Fiscal Cliff Notes

I can remember my freshman and sophmore years in high school. Back when I had acne and could still run. I used cliff notes to gain a better understanding of the book we were assigned in English class. I am sure that some of my readers can relate to cliff notes or similar commercial summaries. Instead of reading the whole book, cliff notes allowed students to read at the last minute and still pass.

In a way, the fiscal cliff reminds me of cliff notes. Congress does not want to do the work they were sent to do and are trying to pass legislation at the last minute. Yes, the stakes are more serious than a bad grade on an English test, but it seems like Congress is looking for a shortcut. If only there were cliff notes on achieving economic stability and fairness.

The reality is that there are no shortcuts to fixing our economy in the global environment that we live in today. Luckily, we can look at other economies and history to help us make fiscal policy decisions. Below are my cliff notes for the fiscal cliff. It is not enough to solve all of the complex problems we face, but it can provide a framework for how we should approach it.

(1) Effective January 1, 2013, tax rates will go up for every level of income. The payroll tax holiday will also expire and spending cuts to schools, public health, and defense will take place. It is estimated that almost 90% of Americans, mostly low and middle income, will face on average, a $3,500 increase in tax liability.

(2) Federal tax revenues have been at there lowest levels in sixty years. This is due to the fact that tax rates have never been lower and the Great Recession has put many people out of work, which has decreased the amount of people who pay taxes.

(3) The national debt is currently over $16 trillion. The first president to go over $1 trillion was Ronald Reagan and it has been estimated that the Bush tax cuts reduced revenue by $1.8 trillion from 2002 and 2009. The debt to GDP ratio is not at the highest level. In 1946, debt was 108% of GDP compared to 104% today.

(4) Since the 1980's, and with the late 90's as an exception when Clinton was president, the United States has run a consistent budget deficit. During the Bush presidency, two wars and the Prescription Drug Bill were expenditures that increased the national deficit. With President Obama as president, the main expenditure was the Stimulus Bill. Both of their tax cuts on incomes over $250,000 have had a significant impact on increasing the deficit.

(5) Entitlement spending on programs like Medicare, Medicaid, and Social Security is rising quickly. Because of the millions of baby boomers who are retiring and the fact that health care costs are rising at a much higher rate than other goods or services, this poses a fiscal challenge. The Affordable Care Act will help, but it will not be enough.

(6) Countries that enacted austerity have suffered more than any country should have to suffer. Deficit hawks in the United Kingdom have drastically cut spending and there has been little to show for it. Unemployment remained stagnant for five years and UK's GDP is smaller than before austerity.

(7) Despite the United States national debt, the US is still able to borrow at historically low costs. Furthermore, those who have warned of hyper-inflation have been proven wrong for years. Inflation has averaged 1.4% during Obama's presidency and it is projected to be 1.2% for the next 10 years.

(8) Income inequality has grown to unsustainable levels. The top 1% of incomes take home over 20% of total GDP wealth. CEO pay has increased 300% since 1990 compared to the 4% increase for the typical worker. Out of every developed country in the world, the United States has the highest level of income inequality. It may be appropriate that the "Great Gatsby" is going to be in theaters soon, because there has not been this much inequality since the Roaring 20's.

These eight fiscal cliff note summaries give some perspective. While it is important that we confront entitlement spending and lower the national debt to GDP ratio in the long run, the main focus should be on achieving growth.

The average middle class American should not have to shoulder the responsibility of paying down the deficit so that the wealthy can keep their tax rates at historically low levels. Moreover, we have seen the effects of austerity, or cutting discretionary spending that benefits low and middle income citizens. It is a prescription for economic malaise.

To achieve growth, we will need to spend on infrastructure, education, and research. These are the ways in which our businesses can remain competitive in a global economy. Spending in and by itself is not the problem. And while the debt has increased to its highest numerical value, US bonds still have incredibly marginal yields.

When Speaker John Boehner failed to rally his own GOP members to pass his "Plan-B," it was another sign of GOP infighting. They were unable to pass legislation that would have increased taxes on incomes of over $1 million. The extreme tea party wing have gained so much clout that it may mean the end for the Republican party. But more importantly, it may mean the end for a fiscal compromise.

A part of me wants to go back those high school years when I had little responsibility. No bills, no worries, and no care for how Congress made its decisions. It is different now. As a small practitioner, I need Congress to do the right thing. Too bad they're not doing their homework.

The Newton Shooting and the Law

In a time that is traditionally set aside for the family and holiday spirit, fellow Americans are trying to cope with the task of planning the funerals of their young children. The shooting at Newton, Connecticut is a tragedy beyond what anyone could imagine. The lives of innocent elementary students were taken away suddenly and senselessly. 

This mass shooting did not only have an impact on the victims' families or the small town of Newton. The whole psyche of the nation has been affected in a traumatic way. I, who will one day have a family of my own, fear that my children will be brought into a world that is far different from when I was born.

While the nation grieves, there is the need to find answers. What could have been done to prevent this crime? Would it be prudent to immediately pass strict gun control laws? How about increasing the opportunity for low-income individuals to obtain mental health coverage? 

These "solutions" may increase the nation's safety, but cannot take away the pain of the victims and their families. Nevertheless, it is wise to have a discussion about current law related to gun control and mental health care. 

Gun Control

In June 26, 2008 there was a 2nd Amendment case, D.C. v. Heller, wherein a strict gun regulation law was struck down. The District of Columbia attempted to prohibit the use of handguns, unless it was registered and in the home of the owner, unloaded or locked away. The Supreme Court, in a 5-4 decision, held that "[the law] makes it impossible for citizens to use arms for the core lawful purpose of self-defense and is unconstitutional."

The National Rifle Association, or NRA, declared it a "major victory." The minority opinion disagreed with the NRA and stated that "the words 'the people' [in the 2nd Amendment] do not enlarge the right to keep and bear arms to encompass use or ownership of weapons outside the context of service in a well-regulated militia. 

In sum, the Court interpreted the 2nd Amendment to mean that every citizen has the right to defend himself/herself. The dissent's opinion, that the rights of gun ownership are supposed to be decided within the context of an 18th century world, when 95% of the population lived in rural areas, is simply an opinion, not the supreme law of the land.

The effect of this monumental 2nd Amendment case has been disappointing to gun enthusiasts and advocates. Since Heller, the Court has upheld most gun regulations that have attempted to expand on the requirements for those wanting to purchase weapons or ammunition. For example, a felon or a person committed to a mental institution may not legally purchase a firearm, and laws strengthening those policies are constitutional.

Heller may be more symbolic than anything but it sets precedent for future regulation. States are already thinking about legislation that could pass the scrutiny of that case. California is discussing legislation that will make it more difficult to purchase ammunition. Congress is considering laws that will curb the gun show "double standard", in which private sellers are able to bypass the requirements that all licensed dealers must meet before selling a firearm. 

In my opinion, we need to regulate ammunition to the same extent as guns. Adam Lanza had hundreds of rounds of ammunition. There is no purpose to have a large amount of ammunition to defend yourself. Do we need to place hundreds of ammunition boxes near the window, instead of a Christmas tree, to ward off potential criminals? I think not. We should also implement stricter background checks and require mandated educational classes to instruct people on gun safety prior to their purchase.

Mental Health

There is confusion among citizens about mental health. For far too long, there has been a stigma surrounding it. If a person is suffering from depression or bipolar disorder, individuals may misinterpret it as weakness. More education about mental illness needs to be a priority despite the fact that Adam Lanza may have had some variant of autism, a mental syndrome.

Almost 1/4 of the population will suffer from a mental illness and less than half will be treated. And since it is an illness, like any other common illness, a person suffering from post-traumatic disorder or depression needs to be treated.The Affordable Care Act ("ACA") has already attempted to cover more individuals that need this type of healthcare. Employers, both large and small, will have to offer policies that cover mental health. Moreover, the ACA will also invest in recruiting mental health professionals. That's a good start.

But more importantly, the conservative governors in the red states need to expand Medicaid to cover low-income individuals. So far, they have issued statements that they are unwilling to allow the implementation of the ACA. I find this both morally unacceptable and dangerous. Is it not possible that a low-income person suffering depression could resort to a mass shooting because of no treatment?

This is a time for reflection and prayer. But I also do not think that sending condolences is enough. We should have an honest conversation about how to prevent a tragedy of this magnitude in the future. As citizens of this great country, it our responsibility to those children that we find solutions.

The Bar Exam

Ever since I can remember, I knew that I wanted to be a lawyer. Maybe it was because my family loved going to the movies and I was enthralled with the legal characters that could win over jury with a persuasive argument on the big screen.

Or maybe it was because I have always had great respect for my uncle who was a tax attorney. His humble demeanor, great intelligence, and compassion were characteristics that I wanted to possess when I became an adult.

Or perhaps I was called to be an attorney because my interest for politics gave me the curiosity to look at a congressional website detailing the occupations of all of its members in the fifth grade. The 112th Congress, for example, had 200 members who declared law as their occupation.

Whatever the reason for my inspiration, I vividly remember my answer to the question, "what do you want to be when you grow up?" I, without missing a beat would reply, "a lawyer."

That's why Friday, November 16 was a memorable day. It was the end of a journey that I began after high school - but in a way - a path that began even before high school started.

The California bar examination is a three day exam, six hours each day. Since we had to be there early and wait for instructions after, it was an all day exam. But actually taking the exam may have been the easiest hurdle.

That is because my fellow July takers and I all began to study months before July 24. Before the ten hour Bar/Bri study days, we took the LSAT; completed law school applications; went through three years of law school classes and final exams; and fulfilled all of the necessary requirements to leave school with a postgraduate Juris Doctor degree. So in reality, the three days out of the five year process seemed quite infinitesimal.

Even if it seemed small, those three days would provide me the opportunity to practice the law as a licensed attorney.

On the night of the results, I screamed out loud with my fists clenched in celebration after Elizabeth told me that I passed. Even as I looked at the screen, it did not become real until she told me.

For those students who have not taken it yet and happen to also read my blog, I have a few pointers for you.

First, thanks for reading my blog. I know that it may be more painful than reading a casebook but at least you do not have to look for the issue, rule, and holding. There is not a final exam either.

Second, study with the right mental frame of my mind. Why did you go to law school? You aren't a masochist, you wanted to become an attorney. Remember that in our profession, attorneys read and write and then read and write. Think of bar prep as a preparation for your future practice and stay positive.

Third, do everything that you are told. I do not care if you get tired or think that you have done enough for the day. Complete every task assigned during bar prep and then do some more. You want to go in with complete confidence in your abilities because you will perform at your peak. And guess what? If you have a J.D., your best means that you can pass.

Fourth, embrace your faith or spirituality. It is no secret that in challenging times, we strengthen our relationship with God. Even if you do not believe in a Supreme Being, you can meditate or do something to make you focus on the bigger picture. In the end, there are more important things than an examination.

Fifth, allow your family and loved ones to help. I am a lucky man because my beautiful girlfriend, Elizabeth, did everything in her power to help us pass. She cooked, cleaned, did laundry, and was only a phone call or chat away. We shouldn't have to face the bar exam by ourselves and we do not have to. Reach out to whomever will help you succeed.

Sixth, take breaks during the day and on the weekends. Do not get burnt out. You will be working hard and that means your body and brain will need a rest. Go to the gym, a movie, or play some mini golf.

Seventh, on the day of the exam, enter the convention center with complete faith in what you have done during law school and bar prep. I listened to some motivational songs, remembered back to some of my favorite accomplishments, and was ready to give it my all. I had fun with it.

Tomorrow is the swearing-in ceremony. Let's hope I don't mess it up. I know that an attorney, a great attorney, would get it right.

Death to Twinkies!

In 1930, James Dewar, the manager of the Chicago Hostess Bakery plant, was probably tired. He spent most of his days overseeing the tedious production of the company's delicious cakes. Complete with strawberry filling, the variety of pastries produced in Chicago were certainly being enjoyed by people all over the country.

According to history, Mr. Dewar noticed one day that the Hostess shortcake pans were hardly being used during the short strawberry season. Instead of having the pans sit idly in the dust of the factory, Mr. Dewar began to inject smooth banana and vanilla creme filling into the cakes. These non-strawberry filled treats would later be named, "Twinkies." And this beloved snack would later contribute to the increased size of America's belly.

Today, the bankruptcy court judge presiding over the Hostess proceeding approved the winding down and liquidation of the company. The management at Hostess quickly placed blame, even before the judge made a decision. It was those greedy unions and their ridiculous demands for decent wages.

It is true that the union strikes made it difficult for the company to reorganize under Chapter 11, but the death of Hostess was long ago determined because of a number of non-union factors.

Hostess had already filed bankruptcy in 2004 and 2009, employed seven different CEOs in ten years, before private equity began to load the company with debt. Hostess had over $600 million of debt on the books before the unions were able to write on their picket signs. The total amount of debt was two-thirds of the complete asset value of Hostess.

Add the problems of consumer trends favoring healthier snacks, management's refusal to adapt to the market rate of labor, and leadership's failure to retool the business model; and you get the demise of a bakery company that has been around for over 70 years.

It is always easy to blame the workers, the unions, the blue-collar employees who are content in being a small part of the larger process in making a delectable product. But in blaming them, the Hostess executives associate themselves with the "severe" conservative agenda which holds working people in contempt.

The Republican House Majority leader Eric Cantor is a perfect example of an individual who disdains the working class. He issued a statement on Labor day 2012 stating, "we celebrate those who...built a business and earned their own success." I have nothing against business owners, but praising just them on labor day shows great disrespect to the labor class.

There is a wide-held belief that businesses would do better without unions. Let's examine whether this belief is backed by evidence.

Since 1970, union membership has gone from 1/3 of the workforce to less than 14 percent. What is the result of this decline? The top one percent of incomes increased 275% while middle class incomes went up just under 40%. This income inequality has had an effect on the whole economy. Because of the weak purchasing power of consumers, overall aggregate demand declined tremendously. If families cannot afford to purchase Twinkies, how is Hostess or an equivalent company supposed to sell its products?

Companies need to stop playing the blame game and realize that if the middle class does well, so does the whole country.

I am sure that James Dewar, once a delivery boy for a pastries company, would be disgusted with the turn of events regarding the Hostess bankruptcy. He could not have anticipated that the bakers would be the "ones responsible" for the end of Hostess. Although the Twinkies brand will live on, the respect for the people who made the Twinkies, Hostess bakers, will be discarded. Someone give me a sugary treat.

All on Red: How Wall Street Gambled Big and Lost

Most people go to Las Vegas to gamble. Surrounded by flashing lights and luxurious casinos, there is something alluring about sitting at a blackjack table for hours on end. I am sure that the free drinks might have something to do with it too.

But when I looked at a recent Reuters article, I read facts that reaffirmed my belief that people on Wall Street are different. They are not like most people. Instead of rolling the dice, they would rather "gamble" on complicated financial instruments or presidential elections. And with the results of this election over, it was clear. Wall Street crapped out.

In late July 2010, President Obama signed Dodd-Frank, a financial regulation law, named after the two Democrat legislators who sponsored the bill. It became immediately clear that the banks on Wall Street were not happy. One paper stated that, "within minutes of the bill signing, several Wall Street groups were leveling criticism at the new regulations, reflecting Mr. Obama’s increasingly fractious relations with corporate America."

Their criticism did not end with harsh words. In the presidential election, Wall Street gave over $150 million to Romney, or Super PACs whom supported Romney. Wall Street put it all on red and the ball ended up on blue. 

What caused the animosity between the financial services industry and the White House? Was it only because of the monumental financial reform bill?
 
You may have read that the financial crisis was brought on by the housing bubble. However, you may have missed the fact that the banks on Wall Street were the ones putting the batteries in the bubble machine. In creating collateralized mortgage obligations, or the securities that were later known as "toxic," the banks accomplished what they always do best - make sure that someone else bears the risk.

The main idea behind these securities was that it would be less risky. The banks would bundle up a bunch of mortgages, label them as high-risk or low-risk, and put them in their respective tranches. Investors would buy them according to how risk-averse they were. It was the perfect way to lend to prospective home buyers because it was supposed to spread the risk among a number of parties. Or so they thought.

With the help of rating agencies listing most of the securities as triple-A,  the prices of these "toxic" instruments went up as demand increased. The banks sold them faster than a casino sells drinks. Instead of having the borrowers pay the banks directly, the banks sold the complex securities to investors, whom were to be paid from the borrowers. The banks shifted the risk of default and foreclosure to the investors.

It didn't end there. Before the fall of Lehman Brothers, some banks began to purchase credit default swaps. These instruments acted as insurance. The banks would pay a premium, and in the event of a mortgage default, the issuer of the swap would have to pay the bank. They were betting against the very securities that they were selling.

The bubble eventually burst when people realized that the values of homes across the country were inflated. More homeowners began to default on their loans and the securities bought by investors lost their face value. The consequence of these events led to the Great Recession, in which millions of Americans would become unemployed or underemployed.

When things began to settle, laissez-faire "fiscal conservatives" already had their fingers pointed to the ones responsible - the government and the indigent. Their main theory, the one you've probably heard from your conservative friend, is that Fannie Mae and Freddie Mac ("GSEs") encouraged subprime lending to people who couldn't afford it. It's these irresponsible borrowers and government enablers who shoulder the blame.

The problem with this conservative theory is that it doesn't have evidence or facts to support it. The primary holders of the "toxic" assets were the private banks. Moreover, many economists and authors pointed out that, "the GSEs’ overall purchases and guarantees were much less risky than Wall Street’s... their default rates were one fourth to one fifth those of Wall Street and other private financial firms." So, in effect, the banks ran wild, but somehow still found a way to persuade some Americans that it was the fault of poor people.

President Obama didn't buy it and he explained his position on financial services and the need for regulation. At times, he even called the Wall Street bankers "fat cats." The bankers must have had some self-image issues because they were deeply hurt. One Wall Street exec said it wasn't so much what the President did, but the "vibe they get."

Dodd-Frank was historic in its ambition and scope. It created the Consumer Financial Protection Bureau, the "Volcker rule," which will limit proprietary trading by the banks, credit default swaps regulations, and a number of other safeguards to protect financial stability. The legislation put Main Street back as America's number one priority, much to the dismay of Wall Street.

The gamble to oust President Obama may not have gone in Wall Street's favor. But I know they aren't done. They can spend just as much on challenging the law in the courts. I bet money that they'll try.

Binders Full of Lawsuits, with Women!

Shortly after Justice O'Connor retired, Justice Ginsburg said that she was "lonely" on the bench. She had just become the sole woman on the Supreme Court. Ginsburg expressed her belief that she and O'Connor had brought certain sensitivities to the court, a quality that the other justices could not because they did not grow up as women.

Fast forward to the Ledbetter v. Goodyear Tire & Rubber Co. case, were Ginsburg displayed a passionate dissent. Not only would she read the dissent but she called the 5-4 majority "acrimonious" and called for Congress to change the law. Congress listened to the "lonely" woman.

Justice Ginsburg must have been sensitive to Lilly Ledbetter's case because in a way, they shared similar roles. Both of them had experienced the solace of being the only woman in a profession full of men. Lilly Ledbetter, a district manager for Goodyear for a number of years, was the only woman out of 28 managers. That is  somewhat different than having only eight male colleagues on the bench. And Lilly Ledbetter also had to face extremely disproportionate pay in relation to her male counterparts.

After the Supreme Court reversed a three million jury verdict for Ledbetter, Democrat lawmakers sprung into action. Ginsburg's statement that the "ball was in Congress' court," sent a message. You better have your glove and bat ready because it is time to run onto the field of legislation. 

But what was the effect of the Ledbetter v. Goodyear case? How would Congress shape the new legislation? 

The Supreme Court held in Ledbetter v. Goodyear that the statute of limitations had barred her claim because she brought the action 180 days after the discriminatory act. The majority, five men, determined that the alleged discrimination occurred when they decided to set her pay far below her male counterparts. In strictly applying the statute, the court stated that the discrimination did not occur when she was actually paid. This precluded her from being able to recover under Title VII. 

Lawmakers from both the House and the Senate began to craft new language extending the statute of limitations and defining the discrimination in a more liberal way. The new legislation agreed upon, by mostly democrats, would allow women to bring a discrimination suit after they had learned of the pay discrimination, and would not time bar the suit in relation to the discriminatory act. Although it was passed before President Obama was elected, it would be the first piece of legislation signed by him.

Reactions from both sides were predictable. Democrats hit a home run, expanding the role of women in the workplace and Republicans were outraged that employers would now have to face more lawsuits from the damn plaintiff's bar. 

Both are right to an extent. But, I feel that if we are to error; let us error on the side of equality in the workplace. When there is a woman's perspective at work, the company will be better suited to succeed.

I strongly disagree with Republican presidential candidate Rick Santorum's statement.  He recently said that the, "[Lilly Ledbetter Act] had nothing to do with changing the law with respect to pay for women or rights for women. It simply gave lawyers a longer time to sue..." 

Lawyers do not simply sue an employer for the hell of it. Lawyers have clients, and some of those clients may happen to be women who have faced discrimination. When most attorney's decide whether to take a case, he or she makes certain that the case has merit. Lawyers are bound to an oath of responsibility and despite what Senator Santorum says, will pursue a claim only if there sufficient evidence of discrimination.

Besides, this can only be good for employers. Businesses will take precaution in assessing the pay of employees and it will ensure that a person's  pay will be determined by their work, not their gender. There may be more discrimination suits initially, but the courts will delineate guidelines on when is the appropriate time to bring a suit in accordance with the Lilly Ledbetter Act.

Justice Ginsburg and Lilly Ledbetter may have shared adversity in explicating a woman's perspective to a group of men. But one thing is for sure; a whole country full of men have now heard a woman's opinion, and it is now the law of the land.

Negative Action: Why the Supreme Court Should Not Change Current Law

Chief Justice John Roberts was sworn in on September 29, 2005 with thunderous applause and praise. His appointment was seen as a win for conservatives and for originalism judicial philosophy. Despite the clear victory for traditional moral values, the Chief Justice expressed that his bipartisanship appointment proved that "judging is different from politics."

Boy, was he wrong. Politics soon became intertwined with the highest court when "Obamacare" was upheld.

The Affordable Care Act was arguably the most watched Supreme Court Decision in modern history. By the end of the day, after Chief Justice John Roberts sided with the court liberals, he was vilified and called a traitor. Rand Paul said, “just because a couple people on the Supreme Court declare something to be ‘constitutional’ does not make it so..." Actually Rand, it does.

Now, Justice Kennedy has the same opportunity to be scorned. His swing vote decision on the current affirmative action case, Fisher v. University of Texas, will give him an opportunity to put the judiciary branch in direct line with the political line of fire.

But like Roberts, Kennedy should not fear the conservative's wrath. He should keep current law in place or uphold the tradition of encouraging diversity in schools. I have first hand knowledge that a diversified school can lead to a better understanding of others and ourselves.

The first woman on the Supreme Court Justice believed this sentiment too when in 2003, Grutter v. Bollinger, she put in place the standard for how universities may consider race as a factor.

Justice O'Connor said race may be used in a flexible non mechanic way with a number of other factors by admissions offices when they determine who will be the next batch of students. This "holistic review" has worked and almost all universities want to keep the current system in place.

Besides schools wanting a diverse student body to ensure that the best and brightest students resembles the make up of the public, there is overwhelming evidence that race relations is still a problem today. A Newsweek poll suggests that minorities still feel that relations between race have stagnated or deteriorated.  

The Trayvon Martin incident has split opinions on racial lines, the Arizona immigration law has brought attention to racial profiling, and the birther issue has led to questions of blatant racism.

One way these problems can be addressed is to ensure that students learn besides students of other races, socioeconomic backgrounds, and religion. When universities accept students based upon factors of race and other criteria, it will allow friendships to be made and differences to be embraced. This will lead to progress in race relations.

I graduated high school from an affluent, mostly white school, in Temecula. When I stepped foot into my law school after attending UCI, I met people from a wide variety of backgrounds. I was challenged for the first time to rethink some of my ideas related to affirmative action. Now that I have graduated, I know that a diverse student body is indelible to a career in law. The American Bar Association agrees, filing an amicus curiae brief in Fisher v. University of Texas to voice its support of our current law.

Justice O'Connor said in 2003 that “we expect...that 25 years from now, the use or racial preferences will no longer be necessary.” If the court agrees with her, it should keep Grutter in place until 2028. I think there is still some time left.

When Justice Kennedy makes his decision he should remember the words of Justice O'Connor. He definitely shouldn't consider the political assault on John Roberts. Maybe then Roberts statement will be correct. The Supreme Court will never have to bow to political pressure.

Facebook's IPO: Lawsuits, Billions Lost, and Wall Street Wins

There is something attractive about a criminal trial. Most of our beloved shows involve violent crimes and the aftermath of police and prosecutors trying to seek justice. Maybe too many. I lost count with how many CSI shows there are.

We are enamored with the whole process and the high stakes involved. A person's liberty is at stake versus the justice rightfully needed for the victim's family. It is fundamental to our core that we see to it that criminals are punished and that's why it catches our attention.

For me though, a botched initial public offering of a tech company and the legal aftermaths captures my interest. I'm just fascinated with the idea that an attorney can wave around a disclosure form and some documentary evidence representing the current trading price of a Facebook share and win an argument. And there are many people who are trying to do just that.

In May, the news coverage was heavy on the genius of Mark Zuckerburg and the meteoric rise of the social networking site. Look in the Wall Street Journal today and there are articles about dozens of lawsuits pending against Facebook and the underwriter, Morgan Stanley.The bases for their claims is  that the required disclosures given to investors prior to the public offering were insufficient and the analysts failed to provide realistic revenue projections.

The plaintiffs, investors who lost a substantial sum of money from the IPO, argue that there should have been more information given as to  Facebook's problems with advertisement, revenue, and trend that users are accessing Facebook with their mobile devices.

In other words, the investors feel duped into buying a stock that was overvalued. It sounds ridiculous, right? They should have been more careful. Haven't they heard of "buyer beware?"

Wall Street is never simple and that has been proven with the third largest IPO in our history. There seems to be a lot of news coming forward that despite investors losing money and Facebook losing respect in the mind of investors, Wall Street ended up with more money than usual. That shouldn't sound ridiculous, they always win.

The banks used an underwriting provision called a stabilization clause, or a Greenshoe option, to minimize their risk. It paid off. While Zuckerburg lost billions, Morgan Stanley was handing out the pool of about $100 million.

Not only did banks profit from their underwriting services, they profited from taking short positions on the Facebook stock. Traders at Goldman Sachs and JP Morgan took positions that the shares would decline in value. These complicated and controversial trades almost always benefit the banks despite the damage done to the issuing company.

When its all said and done, we have laws in place which enable investment banks to engage in this business. We can put some blame on Facebook for overvaluing itself or the underwriters for failing to disclose all material information. At this point, it may not matter. The average investor lost money, Facebook lost money, and the banks made money. Like I said, it is totally legal but its like they are getting away with a crime. The banks are the ones robbing the investors.

It may be best to just watch CSI. In those shows, there is always justice at the end.

Mayweather Knocked Out in Court!

Floyd Mayweather Jr. is one of the most successful boxers of all time. He has a perfect record of 43-0. No losses, and all wins. It's too bad for him that it does not carry over into the court. He's losing all those fights.

A couple of days ago, Mayweather was forced to pay his nemesis, Manny Pacquiao, over $113,000 in legal fees and costs. Pacquiao's attorneys made the legal jab when Mayweather failed to show up to his own deposition. The court stated that it was "obviously intentional," and ordered monetary sanctions.

This case is not for a battery or an upper punch. Pacquiao sued Mayweather in federal court for defamation when Mayweather made a statement that claimed Pacquiao used performance enhancing substances. Instead of retaliating with his fists, Pacquiao retained an attorney. I would have liked to see the fight on pay-per-view.

A defamation case gives justice to those who believe that their reputation has been tarnished due to a false statement. Pacquiao has every legal right to pursue this remedy, but it seems unnecessary. Mayweather seems to be losing the fight for the public's respect. It could be because of his domestic abuse conviction or the controversial win against Victor Ortiz. But, its probably a combination of the two.

Mayweather is also losing any fans he may have had in the legal field. He is blatantly disrespecting the judiciary. The deposition of a party is a necessary part of the discovery process. It allows all of the necessary evidence to come before the court. It is within the court's power to sanction those individuals that refuse to participate and rightly so.

I do not think it will have any effect on Mayweather's finances. He makes millions for each fight he takes part in, before it is even decided who wins. One contract showed that a Mayweather-Pacquiao fight would have netted over $50 million for both. A $113,000 sanction is like chump change to the champ.

Ultimately, this dispute between the two must be decided in the boxing fans eyes highest court  - the boxing ring. We will have to wait and see whether Mayweather wins this legal fight first. It's not looking good, his 0-2 record in court  proves the law has been the Kryptonite to this undefeated boxing champ.

Vote (with an ID) or Die!

From 1776 until now, we have had men and women die for our freedom. In risking and sacrificing their lives , our citizens in uniform believed that it secured the rights of all people. Including those people without photo identification.

Unfortunately, the right to vote has been turned into a polarized issue. Just like with any issue our elected officials can argue about, it has become a party line vote. I would not be surprised if Republicans and Democrats took party positions on whether Coca-Cola or Pepsi was more American.

It did not have to be this way. Right after the Tea Party birth in 2010, newly Republican-controlled legislatures started passing voter ID laws with the hopes of preventing fraud. There was only one problem with their goals. There was no fraud occurring.

Before Pennsylvania's highest court heard arguments on the validity of the law, both parties stipulated that, "[the state] will not offer any evidence in this action that in-person voter fraud has in fact occurred in Pennsylvania and elsewhere,” nor will it "offer argument or evidence that in-person voter fraud is likely to occur in November 2012 in the absence of the Photo ID law."

With no evidence of past fraud or evidence that fraud will likely occur in the future, the Pennsylvania Republican Legislature has passed laws that could prevent thousands from voting. And there just so happens to be evidence of the law's negative effect on the poor, minority, and elderly. Even Jim Cramer, the host of Mad Money, has said it has caused a burden to his father.

Pennsylvania's counsel should have at least mentioned that there have been 13 credible cases in the past 10 years throughout the whole country. I mean its less than the amount of UFO sightings reported, but it is still a number. 

If this law is not about preventing fraud, then what is it really about? Could it be about politics? Sadly, there's recorded evidence to support that.

Mike Turzai, the Pennsylvania House Majority Leader, said so clearly while he was being recorded. In puffing his chest in a speech regarding the Pennsylvania House's accomplishments he stated, "voter ID, which is going to allow Mitt Romney to win the state of Pennsylvania, done!"

That takes some brass. The main legislator responsible for passing the voter ID law in Pennsylvania said that it will allow Mitt Romney to win, not that it will prevent in-person voter fraud.

I know that some Republicans will shrug their shoulders and dismiss it immediately. I know that for other moderate and reasonable minded Republicans it will cause a moment for concern. Winning a presidential election is not as important as the fundamental right to vote.

Many years ago, this country came to the conclusion that it is better that everyone get's an opportunity to vote. Not just a few. We decided that everyone should have a say in what direction America should take.

When the lower court in Pennsylvania relied on precedent to rule in favor of the voter ID law, it cited a 1869 case in which the court upheld a tough and similar law. That historic case said that if the law were not passed, the vote “would be to place the vicious vagrant, the wandering Arabs, the Tartar hordes of our large cities, on a level with the virtuous and good man.”

I do not think the Republicans have a monopoly on virtuous and good men. Nor do I think the Pennsylvania legislature should be the judge on what is virtuous. That should be left to Someone else. And when I head into the ballot box on November 6, I hope that I do not have to bring my birth certificate, social security card, and driver's license. As far as I'm concerned, all I need is my belief that we can move forward.








 

Innocent Until Strong Armed into Court?

The dust has settled and the cycles are long gone but there still remains a fog over the polarizing figure, Lance Armstrong.

It has been almost a week since Armstrong has decided to drop his fight against the United Stated Anti-Doping Agency ("USADA") and there has already been screams of constitutional violations and injustice. One yahoo contributor called Armstrong the modern day "Robin Hood," and called the whole situation a "travesty of justice."

I think she's completely right. This reminds me of when the Sheriff of Nottingham stripped Robin Hood of his archery trophies because of his alleged doping. There was absolutely no proof that the witch concocted the testosterone steroid and supplied it to Robin of Loxley. And the testimony of Little John against Robin Hood was completely motivated by his desire to smear Robin's name. Obviously I jest. Robin Hood fought the allegations till the end and ultimately proved his innocence.

Lance Armstrong is undeniably an inspiring figure. He was diagnosed with testicular cancer as a young man and beat it. His charity does great work and helps individuals live a more healthy lifestyle. But, this does not change the fact that there is overwhelming evidence that he cheated. Armstrong's courage and success against a horrible disease does not mean a successful argument can be made that he has been denied his due process rights.

USADA, in accordance with authority given to it through various treaties ratified by the United States Congress, moved to sanction Armstrong when a number of people came forward willingly to testify against him. The list of adverse testimony was credible and long. The list's length may have rivaled the Tour de France route.

Instead of vindicating his claims of innocence with an adversarial proceeding that would have given him the opportunity to cross-examine his teammates, present exculpatory evidence, and present his own witnesses, Armstrong elected to drop the fight. He issued a statement later in the week that said we should not cry for him. Don't worry, I won't.

The AAA-CAS, the alternative dispute resolution organization, that would have been the impartial determiner of Armstrong's guilt is not a perfect judicial proceeding. But that does not mean it is insufficient, obsolete, or unfair. One could make the argument that it is on par with most judicial courts in the United States.

A case in arbitration still has an equitable process. It is not a sham proceeding. Thousands of people use arbitration every year and receive an award or a favorable result. Furthermore, Armstrong would have been able to appeal in the event that he was found guilty of doping.

It is unfortunate to see people vilify USADA when it was simply doing what it was formed to do - keeping international sports free from doping. Of course, there may be some ways to improve the independence of the proceedings for the athletes accused of doping. Armstrong's case could have moved that conversation forward.

Armstrong made the decision to forego the arbitration yet still claim his innocence and victories. He does this despite the federal court's dismissal of his suit against USADA and determination that the AAA-CAS is a capable fact finder. It makes one wonder whether he has simply ran out of steam. Or maybe the performance enhancing drugs have no effect on his ability to present a case. I'll have to ask Robin Hood.

Legimate Rape: Something "Akin" to Rape?

I have friends that fall on every notch of the political scale. They range from tea party conservatives to occupy progressives.  With that in mind and as a preface, I want to discuss a heated political issue that should be non-partisan. I am afraid, however, that like with every public matter - it will turn into a dividing issue among friends and colleagues.

The 2012 election cycle is one of the most important in our lifetimes. There is a lot at stake in regards to what values and economic reforms we ultimately embrace. We have two distinct presidential candidates with clear differences in opinion about the economy. It will be a stark choice. However, many people are unaware that there are other important issues at stake.

Recently, a candidate for the senate in Missouri, Todd Akin, started a firestorm of controversy when he took up the issue of abortion. He was answering a question on why he vehemently opposes a rape exception to the anti-abortion law when he made the following statement:

"'From what I understand from doctors, that’s really rare,' 'If it’s a legitimate rape, the female body has ways to try to shut that whole thing down. But let’s assume that maybe that didn’t work or something, I think there should be some punishment, but the punishment ought to be of the rapist, and not attacking the child."

His statement is scientifically unsound. A woman's body cannot shut down ovulation of an egg merely because it was the product of rape. There is no legitimate rape. There is just rape.

I do not think this should be a dividing issue.

The comment, however, does put into perspective a Republican party position, which will cause debate. The Republican party wants to add a human life amendment which would ban abortion in all instances, even rape. The RNC will vote to add this position to its platform before the convention in Florida.

Furthermore, state legislatures, throughout the year, have attempted to pass "personhood" bills, which would legally make a fertilized egg a "person." The law's effect would make an abortion illegal in all circumstances.

It is not news that conservatives and Republicans are pro-life. It is newsworthy that elected officials are taking drastic measures to overturn forty years of precedent. Some of the candidates, like Akin, are explaining their position, albeit poorly.

Roe v. Wade, a 1973 decision, established abortion as a 14th Amendment liberty right. In Pennsylvania v. Casey, the court upheld that restrictions on previable abortions are unconstitutional when they cause an undue hardship to the woman. This has been the law for decades. The court in Casey even acknowledged that precedent should be followed to avoid further political polarization.

A pro-life individual has a right to oppose abortion. I understand the moral, ethical, and legal arguments against abortion. I emphasize with them. Everyone should do what they can  to help prevent abortions through education and counseling. Those tools needs to be utilized. That's where I draw the line.

Like my conservative friends, I think the government should stay out of our personal lives. Elected officials should not impose their religious beliefs via a constitutional amendment. Women should be able to make their own decisions.

No matter what I think, this election will have consequences. Even on non-economic issues, like abortion.

Ultimately, we can spend a lot of time trying to overturn a law or we can take steps to decrease the need for abortions. We can educate individuals about sex and its consequences. We should implement values in our schools that can help prevent unwanted pregnancies and strengthen the family.

I guess pushing for a radical change in the law regarding a woman's right to choose is also an option. That is why we have elections.

Don't "Like" this!

I write this blog for a number of reasons. One reason is that I want to give readers insight into important law cases that are being covered by the media. Second, I like to practice my writing skills. But probably the most important reason is that I want to get as many facebook "likes" as possible to boost my ego. As if my ego needed it.

But in all seriousness, as Facebook evolves and becomes more involved in our everyday lives, so does the law developing around social networking. It has been at the center of conversation about privacy rights. And just recently, it has been a topic of interest among 1st Amendment enthusiasts.

Bobby Bland and other sheriff deputies probably did not expect that a simple "like" could jeopardize their careers. They surely did not anticipate that they would be arguing in front of the federal circuit court of appeals about Facebook. No matter what the expectations were, the following decision could potentially affect how government employees socialize online.

The deputies of Hampton, Virgina are arguing that a simple online click is protected free speech. The Sheriff who fired them, allegedly because the deputies liked a competitors Facebook page during a local election, is arguing that it is not. They fought the law in the district court, and the law won.

The district court judge held that a Facebook "like" is insufficient speech to warrant protection. It saved the judge some time because he did not have to analyze the three-prong test to determine whether the state's conduct was retaliation to their "speech." If their conduct did not amount to speech, then obviously it could not  be speech regarding the public concern, which state employees may  constitutionally engage in.

The district court judge cited cases argued by the deputies in which the court did hold that Facebook activity is protected. He distinguished these cases, however, by stating that they differ markedly in one crucial way: both cases involved actual speech. They had commented on a post.  Maybe the judge is not a Facebook user because most people know that a "like" could have the same effect as a comment or even more. I mean everyone knows that if a woman "likes" a man's status update, it's because she has a crush on him.

After the case, there was a firestorm of commentary from different individuals, associations, and professionals. The ACLU, Facebook, prominent lawyers, and users each gave their two cents. Everyone came up with their own unique analogy for a Facebook "like" to actual speech. Facebook Inc. analogized a "like" to a campaign sign in the yard. An attorney analogized it to wearing a campaign button on a shirt. The ACLU analogized it to an "I like Ike" pin. How original. Although if I had to pick a winner - it would be the ACLU.

The United States Court of Appeals for the Fourth Circuit will have the opportunity to reverse the District Court. If it decides to uphold the decision, government employees will definitely have be more careful on Facebook. Like that's a bad thing. But, I do predict that it will be reversed because the courts are more likely to classify  this type of activity as protected speech. However, if it is "speech," it does not necessarily mean that the appellants would win. The three-prong test would still need to be employed.

Part of me actually wants the decision to be upheld. Maybe then, people will start to think about the consequences of their social networking activities, thinking before posting. But, let's be honest. I will probably see a "bong hit" on my news feed before the day is over.

iRipped: Battle of the Smartphone Giants

Chances are that the phone in your pocket is either a Samsung device or the coveted iPhone. Together the tech titans sell over 41% of all the smartphones in the market. And, I just found out via my news app that both companies are 100% committed to winning the high stakes legal battle they are embroiled in.

In 2007, Steve Jobs introduced the original iPhone. He was right; it was revolutionary. But, the important question now, five years later, is whether its been ripped off by a big competitor.

The Constitution mandates that the Executive Branch "promote the progress of science...by securing for limited times to inventors the exclusive right to their respective discoveries." This mandate allows inventors to bring lawsuits into federal court to protect their products. Or, like in this case, protect the future success of its brand.

It looks like Apple may have a few ambitious attorneys because it is not timid when it comes to enforcing it's patents. On June 30, 2011 Apple filed its amended complaint against Samsung stating that, "instead of pursuing independent product development, Samsung has chosen to slavishly copy Apple's innovative technology..." Ouch.

This case is not only about patent infringement. Apple's complaint also contained claims of Lanham violations. For Apple to win on these additional claims, it will need to show that Samsung intentionally made its products to confuse consumers. And no, not confusion regarding price differences.

Winning a Lanham Claim

Apple is arguably the best technology company. It offers sleek products that talk to you. Siri has been known to carry on conversations better than most patrons at a local bar. The ironic thing about the lawsuit is that Apple will have to argue and successfully prove that consumers believe Samsung devices are the same as iPhones. To win versus Samsung, Apple will argue that its devices are just as revolutionary.

A New York case sums up actual confusion. "[Consumers are confused when there is a] likelihood that an appreciable number of ordinarily prudent purchasers are likely to be misled, or indeed simply confused, as to the source of the goods in question." In other words, when you go to best buy - you are not be able to tell the difference between a Samsung and Apple product. Consumer sophistication is one of the factors for the court to consider when determining a finding of confusion.

This legal standard will make it difficult for Apple to win on these trade dress claims in my opinion. The ordinary smartphone user is financially wealthy and sophisticated. I know its shocking but young college-educated individuals are likely to be a consumer of these devices. These facts bolster Samsung's arguments that most consumers are sophisticated enough to not be confused. Although, I do know some college graduates that are dumb as bricks. I'll refer Apple to them.

Apple v. Samsung is a big case. The outcome will have serious consequences in the mobile phone market. I am sure the other big players will be watching closely. As for me, I already set notifications to alert me of any new developments. It was not too difficult, my Samsung Galaxy S III is just like an iPhone.

Is Law School For You?

As a recent law graduate, I did the most sensible thing while waiting for my bar results - I started a blog. The most difficult thing about blogging is coming up with interesting topics for potential readers. My girlfriend, mom, and dad.

All kidding aside, my blog will cover trending law. The purpose of the blog is to provide easy to understand commentary on legal matters that affect my readers. My passion lies with business law but I will comment on other civil matters.

With that being said, I do feel it is important to discuss whether law school is right for those thinking about attending 3+ years of law school . The Wall Street Journal and the Huffington Post report a decline in law school applications. The articles attribute the lower rate to the difficult job climate. I suggest it may have more to do with the stress, weight gain, and repetition of reading boring casebooks that law school has to offer.

Attending law school is an important decision. It's a career path that can offer many new opportunities. Almost 200 members of the House of Representatives and over half of United States Senators hold law degrees. That fact may persuade you that law school is not for you since congress is despised by almost everyone according to some polls.

A juris doctor degree is also expensive. Be prepared to accumulate large debt unless you have wealthy parents. I love my parents but they are hard working middle class Americans so I had to take out a few loans to finance my higher education goals.

Like with any decision, you have to weigh the benefits versus the costs. For me, the education and opportunity I will receive outweighs any pecuniary sacrifice I had to make. But, for those still undecided - I will give some quick takeaways.

1) Law school is what you make of it.

If you have friends who have graduated from law school or who are currently in law school, I am sure you have heard horror stories about exams, professors, and assignments. Most of them are highly exaggerated. I do not want to discredit what graduates or attorneys have accomplished, but with the right attitude and work ethic you will be able to succeed. Just be prepared to read material that should be saved for bedtime.

2) Law school allows you to meet a diverse group of people.

Lawschools are centers for diversity. This allows students to learn about different cultures, ideas, and customs. I find that this benefit will help me tremendously when I enter into practice. I made friends from Armenia, England, the Philippines and Mexico.

3) Law school is a three year boot camp for the bar examination.

Law school is just the beginning, a mere boot camp. The real challenge will come when you have already graduated. The California bar examination is a three day struggle that tests your mental and physical resolve. It will cause nightmares, high levels of stress, and doubt. Law school prepares you for this as best as it can. For example, your grade will come down to one final exam in most cases. It will also train you to write, analyze, and critical think which are the skills that will ultimately be tested on the bar.

Before applying you should weigh the traditional factors, i.e. costs, living arrangements, and the time commitment involvement. However I hope that my takeaways give you some perspective before taking the plunge.

I know I made the right decision. I learned a great deal about important and not so important legal matters. I am one step closer to reaching my dreams.

As far the bar exam goes - I'll keep my fingers crossed. I may even say a prayer or two. Maybe three to be on the safe side.