The South Butt Answer to the North Face

For a brilliant combination of technical perfection, persuasion, and humor of a sort I’ve never before seen in an answer to a complaint, you’ve got to see the answer filed by South Butt to the complaint filed by North Face alleging that South Butt’s name and its slogan, “Never Stop Relaxing,” infringe North Face’s trademarks in its name and its own slogan, “Never Stop Exploring.” I will be forever grateful to techdirt for bringing this document to my attention.
The South Butt Answer to the North Face

True innovation in health care: no-fault insurance for bad medical outcomes.

We would make genuine and profound progress in “fixing” our health care system if we replaced the existing malpractice system with (1) no-fault insurance to compensate patients for the long-term medical and personal costs of bad medical outcomes and (2) an effective mechanism by which the medical profession policed the quality of the care provided by its members.

One political war that never seems to wane is over the medical malpractice system. On the one hand there are the doctors, the insurance companies, and right-wingers screaming that it is medical malpractice that is bankrupting us; on the other, there are the malpractice lawyers and the rest of us who want protection against the risk of suffering unexpectedly from medical treatment.

The critique of the malpractice system has a lot of validity — it’s a lottery in which those patients who have gone to the trouble of hiring lawyers under circumstances smelling sufficiently of medical negligence make out well and the rest of those injured by bad medical outcomes are left with nothing. As a result, too, doctors practice defensive medicine, driving up medical costs for all of us.

But that’s not the entire story. Our health insurance system is a failure, and patients who suffer bad medical outcomes often won’t have coverage sufficient to provide them the care required by the bad outcomes. The only alternative is to sue for malpractice, but the premise of malpractice is that there is no recovery unless the patient is able to prove the doctor was negligent.

Is it any wonder, then, that in a close case, given the choice between, on the one hand, compensating a badly injured patient from with money provided by an insurance company and, on the other, declaring the doctor to be without fault, a jury of human beings will tend to do the merciful thing and find the doctor acted negligently?

Doctors, of course, hate that question. They look at malpractice cases as judgments on their talents, not as tests of mercy. A jury that finds a doctor liable for malpractice has, in the doctor’s eyes, found the doctor to be a bad doctor. To the doctor on trial, The patient’s injuries –as opposed to the doctor’s efforts — are irrelevant.

The dilemma is obvious. First, bad medical outcomes are inevitable regardless of the adequacy of care. As a result, bad medical outcomes are risks we all face. Second, our existing insurance scheme does not spread this risk — rather, those who suffer bad medical outcomes and are not compensated by the malpractice system themselves bear all the costs of that risk.

Wouldn’t we be better off if everyone who suffered a bad medical outcome was compensated for the costs that arose out of that bad medical outcome regardless of the quality of the medical care? No one would be over-compensated, everyone would be fairly compensated, and the abilities of doctors wouldn’t be judged by juries of lay people who are motivated to disregard good judgment regarding those abilities by an entirely understandable and praiseworthy sense of human sympathy.

Such a scheme does raise one problem that the critics of the malpractice system also ignore — we really do enjoy a remarkably high standard of care in this country precisely because of the malpractice system. Doctors have never gone to the trouble of instituting an effective means of policing the quality of medical practice. To some degree they haven’t needed to do so because the risks posed by the malpractice system have forced insurance companies to take on that role. To replace the malpractice system with a no-fault insurance system, therefore, would require some genuine quality control imposed by the medical profession itself.

But if we simply gut the malpractice system and ignore the costs of bad medical outcomes and the need for some genuinely effective means of quality control, we would instead have the worst of all worlds.

What is a Judicial Author?

I have posted on SSRN a copy of an article entitled “What is a Judicial Author?” I presented several years ago at a conference. I have learned to my utmost gratitude that Lewis Hyde will be quoting and citing the article in his forthcoming, much-anticipated book on the cultural commons. As the article’s abstract explains:

This paper, originally presented in draft at the Con/Texts of Invention Conference sponsored by the Society for Critical Exchange, examines the ways in which judges write opinions, the ways experienced and inexperienced legal readers conceptualize judges as authors, and the affect these conceptions have on the way they read those opinions. The paper describes judicial writing as a quintessential example of collaborative writing, a view corroborated by the ways experienced lawyers use and interpret judicial opinions in practice. The judicial opinion is not, as lay opinion grounded in the Romantic view that forms contemporary common wisdom would have it, the original work of the wise and creative judge pronouncing from on high. Rather, the opinion itself is a piece cobbled together from a number of other sources that include established law, the lawyers’ written and spoken legal arguments, secondary legal sources, and earlier opinions that were themselves built up from the bits and pieces floating through the legal discourse community. Nevertheless, conventional legal thinking has since at least the 19 th Century through today propounded the notion of the judge as quintessentially Romantic author-creator. This clash between legal practice and the conventions of legal (and especially academic) discourse poses real and neglected problems in legal education, especially in the ways the Romantic view of judicial authorship instills in students habits of reading.

The source of innovation — as a lawyer, as a business person, or as a designer — is creative thinking.

One of the reasons I was willing and remain committed to writing about law and creativity here at Geniocity is the purpose of this site as Carolyn Jack, its founder, has made clear to me from the beginning: it’s intended to show how innovation works across professions and disciplines normally segregated from one another so that people in those disciplines and fields can learn from one another. Innovation requires a remarkably agile mind — a creative mind — and so anyone wanting to innovate should look to the thinking of creative people no matter where they find them. Businesses should look to artists. Artists should look to game designers. Game designers should look to lawyers. Lawyers should look to fiction writers . . .

Again: no matter what you do — law, business, education, etc. — you should pursue innovation by seeking ideas from people whose job it is to innovate. As Fast Company reports, that’s also precisely the advice Roger Martin gives to businesses:

[T]he dean of the Rotman School of Management at the University of Toronto is traveling the country, throwing down the gauntlet to companies who hope to analyze and strategize their way out of a recession by bringing in armies of management consultants. You’ll get what you pay for, he warns, and it won’t be innovation. “The business world is tired of having armies of analysts descend on their companies,” he says. “You can’t send a 28-year-old with a calculator to solve your problems.”

The problem, says Martin, author of a new book, The Design of Business: Why Design Thinking is the Next Competitive Advantage, is that corporations have pushed analytical thinking so far that it’s unproductive. “No idea in the world has been proved in advance with inductive or deductive reasoning,” he says.

The answer? Bring in the folks whose job it is to imagine the future, and who are experts in intuitive thinking.

As Martin points out, even scientific progress starts with hypotheses; it doesn’t merely apply the known. Which, interestingly, is precisely the point evolutionary biologist Olivia Judson made in the New York Times this week:

One of my favorite things to do is to take a set of facts and use them to imagine how the world might work. In writing about some of these ideas, my aim is not to be correct — how can I be, when the answer isn’t known? — but to be thought-provoking, to ask questions, to make people wonder.

[S]cience is usually presented as a body of knowledge — facts to be memorized, equations to be solved, concepts to be understood, discoveries to be applauded. But this approach can give students two misleading impressions.

One is that science is about what we know. One colleague told me that when he was studying science at school, the relentless focus on the known gave him the impression that almost everything had already been discovered. But in fact, science — as the physicist Richard Feynman once wrote — creates an “expanding frontier of ignorance,” where most discoveries lead to more questions. (This frontier — this peering into the unknown — is what I especially like to write about.) Moreover, insofar as science is a body of knowledge, that body is provisional: much of what we thought we knew in the past has turned out to be incomplete, or plain wrong.

The second misconception that comes from this “facts, facts, facts” method of teaching science is the impression that scientific discovery progresses as an orderly, logical “creep”; that each new discovery points more or less unambiguously to the next. But in reality, while some scientific work does involve the plodding, brick-by-brick accumulation of evidence, much of it requires leaps of imagination and daring speculation. (This raises the interesting question of when speculation is more likely to generate productive lines of enquiry than deductive creep. I don’t know the answer — I’d have to speculate.)

Being effective at anything requires innovation to address an ever changing world. It’s true in law. My students arrive in law school wanting to be told the answers law provides. I hope by the time they leave that what they’ve learned are not answers but, rather, ways to creatively reach answers to questions no one can anticipate they will face.

In other words, the qualities required by effective lawyers are the same qualities  – as Hartmut Esslinger, the founder of frog design, tells Guy Kawasaki — required by effective designers.  Both great designers and great lawyers lawyers have an enormous depth and breadth of knowledge, an ability to connect that knowledge to human lives and human hearts, desire, and persistence:

The artistic talent required is more of an enabler at the end of rational and emotional analysis as well as strategic conceptualization. Therefore, it is vital to learn and study as much as possible especially about business, technology and human nature. In the end, there are flavors in design which are more esthetic—see New York Times “Style Magazine”—but design is only relevant when it improves human lives by appealing both to the mind and the heart. Finally, a young person with the right talents needs to have infinite desire and never give up. I apply a simple test with young students: smash a teapot into pieces and then hand out the glue. Those who rebuild the teapot won’t make it, those who create phantasy animals and spaceships will.

So next time you are looking to innovate (and you always should be), look to creative people to help you do it.

Kids need to learn a lot, but they can teach us a lot too.

The information and communication revolution wrought by the internet is, among other things, a generational divider. While one generation bemoans the threat of the internet to newspapers and books, a new generation — the one I teach — appears to do the vast majority of its reading online. It is of course not all a matter of the younger generation having aptitudes for a new environment we old people resist adapting to. There is as much lost as is gained. (One of these days I’ll explore the loss I’ve noticed in researching skills, the ability to ferret out information that is not easily accessible or even immediately recognizable as important.)

But there is so much that is of great use in the new environment that too many of my contemporaries (and, also, too many of my students) don’t take advantage of. Social Media Law Student is a terrific site for helping us all find and learn how to use new tools. It’s run and written by law students. Yana Siganur writes today’s lead article, in which she takes the opportunity “to remind everyone of the efficiency that is Google” in a well-written and concise guide to a number of tools available from Google that can our professional lives easier.

The new economy, the billable hour, and law school tuition — change is afoot.

When things change, things change.

I’ve written at length before about the perversities created by the hourly rates charged by lawyers. Hourly billing has been the standard practice in most of legal practice for the past 50 years or so. The practice on its face is troubling — just as our current health insurance scheme provides incentives for doctors and hospitals to do and bill more (and, conversely, to engage in less preventative medicine), so too does the billable hour provide incentives for lawyers to do more and, therefore to bill more.

The system has maintained itself in the same way many of our economic practices have maintained themselves — by means of an every increasing pie. And from the provider end the inflation worked its way down to every level — bills, salaries, hours, and law school tuition all skyrocketed. The tuition rise could be paid for by loans that could be paid with inflated salaries. The inflated salaries were paid by inflated bills, which were produced by inflated hours.

And in 2008 the whole edifice came crashing down. Now, all the talk is about different billing practices.

We’re all still waiting for the change, however. One outcome of a change would be, I hope, a decrease in the use of sheer economic weight to out-litigate an economically disadvantaged adversary. As things stand, as much as I hoped always to be efficient for my client, the adversary would require me to do more than I otherwise would if the adversary chose to contest every matter and to thoroughly investigate every single piece of discoverable evidence (no matter how trivial or irrelevant).

And U.S. students are desperate for relief from the tuition costs the billing practices have raised. Legal jobs are scarce, and those that exist are at depressed salaries. But tuitions have not yet come down. They’re going to have to.

Teaching legal imagination: Harvard dean calls for it, I am grateful, but a lot of work remains.

Kristopher Nelson of in propria persona graduated from Harvard Law School in May and now is a graduate student in the history of science. He astutely observes that law school emphasizes training its students to practice law but does a rather poor job of actually doing so: “Law school . . . while pushing the prac tical, does not teach it.” As I’ve made clear, I think his criticism is particularly well placed when it comes to Harvard.

So I am happy to see that Nelson points to an article written by co-written by Martha Minow (pdf), the new dean of Harvard Law School, in which Minow and her co-author, Todd Rakoff, explicitly acknowledge that law students need more. What do they need? I think Minow and Rakoff are right to identify it as “legal imagination”:

[S]tudents need more, and they need more not for arcane or unusual careers, but simply to be good lawyers. While an expert in differentiating mental skills could probably produce a raft of labels for what they also need, when we think of what students most need that they do not now get, we think: “legal imagination.” What they most crucially lack, in other words, is the ability to generate the multiple characterizations, multiple versions, multiple pathways, and multiple solutions, to which they could apply their very well honed analytic skills. And unless they acquire legal imagination somewhere other than in our appellate-case-method classrooms, they will be poorer lawyers than they should be.

How will they be taught this legal imagination? By being given “cases” more like students are given in business school than students are given now in law school: complex problems in which the students are required to generate real world alternatives, recommend the best, and be evaluated on the quality of their judgment:

[T]he type of materials we have in mind can be described in general. Students ought to be presented with relatively dense materials that lay out a situation, experienced as a problem for a person, or group of people, for legal treatment. Students should face a choice that challenges them to identify options and that permits multiple resolutions, sometimes within a relatively tight ambit. Such resolutions might include issues such as which settlement offer would make it sensible to forego litigation. Sometimes these choices might be within broader (but still specifiable) alternatives, such as whether trying to get particular legislative language adopted would be feasible and preferable to private ordering. The problems ought not to be situated in one doctrinal area, but should present opportunities for mental maneuvering around the legal universe. Teaching should emphasize generating alternative solutions as well as appropriate grounds for choosing among them. And criteria for resolution should include legal, normative, and practical considerations.

Of course, Minow and Rakoff also believe that “following the business school model, we think that case writers will need to get their materials from practitioners.” Why isn’t this already going on throughout law school? One reason, I’ve always believed, is that law professors are those who have done best in law school (not necessarily, or even usually, as lawyers), so they perpetuate the existing institutional model in their belief that if law school has identified them as the best and brightest it must be well designed. Law professors are not unique in this tendency. Anyone who succeeds in an institution has a vested interest in believing the institution’s promotion procedures are very good at judging genuine merit. 90% of law firm partners will tell you their firm is better than most at judging associates. And Minow even recognizes this impediment to the change she calls for:

Law professors were good law students, and given the history of legal education, this means that they almost universally feel comfortable handling appellate opinions in the classroom even if they have no experience doing so in practice. By contrast, for many of us, the arenas of the legislature, the agency, the political movement, the media— perhaps even the trial courts—are ones we may only remotely watch. Ideally, case studies and teachers’ notes could be crafted so that they could be taught by professors as we know them in law schools as we know them. But, frankly, many of us will need to learn some new things.

I am thrilled that the dean of Harvard Law School is making these arguments. As goes Harvard, so goes virtually every law school in the country. But there is also another piece of the puzzle that needs to be put into place, as I’ve previously written about: how in the world can we measure whether we are effectively teaching “legal imagination”? In many ways I think I’m ahead of Minow in trying to do what she calls for. But until I can prove that what I am doing in fact teaches students how to be lawyers better, I’m afraid that I won’t have a ton of influence. Fortunately, Minow, merely because she is the dean of Harvard Law, can have influence even without first proving what she is arguing for works.

The EFF surely wants Jammie Thomas not to settle at any price, while the RIAA, even though it won $1.92 from a jury, surely wants her to, likely for any price.

Mike Masnick of Techdirt reports that the RIAA is anxious to settle the case in which it won $1.92 million from Jammie Thomas-Rasset for illegally downloading 24 songs. As Masnick writes, the RIAA “seems to recognize that the insanity of the $1.92 million doesn’t do it any favors. Even the musicians whose music was part of the case are embarrassed by the amount. . . . the RIAA would love to settle the lawsuit for some lower amount so it can run around touting the ‘risks’of file sharing without having people laugh outloud when hearing that someone had to pay $1.92 million for potentially sharing 24 songs that could be bought for $1 each.”

Masnick writes too that he’s been expecting Jammie Thomas to settle “but the longer this goes on, the more I wonder if she’s actually planning to fight on. If so, this could certainly represent a case to examine the statutory rates associated with copyright violations.”

Mike is more right than he may know. Any lawyer interested in challenging the constitutionality of the statutory penalties imposed by the Copyright Act would want to represent Jammie Thomas on this appeal. When a lawyer looks to challenge a law, if he’s got any sense he doesn’t challenge it via any case that happens to come up. He chooses a case that presents especially good facts for the challenge. The EFF would love to have Jammie Thomas appeal – no case involving a defendant found liable for illegal downloading would be a better vehicle for bringing the challenge to the statutory penalties.

Do you know you’ve agreed that Amazon can decide you’ve agreed to something other than what you agreed to?

I teach contract law. One of the most interesting issues in contract law is the extent to which it is based on conscious agreement. Theoretically, two free individuals are at liberty to agree to govern their relationship with respect to any given matter (the sale of a car, the division of assets in a divorce, the employment by one of another, the limitations on the use of materials posted by one on a web site governed by another) in any way they agree.

One problem with this theory is that so few of our contractual relationships are based on anything resembling conscious agreement. When is the last time you read a rental car agreement? The agreement governing use of your credit card? (Well, we might all be doing that more these days.) The terms of service governing your Facebook account?

The vast majority of us never read the terms of service governing our use of commercial web sites. Yet there is little question we are bound to them and that we entrust them with our creative work and our information we want to keep private. More surprisingly, perhaps, when we agree to these terms of service we almost always agree that the service provider can change the terms unilaterally. In other words, we are agreeing that our relationship with the web site will be whatever the web site decides that relationship will be.

As Plagiarism Today explains:

[I]t is standard practice for many sites to silently change their terms of service as the terms itself allow them to do. Users are often unaware of potentially worrisome changes until after a problem has arisen, when it is often too late to do anything about them.

But now the Electronic Frontier Foundation has created “‘TOSBack‘”: a ‘terms of service’” tracker for Facebook, Google, eBay, and other major websites”:

At www.TOSBack.org, you can see a real-time feed of changes and updates to more than three dozen polices from the Internet’s most popular online services. Clicking on an update brings you to a side-by-side before-and-after comparison, highlighting what has been removed from the policy and what has been added. . . .

“Some changes to terms of service are good for consumers, and some are bad,” said EFF Senior Staff Attorney Fred von Lohmann. “But Internet users are increasingly trusting websites with everything from their photos to their ‘friends lists’ to their calendar — and sometimes even their medical information. TOSBack will help consumers flag changes in the websites they use every day and trust with their personal information.”

How does legal innovation occur? Slowly, by looking to the laws of other countries, and by disguising innovation as interpretation.

In “Inventing Invention: A Case Study of Legal Innovation,” Professor John F. Duffy recognizes that change and evolution in law are taken for granted but rarely studied in depth: “Legal change is treated as if it is something that just happens-that follows inexorably from the emergence of social needs and changed social conditions.” Duffy’s article is an antidote to these truisms, studying in depth the development of the requirement that in order to be patentable an invention must be “non-obvious.”  Duffy identifies in the development of this major legal innovation several characteristics he believes could be generalized to a lot of legal innovation:

(1) “Nation-states do not seem to create new legal conceptions independently nearly as frequently as they borrow them from other nation-states.”

(2) “Nations with similar legal cultures and industrial capabilities, such as the United States and England, sometimes maintain significant differences in their law for periods of decades. The speed of convergence on a single ‘common’ law seems extraordinarily slow.” This deliberate pace seems to be the product of a wait and see attitude: “because [one country does] not know whether the innovation is a pathbreaking and salutary development, like obviousness, or a disastrous experiment that will eventually be discarded,” it will wait and see the results.

(3) Courts are wary of the criticism often directed at them for “making policy” rather than merely applying existing law. As Chief Justice John Roberts puts it, his role is merely to be an umpire, not to determine what is a ball and what is a strike. Of course, Roberts ignores the fact that a strike zone is rather well defined, whereas law is full of open-ended standards (the requirement of “due process,” for example), gaps that do not fit cases that courts must decide, and outright ambiguities. But, as Duffy points out, the attitude Roberts exemplifies forces courts to engage in innovation under the guise of mere intepretation: “even when courts are trying to change the law, they often deny that they are doing so by creating clever reconstructions of the language that previously defined the relevant doctrine.”

The justice system complements the political system: Climate Change and Human Rights.

The University of Washington School of Law recently hosted a conference entitled Three Degrees: The Law of Climate Change and Human Rights. In the words of the conference organizers:

Numerous scholars have suggested that human rights law may provide the most adequate and responsible remedy for climate-related impacts, and this conference will create an international forum to thoroughly test the available remedies, raise the legal issues associated with these remedies, and collaborate over necessary advancements in the law.

Dan Bodansky raises an interesting question about using human rights law to address the problems posed by climate change: wouldn’t the focus on individuals through the use of legal remedies detract from the big-picture policy approaches that are most needed?

Climate change mitigation involves tremendously complex tradeoffs between different values. Focusing on particular individuals or cases, or on particular human rights, can obscure these tradeoffs, making sensible policymaking difficult. Although emphasizing the effects of climate change on human rights may be a useful means of mobilizing public concern and of prodding the political process, a solution to the climate change problem will, in the end, require political decisions by states, both nationally and internationally.

I appreciate Bodansky’s preference for large-scale political movements, but I think that law-making directed prospectively at the level of a political entity (city, state, country, etc.) can and is complemented by legal remedies for individual harm. Again and again I marvel at the blindness of doctors, for example, who direct their wrath at the legal malpractice system without considering the functions the system serves above and beyond punishing doctors. A patient injured by a medical procedure needs to bear the cost of taking care of his injuries regardless of the doctor’s fault. Given the absence of universal health care and the inadequacy of much of the existing health insurance in this country, is it any wonder that juries are likely when they have the chance to choose to have the doctor’s insurance carrier pay for the injured patient’s care? We all face the risk of bad outcomes from medical procedures; doesn’t it make perfect sense to socialize that risk, to have us all share it? Until we come up with a way to do that other than the malpractice system, individual justice is the best we’ve got.

So I would say to Bodansky: unless and until we have the most effective policy solutions to the problems posed by climate change, individual, case-by-case remedies for harm caused by climate change can only help.

The argument against Proposition 8 — result due in a few hours.

Today, the California Supreme Court announces its decision on Proposition 8, the voter initiative passed in November that outlawed same-sex marriage. In May 2008, the court, held that prohibiting same-sex marriages violated the Equal Protection Clause in California’s Constitution.

The briefs filed in the case are all available here.

The essence of the argument advanced against proposition 8, as I understand it, is as follows: the state constitution’s requirement of equal protection requires that same-sex couples be permitted to marry. The state Supreme Court is the final arbiter of the meaning of the state consitution. Thus, a voter initiative that by a mere majority declares that same-sex couples are not permitted to marry usurps the constitutional role of the state supreme court in interpreting the state’s equal protection clause. It’s an interesting argument — if the voters want someone other than the Supreme Court to interpret the state constitution, they must revise the constitution to alter the role of the Supreme Court. Leaving interpretation of constitutions, however, has been firmly embedded in U.S. jurisprudence since Marbury v. Madison, in which, of course, Chief Justice John Marshall stated:

It is emphatically the province and duty of the judicial department to say what the law is. . . . If two laws conflict with each other, the courts must decide on the operation of each.

Thus, the argument in California goes, the electorate usurped the role of the state Supreme Court in voting by a majority that the equal protection clause does not allow same sex marriage. Here, in summary, is the way the argument was articulated by the Petitioners in their Petition for Writ of Mandate (pdf):

13. Proposition 8 alters Article 1 of the California Constitution by adding “SEC. 7.5. Only marriage between a man and a woman is valid or recognized in California.” By its terms, Proposition 8 purports to strip a constitutionally protected minority group of the fundamental right to marry even though that right was previously conferred by the equal protection clause of the California Constitution.

14. Proposition 8 is invalid under the California Constitution because the initiative power does not permit voters to divest a politically unpopular group of rights conferred by the equal protection clause. A transfer of the final authority to enforce the equal protection clause from the judiciary to a political majority can only occur by revision. The Constitution, however, has never been revised to remove final autohority to enforce the equal protection clause from the judiciary.

Tweets on Law Practice

Matthew Homann, at the [non]billable hour, has published  100 Tweets: Thinking About Law Practice in 140 Characters or Less (pdf).  His advice is terrific. Here are some of my favorites:

1. “My lawyer can beat up your lawyer” is not a marketing strategy. “My lawyer will call me back before yours will” is. 

8. The most significant advantage you possess over lawyers who’ve come before you is that you don’t believe what they do. 

16. The confused mind always says no. 

28. You should never have a bigger monitor or more comfortable chair than your secretaries do. 

53. Never confuse your desire to explain something with yourability to do so. 

84. Trying to learn client service in ethics class is like trying to learn to ride a bicycle by watching lots of bike accidents. 

By the way, on Twitter, I’m “@pbfriedman.”

Dow v. Rohm & Haas, settled

One of the more controversial pieces I have written on this blog was in connection with the lawsuit brought by shareholders of Rohm & Haas to force Dow Chemical to complete its purchase of Rohm & Haas pursuant to a contract entered last summer that pegged the purchase price at $78 per share of Rohm & Haas.  My principal point was in response to an article written by Joe Nocera in the New York Times that to even suggest “that maybe, just maybe, deals that stop making sense ought to be called off, or at least rejiggered, especially in the middle of a once-in-a-lifetime financial crisis – invites withering scorn, especially if you say it to someone on Wall Street or in the legal profession.”

My point was that when something stops making sense, the law, if it is working properly, should not force the nonsensicle result.

Responses varied from the grateful to the withering.

The outcome, however, makes remarkable sense.  Last week, Dow and Rohm & Haas settled their dispute over the $15.3 billion merger.  Pursuant to the settlement agreement, Rohm & Haas’s shareholders will get the $78 per share Dow originally promised.  But hedge fund manager John Paulson and the Haas  family shareholders will in essence re-invest their proceeds from the sale for preferred stock in Dow. Doing so gives Dow “enough room to purchase Rohm without immediately running aground. Dow had earlier refused to close the merger, saying its business would be hurt if it had to draw heavily on risky short-term debt.”

In essence, Paulson and the Rohm & Haas family shareholders are helping Dow finance the purchase, protecting the deal they had negotiated for the rest of the Rohm & Haas shareholders.  In exchange, Paulson and the Haas family get great value in return.  Moreover, if I read the situation correctly, there may be tremendous tax advantages for the Haas family.  If the transaction is treated as an exchange of Rohm & Haas stock for Dow preferred stock, it will not be a taxable event.  Moreover, upon transfer to the Haas family heirs via testamentary disposition, those heirs would be considered to have a tax basis in those shares equal to their value upon that testamentary disposition.  In short, whatever gain the Haas family earned in the Dow transaction and whatever gain is earned in the future in the Dow stock they received in exchange will never be taxed to the Haas family or its heirs.

Everyone comes out ahead, and Dow was not forced to go through with the deal it had originally contracted for and so many thought would have to be enforced.

Friday Night Music Club: Warren Zevon, Mr. Bad Example

Of course I went to law school
And took a law degree
And counseled all my clients
To plead insanity…

Good lawyering means remixing

Gerry Spence on one of the secrets of his enormous success:

Is Shepard Fairey a hypocrite?

I’ve written that I believe strongly that Shepard Fairey’s Obama Hope poster does not infringe the copyright of the AP photograph he stenciled to begin his work. First, I think the poster is a fair use of the image, and, second, I think the poster doesn’t take anything that can be copyrighted from the photo.

But Fairey’s practices have often raised questions about the originality of his art.

There are also questions about his possible hypocrisy. MYARTSPACE today focuses on the fact Fairey is trying to assert he has a trademark in the term OBEY. The blog also discusses two potential claims of copyright infringement by Fairey against other artists.

I’ll stick to the copyright claims. They involve two works that borrow significant elements from two of Fairey’s works. In fact, they borrow everything except the mask over the face of the image on Fairey’s poster:

Both images copy far more of Fairey’s original than Fairey’s Obama poster borrowed from the AP photograph. Nonetheless, there’s a very good argument that they are parodies of Fairey’s original, and thus constitute fair use. A parody uses the original work to comment on the original work rather than using the original work to express a point of view independent of the original work. That isn’t to say using the original in non-parody ways isn’t fair use; it’s only to say that the amount of copying permitted for commenting on copyrighted material is considerably greater than if the appropriating work is not commenting on the copyrighted work.

Fairey’s company sent a cease-and-desist letter to Baxter Orr (the creator of the image above). Orr nonetheless continues to sell his painting online, and Fairey has not followed up with any legal action. Nor has he taken any action at all as far as I know against Dan Nolan, the creator of the poster on the right.

I hope he doesn’t take any further action on Orr’s poster or any on Nolan’s. Nonetheless, the cease-and-desist letter might be an instance of copyright overclaiming. Most people, I think, would have taken the image off the internet rather than do what Orr has done.

You hang yourself with your own words.

One thing I learned well as a lawyer is that you could almost always hang an adversary with his own words.  When deposing the opposing party or a witness for the opposing party, my strategy was always to get the person to talk as freely and voluably as possible.  I’d ask open ended questions, nod agreeably, follow up with words like “Really?” to prompt even more loggorhea, and, invariably, when the transcript came back I’d find one piece of testimony after another that was damaging to my adversary’s case.  Conversely, when I prepared witnesses to testify in response to the questions of adversarial lawyers, the advice, pounded in with a hammer, was to answer the question and SHUT UP.  If a yes or a no answered the question, just say yes or no and SHUT UP.

Here’s an amusing example (pdf): in a prosecutor’s opposition to a defense attorney’s request for a delay in the defendant’s trial, the prosecutor explains that the defense attorney “is a partner in a large law firm (over 325 attorneys) and presumably has daily access to a horde of eager, smart, hard working associates to assist in this case.”  That’s not all that bad an argument about why there should be no delay in the trial, but it doesn’t have all that much bite.   But her footnote points out that the defense attorney “touts himself as a ‘Super Lawyer’ on his website.”  Ouch.  Surely a Super Lawyer shouldn’t need more time given the other points the prosecutor has made.

The threat one’s own words pose to oneself is one of the things that scares me most about writing so much on the internet.  Shoot me if I ever refer to myself as a super lawyer.  But how can I?  A recent commenter wrote that something in a recent post of mine wasn’t “worthy of a First Year, much less a professor of law.”   And, after all, considering what the prospect for a hanging does to one’s mind, being wary of being hanged by my own words probably not the worst thing to consider when I’m spouting off.

(hat tip to Southwest Virginia Law Blog, via Brian Ledbetter)

The Associated Press seems bent on waging an unwinnable war.

The Associated Press has made a number of moves in recent times that demonstrate a indefensibly broad reading of the rights of copyright holders to protect their content.  Techdirt explains that the AP now threatens to require payment for access to its online content. Not only does it seem the AP has a remarkably narrow reading of the law; it also has a tin ear when it comes to navigating the new world of information.  Putting its content behind a pay wall open up the field of wire service reporting to competitors who would not do so if AP’s online content remained free (including CNN, which is apparently eager to do so).  Doing so would also be a stupid business move — not only would internet users likely not pay to get AP’s online content (just ask the New York Times).

As Techdirt points out, all of these moves seem to be the result of the AP’s fundamental misunderstanding of what the internet is used for –  communal sharing and commenting on the news:

The paywall itself is what takes away much of the value by making it harder for people to do what they want with the news: to spread it, to comment on it, to participate in the story. Until newspaper execs figure this out, they’re only going to keep making things worse.

Are lawyers and artists completely different and atagonistic?

Wendy Duong of the University of Denver Sturm School has written an article entitled “Law Law is Law and Art is Art and Shall the Two Ever Meet? Law and Literature: the Comparative Creative Processes.”

It’s a fascinating article and well worth dowloading and reading, but here I’d like to take issue with one of her principle points.  As she puts it in the abstract to her article:

The two disciplines, Law and Art, remain divergent and incompatible in three core aspects: (i) the mental process of creation and the utilization of facilities, (ii) the work product or output, and (iii) the raison d’etre of law versus art. The Article points out that the mental process and utilization of facilities inherent in law has little to offer the creation of art, and the two creative processes are antagonistic to each other. In fact, the rationality and logic properties of law the objective of rendering certainty to uncertain future outcomes so as to achieve and maintain order — will interfere with, and can even destroy, the creation of art.

I will confess that I would not generally consider the product of legal practice “art” and it would be a stretch to fit even certain extraordinary legal products art –  Perhaps the Declaration of Independence? The Constitution? Certain influential legal opinions?)

But does law “render certainty to uncertain future outcomes”?  I passionately believe that an enormous part of the law does not do that at all, that what in fact it does is the kind of activity Ms. Duong attributes to art.

Life is infinite.  Each case courts decide are intended first, of course, to resolve the specific cases they are resolving.  But to the extent they render opinions, they are only contingently trying to address the future, and they know those contingent efforts are subject to irrelevance under new circumstances.

Moreover, life is constantly changing, and the law has to grow out of the material conditions it is always striving to govern.  In doing so, it is constantly striving to envision the future material conditions the law might apply to and to anticipate those conditions in making law.  Lawmakers then do not decide with a certainty what law they want to impose from above on the future; they collaboratively work out the best approach to whatever they can envision, knowing all the while that the law may well have to change in the future.

The practice of law too is the constant telling of stories — stories to persuade, stories to inspire, stories to justify visions of the future.  In doing so they are as constrained as artists in the “realities” available to them.  Lawyers are artists.  They may have to make decisions, but that doesn’t mean that in getting to those decision-making points they are not as creatively engaged as artists.

Finally, if lawyers aren’t engaging in the same mental facilities as artists, I don’t have a clue what mental processes artist and lawyers engage in.  I suspect if those ways of thinking are entirely divorced from one another, the lawyers aren’t practicing law well and the artists are not producing good art.

And if artists’ visions are irrelevant entirely from decisions people make in life (You must change your life.), what is it?