“For years, Harvard’s experts on health economics and policy have advised presidents and Congress on how to provide health benefits to the nation at a reasonable cost. But those remedies will now be applied to the Harvard faculty, and the professors are in an uproar.” [New York Times via Jonathan Adler; Rich Lowry, New York Post (quoting Twitter: “Karma is a pre-existing condition.”; Michael Cannon, Cato (“one of the most wonderful things I have read in the course of my career”)]
“Structuring,” as readers may recall, is the federal criminal offense of splitting up bank deposits so as to keep them under a threshold such as $10,000 above which banks have to report transactions to the government. Structuring is unlawful whether or not it occurs in conjunction with any other legal offense, as opposed to being motivated by, say, a desire to keep a low profile in general or a sentiment that the government already keeps tabs on too many innocent activities. Nor is there any requirement that the person be aware that there is a law banning structuring; someone who gets wind that transactions over $10,000 are reportable, and decides “What’s up with that? I’ll just make $9,000 deposits”), has broken the Bank Secrecy Act. Indeed, the federal government instructs banks to report suspicious patterns of sub-threshold deposits, and not to warn customers that it is doing so.
So who can engage in structuring and get by with it? Well, it might have a bit to do with who you are:
* On the one hand, as Courtney Mabeus reports in today’s edition of the Frederick News-Post, federal prosecutors yesterday filed a six-page complaint against dairy farmers Randy and Karen Sowers, who own the successful South Mountain Creamery in Middletown, Md. On February 29 Treasury officials showed up at their farm to question them about bank deposits; 45 minutes into that interview, according to the Sowerses, they learned that the federal government had just seized their bank account and the $70,000 in it. The family does a lot of business at farmer’s markets and its cash receipts over a ten-month period exceeded $320,000, the feds say. The News-Post account includes no mention of the family being under suspicion of any offenses other than what U.S. Attorney Rod Rosenstein describes as follows: “The holding back of cash receipts in excess of $10,000 indicates a knowledge of the Currency Transaction Reporting requirement and an attempt to evade it.” The couple is now speaking out about their plight to a wider public; they have hired attorney David Watt, though how they intend to pay him given the seizure of their bank account is not clear from the article. (Update Apr. 21: see also Apr. 18 coverage in Baltimore City Paper; & welcome Radley Balko readers)
* On the other hand, if you are former New York Attorney General Eliot Spitzer, you might not find the federal structuring laws so intimidating. Spitzer had good reason to be intimately familiar with the bank reports system since he had relied on its output in conducting white-collar investigations, and he was “smurfing” deposits in furtherance of conduct that was itself illegal, as he knew well, having crusaded in favor of longer sentences for “johns” as part of his appeal to New York City feminist and legal-services groups. But as Harvey Silverglate points out, “Spitzer, with the help of a high-powered legal team, was able to convince the Justice Department’s lawyers to drop the charges.” Now he goes on TV to denounce the federal government’s failure to prosecute persons in high places.
Maybe they’re too busy going after the dairy farmers.
P.S. The Supreme Court, in a majority opinion by Justice Ruth Ginsburg [Ratslaf v. U.S., 1994], admirably “interpreted the ‘willfully’ element for a currency structuring violation under 31 U.S.C. Sec. 5324 to require proof that the defendant knew the structuring was illegal. Congress responded rather promptly to the Court’s holding by dropping willfulness from the statute.” [White Collar Crime Prof, h/t Sam Bagenstos] (& welcome Prof. Bainbridge, Amy Alkon, Hans Bader readers; & see update.)
In a key victory for plaintiffs and their lawyers, the Massachusetts Supreme Court has for the first time adopted the “loss of a chance” doctrine, which allows plaintiffs to recover money without having to show that it was more likely than not that the charged medical negligence made the difference in their recovery or survival. (Denise Lavoie, “Doctor held liable for a ‘loss of chance'”, AP/Boston Globe, Jul. 24). When Medical Economics surveyed the field two years ago, they found that about half the states had accepted the more liberal doctrine, which runs counter to the Anglo-American “more likely than not” prerequisite for establishing causation. More on the inexact and contradictory standards used in such cases here.
Readers of this site will not be the least surprised to learn that American courts have shown little or no interest in extending the “loss of a chance” doctrine for the benefit of plaintiffs in legal malpractice cases filed against attorneys whose inattention might have (but probably didn’t) deprive their clients of a favorable outcome in court proceedings.
- Nothing new about lawyers stealing money from estates, but embarrassing when they used to head the bar association [Eagle-Tribune; Lawrence, Mass., Arthur Khoury]
- Unusual “reverse quota” case: black job applicant wins $30K after showing beauty supply company turned her down because it had a quota of whites to hire [SE Texas Record]
- Who knew? Per class action allegations, pet food contains ingredients “unfit for human consumption” [Daily Business Review]
- U.K.: “A divorcee who won a £1.4million payout from her multi-millionaire husband is suing her lawyers because she claims she should have got twice that amount.” [Telegraph]
- UW freshman falls from fourth-floor dorm window after drinking at “Trashed Tuesday”, now wants $ from Delta Upsilon International as well as construction firm that put in windows [Seattle P-I, KOMO]
- After giant $103 million payday, current and former partners at Minneapolis law firm are torn by feuds and dissension — wasn’t there a John Steinbeck novella about that? [ABA Journal and again, Heins Mills]
- Small firm that used to make Wal-Mart in-house videos sets up shop at AAJ/ATLA convention hawking those videos for use in suits against the retailer [Arkansas Democrat Gazette, earlier]
- When the judge’s kid gets busted [Eric Berlin; Alabama]
Lisa Brockington hired employment-discrimination firm Tuckner, Sipser, Weinstock & Sipser to represent her in a discrimination lawsuit, and was impressed with her resulting settlement enough that she joined the firm as an office manager. But now Brockington is suing Tuckner, Sipser, Weinstock & Sipser on sexual harassment grounds, making a number of lurid accusations about the firm and about Jack Tuckner’s sexual practices (which the New York Post and Above the Law are kind enough to highlight for one’s titillation). Either the allegations are true, in which case the firm suffers from severe hypocrisy problems in addition to its legal troubles, or the allegations are false, in which case the firm wins settlements for plaintiffs who make false claims. Tuckner’s attorney, David Berlin, does indeed say the claims are false. More precisely, he says “[T]hese irrational and untrue charges are a reflection of the person bringing the charges.” Brockington’s attorney is Louis Pechman. Tuckner regularly appears on television as a talking head on harassment law.
- More on that New Mexico claim of “electro-sensitive” Wi-Fi allergy: quoted complainant is a longtime activist who’s written an anti-microwave book [VNUNet, USA Today “On Deadline” via ABA Journal]
- Your wisecracks belong to us: “Giant Wall of Legal Disclaimers” at Monsters Inc. Laugh Floor at Disneyland [Lileks; h/t Carter Wood]
- New at Point of Law: AAJ commissions a poll on arbitration and gets the results it wants; carbon nanotubes, tomorrow’s asbestos? California will require lawyers operating without professional liability insurance to inform clients of that fact (earlier here and here); and much more.
- Actuaries being sued for underestimating funding woes of public pension plans [NY Times via ABA Journal]
- City of Santa Monica and other defendants will pay $21 million to wrap up lawsuits from elderly driver’s 2003 rampage through downtown farmers’ market [L.A. Times; earlier]
- Sequel to Giants Stadium/Aramark dramshop case, which won a gigantic award later set aside, is fee claim by fired lawyer for plaintiff [NJLJ; Rosemarie Arnold site]
- Privacy law with an asterisk: federal law curbing access to drivers license databases has exemption that lets lawyers purchase personal data to help in litigation [Daily Business Review]
- Terror of FEMA: formaldehyde in Katrina trailers looks to emerge as mass toxic injury claim, and maybe we’ll find out fifteen years hence whether there was anything to it [AP/NOCB]
- Suit by “ABC” firm alleges that Yellow Book let other advertisers improperly sneak in with earlier alphabetical entries [Madison County Record]
- Gun law compliance, something for the little people? A tale from Chicago’s Board of Aldermen [Sun-Times, Ald. Richard Mell]
- Think twice about commissioning a mural for your building since federal law may restrain you from reclaiming the wall at a later date [four years ago on Overlawyered]
While trial lawyers attempt to abolish every-day businesspeople’s right to arbitrate, they continue to use arbitration with their own clients. The Texas Supreme Court, in a December 14 opinion, recently defended John O’Quinn’s right to arbitrate with his clients; the Wolfgang Demino blog has details. (Other clients have had more success against O’Quinn in arbitration.) Note that the Arbitration Fairness Act, the trial bar’s effort to deprive consumers of the choice of predispute arbitration clauses, doesn’t apply to attorney-client relationships. Earlier.
The Civil Justice Association of California says it so well, we might as well just quote them:
“Fee arbitration offers cheaper, faster alternative to litigation.” Where did that headline run? Give up? In the California Bar Journal, the “Official Publication of the State Bar of California! The story beneath it praises fee arbitration between lawyers and clients, saying that arbitrators are reporting that their work “gives people immediate results, unlike protracted litigation.”
The Bar’s presiding arbitrator, Arne Werchick, is quoted as saying: “It’s a neutral program that gives everyone a fair shake.”
We hope Mr. Werchick, who was president of the trial lawyers association in 1980, sends copies of the article to personal injury and other plaintiffs’ lawyers in Sacramento and Washington. They are once again firing up their endless campaign to block people’s constitutional right to contract to settle future disputes by arbitration rather than going to court.
Separately, ABC News parrots the trial-lawyer line with misleading coverage of another arbitration involving Tracy Barker: they falsely report that Barker’s lawsuit was “killed” (when it will in fact be heard in the forum that Barker contractually agreed to litigate in), that the proceedings will be “secret” (when Barker has the right to publicize them the same way she can publicize a trial), and waits until deep into the story to acknowledge that the arbitration clause does not prohibit the employee from bringing litigation against her alleged rapist. Where’s John Stossel and “Give Me A Break” when you need him?
For more on the litigation lobby’s battle against arbitration, see the Overlawyered arbitration section.