Category: Legal Ethics


First, Blame the Lawyers

laweducation.jpgDale Oesterle (Ohio State) highlights the legal problems facing ex-Apple lawyer Wendy Howell. Howell, a graduate of John F. Kennedy University School of Law in Walnut Creek (California), has admitted to falsifying options grants and has been fired by Apple. She also faces potential indictment (and civil suits).

According to The Recorder (a trade paper) Howell was undercredentialed for her suddenly glamorous job after iPOD changed Apple’s brand. And,

It was in that atmosphere that someone decided to grant Jobs a pile of backdated options — and it was up to Howell to fill out that paperwork, which, according to people familiar with the case, included writing up minutes for a board meeting that never happened.

Howell will likely claim that she was asked/ordered to backdate by a higher executive (although under SOX, I’m not sure that this defense would save her were matters to come to a head). In any event,

Whereas Howell will probably try to extricate herself by saying superiors ordered her to fabricate filings, those superiors, said people familiar with the case, are certain to argue that the wrongdoing was limited to Howell, who, as an attorney, would be expected to know that faking documents is illegal.

This is indeed an interesting dynamic. The argument that “the conduct was illegal, but our lawyer didn’t tell us” seems to me to a bad place to start a defense (especially in civil court). But it is, at least, consistent with recent trends to force lawyers to act as gatekeepers with teeth within corporate organizations.

In any event, Dale offers a caution that is worth repeating:

A[ll] young lawyers in corporate practice should heed the simple advice of NEVER, EVER BACKDATE A DOCUMENT. Refuse to do it; if it costs you your job so be it. Otherwise it could cost you your career.


Nifong to Face Bar Discipline

N.C. D.A. Mike Nifong will face a bar charges, according to the AP (via Drudge). The weird part: the Bar opened its investigation last March!

Among the four rules of professional conduct that Nifong was accused of violating was a prohibition against making comments “that have a substantial likelihood of heightening public condemnation of the accused.”

In a statement, the bar said it opened a case against Nifong on March 30, a little more than two weeks after a 28-year-old woman hired to perform as a stripper at a lacrosse team party said she was gang-raped.

You can find the complaint here. And helpful comments at the Legal Ethics Forum, of course. I agree with John Steele that Nifong will raise 1A objections, but it seems that he is poorly positioned to make them stick.


Xoxohth 1.2: The Whys and Wherefores

[This is Part I, Section 2, of the project I announced here. (Part 1.1 is here.) The goal of today’s installment is to present a diversity of views on why people spend time on Xoxohth, drawing largely on the voices of posters themselves.]

inkblot.cgiI’ll start by acknowledging an uncomfortable fact. This project suggests, and perhaps even reinforces, that critique of academic life often bandied about by the popular press: I’m asking a minor question, focusing on the uninteresting choices of marginal members of society, and using a methodology of debatable validity.

I felt bad about this for a while. And then I realized that the next best use of my time is grading: a similar process, but with higher perceived stakes.

Forward. The issue for today is why people continue to spend substantial amounts of time on XO. The question arises from the obvious point that students and lawyers have many ways to spend their time. Most of those ways are unlikely to lead to professional embarrassment if publicized, and may even enable individuals to build reputations for probity and acuity. It is odd, then, that hundreds or thousands of students and lawyers devote significant chunks of their free time to talking anonymously on XO. What gives?

It seems to me that there are a few motivations in play: entertainment, a search for information, the need for community, and the pleasures of transgression. Before we begin, let’s get some reader input. What motivation do you think drives XO’s traffic?

Why Do People Spend Time on XO?
The Community
The Transgression!
Information (Giving and Getting)
Free polls from

Now that we’re done with the scientific polling, let’s look at the qualitative data.

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Xoxohth 1.1: The Past and Present

[This is Part I, Section 1, of the project I announced here. The goal of today’s installment is to set out the history of the XO board, and briefly describe its present statistics.]

goldencalf.jpgHugs and Kisses, Hope this Helps

The genesis of XO was less gripping, bloody, tortured, significant and miraculous than the Exodus, a tale which it otherwise resembles in important respects.

The community started as a group of posters at the Princeton Review Discussion Board [PR]. Some individuals began at PR in 1997-1998, as they were applying to college, and continued posting in that forum after matriculation. The reason that people spent time – sometimes 20 hours a week or more – at PR will become familiar:

Before I started law school, I posted on the former incarnation of xoxo (which was then run by the Princeton Review) because it was a wide-open and mostly unmanaged discussion. In one sitting I could have the most sober and serious conversations as well as the most silly and immature b******* sessions, all with the same group of people. The other, more “mature” boards were by comparison intellectual wastelands, partly because they were so “sober” and “mature.” All the really smart people shunned those boring boards in favor of pr (now xoxo).

But not all individuals were looking for information: some were actually, weirdly, (slumming) older alumni.

The standard foundation story holds that in March, 2004, PR switched to a new software format that users found irritating because it (1) enabled IP tracking; (2) discouraged use of multiple aliases; (3) discouraged abusive language through moderation and banning; and (4) eliminated the “‘tree’ format and switching to a vBulletin-type format that was heavily despised by most users.” See here and here and here for some posts from the period. One emailer explains:

The only moderators were Jeff Adams, a Princeton Review employee, and TPR Droid, who was a long-time poster that Jeff hired to moderate the board when he wasn’t around. Anger at TPR Droid’s moderation style was one of the main reasons for the initial rift — while Jeff was even-handed with deletions and bannings, many people felt Droid had an agenda since he would ban people for criticizing his favored posters, or delete racist threads directed at Jews and Christians while refusing to delete equally hateful threads about Muslims.

A group of users decided to leave PR as a group. However,

The law boarders didn’t know about the existence of xoxohth. [A user with the handle Rowan] organized an AIM chat and people were brainstorming ideas of how to re-create the board. I think rk even drafted a letter looking for corporate sponsorship . . . In the very beginning, the law and college boards were one. During those heady first days, all personal wars were called off – Edgar Martinez, Julia, RWA, LawyerBird got along – but soon order was restored and things returned to normal.

Obviously, the domain name had been purchased before problems on the PR board became exigent. According to a WHOIS search, the purchase of the xoxohth domain occurred on January 29, 2004. The buyer was Jarret Cohen, now in business in Pennsylvania. As you can see from this screenshot of the early board, it was intended to be a replacement for the PR community. Contrary to Eugene’s speculations, xoxohth is not a dungeons and dragons reference. It seems to stand for xoxo (hugs and kisses) plus hth (hope this helps).

It is also worth noting that there was an early worry that the former PR community would split into a college (XO) faction and a law faction, located at the JD2B board. A source comments:

[W]hen Marshall [Camp, JD2B’s owner] found out the xo board existed, he not only deleted the JD2B message board, but prominently linked to the board on his site and actively sent traffic our way; basically we were treated as JD2B’s unofficial messageboard.

That site probably accounted for 50-75% of our referring URL traffic in the early days

Organizational Control

Cohen’s – alias Rachmiel – and another user known as Boondocks (from the comics strip?) coded the initial software for the board, which (of course) was unmoderated. Boondocks, I am given to understand, is an African-American man who, though one of XO’s founders, forewent an administrative role after the first two months of the board’s existence.

Instead, in about May, 2004, Anthony Ciolli, a Penn Law student, became partners with Cohen. My sense is that Ciolli – alias “Great Teacher Onizuka” (manga comic reference?) – and Cohen split the board’s revenues 50/50, and share operational control over the permissions on the site.

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Pay the Poor to Be Citizens

money.jpgA colleague suggests that there might be a relationship between a series of seemingly random observations:

  • A sudanese cell-phone billionaire announced a prize for good governance, to be awarded to current African leaders when they step down from office. According to news reports, “each leader awarded the prize will receive $5 million spread over 10 years after leaving office. If still alive when the initial prize is exhausted, prize-winners will receive another $200,000 annually until they die.”
  • The Arizona Voter Reward Act, which would establish a $1,000,000 prize whose proceeds would go to a randomly-selected voter, is on November 7th’s ballot. The state’s Chamber of Commerce is opposed: Harvard’s Info/Law project is more open minded. Most think the law would be plainly illegal preempted by federal law even if passed.
  • Jury pay rates are embarassingly low, if meant to be compensatory. Some jurisdictions are funding pilot projects to study if pay raises will increase compliance with jury service.

Here is the question for debate: is there any meaningful way to distinguish the African prize (which many legal commentators no doubt would celebrate) from the voting and jury service problems? Or, more provocatively, are the powerful the only people who we will allow to make money from being good citizens?

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Law School Admissions Standards As Law

Harvard’s decision to end its early admission program was the big story early week. As President Bok explained, the university worried about the social consequences of its admissions process:

“Students from more sophisticated backgrounds and affluent high schools often apply early to increase their chances of admission, while minority students and students from rural areas, other countries, and high schools with fewer resources miss out . . . . Others who apply early and gain admission to the college of their choice have less reason to work hard at their studies during their final year of high school.”

Harvard’s decision got me to thinking about the relationship between admissions standards at high-prestige universities and legal rules.

Both legal rules and admissions standards are conduct shaping regulations. When you set admissions standards to select for trait behavior X, the prevalence of X in the applicant universe will increase. Such an increase will not be uniform, for the reasons that Bok gives, and there will be further distortions depending on individual (or mass) psychology. But there are reasons to believe that law school admissions address a particularly sophisticated and resource-rich audience, who are well suited to governance. Thus, law school admissions are ripe for evaluation as a form of law itself.

I thought about this after talking with a friend last night who told me about business schools’ strong emphasis on community service as a part of the application of a well-rounded applicant. This probably creates a class of business school students who are more likely to be civic-minded after graduation. But it also (and more simply) results in a great deal of public service by pre-MBA types in the world. The question is: why don’t law schools use the application process to improve the world too?

You might object: “this is paternalistic social engineering.” Yes, yes it is. But law schools, like HLS, already require onerous mandatory pro bono commitments during school. The problem with such programs is that the incentives are all wrong – toward clock management instead of results. But if you made pro bono service an important part of the admissions decision, and suggested that particularly effective public service would be highly weighted, then you’d set folks incentives well to achieve good. Elite schools might collude to create a list of potential law-related public work that candidates would be “well-advised” to perform in order to increase their chances of admission: volunteering for a public interest firm or tax law clinic; working for the PD or DA as a part-time investigator; assisting social security ALJs as a paralegal, etc.

To be clear, I don’t mean to say that admissions committees aren’t already considering public service. Surely, they are. But they aren’t communicating the idea that public service counts in a meaningful way. Check out HLS’ admissions FAQ, and note the silence on this point. The silence is shared by other top schools. The point is that law faculties (at least those I’ve seen) have traditionally seen the admissions committee as wearing a judicial, rather than legislative, hat. As a result, faculty might tend to think of admissions as a necessary chore accomplished by the folks who run the operations side of the school, instead of an extension of the pedagogical mission. [Update: Even the affirmative action debate, which is a policy choice effectuated through admissions, isn’t intended to shape the conduct of pre-law students.] Perhaps its time to rethink that model.


Solum on the Need for Opinions

opinion.jpgLarry Solum recently posted a kind response to my post on the need for judicial reasoning. Here is a taste of his analysis:

An obligation to offer justification has obvious accuracy-enhancing effects: it forces the decision maker to engage in an internal process of deliberation about explicit reasons for an action and to consider whether the reasons to be offered are “reasonable” and whether they are likely to be sustained in the event of appeal. Balancing approaches, which consider the costs of procedural rules as well as their accuracy benefits, point us in the direction of the costs associated with requiring justifications on too many occasions and of the costs of requiring justificatory effort that is disproportionate to the benefits to be obtained. Requiring reasons facilitates a right of meaningful participation as well: when a judge gives reasons, then the parties affected by the action can respond–offering counter reasons, objecting to their legal basis, and so forth. Moreover, the offering of reasons provides “legitimacy” for the decision.

Very helpful. Clearly, the procedural justice literature has much to say on whether it is illegitimate for judges to rule without explanation. It seems to me that much of Larry’s discussion would seem to foreclose the legitimacy of what our commentators have suggested as the backstop for expressed opinions: back-pocket explanations, i.e., reasons produced by litigant demands.

But I still think that much of our thinking on the problem of “why and when reasons” is driven by biases built into our legal-DNA by the law school experience. I’ll ramble a bit more on this problem below the jump.

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Vioxx and Corporate Apologies

Every time I see in the WSJ a mention of the Vioxx litigation or the Bausch & Lomb eye solution situation or any similar recent potential mass tort situation, I think back to my clerkship with Judge Jack B. Weinstein, EDNY, and I call to mind his opining about the value of apologies in the mass torts context.

As most of you might know, Judge Weinstein is famous for (among other things) facilitating the resolution of many major mass torts disputes, including those related to DES, Agent Orange, silicone breast implants, tobacco, and asbestos. Judge Weinstein is a wizard at managing the litigation of these sorts of cases, but he is equally masterful at assisting in the settlement process. When talking about some of these cases and about mass torts generally, in speeches, law review articles, and opinions, the Judge has often alluded to value corporate-level apologies might have in the context of resolving mass tort litigation. Indeed, the Judge often references (seemingly favorably) the role corporate-level apologies have had in the Japanese legal realm. While I do not purport to speak for the Judge, my impression is that he thinks that apologizing – by corporate officials to persons injured by the use of the corporation’s product – is something that is perhaps considered too infrequently (either in the absolute sense or in facilitating settlements and/or less costly resolution of mass torts disputes).

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Price Discrimination in the World of Medicine

The WSL had an article today about drug pricing and the power that big purchasers have with the drug manufacturers. The article got me thinking: Am I the only one who cares that small retail pharmacies (to the extent that they still exist) get the short end of the stick with drug manufacturers (or have historically, anyway)?

A nice example, albeit dated, deals with birth control pills. Most colleges sell to their students birth control pills at somewhere around $10 per package. The colleges get their birth control pills for perhaps . . . $5 per package. The retail pharmacy on Main Street, however, gets the pills for $14 per package, and it sells the package for $19 to the person with insurance and $38 per package to the person without insurance. How is that fair? There is no way the retail pharmacy can ever compete with the University pharmacy (or the Wal-Mart pharmacy, that likely gets a similarly significant discount).

The birth control pill manufacturers typically evade antitrust scrutiny b/c they maintain that they are giving the university a “volume discount.” Last I checked, however, most antitrust lawyers agreed that the true volume discount in situations like that was nowhere near the discounts universities, Wal-Marts, etc. were actually being given. The discounts given were far larger than the discounts that could be justified on a basis of costs saved due to volume purchases. Yet nobody squawks.

On a related note, why is it that I have to pay $75 for my doctor’s appointment if I miss it and don’t call to cancel, but, if I had actually gone to the appointment, my insurer would have only been billed $48 or some such? I realize that my insurer has negotiated better prices with my doctor than have I, but why is that not price discrimination in violation of the Robinson-Patman Act? Where are our antitrust lawyers? I cannot believe that the volume discount math really works out in this case – my gut instinct is that the doctors are just caving to the insurers and sticking it to the poor individuals when insurance does not apply.

In my pursuit to be like Harvey Goldschmid, I have long wanted to teach antitrust, but Richmond could not really afford to have me give up a corporate class to teach antitrust. Hopefully, if I were teaching antitrust, I could answer my doctor’s appointment question myself.