Law isn’t about what’s legal and illegal; it’s about serving clients.

Law students, too many lawyers, and most non-lawyers think that lawyers tell clients what they can do and what they can’t — what’s “legal” and what’s not. This caricature is so far from the truth it’s laughable. Lawyers serve clients, and there is so, so much more that drives client decision making than what the law states (except, perhaps, in those exceedingly rare instances when the law mandates a certain decision).

So it’s refreshing that Settlement Perspectives reviews the kinds of questions clients want to hear from their lawyers but don’t hear often enough. Perhaps the most important one is this:

What is an acceptable outcome in this matter?

The article goes on to list a number of other questions of particular import to clients, including this one, perhaps most immediately comprehensible to my first year students:

In the case of a litigated matter, on the continuum between winning and losing, what is considered acceptable? Is there a possibility for success short of complete victory? Prevailing without success? Not prevailing but not losing?

(Hat tip to What about Clients?)

Chief Justice Roberts has no respect for precedent that doesn’t suit his purposes.

One of the less noticed parts of last week’s Citizens United decision by the Supreme Court overturning precedent that had supported over 100 years of congressional restrictions on corporate campaign contributions was precisely the question of the strength of precedent. During his confirmation hearings, prospective Chief Justice Roberts was questioned intensely on the question of his respect for precedent, particularly with respect to Roe v. Wade. In keeping with the image he plainly intended to project of a true conservative, a non-activist who respects existing institutions, Roberts emphasized his respect for precedent.

Thus, it should not be particularly surprising that Roberts wrote a separate concurring opinion in Citizen’s United to supplement his support of Justice Kennedy’s majority opinion. Roberts’ concurrence focused on the need to follow Court precedent — or, rather, the need to depart from precedent in this particular case.

Roberts’ concurrence should leave people convinced he would overturn Roe v. Wade and that his persona as a non-activist “umpire” who merely calls balls and strikes is a fraud. First, Roberts wrote, upholding precedent “is not an end in itself. It is instead ‘the means by which we ensure that the law will not merelychange erratically, but will develop in a principled and intelligible fashion.’”

So why would Roberts depart from precedent? First, if he thinks it’s wrong: “[I]f the precedent under consideration itself departed from the Court’s jurisprudence, returning to the ‘ “intrinsically sounder” doctrine established in priorcases’ may ‘better serv[e] the values of stare decisis than would following [the] more recently decided case inconsistent with the decisions that came before it.’”

Merely overturning precedent because a judge thinks it’s wrong, of course, does away entirely with what court’s call “stare decisis,” the rule that compels them to follow precedent (except when they don’t). If all that mattered was a judge’s determination of what is right, then there would be no need for stare decisis — a judge will always uphold precedent he or she believes is right.

So Roberts has to come up with something better. What does he come up with? To me it’s plain: precedent ought to be overturned if its justification is difficult, if using it to decide future cases is difficult, and if its original justification is open to question:

[I]f adherence to a precedent actually impedes the stable and orderly adjudication of future cases, its stare decisis effect is also diminished. This can happen in a number of circumstances, such as when the precedent’s validity is so hotly contested that it cannot reliably function as a basis for decision in future cases, when its rationale threatens to upend our settled jurisprudence inrelated areas of law, and when the precedent’s underlying reasoning has become so discredited that the Court cannot keep the precedent alive without jury-rigging new anddifferent justifications to shore up the original mistake.

Justice Blackmun’s opinion in Roe v. Wade has been under attack by both supporters of the right to choose whether or not to carry a pregnancy to term and those who oppose the right to choose since the day it was issued in 1973. And in fact, our courts should and do uphold precedent if there is any legitimate justification to uphold — that’s a central truth about legal interpretation (and one law students have a very difficult time gaining an understanding of). But Justice Roberts and his allies on the Court now have authority to cite as support for overturning Roe v. Wade because its original justification may not gain widespread support — this opinion of in Citizen’s United.

Finally, Roe v. Wade fits that other justification Roberts advances for overturning precedent —  it is “hotly contested,” and no doubt he and his allies would argue it therefore “cannot reliably function as a basis for decision in future cases.”

One thing I do know — Roberts has no respect for precedent that doesn’t suit his purposes.

SNAFU, anyone?

It’s not for nothing the word “snafu” is a military coinage. Ars Technica reports that “militants [in Iraq and Afghanistan] have been intercepting US Predator drone video feeds using laptops and a $30 piece of Russian software, and that the military has known of this vulnerability since the Nineties. But at least we have our priorities straight:

Operating system vendors have built entire “protected path” setups to guard audio and video all the way through the device chain. TVs and monitors now routinely use HDCP copy protection to secure their links over HDMI cables. Game consoles are packed with encryption schemes to prevent copied games from playing. Microsoft even goes out of its way to add encryption when Windows Media Center records unencrypted over-the-air TV content. Even the humble DVD, with its long-since-breached CSS encryption, offers more in the way of encryption.

But US drones, which spy on militants and rain down death from a distance, have none. The mind boggles, as it seems like the situation should be totally reversed: no encryption on legally-purchased content, more encryption on devices designed to watch and kill human beings.

But the fact Obama didn’t immediately bow down to the military and order up General McChrystal’s 40,000 troops the moment they were demanded was “dithering.” Too bad Johnson didn’t follow Kennedy’s lead and dither himself in Vietnam:

In November 1961 Kennedy sent Gen. Maxwell Taylor and foreign policy adviser Walt Rostow to South Vietnam. On their return they reported that it was possible for the South Vietnamese to defeat the Communist insurgents without an American takeover of the war effort if the United States provided strong political backing for the South Vietnamese government and provided substantially in-creased military and economic assistance. They further recommended that President Kennedy send 8,000 combat troops to South Vietnam. Kennedy decided against sending combat troops but authorized the deployment of up to 15,000 military advisers. By the time of Kennedy’s assassination in November 1963 the U.S. effort in Vietnam was costing $400 million a year, and about 12,000 military advisers were providing assistance to the South Vietnamese military effort. By the end of 1963 there had been only 70 American casualties.

Of course, in “January 1964 the Joint Chiefs of Staff had sent President Johnson a memo urging him to increase the U.S. commitment and to consider a bombing campaign against North Vietnam. By following these two strategies the military hoped that the war could be won more quickly. The commitment of U.S. troops was doubled; by the end of 1964 there were 23,300 Americans serving in Vietnam.”

Nesson continues to blame others for his lousy job of lawyering.

The  Harvard Law Record reported yesterday on Charlie Nesson’s address to : a room full of HLS students to explain his motivations and methods as the lawyer representing Joel Tenenbaum in Sony BMG Music v. Tenenbaum, the case that resulted in a $675,000 judgment against his client.

I have on more than one occasion expressed my harsh views regarding Nesson’s lawyering in the case (here and here). But the Harvard Law Record’s story only adds fuel to my fury at Nesson’s lawyering skills. According to the story, “When the case first came to his attention, Nesson knew that there was little chance of victory on the merits, with the only truly viable strategy at trial being the minimization of damages.” (emphasis added)

The RIAA cannot have been happy about the way it looks after winning a judgment of $675,000 from a kid, especially since, as Nesson with some degree of accuracy explains, “[w]hat Joel did in downloading and sharing songs was what just about every kid in his generation did and which I bet a great many of you did.” The RIAA was anxious to settle a similar case in which it won $1.92 million from Jammie Thomas-Rasset for illegally downloading 24 songs. As Mike Masnick wrote, 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.”

And Tennenbaum quite plainly had the ability to minimize damages through settlement rather than by means of Nesson’s tactic of going to trial. In February, Ars Technica reported that the “RIAA’s initial offer to settle, made way back in 2003, was for $3,500. Joel offered $500, which was declined. After the case went to court in 2007, the judge ordered the parties to settle and work it out between themselves. Joel offered $5,000. The RIAA demanded $10,500.”

And yet Nesson, realizing that “there was little chance of victory on the merits” and that the only viable way of representing his client’s best interests was to minimize the amount of his liability, failed to settle a case that at most would have cost his client $10,500 (assuming, contrary to any notion of common negotiating sense, that the RIAA would not have moved off of its last offer).

The Harvard Law Record’s story goes on to state that “the evidence presented by the RIAA . . . made it look like Tenenbaum blamed others and lied,” thereby interfering “with his effort to appear credible and sympathetic.” The problem is that the evidence didn’t merely make it “look like” Tenenbaum lied. He admitted in trial that had lied in sworn statements he had made before trial that he had not used peer-to-peer file sharing networks to download and upload recordings.

I’ve said it again and again. I’m no fan of the RIAA. The recording industry’s business and legal responses to the technological revolution that has deprived them of their former monopoly on the means of mass producing and distributing recorded music have been, to my legal and business mind, idiotic. But Nesson was Tenenbaum’s lawyer. His professional judgment as a lawyer was that any legal defense to the RIAA’s claims had little chance of success and that the best lawyering job he could do for his Tenenbaum was to minimize the damages he would be liable for. Nesson clearly had the opportunity to do so. That he passed up that opportunity in a quixotic fight for a principle might be something a lot of people admire, but it’s terrible lawyering.

Can we force a prisoner to be medicated in order to be competent enough to be executed?

Truly only Franz Kafka could do justice to some of the questions that arise in our justice system. In Singleton v. Norris, 319 F.3d 1018 (8th Cir. 2003), the defendant argued that he could not be executed because he was not mentally competent and that he could not be forced to take medication to make him medically competent because to do so would make him eligible for execution and therefore could by no means be in his “best medical interest.” The 8th Circuit disagreed, requiring the question whether the medication to make the defendant competent  to be answered “without regard to whether there [was] a pending date of execution.” Id. at 1026. Both the death sentence and involuntary medication regime had been lawfully imposed. The defendant thus could no longer assert either a life interest nor a liberty interest.

Now, though, the North Carolina Criminal Law Blog suggests that more recent U.S. Supreme Court precedents “may collectively stand for the notion that the execution of an inmate who is competent only by virtue of forced medication might violate the Eighth Amendment’s evolving standards of decency.”

I find the suggestion encouraging, but I am skeptical. We seem loathe to find reasons not to execute people these days.

Shepard Fairey and Manny Garcia: is Garcia lying, or is Tom Gralish(?)? Or is there some other explanation?

As much as law students and law professors want legal questions to resolve into nice, neat abstract questions, they seldom do.

Legal questions are only answered definitively by courts when those questions are necessary to resolve lawsuits, and lawsuits necessarily involve all the messy reality of human life, a messy reality which seldom allows one to merely hone straight in on some nice, neat question (like, hey, what is fair use (in some nice, easy-to-follow rule so we can definitely predict what we can and can’t do)?

One problem — the most important one for lawyers — is figuring out what happened. It’s amazing how people take the facts for granted, as if we have God’s videotape to play to a jury or something. Instead, we have conflicting evidence. And the court has to decide what it all means.

So, when Manny Garcia first learned Shepard Fairey had used his photograph for the Obama Hope poster, did he think what Fairey had done was cool and not even conceive of getting involved in a lawsuit, or was he angry at Fairey and already contemplating legal action?

Last January 23, Tom Gralish, a photographer for the Philadelphia Inquirer who also writes the blog Scene on the Road, wrote that, in a conversation with Manny Garcia two days earlier, Garcia “was quick to add he is not mad at Fairey, and he’s not looking at any lawsuits. ‘I know artists like to look at things; they see things and they make stuff. It’s a really cool piece of work. I wouldn’t mind getting a signed litho or something from the artist to put up on my wall.’”

In paragraph 45 of his Answer to Fairey’s Counterclaim, filed on September 8 in the lawsuit between himself, Fairey, and the Associated Press, Garcia “denies he stated in interviews that he was not ‘angry with Fairey or interested in joining any lawsuits.’”

Does that mean he never stated precisely those words? Or does it mean he did not express to Gralish what Gralish reported? It certainly seems to be the latter. And, if that’s the case, then is he calling Gralish a liar?

Welcome to the law.

ADDENDUM: Tom Gralish’s series of posts chronicling his efforts to identify the photograph that served as the source of Fairey’s Obama Hope poster are here. The posts re-enforce something I have suggested before: Garcia’s photograph just isn’t that original. Since the nature of the copyrighted work is relevant to any fair use analysis, and since the copyrighted work is entitled to less protection to the extent it is less creative, the generic nature of the photo militates in favor of Fairey. But I still think Fairey’s work is so obviously “transformative” that it constitutes fair use. Why? Because it had a resonance in the nation that none of the photos Gralish examined would have had on their own. If Fairey’s ability to confer that kind of power upon the source photo isn’t transformative, I ‘m not sure I know what is. And, incidentally, most of my previous posts on the case are here.

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.

How do we decide how a long buried corpse would want his art treated? And is the corpse’s former intent all we care about?

My post last week about art museums and the doctrine of deviation provoked in the comments precisely the kind of discussion/argument that I tried to point out is the whole point: how do we decide how to apply rules or other written expressions when they are applied in contexts that have radically changed. To literally apply the words written by a donor that restrict the use of a gift by an art museum when doing so would threaten the entire point of the gift (a thriving art museum) seems pretty absurd to me. If what we’re trying to do is discern a donor’s intent, shouldn’t we be a little more flexible?

Thus, I am particularly pleased to note Donn Zaretsky’s reference to the Philadelphia Inquirer’s conclusion that the new Barnes Foundation building (the subject of a couple of those comments to my original post) shows “obvious respect for Barnes’ legacy – for his idiosyncratic view of how art should be displayed and appreciated – should reassure supporters of the move.” That’s precisely the point: Barnes’ original bequest might have forbidden the move, but the result of his restriction, 60 years after his death, was the closing off of a multi-billion dollar collection of art to the wider public, strife between the Foundation and its neighbors, and a threat to the very existence of the Foundation itself. Isn’t it at least arguable that satisfying much of Barnes’ obvious intent — precisely how the art is housed and shown — while making it accessible to the world in a location where it is welcome is a reasonable effort to accommodate what he would have wanted? And isn’t it appropriate that we have institutions like courts to decide whether that reasonable argument or the opposing one (Barnes stated in his bequest the collection should never be moved, so it should never be moved, even if there are circumstances now that he did not anticipate and we could not predict his reaction to)?

And that’s not even to mention that there is a public interest involved. Are we to so honor “property” rights that we would sacrifice billions of dollars of the world’s culture to the whim of the owner? As Zaretsky asks in another post:

What if Barnes’s Will had provided that the works were to be exhibited in Merion for exactly 50 years — and then were to be burned in a big bonfire?

Should we honor donor intent in that case?

Or can we agree that sometimes the public interest trumps the donor’s intent?

Lawyers do the best they can for clients; I wish law professors realized that’s what lawyers should always do.

As someone who has practiced over ten years and taught over ten years I am particularly sensitive to the divide between legal practice and legal academia, and I am partial to the legal practice side of the debate. It’s not that a lot of law professors don’t do a lot of good things; rather, it’s that too many law professors and too much legal education proceeds as if the world of practice is irrelevant. In fact, I am convinced that legal education and legal theory divorced from the application of law in practice is meaningless. Law does not exist except as it has the potential to affect the real world (unless you’re talking about religious law).

And it is fundamental to the practice of law that the first and primary responsibility of the lawyer is to the client’s best interests. When you start treating the client merely as a means to raise intellectual issues you find of greater interest you’re doomed to get in trouble.

Charles Nesson is a good example of a law professor who doesn’t understand how to be a lawyer. Nesson ignored the advice of many who are sympathetic to the plight of file sharers in conducting his defense of Joel Tenenbaum, a case which resulted in a $675,000 verdict against his client. There were many who considered Nesson’s defense bad lawyering, including myself. Blue Mass Group even asked whether he was “the worst lawyer ever” in a post that supported the legitimacy of the question with examples from the case:

[T]hrough the course of the litigation, Tenenbaum gave sworn statements that he then contradicted at trial. And in a dramatic moment, it seems that at the end of his testimony, just before the verdict, he actually admitted liability, causing the judge to find him liable and the leave only question of damages for the jury to decide. Who prepared Tenenbaum to testify? Did anyone bother?

It also seems that Professor Nesson made audio-recordings of depositions in the case–perhaps for use in the classroom?–without the knowledge of the lawyers on the other side of the case. This is potentially a crime, as well as an apparent violation of the Rules of Civil Procedure, which require a lawyer taking a deposition to notify the other side of the method to be used to record it (though perhaps if Professor Nesson was recording depositions taken by the other side, he would not be in violation of the rule–I’m not sure).

Now, Professor Nesson says he will appeal on the judge’s failure to instruct the jury on fair use. I’m not a copyright law expert, but I’ve heard others describe this issue as likely to lose.

In any case, it seems clear to me that Professor Nesson did not really act to protect Tenenbaum’s interest. This twenty-something graduate student is now facing bankruptcy when he could have settled the case for next to nothing.

More support for the criticism of Nesson’s job defending Tenenbaum comes today with the news that the judge in Tenenbaum’s case ordered defendants who did not even bother to defend file sharing charges to pay the minimum penalties allowed under the Copyright Act, prompting Ars Technica to point out that Tenenbaum and others like him “would have been far better off monetarily if they had simply ignored the complaint altogether and failed to show up in court.”

The sad part is Ars Technica is right — sometimes bad lawyering is worse than no lawyering.

Nesson’s response to criticism that he ignored defenses and other strategies he might have used to minimize Tenenbaum’s liability? He writes, without an ounce of apparent regret: “these defenses do not join the fundamental issues. this trial was not an exercise in getting joel off the hook.”

That’s precisely my point. If you treat a case as a means to an end and are willing to sacrifice the client’s best interests to get to that end, you are not doing your ethical duty as a lawyer. If you insist on a jury, make legal arguments there is no good reason to think will prevail, allow your client to lie in pretrial testimony and go ahead and put him on the stand anyway, flout good sense in recording hearings without having gotten the judge’s permission to do so, and then go and post those recordings on line, is it any wonder your client ends up paying a big price?

As I indicated in my last post (and numerous times on this blog and elsewhere), I am convinced the RIAA’s campaign to sue file sharers is misbegotten as a practical, business matter. I’ve even gone out of my way to try to help Nesson. (See also here.) That doesn’t mean that Nesson is a noble guy in sacrificing his client to what he considers a greater cause, and a lawyer should know better.

Legal rules, convenient fictions, and figuring out when you’ve agreed to something you haven’t read.

I wrote on Friday about one legal fiction — that a corporation is a “person” entitled to First Amendment free speech rights — and today I can write about another: that contractual relationships are founded on agreement.

I can get one level of the point out of the way quickly. As first year law students learn right at the beginning of their first year contracts course, it is the objective manifestation of agreement that matters, not the subjective intent. You cannot agree to buy a “white” horse and then argue that delivery of a white horse is a breach of your agreement because you subjectively intended “white” to mean black. To suppose otherwise would create a practical nightmare — every contractual dispute potentially would have to be resolved by determining which party to the contract was a liar.

But how do you determine the “objective” meaning of someone’s expressed intent? As a general rule, if you sign an agreement that says you’ve agreed to X, a court will rule you agreed to X. In the online world, if you click on a button that says “I agree,” a court will rule that you agreed even if, as is likely, you didn’t read the agreement.

But there are more complicated possibilities. In Specht v. Netscape Communications Corp. (pdf)(S.D.N.Y. 2001), Judge Alvin K. Hellerstein (someone I once, many years ago, worked for) ruled that an agreement to arbitrate contained in an online agreement Netscape purported to bind anyone who downloaded a certain program from the internet was not enforceable. Why? Because under California law (which the court had determined was applicable to the dispute), someone, “‘regardless of apparent manifestation of his consent, is not bound by inconspicuous contractual provisions of which he was unaware, contained in a document whose contractual nature is not obvious. . . . ‘” Slip op. at 16 (citation omitted).

In Specht, Judge Hellerstein found that the provision in dispute was too inconspicuous to be enforced because the person downloading the program could have done so without even knowing he was agreeing to contractual terms that would limit him in certain ways. Why? Because the language indicating that there even was such an agreement could have been entirely missed — it appeared via a link that could not even be seen unless the user scrolled down on the appropriate page. In other words, the user could click through to the download page without even seeing language indicating that his download represented an agreement to terms he could find by clicking on a link. Id. at 17.

Judge Hellerstein clearly preferred online agreements that require the affirmative act by the user of clicking on a button that says “I agree” and made plain that Netscape’s failure to do that in itself (even if the link to the applicable terms had been visible without scrolling down a page) was enough to undermine its argument that an agreement had been formed:

Netscape argues that the mere act of downloading indicates assent. However, downloading is hardly an unambiguous indication of assent. The primary purpose of downloading is to obtain a product, not to assent to an agreement. In contrast, clicking on an icon stating “I assent” has no meaning or purpose other than to indicate such assent. Netscape’s failure to require users of SmartDownload to indicate assent to its license as a precondition to downloading and using its software is fatal to its argument that a contract has been formed. Id.

Recently, however, as Techdirt pointed out, the court in PDC Laboratories Inc. v. Hach Co., No. 09-1110 (pdf) (C.D. Ill., Aug. 25, 2009), disagreed with Judge Hellerstein and ruled that under Illinois law a contract provision available for viewing behind a hyperlink was an enforceable term in the parties’ contract for the sale of goods.

So, online sellers: if you want to be sure your agreements are enforceable, do what most online sites do — require your customers to click on a button that expresses their agreement before the transaction is complete.

Online buyers: be careful. Don’t believe that you’re getting what you think you’re getting. You’re only getting what the fine print says you’re getting. But if you do get screwed, remember too that even when you sign something it might be so unfair it is unenforceable.

If, like my law students, you’re shaking your head, thinking this guy is not cutting to the bottom line — what does the law say? — understand this: the law is not like the Ten Commandments, setting forth brief rules that are always applicable. Rather, much of the time it gives you guidance on how to minimize your risks. Assume that you’ve minimized your risks as an online seller if you require someone to click on an “I agree” button, and assume you’ve minimized your risks as a buyer if you’ve read and understood the fine print.

Then again, even the Ten Commandments are not as clear cut as most people think. Thou shalt not kill? Unless you’re a Jain, you don’t really believe in the literal truth of that rule.

Doing justice is not calling balls and strikes, and to say it is is un-American.

Law is not a matter of “calling balls and strikes.” Rules in baseball define the strike zone, and there is no reason to suppose those rules should change from game to game or batter to batter.

As I need to begin explaining on Monday to my new law students, to suppose that all one needs to do is know the rules and apply them to the infinite complexities of life to come up with decisions, they are sorely mistaken. Edward H. Levi, in a 1948 law review article later expanded into a seminal book, An Introduction to Legal Reasoning, introduces the complexities of legal analysis as well as anyone I have ever read. As he explains, rules announced in earlier cases are applied as is or changed depending on the degree to which the later case is similar or different than the earlier case in which the rule was originally announced:

Thus it cannot be said that the legal process is the application of known rules to diverse facts. Yet it is a system of rules; the rules are discovered in the process of determining similarity or difference. But if attention is directed toward the finding of similarity or difference, other peculiarities appear. The problem for the law is: When will it be just to treat different cases as though they were the same? A working legal system must therefore be willing to pick out key similarities and to reason from them to the justice of applying a common classification. . . .

Edward H. Levi, An Introduction to Legal Reasoning, 15 U. Chi. L. Rev. 501, 501-03 (Spring 1948)(emphasis added; citations omitted).

So if it turns out that a court is ruling in a case in which a criminal defendant who has been convicted of murder but in the twenty years since the crime “[seven] key witnesses have . . . recanted, and several people have charged that the main prosecution witness was the shooter,” it would seem worthwhile before executing the defendant to hold a hearing to determine whether in fact he is innocent. Certainly there must be some amount of evidence that could turn up years after a murder conviction that would convince just about anyone of the convicted man’s innocence.

Would it make sense in a country that requires “due process of the law” to refuse consideration of the new evidence, no matter how strong? Of course not. It is a justice system. It is fair to say, I think, that it is fundamental to American values that we do not execute people for crimes we know they are innocent of.

But what if a court had never permitted a hearing to prove a convicted man’s innocence before? Should that stop the court from permit the new hearing in the new case? Levy’s account of how the law works makes plain that is not the case. The new case is different than the old one in that the post-conviction evidence of innocence is so strong that it simply isn’t similar enough to all the cases in which new hearings were denied to conclude the court could never order a new hearing.

That, however, is exactly what Justice Scalia, joined by Justice Thomas, wrote yesterday:

This court has never held that the Constitution forbids the execution of a convicted defendant who had a full and fair trial but is later able to convince a habeas court that he is ‘actually’ innocent. (emphasis in original)

My point is that it is irrelevant as a matter of legal analysis that the court has never held that the Constitution forbids the execution of a convicted murderer who can convince a court (via the constitutional right to a writ of habeus corpus) that he is innocent. Scalia, Thomas, and commentators like Andrew Sullivan are simply wrong on this one. The implication of their logic is that if we knew we were executing an innocent man for a murder he had been convicted of the overriding concern with procedural rules, not justice, would prevent our justice system from doing anything.

That’s bullshit. I apologize for my language, and I hope I would never use it in the classroom, but this particular reasoning by Scalia and of those who would justify it is no part of a justice system, and it is no part of the way U.S. courts have always operated.

Easy Case: Postage Stamp is Fair Use of Korean War Veterans Memorial

Over at the Art Law Blog, Donn Zaretsky points to Gaylord v. U.S. (pdf), in which the court held that a postage stamp (pictured at right) that reproduces a photograph of many of the 19 stainless steel soldier sculptures that are part of the Korean War Veterans Memorial (pictured at left below) located n Washington, D.C. did not infringe the copyright in the sculptures.

The court found that the stamp was transformative enough to merit fair use protection because the photograph it used “transformed [the sculpture's] expressionand message, creating a surrealistic environment with snow and subdued lighting.” Zaretsky writes that this is “[n]ot a particularly tough standardto meet.” The first problem with the post is that regardless of whetherZaretsky believes the standard is “tough” enough, it is the standard courts apply in determining the “originality” of an allegedly infringing work.

Worse, though, Zaretsky states that the case is “another good example of how you can make the traditional four-factor fair use analysis do whatever you want it to do.” He cites as authority for this damnation of the law Judge Kozinski of the 7th Circuit Court of appeals, who has said that the 4-factor test applied to fair use “can always go in either direction.”

I think Zaretsky’s be;ief that the 4-factor test can support any position is ridiculous. Granted, determinations on the edge are difficult and plainly depend on a case by case judgment, but judgments as to whether (a) the new work is sufficiently transformative to stand on its own without exploiting the market created by the original work and (2) whether the new work has or threatens an adverse impact on the market for the original work are not the arbitrary decisions you assert they are. That’s the way much of law works — it’s a function of better and worse arguments, not bright lines that offer easy predictability. To accept Kozinski’s statement as the truth is to dismiss an enormous amount of law as the utterly rudderless and arbitrary imposition of power. I’ve practiced and taught law too long to believe that’s what it is.

Moreover, the sculpture allegedly infringed by the stamp, called “The Column,” is not, as Zaretsky asserts, a “good example” of the 4-factor test’s arbitrary nature. In fact, it’s an excellent example of a situation in which the 4-factor test leads pretty easily to the conclusion reached by the court. The court’s conclusion that the stamp significantly reworks the sculpture is pretty convincing. Looking at the stamp you can’t tell you’re looking at figures that originate in a sculpture, and other than the figures themselves the entire image set forth on the stamp is not present in the sculpture. Moreover, it’s laughable to suggest the stamp adversely affects the value of the sculpture. And if you want to look at the other factors, those too are pretty convincingly on the side of fair use: the sculpture is public art and therefore is constantly viewed for free. Moreover, it was done for the government, which, last I heard, is one of the people, by the people, and for the people. Finally, the stamp itself is a governmental product — in other words, it’s a non-profit product.

In making the accusation that the fair use analysis employed by the courts is entirely arbitrary without having engaged in any analysis of his own to suggest the ways in which the analysis might support the sculptor Zaretsky may be acting in a disingenuous fashion. But I suspect what he is really bemoaning is that the fair use test is so case specific it is difficult for artists to know exactly whether, in appropriating copyrighted works, they are acting in legitimate or infringing ways. It is a very fair common complaint. I have yet to see, however, any test that would better draw the line. More importantly, the test is one developed by our courts on a case by case basis for over one hundred years. While it is now embodied as a statute in the 1976 Copyright Act, the legislative history of that act makes clear that the statutory language is meant to incorporate that court-made common law, not supplant it, and courts are not limited to considering those 4 factors in making their fair use determinations.

Applying the law to the facts — where empathy must be part of judging.

There’s been a lot of argument recently about President Obama’s rather innocuous statement that “empathy” is a big part of judging. Thus, I wasn’t surprised that Sonia Sotomayor insisted that all she does is apply the law to the facts in acting as a judge. And, in fact, one of the things I’ve been impressed by in her decisions and statements is her emphasis on facts. Too many law professors and commentators focus on the law as a set of abstract principles and theories rather than what it is — the judgment of how the laws apply to the specific circumstances of the specific case they happen to be judging.

But I think it’s precisely in the importance of facts that empathy does play a part. One judge will consider a given fact crucial, while another judge won’t, and that difference will make a difference in judicial outcomes. In 2008, the Supreme Court upheld Indiana’s requirement of a government-issued identification card to vote. The majority opinion, written by Justice Stevens and joined by Justice Kennedy and Chief Justice Roberts (he who told the Senate in his confirmation hearings that he judges by merely “calling balls and strikes”), stated that “the fact that public transportation is not available in some Indiana counties tells us nothing about how often elderly and indigent citizens have an opportunity to obtain a photo identification at the BMV, either during a routine outing with family or friends or during a special visit to the BMV arranged by a civic or political group such as the League of Women Voters or a political party.” In his concurring opinion, Justice Scalia, joined by Justices Thomas and Alito, wrote that “[t]he burden of acquiring, possessing, and showing a free photo identification is simply not severe, because it does not “‘even represent a significant increase over the usual burdens of voting.’”

In contrast, in one of the dissenting opinions in the case, Justice Breyer considered the burden imposed by the voter i.d. requirement far more significant, seeming to perhaps even “emphasize” with specific types of voters:

For one thing, an Indiana nondriver, most likely to be poor, elderly, or disabled, will find it difficult and expensive to travel to the Bureau of Motor Vehicles, particularly if he or she resides in one of the many Indiana counties lacking a public transportation system. See ante, at 6-7 (Souter, J., dissenting) (noting that out of Indiana’s 92 counties, 21 have no public transportation system at all and 32 others restrict public transportation to regional county service). For another, many of these individuals may be uncertain about how to obtain the underlying documentation, usually a passport or a birth certificate, upon which the statute insists. And some may find the costs associated with these documents unduly burdensome (up to $12 for a copy of a birth certificate; up to $100 for a passport). By way of comparison, this Court previously found unconstitutionally burdensome a poll tax of $1.50 (less than $10 today, inflation-adjusted). See Harper v. Virginia Bd. of Elections, 383 U. S. 663, 664 n. 1, 666 (1966); ante, at 30 (Souter, J., dissenting). Further, Indiana’s exception for voters who cannot afford this cost imposes its own burden: a postelection trip to the county clerk or county election board to sign an indigency affidavit after each election. See ante, at 8-10 (same).

Both sides are looking at facts. Both sides are applying the same rules (which require, among other things, looking at the burden imposed by the state by its requirements for voters). They are coming to very different views of the matter. Is empathy at work? Of course it is, but it is inescapable too.

The Madoff Investigation Should Focus on the SEC.

Ever since the Bernie Madoff scandal broke, I’ve wondered: was the SEC paid off? It’s hard to believe the SEC could have investigated Madoff as it did, see what anyone who looked closely could see, and not dig sufficiently to uncover the fraud. And a story today from the Washington Post only adds gasoline to the fire of that suspicion. An SEC lawyer told her superiors in 2004 that “information provided by Madoff during her review didn’t add up and suggest[ed] a set of questions to ask his firm.” She was instructed in response to focus on other matters. And her immediate supervisor’s boss later married Madoff’s niece!

The suspicious SEC lawyer, Genevievette Walker-Lightfoot, “had previously worked at the American Stock Exchange, where she developed an expertise in specialized trading strategies.” After she was diverted to other matters, she never was asked about the Madoff investigation again, even during an agency investigation into Madoff in 2005 which only “found three violations of minor rules.” In 2006, Walker-Lightfoot left the SEC after filing a complaint with the agency alleging that she’d been subjected to a hostile workplace. A person familiar with the complaint said it was settled in Walker-Lightfoot’s favor.”

Madoff, incidentally, once “boasted at a business roundtable discussion about his close relationship with SEC regulators, saying “my niece just married one.”

Did Apple Mislead Investors Regarding Steve Jobs’ Health? Almost certainly, yes. Then why did it not disclose the medical facts? (Part I)

Steve Jobs had a liver transplant last week, and, the L.A. times and others report, the “doctor who led the transplant team said this week that Jobs was ‘the sickest patient on the waiting list’ at the time a donor liver became available.” All Apple had earlier disclosed to the public regarding Jobs’ health was set forth in 2 statements written by Jobs and posted on Apple’s website posted last January. The first, in connection with his widely reported drastic weight loss in 2008, stated that “my doctors think they have found the cause—a hormone imbalance that has been ‘robbing’ me of the proteins my body needs to be healthy. Sophisticated blood tests have confirmed this diagnosis. The remedy for this nutritional problem is relatively simple and straightforward, and I’ve already begun treatment. But, just like I didn’t lose this much weight and body mass in a week or a month, my doctors expect it will take me until late this Spring to regain it. I will continue as Apple’s CEO during my recovery.” (emphasis added) The second letter, posted one week later, stated that “during the past week I have learned that my health-related issues are more complex than I originally thought. In order to . . . focus on my health, and to allow everyone at Apple to focus on delivering extraordinary products, I have decided to take a medical leave of absence until the end of June.” (emphasis added) In April, “[a]ccording to unnamed sources . . . Jobs continue[d] to work on the “most important strategies and products from home,” though Apple’s only official statement was that “Steve continues to look forward to returning to Apple at the end of June.”

Inevitably, people are asking a question lawyers representing a company whose stock is traded on public exchanges always have to ask themsevles about any facts that might affect the company’s’ value: is the information “material”? On the one hand, the L.A. Times story states: “Companies are not required to divulge medical details about executives, lawyers said.” But the story also quotes a lawyer stating that “If [Apple] tried to lessen the disclosure and make it misleading by omission, that’s just as bad as telling something that flat isn’t true . . . . ” And Warren Buffet is quoted stating: “Certainly Steve Jobs is important to Apple. . . Whether he is facing serious surgery or not is a material fact.” (emphasis added).

What’s going on? What information is “material” and therefore has to be disclosed to the public by a publicly traded company? Well, Neil Lipschutz is right that “something is material if ‘there is a substantial likelihood that a reasonable shareholder would consider it important” in making an investment decision. Also, if there was a substantial likelihood a reasonable investor would think the information ’significantly altered the total mix of information available’ about a company.’”

Do we have anything better to guide us than (1) what seems a terribly subjective test, (2) the gut reactions of lawyers and of Warren Buffett, and (3) the almost certain fact that Apple, after close consideration of the facts and the law by its lawyers, made the business decision that the risks and probabilities of disclosure last January (or at any time between when Jobs first got sick and now) were outweighed by the risks and probabilities of liability for securities fraud if and when its lack of candor became known?

Well, if what you’re seeking is guidance in the way beginning law students and most non-lawyers want the law to provide guidance — articulation of rule that makes it easy to decide the question — the answer is a resounding NO. These are judgment calls based on the specific evidence of each case. In order to determine if a set of facts would matter to an investor, you need to look at those specific facts. And plainly I have not had available to me all the evidence that might eventually be considered to judge the question in this case. But there is a lot available, and based on only that, I have to agree with Warren Buffet that the fact Steve Jobs was so ill he required a liver transplant certainly is material.

But, again, my certainty is not a product of pointing to a “law” and having you nod your head in agreement. I have to look at the specific evidence regarding Apple, the law, and the facts in the cases in which courts have concluded that events are material and in which courts have concluded the events are not material. By doing that, I hope I can convince you that my certainty is well founded. That’s the best I can do.

Moreover, that’s not the end of the lawyer’s job. Even if the lawyers concluded that the facts regarding Jobs’ health prior became “material” at any time before the next week would not mean Apple necessarily would disclose those facts. Apple’s lawyers would have to consider what potential downside its failure to disclose those facts would present and the likelihood that downside would occur. Then Apple, not the lawyers, would have to decide if those risks and probabilities would outweigh the likelihood and degree of the impact disclosure would have on Apple’s value.

There are a number of rules under which a publicly traded company is obligated to disclose “material” information to the public or face criminal and civil liability, but the definition of “materiality” is the same under all of them. One is a regulation known in the trade as “Rule 10b-5″ [17 CFR 240.10b-5], which makes it a crime and a civil wrong for any a company or an individual purchasing or selling stock “to omit to state a material fact necessary in order to make the statements made, in the light of the circumstances under which they were made, not misleading, . . ” As the United States Court of Appeals for the 2d Circuit stated in SEC v. Texas Gulf Sulphur Co., 401 F.2d at 833, 848 (2d Cir. 1968), this requirement to disclose material facts is based “on the justifiable expectation of the securities marketplace that all investors trading on impersonal exchanges have relatively equal access to material information . . . .” The requirement originates in the Securities Exchange Act of 1934 (15 U.S.C. § 78j(b)), one of the keystones of the New Deal passed in response to the practices prevalent on Wall Street that had led to the 1929 stock market crash.

As the court further stated in Texas Gulf Sulfur, “[t]he basic test of materiality * * * is whether a reasonable man would attach importance * * * in determining his choice of action in the transaction in question.” Thus, material facts include any facts “which affect the probable future of the company and those which may affect the desire of investors to buy, sell, or hold the company’s securities.”

The defendants in Texas Gulf Sulfur had argued that tests showing one of their company’s mines was likely a rich one were not material because there was nothing certain to report until mining had actually begun and there was more certainty than the tests could provide.  The Second Circuit rejectted their argument, ruling that even possibilities that never occur might be material. One must look at the probability the fact would have an impact on the company’s value and the magnitude of that potential impact: “whether facts are material . . . will depend at any given time upon a balancing of both the indicated probability that the event will occur and the anticipated magnitude of the event in light of the totality of the company activity.” 401 F.2d at 849. Thus, the court reversed the trial court’s decison to dismiss the criminal charges against the defedants because, the Second Circuit decided, they would be guilty if it were true that they had failed to disclose “the possibility, which surely was more than marginal, of the existence of a mine of the vast magnitude” as a result of a “remarkably rich” sample taken  ”close to the surface (suggesting mineability by the less expensive openpit method) within the confines of a large anomaly (suggesting an extensive region of mineralization).” That mere “suggestion . . . would certainly have been an important fact to a reasonable, if speculative,  investor in deciding whether he should buy, sell, or hold” stock in the mining company the defendants controlled. Id. at 849-50 (emphasis added).

The U.S. Supreme Court expressly adopted the Second Circuit’s test in 1988 in Basic, Inc. v. Levinson, 485 U.S. 224 (1988), a case in which the Court determined that corporate insiders might have had the duty to disclose negotiations for a corporate merger before the merger was concluded. Some courts outside the 2d Circuit prior to that time had ruled that a deal didn’t have to be disclosed until it was a binding deal. The Supreme Court rejected the reasoning of those courts and made plain that an event that might not ever happen nevertheless might at some point be likely enough and big enough that it would affect a reasonble investor’s investment decisions.

So the questions Apple’s lawyers had to be asking themselves all the time ever since they learned in 2004 that Jobs had pancreatic cancer, are the following:

(1) Is Jobs so important to Apple that an investor would make a decision to sell, buy, or hold on to Apple stock based on his ability to do his job?

(2) Do the medical facts demonstrate with sufficient probability that Jobs’ condition is threatened enough that those facts would cause an investor to sell, buy, or hold on to Apple stock?

(3) Did Apple’s words or omissions mislead reasonable investors in evaluating whether Jobs could continue to do his job well enough to not affect their investment decisions.

Let’s get the easy stuff out of the way. Jobs’ health and its impact on his ability to do his job  are so plainly material that to argue otherwise wouldn’t pass the “giggle test.”  I would therefore, if I were representing Apple in litigation, advise the company simply to admit this point in the answer to any complaint anyone filed. To admit the point would at least minimize attention to something that, if Apple did dispute it, would only increase attention to a weakness in the company’s case. But just in case you think I don’t understand when it’s smart lawyering to concede a point, remember these things — someone’s own words are taken by a court as “admissions.” In other words, if someone admits something that is harmful to his legal position, the court will assume the facts are at least that bad. In the letter posted online last January, addressed to the “Apple Community,” Jobs ended with this: “So now I’ve said more than I wanted to say, and all that I am going to say, about this.” I’d love to ask him in a deposition why, if he didn’t want to write what he wrote, he did. The probelm, if Apple had decided to dispute the materiality of Jobs to the company’s value, is that he’d have to deny and dance around the obvous: his lawyers told him he had to write the letter because his health and its impact on his capacity to do his job is material to Apple’s shareholders and potential shareholders.

Don’t assume I haven’t considered the arguments I could make on Apple’s behalf on this point — I could point out, for example, as MacNewsWord did yesterday, that since January, when Jobs wrote the letter he didn’t want to write, Apple stock has almost doubled in value. The Apple loving outlet implied that market shows that investors have been confident that Apple was fine without Jobs:  ”This could be due to general belief among investors that Apple has a good management team in place which has kept the company running on an even keel despite the CEO’s absence.”  Or it could mean the market had already accounted for Jobs’ illness.  Or it could be that the market is driven by unreasonable investors.  It could be for any number of reasons. Regardless, I am convinced  that a strategy to fight a securities fraud case on the grounds that Jobs isn’t important enough to be material to Apple is not going to make winning the case more likely. I could go on and on . . . Last October, just to take at random one piece of evidence easy to find via a mere Google search, (according to CSnews) “Some individual had posted a fake report . . . claiming Steve Jobs had suffered from a heart attack and was rushed into the hospital. As a result, Apple’s stock made a 10% nosedive.”

NEXT: (a) was Jobs’ health so dire its specifics would have made a difference to people thinking about buying, selling or holding on to Apple stock, (b) did Apple’s statment’s or silences mislead investors about Jobs’ health, and (c) why would Apple choose not to disclose specifics regarding Jobs’ health even if its lawyers were telling it that those were material facts?

“Expert” is only a name; an “expert’s” ideas are only as good as the ideas themselves.

This is the honest truth: back when the Napster case was pending on appeal (the appeal Napster would eventually lose), I was teaching a legal writing class and the problem was about copyright and fair use in connection with a web site that used posted exerpts of copyrighted works and also an online “bulletin board” (it was that long ago) for discussion of the works. I told my class that I thought that if the music industry had any sense they’d put significant excerpts of every work in their catalogs in streaming audio next to a button that would allow electronic download of an mp3 file of each song for a price.

I bring this up not to boast that I am some brilliant businessperson who would’ve wisely been picked up by Apple to help produce iTunes. I have no doubt I’d read the idea a hundred different places and that it sounded good to me. So why do I bring it up?

The students reacted this way: it’s a stupid idea; if it weren’t, the music companies would’ve done it already. What would I know that they don’t? I was left almost speechless. I asked them if they really believe that people who do things necessarily know what’s best with respect to doing those things. They apparently did. I told them I thought that it was very important that they learn that just because an “expert” thinks certain things about his area of expertise doesn’t mean that a non-expert can’t have better ideas, and that it certainly isn’t the case that an entire industry necessarily does business in the best way it could.

I was reminded of all this when I read at Ars Technica that “Geoff Taylor, head of UK major label trade group BPI, wrote an op-ed piece for the BBC today in which he called Napster the ‘Rosetta Stone of digital music,’ said it was ’simple to understand and use,’ and said that the music industry should have ‘embraced Napster rather than fighting it.’”

Yes, Kevin, empathy is part of judging well, and Oliver Wendell Holmes thought so too.

Kevin O’Brien of the Plain Dealer expresses the view of many who mock President Obama’s desire that his Supreme Court nominee have “empathy”:

I have scoured my pocket copy of the Constitution. Couldn’t find a single reference to “empathy,” though. I tried searching an online version, too, but when I typed “empathy” in the search window, the only answer I got back was, “Did you misspell something?”

I looked up the oath of office that Souter’s successor will take. I don’t see “empathy” there, either, . . . 

O’Brien and his ilk have a stunted view of what it means to be a judge. Applying the law is not like doing algebra; instead, it is far more often (at least in cases so contested they get to the Supreme Court) a matter of making difficult judgments that involve weighing values and consequences in the real world. It hardly is ridiculous to consider “empathy” a valuable quality in making these judgments. One need not look far into the past to see a case where an inability to empathize with what Congress plainly intended led to a ridiculous (and soon overturned) outcome.

But you need not take my word for it.  Oliver Wendell Holmes, Jr., Supreme Court justice and one of the most influential intellects in U.S. legal history, made clear in The Path of the Law that it is a fallacy to think judges can apply only logic to the law and that a keen sense of the social impact of one’s decisions is fundamental to sound judging (emphasis added):

The fallacy to which I refer is the notion that the only force at work in the development of the law is logic. . . . The danger of which I speak is not the admission that the principles governing other phenomena also govern the law, but the notion that a given system, ours, for instance, can be worked out like mathematics from some general axioms of conduct. . . .

This mode of thinking is entirely natural. The training of lawyers is a training in logic. The processes of analogy, discrimination, and deduction are those in which they are most at home. The language of judicial decision is mainly the language of logic. And the logical method and form flatter that longing for certainty and for repose which is in every human mind. But certainty generally is illusion, and repose is not the destiny of man. Behind the logical form lies a judgment as to the relative worth and importance of competing legislative grounds, often an inarticulate and unconscious judgment, it is true, and yet the very root and nerve of the whole proceeding. You can give any conclusion a logical form. You always can imply a condition in a contract. But why do you imply it? It is because of some belief as to the practice of the community or of a class, or because of some opinion as to policy, or, in short, because of some attitude of yours upon a matter not capable of exact quantitative measurement, and therefore not capable of founding exact logical conclusions. Such matters really are battle grounds where the means do not exist for the determinations that shall be good for all time, and where the decision can do no more than embody the preference of a given body in a given time and place. We do not realize how large a part of our law is open to reconsideration upon a slight change in the habit of the public mind. No concrete proposition is self evident, no matter how ready we may be to accept it, not even Mr. Herbert Spencer’s “Every man has a right to do what he wills, provided he interferes not with a like right on the part of his neighbors.”

. . . There is a concealed, half conscious battle on the question of legislative policy, and if anyone thinks that it can be settled deductively, or once for all, I only can say that I think he is theoretically wrong, and that I am certain that his conclusion will not be accepted in practice semper ubique et ab omnibus [always, everywhere, and for everything]. . . .

I think that the judges themselves have failed adequately to recognize their duty of weighing considerations of social advantage. The duty is inevitable, and the result of the often proclaimed judicial aversion to deal with such considerations is simply to leave the very ground and foundation of judgments inarticulate, and often unconscious, as I have said. . . . I cannot but believe that if the training of lawyers led them habitually to consider more definitely and explicitly the social advantage on which the rule they lay down must be justified, they sometimes would hesitate where now they are confident, and see that really they were taking sides upon debatable and often burning questions.

Wind of Change: Education and democracy are the ways to wind power.

Legal disputes may be arguments over the meaning of laws, but they are even more importantly disputes over different views of what is right, what is just, what is fair.  And the practice of law is, above all else, the practice of problem solving and dispute resolution.  The laws and the procedures are really only vehicles for solving the problems created by those disagreements about values.  There may be no more concise a way to sum up why yesterday I wrote that the most difficult part of practicing law isn’t learning the laws and the procedures but,  rather, learning how to apply the law in an infinitely complex world.

So I could pretend that there’s some deep significance in the fact that four weeks ago an appellate court in New York rejected the lawsuit instituted by the Wind Power Ethics Group (WPEG) — a citizens’ organization based in upstate New York — in an effort to stop the proposed construction of a series of wind-powered generators by St. Lawrence Windpower, LLC.  According to WPEG, the project is one of a four wind projects that, if completed, will “create a continuous swath approximately 25-30 miles east to west . . . where wind turbines will be ubiquitous.”  The result, WPEG continues, “amounts to an unacceptable sudden and uncontrolled environmental transformation of an entire region of New York State driven by corporate greed and questionable ethics.”  The court rejected WPEG’s claim (opinion, pdf)  that the local zoning board had been mistaken in ruling that St. Lawrence Windpower’s project “qualified as a utility and that the project therefore was a permitted site plan use in that district.”

More specifically, the court ruled “that the classification by the [zoning board] of the series of wind-powered generators as a utility within the meaning of section 315 of its Zoning Law is neither irrational nor unreasonable, and that the determination is supported by substantial evidence.”  But if you think that the important parts of this court case were the meaning of the word “utility,” how courts distinguish between rational and irrational classifications, and how much evidence is “substantial” evidence, you’re sadly mistaken.  I’m not at all suggesting that lawyers don’t need to understand these matters; rather, what I’m suggesting is that these legal issues are merely vehicles in which what really is being decided is the justice of placing a series of wind power projects in an area extending 30 miles in one of the most beautiful parts of our continent. In short, the real issue (which might have been, but likely was not, most readily shown through the events leading up to and resulting in the zoning board’s decision) is whether the opponents of the wind power projects should (as a matter of justice) prevail over the proponents of the projects.

It is plain that one source of opposition is the NIMBY syndrome.  People will protest — and sue — to keep whatever they fear and loathe away from where they live.  But they will also protest and use the law to fight whatever is imposed on them without any consideration of their views.

The Danish Wind Industry Association has looked closely at attitudes to wind power, observing, in a paper entitled “Public Attitudes Towards Wind Power” (pdf), that in general opposition to wind power comes from people who do not think it is a practical solution to our energy problems because it is too expensive and unreliable (because of its dependence on the wind) and because wind turbines are ugly and noisy.  Supporters of wind power, on the other hand, believe it is a practical solution to our energy needs, that climate change poses risks that must be addressed, and that wind power is limitless, non-polluting, and safe.

But when confronted with the prospect of wind turbines in their own neighborhood, supporters tend to lose their enthusiasm:

There is a great difference between wind energy as an idea and wind turbines as acceptable structures in the landscape. As we have seen people support the general idea of renewables and wind power. But when it comes to actual projects in a local area, the acceptance of wind power seems to vanish. This pattern is called the “Not In My Back Yard” syndrome or in short just the NIMBY syndrome (Paul Gipe, 1995). The basic theory is that people support wind energy on an abstract level but object to specific local projects because of the expected consequences concerning primarily noise and visual impact. The NIMBY syndrome is not a special feature for wind power. It can be detected in many other situations. New highways, bridges, tunnels, hospitals, airports, nuclear power plants, and other energy generating plants all face resistance at the local community level.

Nevertheless, the support returns among people who actually do live with wind turbines in their back yards.  The “latest study done in Denmark (Andersen et al., 1997) . . . shows “some interesting results.”  The study was conducted in the town of Sydthy, which has a population of 12,000.  98% of Sydthey’s energy iis provided by wind power.  Many of Sydthey’s turbines date from the early 1980’s and therefore are smaller and noisier than more modern turbines.  The study shows “that people with a high degree of knowledge about energy generation and renewables tend to be more positive about wind power than people with little knowledge.”

First, proximity to turbines has no significant correlation to support or opposition to them (though, surprisingly, the people with wind turbines almost literally in their back yards are more positive about wind power than people living further away):

The distance to the nearest turbine has no effect on people’s attitudes towards wind turbines in general. This indicates that people living close to wind turbines do not consider noise and visual impact to be significant problems. As a matter of fact people living closer to the nearest wind turbine than 500 meters tend to be more positive about wind turbines than people sited further away from the turbines.

In addition, the visibility of turbines seemed to have no effect on attitudes toward wind power (but  increased numbers of turbines seem as surprisingly attractive as turbines next door: “people who could see between 20 and 29 turbines tended to be more positive about wind energy than people being able to see only a smaller number of turbines.”)  Perhaps confirming the stereotypical rural contempt for the tendency of city dwellers to romanticize nature, “people living in a city zone (defined by speed limits) tend to be more negative than those living in a country zone.”   Four out of five Sydthey residents “do not feel bothered at all by noise made by turbines,” and “[a]s expected, the longer people live near the turbines the fewer experience noise inconveniences.”  Finally, middle-aged people are most sensitive to the noise of turbines, men perceive the noise to be louder than do women, and people who have a more favorable view of the utility of wind power feel less inconvenience.

One might conclude that the solution to the NIMBY problem, then, is increased information, but the Danish Wind Industry Association recognizes that inference may be too simplistic or, at least, incomplete.  As is apparent from WPEG’s assertion, mentioned above, that its opposition to the wind power projects in the Thousand Island region is based on its opposition to “corporate greed and questionable ethics,”

people in areas with significant public resistance to wind projects are not against the turbines themselves, they are primarily against the people who want to build the turbines. Often the local people are kept out of the decision making process. Some have hostile attitudes against the developers, the bureaucracy or the politicians on beforehand. Those factors have a significant effect on public attitudes in a specific area. Attitudes towards concrete projects are site specific. They are primarily formed by the interaction with central actors and the extent of involvement of local interests are a major explanatory factor.

So the answer is no merely to educate people on the practicality, aesthetic quality, and relative quiet of wind turbines.  It is to get people involved.  Another recent study shows that “85 per cent of the population wants to be kept informed about plans for new windpower. . . . 49 per cent said they would definitely go to public meetings if such meetings were arranged.”

Unfortunately, wind power developers may not have yet gotten the message.  “[I]n less than 50 percent of German wind power projects local inhabitants were given opportunities to articulate their opinion during planning phase. And in only 8 per cent of the cases where people were actually heard, did the developers hold information meetings. In one out of three cases the public had actual influence on the siting process typically through legally prescribed access to present formal objections.”

As Steffan Damborg, the author of the Danish Wind Industry Association’s article concludes, “Decision making over the heads of the local people is the direct way to protests.”  I would add only this: decision making over the heads of people affected by the decisions is the direct way to lawsuits.  The lawyers representing the parties to the lawsuits probably don’t mind, but the rest of us should.

Best bonds: AIG? Greatest Fascist Dictator: Adolf Hitler? Best Law School: ?????

What is it with the human thirst for numerical rankings, for judging one thing better than another even when the comparisons are known to be completely arbitrary or, at best, based on judgments so subjective regarding criteria so limited as to render the rankings nothing more than crude subjective judgments disguised as hard data?

Woody Allen fittingly complained:

What’s with all these awards? They’re always giving out awards. Best Fascist Dictator: Adolf Hitler.

But it’s not just the thirst for the rankings.  It’s basing one’s actions on rankings as if they have profound meaning despite their lack of meaning.

As I wrote recently, US News and World Report’s rankings of law schools are determined largely by the LSAT scores and undergraduate grade point averages of the students each law school admits even though those scores and averages bear no correlation to success as a lawyer; rather, they correlate only to success in law school, which, again, bears no meaningful correlation to success as a lawyer (as would not surprise most lawyers but, I would guess, would surprise most non-lawyers, including law students and law professors who have not practiced extensively).

Yet an overwhelming number of law applicants rely on the US News rankings.  Even more depressingly, an overwhelming number of law faculties make their educational decisions to improve those rankings, not to improve the way they educate law students to be lawyers. (As I also pointed out, Detroit Mercy, where I am currently a visiting professor and where I will continue in that capacity next year while remaining on leave from Case Western Reserve, is a rare exception to this rule.)

And today, reading in the New York Times about Moody’s, I realized another reason the US News rankings are so useless and their importance so poisonous to legal education.  It is because the US News rankings are accepted, followed, and never questioned in a way meaningful enough to threaten their influence. There is therefore little incentive to make judgments on a law school’s quality based on judgments independent of those rankings.

Moody’s is one of the private companies that rate corporate bonds.  When a corporation sells bonds to raise money (simply put, they borrow money from the purchasers of the bonds and pay back the loan at the interest rate called for by the bond), Moody’s issues “grades” to the bonds that predict the likelihood the corporation will pay back the loan.  “Junk” bonds are so-called because they are bonds issued by companies that are at high risk of being unable to pay the purchaser of the bond when payment is due.  In other words, junk bonds are “sub-prime” bonds.  Why do people loan money to companies or homeowners despite the high risk the borrowers will default?  Because those borrowers have to pay a higher interest rate.  The high interest rate on the loans that are repaid makes up for the loans that aren’t paid back.

The unconscionable innacuracy of Moody’s rankings, however, has played a major role in our financial crisis.  As the Times points out:

Moody’s rated Lehman Brothers’ debt A2, putting it squarely in the investment-grade range, days before the company filed for bankruptcy. And Moody’s gave the senior unsecured debt of the American International Group, the insurance behemoth, an Aa3 rating – which is even stronger than A2 – the week before the government had to step in and take over the company in September as part of what has become a $170 billion bailout.

Moody’s and the other major ratings companies also “put their seals of approval on countless subprime mortgage-related securities now commonly described as toxic.”

There are numerous reasons to the ratings companies were bound to fail, but the Times article brought up an interesting one I had never considered before.  There is little incentive to question anyone who is paid to judge the the quality of something unless and until the accuracy of those judgments is put to the test. As Frank Psrtnoy, a law professor at the Universitiy of San Diego and a former derivatives trader, explains it:

Imagine if you had a rabbi and said, “All the laws of kosher depend on whether this rabbi decides if food is kosher or not.”  If the rules say “You have to use this rabbi,”  he could be totally wrong and it won’t affect the value of his franchise.

In other words, if you wanted kosher food, you’d buy food approved by that rabbi and never question his judgment unless and until the accuracy of his judgments was threatened in a meaningful way. US News is that rabbi.  It has become the principal judge of law school quality and it doesn’t matter whether its judgments are legitimate or not.  Students buy its rankings guides, law faculties and deans make decisions driven solely by the desire to meet the criteria US News employs, and applicants and legal academia continue to make their educational decisions based on the criteria employed by US News rather than on their own judgments.

It’s a terrible situation, and particularly ironic when it comes to legal education.  Lawyers every day, every moment, make judgments and decisions based on incomplete, subjective, and biased information.  You can only consider the circumstances under which those decisions are made inadequate, however, if you believe it is ever possible to have all the information you would want and if all that information could be stripped of the distortions inherent in the limitations of human perception.  Making decisions based on incomplete, subjective, and biased information is what life is about. That doesn’t mean there aren’t better and worse judgments; it merely means that one can never be certain, that there is always risk, that almost every important decision one makes in one’s life cannot be reduced to a choice between black and white, right and wrong, #1 and #2.  Lawyers make their living making such difficult decisions and judgments.  The legal situations where there are clear answers don’t require lawyers, and if lawyers become involved they certainly don’t make much of a living answering those questions.

Yet law school applicants and law professors act as if the judgment that one law school is better than another can be reduced to a comparison of hard numbers, and that, therefore, those numbers should be the determinant of their actions.  They’re being as stupid as the investors in Lehman Brothers and AIG were in relying on Moody’s.

And the Times article mentions one other fact that bears on this point.  Warren Buffett — the man “known as the Oracle of Omaha,” the daddy we turn to to guide us out of our financial pit, “the closest thing that the United States economy has to a life coach”  — owns 20% of Moody’s.  But you know what?  In making his investment decsions he doesn’t rely at all on Moody’s ratings.  He has his own research department.  He makes his own judgments.  I wish more college graduates did the same.  And it maddens me beyond measure that most law professors don’t.