It has been a great week co-guest blogging here, and thanks to Walter Olson for making it happen and to my co-guest blogger James Maxeiner.  And if I can intra-cross-post, James’s piece on self funding legal aid might be useful for those commenting on my opossum piece; perhaps some form of Germany’s plan for cases against municipalities?  In particular, judges could assess at an early stage meritorious but low-damages cases and assign fees accordingly, and non-meritorious cases can be dealt with earlier.

Anyway, my last post for the week covers the SEC’s proposed new rule reversing the general prohibition on advertising for certain unregistered offerings, such as those under Rule 506.  This was required by the new JOBS act, but it will be interesting to see if it has the effect of allowing more “accredited investors” (basically, people able to afford the risk of buying offerings that are not registered) into this market.  Because over the last couple of years, FINRA, the self-regulating organization that regulates the brokerage industry, has been cracking down on such sales where it believes fraud occurred and imposing more regulations on the brokers who sell such offerings, thus giving them a strong disincentive to look for and sell these offerings.

Have a great Labor Day weekend!

To the relief of many, last year in Turner v. Rogers the Supreme Court again held that there is no right to legal aid in civil matters. The very idea conjured up a nightmare of movement lawyers bringing on class action suits.

But is it right that someone should lose a lawsuit because he or she can’t afford to contest it? The founders did not think so. In 1776 they declared that everyone “ought to have justice and right, freely without sale, fully without any denial.” In 1793 Joel Barlow, a confidant of Thomas Paine in London, lectured European rulers that in America, courts were equally open to the poor as to the rich. Today, tables are turned: Europeans — from Georgia in the Caucasus to Portugal on the Atlantic – have a right that Americans do not have.

The German system of legal aid is a model for the rest of Europe. Here is how Germany can make legal aid available to all who need it without bankrupting the treasury:

(1)    Litigation for everyone is less expensive and faster than here. Attorney’s fees are proportionate to amounts in dispute.

(2)    Legal aid is dependent on a judicial finding at the outset of the case that the party requesting aid has a reasonable chance of success.

(3)    Legal aid consists of state advances to cover court costs, attorneys’ fees and expenses to permit recipients to participate in lawsuits and, if necessary, to obtain private counsel of their own choosing.  Not all recipients get private counsel. When counsel are employed, their mission is not to make law, but to protect their clients’ claims.

(4)    Legal aid is not a gift to recipients but a loan, to be repaid in 48 monthly installments beginning already when aid is granted.

(5)    Legal aid is built into the loser-pays cost-shifting system. When the legal aid recipient wins, the other party, and not the state pays the costs, fees and expenses of the legal aid recipient.

Legal aid doesn’t come free to the states’ budgets in Germany, but to a substantial extent it is self-funding. Proponents of legal aid and court reform have common cause: we will not have legal aid for everyone with need, until we have a legal system that works well for everyone, needy or not.

Read more: James R. Maxeiner, A Right to Legal Aid: The ABA Model Access Act in International Perspective, Loyola New Orleans Journal of Public Interest Law, Vol. 13, No. 1 (Fall 2011), pp. 61-113. Available at SSRN.

 A man and his 12-year old son arrested in California for killing an opossum on their property with a shovel can sue the police for false arrest.  The federal district court threw out their claims, but were revived by the 9^th Circuit.  As reported, the court held that the officers could have had no probable cause for an arrest given that killing an opossum under those circumstances was not illegal.

 Not sure why this needed to go to the 9^th Circuit, and now a further court case on the merits is in the wings.  Our tax dollars, working again.

More here:  http://www.huffingtonpost.com/2012/08/10/lorenzo-oliver-opossum_n_1765097.html

Earlier this week we noted Justice Scalia’s new book, Reading Law. But reading won’t be enough. We need to worry about writing law. In an interview on C-SPAN a few years ago, Justice Scalia said: “But in this job, it’s garbage in, garbage out. If it’s a foolish law, you are bound by oath to produce a foolish result, because it’s not your job to decide what is foolish and what isn’t. It’s the job of the people across the street.”

The current Congress telegraphs that we won’t get well-written, indeed any laws, from across the street.  What to do about it? In most countries, for well over a century, government ministry drafts laws, presents them to the public for discussion, to the government for approval and then finally to the legislature for consideration. In Germany, for example, the Federal Ministry of Justice is a “legislative ministry.” Its principal tasks are to make sure that bills would make good rules and, if adopted, would work in practice.. The legislature and the public consider for enactment-ready well-designed bills. The legislature avoids eleventh hour compromises held together with duck tape.

Read more: James R. Maxeiner, Legal Certainty: A European Alternative to American Legal Indeterminacy?, Tulane Journal of International and Comparative Law, vol. 15, No. 2, pages 541, 556-567 (2007) available at SSRN: http://ssrn.com/abstract=1150522

Thanks for all the comments about the posting.  I think I fixed it!

 

 

Pollutants in the air of state 1 travel downwind and pollute the air of state 2.  How do we solve that problem?  The Clean Air Act sets up a federal system in which the federal government sets up national air-quality standards, with the states left to implement those standards.  In particular, “upwind” states – who generate the bulk of the nation’s power, have to be responsible for their own emissions, lest they pollute the “downwind” states unduly.  The EPA, that engine of a massive rules-emitting machine, believes it gets to have the final, and full, say.  But the DC Circuit disagreed.  The EPA issued rules that not only enforced upwind state’s federally-mandated standards, but the rules also would require upwind states to care of pollutants that came from other upwind states.  As Judge Kavanaugh stated,

“Absent a claim of constitutional authority (and there is none here), executive agencies may exercise only the authority conferred by statute, and agencies may not transgress statutory limits on that authority.”

A principle worth remembering, in areas well beyond environmental regulation.

The opinion can be found here:  http://www.cadc.uscourts.gov/internet/opinions.nsf/19346B280C78405C85257A61004DC0E5/$file/11-1302-1390314.pdf

125 years ago this month the British parliament required that goods made abroad and sold in Britain state their country of origin. Hence was born “Made in Germany.” To the chagrin of the British, it became a badge of high quality and not a warning of inferiority. Now, it’s being used against the Law Society of England and Wales. A few years ago the Law Society published a brochure designed to entice foreign litigants to sue in England. The German Ministry of Justice responded with its own brochure, recently released in a second edition: Law—Made in Germany: global – effective – cost efficient. You can download a free copy at http://www.lawmadeingermany.de/Law-Made_in_Germany.pdf

In the brochure the Minister of Justice writes: “‘Made in Germany’ is not just a quality seal reserved for German cars or machinery, it is equally applicable to German law. Our laws protect private property and civil liberties, they guarantee social harmony and economic success. “

“For entrepreneurs, German law constitutes a genuine competitive advantage. It is predictable, affordable and enforceable. Our law codes ensure legal certainty. Whoever loses his case in court will have to bear the costs of the litigation. Once a court has made its rulings, its judgments are enforced swiftly and effectively. It is primarily for the sake of legal certainty and swift enforcement that German law does not recognize some legal concepts, such as class actions or punitive damages, which are common in other legal systems.”

As an advertising lawyer, I am skeptical of claims such as these as puffery. But after thirty-five years of study and work with the German system, I believe them. The German system is a court reformer’s paradise.

The French and Germans have cooperated on another brochure for both their systems. It is Continental law—global—predictable—flexible—cost-effective. It is available at http://www.kontinentalesrecht.de/tl_files/kontinental-base/Broschuere_DE.PDF.

These brochures are concise introductions to Continental systems. They are accessible to non-lawyers. They are highly recommended for anyone interested in alternatives to our dysfunctional system.

Read more: Maxeiner, James R., Law – Made in Germany: Global Standort or Global Standard? (June 3, 2012). Draft of article for book to be published October 2012. Available at SSRN: http://ssrn.com/abstract=2135684

Whatever happened to buy beware?  A Massachusetts state judge and former state senator  is faced with criminal charges for failing to note the crib she sold via Craiglist lacked a vibrating baby pad.  As reported in the Boston Herald:

“Former state Sen. Cheryl Ann Jacques is due to appear in Newton District Court tomorrow to be arraigned on a misdemeanor charge of larceny by false pretense brought by a pregnant woman who claims Jacques sold her an incomplete baby’s Pack ’n Play Playard on Craigslist.”

This despite the fact that Jacques apparently refunded the purchaser the money and the buyer came to the house to look at the crib before it was purchased.  Jacques could face up to a year in jail and a $300 fine for the charge of larceny-by-false-pretenses.

 

 

 

Justice Scalia (with Brian Garner) has a new book out that is drawing attention as he presents it around the country: Reading Law: The Interpretation of Legal Texts. Its most enduring lesson may not be his proposal for reading texts, but his unequivocal denunciation of common law methods and of law schools for continuing to teach them in the 21^st century. He sees law schools, as Walter Olson does, as “Schools for Misrule.”

Scalia writes: “American legal education has long been devoted to the training of common-law lawyers, and hence common-law judges. What aspiring lawyers learn in the first, formative year of law school is how to discern the best (most socially useful) answer to a legal problem, and how to distinguish the prior cases that stand in the way of that solution. Besides giving students the wrong impression about what makes an excellent judge in a modern, democratic, text-based legal system, this training fails to inculcate the skills of textual interpretation.”

What we need are good rules applied according to their terms. We don’t need every case to be a contest in which we debate which rules are appropriate. Scalia is right: the rule of law is a law of rules.

Read more: James R. Maxeiner, Scalia & Garner’s Reading Law: A Civil Law for the Age of Statutes? (August 18, 2012), available at SSRN: http://ssrn.com/abstract=2132581; James R. Maxeiner, Thinking Like a Lawyer Abroad: Putting Justice into Legal Reasoning, Washington University Global Studies Law Review, vol. 11., no. 1 page 55 (2012), available at http://law.wustl.edu/WUGSLR/Issues/Volume11_1/Maxeiner.pdf , Walter Olson, Schools for Misrule: Legal Academia and an Overlawyered America (2011) http://www.amazon.com/Schools-Misrule-Academia-Overlawyered-America/dp/1594032335 .

As I am a great fan of Walter’s book on legal education (subscription required, alas), I am very excited to be co-guest blogging with James Maxienier.

 

Unlike Walter or James, I am not an academic.  My background is as a lawyer in financial services, first as a regulator and in-house, and now in private practice. In my spare time I’m editor of an online book review, the University Bookman, which covers law and other subjects.

 

The financial system is an exceedingly complex set of relationships and legal obligations. It is also very highly regulated – some op-eds to the contrary – but sometimes so highly regulated that unintended consequences sometimes trumps the regulatory scheme. A recent example:  Knight, a brokerage firm recently caught, through apparent computer programing errors, with a loss of over $400 million earlier this month.  But the error may have been exacerbated by rules enacted in the wake of the last computer programming error, the so-called “flash crash” in 2010.  As reported in the Wall Street Journal

“Desperate to keep the company afloat, Knight Capital CEO Thomas Joyce spoke with SEC Chairman Mary Schapiro Wednesday about having its erroneous trades cancelled. Citing SEC rules, Schapiro effectively turned him down, according to a person familiar with the agency.”

This week I hope to explore some of examples of regulation – in the financial services area primarily, but not exclusively – where the rules don’t seem to work as intended, as well as anything else I think you may find of interest.