Most everyone is aware that a legal education does not, of itself, permit a person to practice law.  (You’re probably not aware that New York was among a number of states that allowed lawyers holding J.D.s to title themselves “Doctor,” which I find hilarious, as there is an actual doctorate degree in the legal field, called the S.J.D. But I digress.)  It varies by state, but folks with a J.D. in New York are merely qualified to take the dreaded Bar Exam, a two day test of nearly thirty subjects all at once.  Being tested on one subject in law school is bad enough, I can assure you.

Of course, the law school model of education doesn’t really encourage long-term retention of much of these thirty subjects, and none of us have studied all thirty in school, anyway.  That’s where Bar Review classes come in: supplementary private education that’s the de facto way for almost-lawyers to become barely-lawyers.  I’ve been in that for the last couple of days, learning about the driest bits of civil procedure law New York has to offer, and there I shall remain until early July, when I’m sent off to study on my own for the two-day Exampocalypse in the last week of July.

Today in my class, we covered the Statute of Limitations.  The name itself is about as helpful as a sign in the middle lane of the highway reading “Beware of Signpost.”  Statutes usually involve all kind of limitations: they limit what the government can do, they limit what you can do, they limit what other people can do to you, and so on.  The name needs some creative imagineering; some zing, zork, or kapowza.

Decades-old Simpsons references aside, the specific limitation in this specific statute is a blanket prohibition on your ability to sue or be sued — there’s a time limit on how long you can wait before commencing a lawsuit.  Conversely, if you do something bad and you don’t get sued in X number of years, you’re immune to that lawsuit for the rest of your life.  This sounds straightforward, until the professor explains that there are different time limits for different kind of lawsuits before the SoL will leave you SOL. (Do not LOL.  Puns should never be encouraged.)

By way of some horrifically oversimplified examples, if someone takes up residence on your land, you have ten years to kick them out, after which you lose your right to sue them for trespass, and now the trespasser can actually take legal ownership of that bit of land.  Do try to visit your beach houses at least once a decade, old bean.  Similarly, if you borrow money from someone, and you never agree (or mention) a time to pay your generous friend back, after six years, the lender will lose the legal right to sue you for their money back.

These seem hilariously backwards.  Rights shouldn’t just disappear, right?  If someone’s wronged you, your ability to sue should be able to wait until you can afford top notch lawyers, or until you realize how much it’s going to cost to actually buy all those beach houses upon which trespassers will encamp.  Well, if you think about all the people you’ve ever wronged, you don’t want to be sitting at home with the grandkids in sixty years when armed robo-cops kick down your door and tell you that you’re being sued for saying something mean to someone in high school.¹  It’d suck to keep having to look over your shoulder for the rest of your life.

Also, in Ye Ancient Times, apparently the internet took forever to look up records for things like loans, and peoples’ lifespans were like fifty years shorter, so ten years was actually approximately eight or nine generations of humans.  Back then, when people died or moved or died of Polio or something, there were no good witnesses to loans and rightful owners; it was just case of he-said/ye-said (what did I tell you about encouraging the reckless commission of puns?) that wasted the court’s time.  And since the judge was decrepit at the age of twenty-six back then, he was like two weeks away from retiring and in no mood to have his time wasted.  The solution?  The Statute of Limitations, the “you snooze you lose” law.  As we all know, the strongest laws are the ones that rhyme.²

Now, not all laws date back to the prehistoric days of yore; some were passed in the prehistoric 1980′s.  I’m downright awful at remembering silly little things like “when did this law come into effect oh god I’m going to fail this stupid class and I’ll never get a date to law prom now.”  However, today in class, we discussed the SoL time limit for suing for child support: it’s now 20 years, but it used to be 6 years.  The law changing the SoL from 6 years to 20 years took effect on August 7, 1987.  Where do I know that date from?  Why, it’s the birthday of Sidney Crosby, the most hated man in US Olympic hockey!  He wears number 87, and signed a contract for $8.7 million a year, because his birthday is 8/7/87.  He scored the gold medal goal in overtime, and now I have this horrible Gollum/Bilbo thing going on with him.  Except for that part where I try to kill his nephew and his gardener while they try to save the world.  (Spoiler Alert!)

I’ll remember the significance of the date, because Crosby’s nickname is “Sid the Kid” — the mnemonic refers to child support payments, which take significantly longer to expire since Sid the Kid was born.  Easy as pie.  My resentment towards Crosby finally pays off in a constructive way!

1. Even if that guy Blake totally deserved it.
2. See Banana v. Fanana-fo-fanna-fe-fi-fo-fanna.

Law students read appeals almost exclusively, in no small part because nearly every trial is focused around determining what actually happened: what did Billy say?  What did Billy do?  What did Billy intend?  (That peculiar sound you hear is the sound of ten thousand philosophers at ten thousand typewriters, one of whom will accidentally theorize about the collected works of The Bard when given a large enough graduate student stipend.)  The appeals process focuses on the proper construction and application of laws, and in some cases, on the Constitutionality of the laws themselves.

Take a simple law from New York’s Penal Code: Assault in the Third Degree (120.00):

A person is guilty of assault in the third degree when:

1. With intent to cause physical injury to another person, he causes such injury to such person or to a third person; or
2. He recklessly causes physical injury to another person; or
3. With criminal negligence, he causes physical injury to another person by means of a deadly weapon or a dangerous instrument.

Assault in the third degree is a class A misdemeanor.

Let’s just focus on the first variety of Assault in the Third Degree.  There are a few elements to this:

• • intent to cause
• • physical injury
• • to another person
• •[actually] causes
• • such injury
• • to such person
• • or a third person

Whether or not Billy “intended to cause” is an issue of fact.  Did Billy, in fact, have that intent?  That’s a question for the jury.  Was Billy’s intent to cause a “physical” injury?  Jury question.  Is the injured person “another person?”  (Easy) jury question.  So on and so forth.

Issues of law are the kind that laypeople roll their eyes at.  If Billy scared someone so badly that they had a heart attack, is that a physical injury?   When the law says “causes,” what does it mean?  Billy caused someone to be scared, which is a far cry from stabbing someone, or pushing someone down a flight of stairs.  Further, although Billy may have intended to scare this person, does the law transfer his intent to scare over to an intent to cause a heart attack?  These are all issues that are hopelessly absurd in my elementary hypothetical situation, which illustrates why law professors spend more then seven seconds thinking up exam questions.

So when a judge overrules a jury, and issues a verdict notwithstanding the jury, she is not deciding issues of fact.  The judge is not permitted to decide that a witness is lying, or that there’s simply no way Billy’s alibi could be true.  (As always in our legal system, there are exceptions for outrageously inept juries.)  But after the jury decides what the basic facts are, and then proceeds to misapply those facts to the law, the judge can enter a JNOV.

In my horrible hypothetical, if the jury were to find that Billy did not actually cause the injury to the third person (an element in any of the three varieties of Assault in the Third Degree), but nonetheless convicted him, the judge can overrule the jury because at that point, the issue is a matter of law.  The jury has done its job in finding what the basic facts of the case are, but has failed to properly apply the law.  In this contingency, the judge may step in and assure that a convoluted legal process does not lead to an improper decision.

So in 1907, Learned Hand is considering leaving a big law firm on Wall Street in hopes of becoming a judge.  His father-in-law, aware of how poorly judges are paid compared to high-powered attorneys at law, attempts to dissuade the young Hand.  When Hand makes clear that he intends to be a judge, his father-in-law finally relents, promising to support Mr. and Mrs. Hand, even after his death.  He writes:

“It’s up to me to add ultimately to the family store when my life’s action has been dismissed with costs…”

See?  Old lawyers don’t die, they just get their motions denied, and are remanded for further proceedings in a higher court.

There’s also Congress, which is probably the most conventional source of authority: if you want a new law, you write your Senator or Representative a nice big check letter, explaining your concern.  You’ve also got federal courts, which interpret law and impose balancing tests and invent factors of elements of crimes that Congress failed to draft, owing to the latter’s overall lack of psychic abilities.

But there are also agencies: created by Congressional Act, these entities incorporate a little of all three branches.  While they don’t get to enact legislation, they do get to promulgate regulations.  Those two ideas may sound alike, but I assure you that there are no synonyms in law.

Take the agency most of us focus on this time of year: the IRS.  Congress passes the actual Internal Revenue Code, but the IRS promulgates regulations to supplement the requirements of the code itself.  There’s also something called Revenue Rulings: think of them as IRS newsletters, but instead of birthdays and promotion notifications, they contain guidance about how the IRS plans to enforce its rules and regulations.  You can even pay the IRS to examine your situation and tell how what to do.  In addition to all these sources of authority, you’ve also got a limited variety of courts that rule on the rules and regulations.

With all this to keep track of, the IRS is aware that certain situations can still be a little tricky to sort out. As such, the IRS has still more miscellaneous publications that address common questions.  And The Prestigious Internet has located a lovely one.

The IRS has addressed the apparently(?) common question of whether you can write off a child as a deduction if they’ve been kidnapped.  In the matter-of-fact way that only the federal government can muster, the IRS notes that this tax treatment only applies until there has been a determination that your child is dead, and won’t apply if another family member has kidnapped your child.

I kind of wonder about that last requirement: I’m certain it’s there to close a loophole, but I can’t for the life of me imagine a scenario in which you need your ne’er-do-well brother to kidnap your children.  You know, for tax purposes.

I keep reading about the people in charge of investing all kinds of money into what the media continues to call “toxic assets” – securities that aren’t worth nearly what investors were betting they’d be worth.  This bit from today’s New York Times struck me:

Still, the big banks say they remain relatively healthy and that, with time and support from the government, they will regain their footing.  But many economists, Wall Street analysts and even some bank executives contend that some of the banks are already effectively insolvent.

Even though banks have reported billions of dollars of losses from bad loans, these critics say, the major institutions still carry trillions of dollars in additional toxic assets and are too damaged to resume normal lending.

Trillions?  With a T?  When we the taxpayers floated Citigroup $50 billion, that was less than 2% of the market’s total toxic assets?  At this point, incompetence can’t hope to explain this mess.  The banks who made these investment decisions inflated short-term profits (and short-term bonuses) so much that the people responsible can retire today in comfort for the rest of their lives.

I’ve had this vague sense of how horrible this situation is; I understand that we haven’t hit bottom just yet; I know that $50 billion is a mind boggling amount of money, and I can’t imagine that there are trillions of dollars of these assets that just aren’t worth trillions of dollars.

At this point, I started thinking about one of the fundamental concepts of my criminal law class from last year: the culpable mental state.  While doing something bad (actus reus), you have to have something happening in your brain (mens rea) that makes you responsible in some capacity for your action.

<sidebar> Were I still in college, I’d probably diverge into a long and perilously drawn out discussion of how difficult or impossible it can be to discern the subjective mental state of another person.  The law makes certain allowances for this.  I’ll satisfy my urge to be the Socratic gadfly to my own monologue with a link to the wonderful Stanford Encyclopedia of Philosophy’s entry for philosophical zombies, and pose the question: can we ever see what (if anything) goes on inside someone’s head? </sidebar>

The two relevant mental states with regard to the banks are negligence and recklessness.

Negligence in the criminal sense is characterized in part by the failure to perceive a substantial and unjustifiable risk that a certain result will occur, or a certain circumstance does exist.  As always, I’m oversimplifying – the full text of the law is available on Justia here.  The part of the definition I want to focus on is the existence of a substantial risk that the actor fails to perceive.

In the case of the bankers, I gave them the benefit of the doubt.  When word came out about the toxicity of the banks’ assets, I knew I had heard relatively few details and I assumed that these people are good at what they do.  It’s clear that there was a risk that mortgage-backed securities would burst into flames and plunge the country into a second Great Depression, but the bankers were probably ignorant, right?  Why would you take a risk that will kill your 150 year old investment firm?  It seemed to be an irrational action against self interest that no rational actor would take.

But I’m starting to see the behavior of the banks as less negligent and more reckless.  Recklessness is different from negligence in that the actor perceives the substantial risk before he goes ahead with his action anyway.  It seems baffling that bankers could think there was no risk in having over 30 times as much debt as assets, with so many of their “assets” in the form of mortgage-backed securities that the government has $4.6 trillion tied up in shoring up the market.

It’s obvious now that there was a risk: perhaps it wasn’t certain that the gross overvaluation of assets like mortgage-backed securities would cripple the economy exactly when it did, but there was clearly an ongoing risk.  It’s a multi-trillion liability, and it seems impossible that people who were paid to assess risk didn’t see this possibility.

So where I assumed simple negligence had caused this problem, now it’s hard to believe that this is anything but recklessness.

Similarly, it’s hard to believe that my train of thought wanders into legal definitions.  Halfway to getting my J.D., law school has broken my brain.

It’s actually a remarkably simple process: you get a person called an “incorporator” to sign a legal document called the Certificate of Incorporation which has some Magic Language (dictated by statute). You send the document off to the Secretary of State (of your state, not Ms. Clinton), and some clerk stamps the document, files it, and proceeds to do the same for the next ten thousand documents in the inbox.
The corporation now exists: there are three categories of people that are more or less unique to the corporate anatomy. We’ve all heard about these people, but I for one was almost completely ignorant of their actual relationship to one another and the corporation before law school.

The first group of people by necessity is the Board of Directors. These people individually have little to no power to run the corporation. Any single Director is virtually powerless, but like the Justice League, when they assemble, they wield formidable powers.  By majority vote, they make the big decisions for the corporation like entering into contracts and hiring the second group of people.

The second group of people is the Officers. They have familiar titles like President and Vice President and Treasurer and so on. The officers are elected by the Board of Directors, and hired for lots and lots of money because they’re in charge of running the day to day operations of the corporation. They hire employees like management (who hires other employees like middle managers and janitors) and have meetings and look at charts and pick which widgets they want the company to sell.

The third group of people are the Shareholders. These are people who’ve invested money into the corporation, and in exchange, have the right to get some money back (in the form of dividends) when the company is doing well enough to hand it out.

The Shareholders are the only group that doesn’t owe a very strict duty to act in the best interests of the corporation: the Directors and the Officers can be sued for all kinds of money if they use their powers to do anything to enrich themselves personally: they’re there to serve the corporation and the corporation only.  Shareholders can even take their dividends and use it to start a company that directly competes against the corporation.  A director would be in big trouble if he tried that.

However, in return, the Shareholders have even less power than the Directors. The Shareholders all get together and elect the Board of Directors: generally speaking, (there are always exceptions in the the law, it seems.) you get one vote for one share. This makes sense: the more money you invest in the corporation, the more of a say you get in the election of the people who have all the say in hiring the people who run the company.

Of course, then, if one person owns a majority of the shares, he can elect whomever he likes to the Board of Directors. It follows that this majority Shareholder, controlling the Board of Directors, can then control who is appointed as an Officer.  He can have himself appointed as the President, CEO, or whatever he likes.

Of course, as a practical matter, he’s got the biggest stake in whatever mess he makes, so if he insists on appointing himself President and promptly runs the company into the ground, no shareholder has lost more of their investment than he.  The employees are a different story, however.  They had better hope that if there’s an egomaniacal shareholder trying to get 51% of the shares, he’s got some solid business acumen.

<sidebar> The people who lost their savings were, by and large, operating through brokers.  If ever there were a time when judges should consider sentencing someone to serve as the aggrieved party’s butler, (like that show within a show on Seinfeld) I think this is it.  It’s not nice to throw away other peoples’ money.</sidebar>

The first and most fundamental concept of income tax is deciding what a taxpayer’s Gross Income is.  Your Gross Income is your “raw” income, before you start doing any crazy deductions or hiding money in bizarre off-shore pyramid-shaped tax shelters.  Tax liability is set at a certain percentage of a person’s gross income, so you have to know what that number is before you can decide what percent of it’s owed to Uncle Sam.  

(Note that there’s no single percentage for your entire income.  I don’t have the precise numbers in front of me, but as an example,

• -Your first $30,000 is taxed at 10%,
• -The next $30,000 [income between $30,001 and $60,000] is taxed at 15%,
• -The next $40,000 is taxed at 20%,
• -And then your next $100,000 [your income between $100,001 and $200,000] is taxed at 22%.
• -and so on and so forth.

There’s a popular misconception that if you made $120,000, your entire income would be subject to the 22% tax rate.  Really, only $20,000 would be subject to that 22% tax rate in this fictional tax schedule. The real tax schedule works just like this, but with different numbers.)

The Internal Revenue Code lists a whole bunch of examples of what the IRS will consider gross income: the list isn’t exhaustive, but it does illustrate just how much stuff is gross income that you wouldn’t think should count.

In a rather recursive example, if your employer notices that you owe $15,000 in income tax this year, and promptly gives you the $15,000 to pay the IRS, that $15,000 is actually gross income.  As a result, while you just handed the IRS a check for $15,000, now you’re counted as having made $15,000 more than you thought you did: you didn’t owe $15,000 in taxes, but $18,000.  You owe the IRS $3,000 more.

So now if your employer pays this extra $3,000, you’ll owe an extra $600, and so on and so forth.  This recursion can only go on for so long: eventually, your employer will be tossing you fractions of pennies, and the IRS will be taxing a fraction of those fractions of pennies.  You can whip up an Excel spreadsheet to do this math for you in a few minutes, if you like.  Or you can read what Zeno had to say about these sorts of fractions of fractions of fractions.

So why on earth does the IRS get to keep taking more and more?  If my employer will pay for my taxes, why should that count?  I don’t get to keep the money.  If I’m smart, I don’t ever even touch the money – it just goes right to the IRS.  Surely you can’t tax me for money I never received, right?

Think about it this way: say you backed into Tony Soprano’s favorite Mercedes trying to park your car.  He seems like a nice enough guy: he’s only going to take 10% of what you earn every week until you fix his car.  The next day, you go into work and tell your boss that from now on, you want your company to pay for your rent, so Tony is none the wiser, and you get to keep more of your money.

Well, Tony might not immediately catch on that you’re lying about how much you make.  But when he does, rest assured that Paulie Walnuts and Joey Baggadonuts are going to kick you and your boss in your respective shins very hard.  You can’t trick either Tony or the IRS just by claiming you never touched the money: if you get someone to take care of money you owe (payment to Tony, or taxes to the IRS), that’s gross income.

Just be glad that when the IRS says they’re going to audit you, they don’t mean “beat you into unconsciousness with a baseball bat and stuff you in the trunk.”

One of the biggest treasure troves of irrelevant evidence is character evidence: evidence that has nothing to do with the facts of the case, but instead serves to poison the credibility or reputation of a witness or the defendant.  You can read the relatively simple rules for excluding character evidence for defendants or witnesses, if you like.  They’re not really important for the purposes of this discussion.

This discussion is about a rather odd case we read in my Evidence class.  A widower was suing the driver of a car that hit for wrongful death.  When you sue for wrongful death, there are a number of specific reasons you can claim you deserve damages: there is the physical pain from the actual loss of your loved one, there is the future companionship you would have enjoyed from that person, and there could also be the future financial benefit that person would have provided you.

The first theory is pretty simple to understand: the loss of a loved one due to someone’s negligence is immensely painful.  The second one is also pretty straightforward.  By definition, “loss of a loved one” means the loved one isn’t around to provide comfort anymore, and this leads to some odd discussions.

A defendant can either attempt to lessen the damages he would owe by showing that the yearly amount of comfort was not as great as the plaintiff is making it out to be, or the defendant can try to show that the plaintiff (or the loved one) will/would not be around to receive/provide as much comfort as the plaintiff is claiming.  Think of it like algebra:

(Comfort Provided Per Year) x (Years Both Loved One and Plaintiff Would Be Alive) = Damages

Reducing either variable will reduce the overall damages, but you might imagine that a defense of “well, she was going to die soon, and she didn’t like you very much anyway” will not be very well-received by a jury.

Getting back to the case in my Evidence class, that was exactly the defense used in the widower’s claim against the driver.  While evidence of one party’s character is usually irrelevant to the proceedings, the deceased’s opinion of the plaintiff can be very critical in determining just how much comfort and support the loved one would have provided.

While you can’t ask the plaintiff’s neighbor or mother or pastor what his opinion of the plaintiff is, you can produce evidence of the deceased’s opinion (for instance: a letter the deceased wrote to someone talking about how they couldn’t wait to divorce the plaintiff, because he’s a jerk).  Despite the fact that this is certainly character evidence, this is also relevant because the deceased’s opinion of the plaintiff bears directly on the amount of money the plaintiff could receive.

It’s kind of funny that our legal system has created a process by which humans can be compensated for the loss of the uniquely human relationships that we enjoy, but the process itself dehumanizes the parties involved; we’ve just reduced the relationship and the remedy to morbid algebra.  In a way, this seems very rational: if two parties have failed to reach a conclusion as reasonable human beings, then the best way to handle a situation is to empanel representatives of community standards (the jury) and use objective referees (the justice system) to reduce the whole situation to an indisputable mathematical certainty.

There’s something romantic about something so cold and emotionless.  Perhaps it’s my inner Kantian at work.

Ethical or not, it looks like using [fake names to protect your privacy online] could set you up for doing some hard time in a federal penitentiary. Lori Drew was convicted of violating the Computer Fraud and Abuse Act because the jury deemed that by creating a fake identity as a boy, she had gained “unauthorized access” to the servers of MySpace, whose Terms of Service state that registration information must be truthful. By that logic, anyone using Bug Me Not is setting themselves up for indictment on the same charge.

The rest of the post, including some context if you’ve never heard of the wonderful web service Bug Me Not, is available at Mr. Lewis’s website here.  And if you’re a little shaky on the technological side of some of these issues, I recommend Blown to Bits to help you understand the issues of the day.

The other big concern, of course, is keeping confidential information that your lawyer has confidential.  To that end, not only is a lawyer prohibited from representing both sides of a conflict, but every other lawyer in his firm is prohibited from representing his opponents.  And not just within the same trial, but in any two trials (about the same legal issue) where two clients have diametrically opposed interests.

A lawyer that is found to have a conflict of interest is disqualified from the case, and forfeits the right to bill his client.  Whoops.  All that time you spent working on the case before someone pointed out your conflict of interest?  Turns out it was pro bono!  Congratulations.

I’m simplifying, of course.  But there are implications even in the simple version of the rule.  In the age of huge law firms with an army of lawyers located in offices all around the world, it can be complicated to figure out which branch is representing whom, and which lawyer in which branch is representing whom.

In the olden days, this rule made a lot of sense.  A law firm was comprised of three gentlemen who would sit down for tea every afternoon and talk about what they were working on.  But law firms kept getting bigger and bigger, and eventually, the rule seemed kind of silly.  There were five hundred lawyers in three different offices, and the lawyers from one office couldn’t pick lawyers from another out of a police lineup.

These days, the rule seems like a good idea, because computer networks have made it possible to share more information with more people than ever before.  While two attorneys from two offices on two continents might not have ever met, they can share information (whether intentionally or not) that ought to be held in confidentiality.

At some point, some lawyer got the bright idea to treat conflicts of interest not just as situations to be avoided, but situations to be created.

Apparently, large corporations are continually buying and selling pieces of other companies, attempting to create a hopelessly tangled web of business relationships.  If you own a stake in a dozen companies that each retain a firm, that’s a dozen firms that can’t sue you.  Even better, if you can create a conflict of interest with your opponent’s lawyers during a trial, you can disqualify them from the case, and force new lawyers to come in and start all over.

As far as I can tell, being a good lawyer involves more than just being good at the practice of law.  Sometimes, it involves being a cunning bastard advocate and thinking of all the unorthodox things you can do to represent your client.  Why beat the other team’s lawyer when you can disqualify him?  One of my professors likes to say “you’re not being paid to be ‘fair,’ you’re being paid to do the best job you can.”  There’s a reason jokes like this are so popular.