probably the most detailed account I’ve read explaining the distribution and price determination models within the industry.

Biological Father and Stepmother and Paternal Grandparents Move to Adopt Baby Girl

A new development in the Baby Girl case has occurred--namely, the attempted adoption of the child by her biological father and stepmother and, alternatively, her paternal grandparents.  More information is availiable here.  This is something that Justice Sotomayor predicted could happen in the case, given that ICWA mandates placement preferences for adoption of Indian children that include the child's extended family.  Slip Op. at 25.

The case remains troubling to me in a number of respects, most importantly its exceedingly narrow interpretation of ICWA.  I also remain concerned, as I noted earlier, that sub silento termination of unmarried fathers' rights, as is allowed under South Carolina law, conflicts with the equal protection clause.  Finally, I'm skeptical of the Majority's notion of abandoning children "in utero."  Slip Op. at 16; see also Slip Op. at 2.  I fully acknowledge that it can be harmful and distressing for a pregnant woman to be deserted by her partner, and that this can harm the child who is later born, but I am not sure that that is the same thing as abandoning a child.  It seems to me that it may be necessary to assume a pro-life stance to get to this conclusion (although I think a parent's actions during pregnancy should certainly be relevant in a later proceeding regarding parental rights).     

Contending for the Fifth

Those following the saga of the House Committee on Government Oversight and Reform and Lois Lerner, currently suspended IRS Director of Exempt Organizations, might be interested to read the letter from Regent professor Jim Duane to the committee in which he rebuts Alan Dershowitz's blithe conclusion that Ms. Lerner's brief statement amounted to a waiver of her right against self-incrimination.