Obama Care Oral Arguments Underway

On Monday, March 26, 2012, oral arguments in front of the United States Supreme Court got underway to hear the legal challenge to the Affordable Care Act enacted by Congress and signed into law by President Obama on March 23, 2010.


The Supreme Court scheduled an unprecedented six hours over three days for oral argument this week after granting certiorari. At issue is the Act's individual mandate to purchase health insurance or pay a tax penalty. two federal appellate courts have upheld the mandate, one declared it unconstitutional and one appellate court declined to decide the issue under the Anti-Injunciton Act, ruling the issue could not be decided until tax payers are actually harmed by having to pay the tax/penalty in 2015.


Monday's oral argument focused mainly on whether the Anti-Injunction Act prohibited the present challenge, and whether the requirement that a tax payer who fails to purchase health insurance is assessed a tax or a penalty, which would dictate whether the AIA applies. There was discussion between the Justices and amicus curiae court appointed counsel Robert A. Long whether the Anti-Injunction Act is jurisdictional, thus robbing the courts of the ability to hear the issue, or directed at the Solicitor General, thus prohibiting the litigants from filing suit.


Nomenclature was an issue regarding whether the assessment is actually a tax or a penalty. Right out of the box, Justice Alito quipped to the Solicitor General for the Department of Justice Donald B. Verrilli, "General Verrilli, today you are arging that the penalty is not a tax. Tomorrow You are going to be back and you will be arguing that the penalty is a tax." When Chief Justice Roberts referred to the assessment as a penalty, attorney for challengers to the Act, Gregory G. Katsas, corrected "taxes, Mr. Chief Justice."


The attorneys were peppered with questions mainly from Ginsberg, Scalia, Sotomayor, Breyer, Roberts and Kegan, with a few questions from Alito and Kennedy. Thomas remained characteristically silent during argument.


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Me and 500 of My Facebook BFFs: A Rambling Stream of Consciousness About Facebook

Okay, so this post is not a legal update. So sue me. Just accept that you will see more nonlegal posts interspersed among my legal analyses from now on.

The other morning I was thinking about how on-line banks and financial institutions these days are requiring users to answer “security questions” to verify identity and keep identity theft at bay.  It then occurred to me,that on-line social sites such as Facebook put their users at risk, because they encourage people to share in a public setting the personal information banks use to verify one’s identity. Perhaps people should not be using Facebook the way we all do because many of the answers to the “security questions” used most often can be found on the Wall of one’s  Facebook page. For example, my home town, my high school, a list of my family members, and now with the new timeline, my job history and places I have lived and the respective dates are all posted for anyone to which I give access to find.  Thus, security questions like mother’s maiden name, city you were born in, first pet’s name, first employer, or even high school mascot  all potentially could easily be found with not too much effort.   To put this in perspective, if one’s security setting allows only friends of friends to see wall posts and information, and one has,  say, 500 friends, each of who have 500 friends, one’s “security” information is potentially accessible to tens of thousands of people.

But maybe the flaw isn’t in the information Facebook has lulled us into voluntarily posting on our accounts, or even in Facebook’s privacy settings.  Yes, I know, this is antithetical to the Facebook bashing of late and accusations that Facebook intentionally makes it difficult to control one’s privacy settings. But it is not as if the type of information posted on Facebook is super secret stuff like one’s social security number. With all the conspiracy theories about Facebook, I have yet to see an accusation that Facebook is gathering social security numbers, ATM PINs, or bank account information.  Realistically, the type of information contained on my Facebook wall is information I would have no problem sharing with a complete stranger I just met.  The usual mindless, boring, get-to-know-you chitchat is not infrequently comprised of where one was born, what high school one attended or what type of embarrassing first car one owned.  I am not often concerned nor do I even consider that the person with whom I might share this type of information is going to steal my identity.  So maybe the flaw isn’t Facebook.  Maybe the real flaw is the type of questions the bank considers “security” inducing.  Maybe the banks should be asking stuff that we do tend to keep super secret, such as what loathsome diseases one has, or one’s criminal history, annual income, number of late payments in the past twelve months.  Maybe using information we would divulge just to be social is not fodder for a security question to verify our identity. After all, it is those mundane details about one’s self that we use to socialize and with which we make friends with one another.  So, maybe Facebook has it right after all.

So, maybe the problem is the number of people we friend on Facebook.   Do we really need to friend everyone we ever knew and his brother?  Do we really have 500 bffs in this world?  Before on-line social networks, we made friends the old fashioned way; we hung out with them.  According to research conducted by the likes of Festinger (1954), Schachter and Back (1950), and Zajonc (1968), the one factor that most predicted whether two people became friends is propinquity.  Throughout different stages of our lives, we share propinquity with different sets of people: the kids on our street in elementary school; the kids in our class in high school; the kids in our dorms in college; the colleagues and/or neighbors we have as young adults; the people who parent the kids that hang out with our kids; and perhaps inevitably, the people whose rooms are next to ours in the nursing home.



As we moved along life, we drop some friends, keep in touch with a select few, and move on to a new set of friends. Part of what keeps us friends is being in close enough geographic proximity to one another so that we may share the little mundane things about our lives.  For example,“Oh! Did I tell you what so-and-so’s response was to my letter (email post 1990s)?” or “My wife wants me to take her to another bad 70’s/80’s/90’s band/concert this weekend.  Wanna come?” or “Dude, I want a rematch on that racquet ball game last week.”  If we didn’t have this semi regular discourse, most people who were in our circle fell out, with the exception of the one or two with whom we kept in touch regardless of where we were in life or where we moved geographically.



Facebook has really changed all that.  Not only do we keep in contact with more people, perhaps people we would even be happier to have lost contact with, but we are kept up to date on all those mundane details on a regular basis.  We post our status constantly. “Made it to the gym today, did 50 push ups, my personal best.” Or “My three year old knocked out his front tooth.” Or “I was offered a new job at Local Big Firm.” Propinquity is now present not only in real space, but in cyberspace.  I was keenly made aware of this revelation when I updated my own status last week to announce my accepting a job offer at Local Big Firm.  I received comments or “likes” from somewhere around 50 separate people.  In my life, I have never had 50 people in anyone circle of friends to which I would have made this announcement and in return received so many heart warming good wishes.  And of course, these 50 people don’t include those closest to me who don’t even have (gasp!) a Facebook account!  When I saw (what I consider) the large number of good wishes, I started thinking about what the 217 people I have friended on Facebook really mean to me. Like many, my (modest) Facebook posse consists of friends and acquaintances from: elementary school, high school, college, neighbors from old addresses, work, family, present neighbors, friends/acquaintances, friends/acquaintances made because of my kids’ friends, and all their brothers. Surely I don’t have 217 bffs, do I??  The propinquity theory dispels this, doesn’t it? I don’t have regular contact and/or discourse with 217 people, except in cyberspace. Can the propinquity theory be applied to cyberspace?  The answer is yes.  Propinquity explains cyberspace just as well as real space.


Here’s the thing.  Facebook gives us the tool to create propinquity in cyberspace.  I had an epiphany that brought this conclusion into focus for me.  I have a friend Matt E. from college (not to be confused with my close friend Matt G. from grad school).  Matt E. and I were close friends in college and for a few years after until our lives diverged.  He got married, I moved to go to grad school.  I haven’t actually seen Matt E. in person since Bush Sr. was President.  If not for Facebook, I likely would never have (recently) gotten back “in touch” with Matt.  By Facebook standards, “in touch” means we friended each other and said something like, “Long time no see!” and left it at that beyond public status updates. But I have read Matt’s status updates and posts.  I was updated on his trip to Korea and saw pictures of his college-aged daughter I have never met.  And presumably, Matt has seen my posts about my latest work-out session personal bests and has seen pictures of my five year old’s cut finger that resulted to an ER visit, along with the other 216 Facebook friends I have. 


Here’s how my epiphany went.  After making my post about my new job, Matt made a short, tongue-in-cheek comment that reminded me just how well he knew/knows me.  That short comment bridged both time and space to bring him back, if only briefly, to being one of my closest friends. Without Facebook, that would never have happened. Without Facebook, I might have looked him up on a trip back home. Maybe.  I might have suggested that we grab lunch. We might have spent the two hours “catching up.” “So, how’s your daughter? In college?? Really???” and that would have been that for another ten or twenty years, if we were lucky. Facebook dispenses the small talk we engage in on a semi regular basis when we are in proximity to each other and that brings us together and keeps us friends.  Even if we don’t act on the information posted to Facebook, e.g., “How was your trip to Korea?” (and really, Facebook relieves us of that social requisite of feigning interest in some subjects), nonetheless, it keeps us friends.  So when Matt thinks of something short and witty to say to me that he knows only I will get, time and space don’t get in the way of him making that comment to me. All he need do is click on my post and type a comment.  Just like that, we shared an inside joke between two friends.  So yeah, I really do have 217, give or take, bffs. Facebook, and all it’s evil information-gathering, makes it possible for me to do so.

So, really, it’s the banks that need to come up with some other way to make our on-line banking more secure. Using mundane facts to put up firewalls to our financial information is just a dumb idea, even without Facebook putting it all out there.


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Just Pay The Attorney Consultation Fee: You'll Thank Me Later

There is a saying among attorneys that lawyers do well in good economic times and bad. Of course, the latter hasn't been so true in the present bad economic environment, simply because collecting what is owed has been more challenging for attorneys than in the past. But for some, the adage seems to be backwards; that in good economic times, one does not need an attorney. This could not be further from the truth. 

As a litigator, it never ceases to amaze me when a new client walks in my door with contract in hand asking me to defend a lawsuit that has been filed against him, and one look at the contract reveals  the clients' ignorance of the contract's contents or the obligations the client agreed to. 

In good economic times, new business associates are giddy with anticipation when they venture into a new agreement together. They are in the honeymoon phase, shaking hands, back slapping, and congratulating each other on their new contractual arrangement, and pouring the champagne to celebrate how much money they are going to make. However, too often one party to a contract is handed a prewritten contract, that, though there may be some negotiation about the salient terms (e.g. how much is the monthly rent, what percentage of profits am I entitled to, etc.), they do not pay any attention to the "boiler plate" language, or do not recognize the obligations to which they are agreeing. This especially occurs where one party has more "bargaining power" than the other.  Generally, it is usually the small business owner who forgoes consulting an attorney to "save money." Thus, while everyone recognizes the need for the pre-nup, love is blind and one party may be blinded as to what the pre-nup should or should not say. 

Every party to a contract should consult an attorney to go over the contract with a fine toothed comb. Parties to a contract should not rely on one attorney to draw everything up, because the attorney must have allegiance to only one party. The attorney either represents Party One OR Party Two, OR the attorney represents the corporation, in which case she is not an attorney for EITHER Party One or Party Two. Small business owners must consult an attorney of their own to avoid buyer's remorse when five years later the deal goes south in an economic downturn. Here are some real life examples I have encountered over the years. 

Client A recognized that forming a corporation provided a layer of protection to keep his personal assets separate from the obligations of the business. Client A formed a corporation and entered into a commercial lease agreement for the benefit of the business, in the business's name only, but then signed a personal guarantee.  Client A did not realize that a personal guarantee made his personal assets available for collection for the debts of the corporation. Had Client A come to me before signing the lease, he would have known what he was committing himself to, and could have avoided incurring thousands of dollars in legal fees.

Client B signed a 10 year commercial lease that stated if he broke the lease and vacated the premises prior to the 10 year term, then even if the landlord re-leased the premises at exactly the same or even higher rent, Client A would still be held to the balance owed for all future lease payments on the 10 year lease. Had Client B come to me before signing the lease, he would have understood this commitment, and could have perhaps negotiated a shorter lease term with an option to renew.

Client C signed a signature page presented to her by her cousin without asking to see the full document. Nothing more need be said here.

Client D signed a purchase agreement for a condominium that stated he was obligated to pay even if he could not secure financing from a bank. Client D did not realize this, but would have if he had come to me before signing.

Client E signed a contract that stated any litigation arising regarding the contract was to be brought in Florida. I had to explain he could not file suit in Nevada, but had to find an attorney in Florida to bring suit there.

Client F was in the business of purchasing and selling real estate by borrowing money from others. Client F put the title in other's names, but believed he "owned" the property based on an oral agreement he had with these other people. Had he consulted me, I could have explained that courts do not recognize oral agreements for the transfer of real property. A written agreement could have been drafted to accomplish his goals and reasons for recording the title as he did.

A couple of things to note: Consulting an attorney before you sign a contract will not make you "bullet proof." Even if after getting the advice of an attorney, you are able to change the terms of the contract so they are more favorable to you (and that is not always possible depending on with whom you are negotiating), there are always arguments that can be made in litigation to challenge even the most "iron clad" contract.  An attorney also cannot tell you what the best business decision to make is, only you can make the business decisions. But an attorney can do two things: (1) Help you negotiate he best terms possible, and (2) explain the ramifications of the contract so you can make an informed decision before signing on the dotted line.

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Noteworthy U.S. Supreme Court Decisions of 2010

Once again, this year, I was mesmerized by the melodic cadence of renowned Professor Erwin Chemerinsky’s lecture discussing the significant U.S. Supreme Court opinions of 2010.  Here is a tongue in cheek recap of some of the more interesting decisions Professor Chemerinsky highlighted.

• Don’t expect a Fourth Amendment right to privacy when sending text messages with employer-owned equipment to your mistress while on the job.

City of Ontario v. Quon, 560 U.S. ___ (2010).

• If you want to invoke your right to remain silent, break your silence and say so.

Berguis v. Thompkins, 560 U.S. ___ (2010).

• Justice Scalia has decided the invocation of the right to counsel while being questioned automatically expires after 14 days.  Thus, the new police interrogation  techniques will be to arrest and Mirandize  a suspect, and if he invokes his right to counsel during questioning, simply wait 14 day periods before interrogating again.

Maryland v. Shatzer, 559 U.S. ___ (2010).

• Locking up your teenager and throwing away the key for anything less than murder is cruel and unusual punishment.

Graham v. Florida, 560 U.S. ___ (2010).

• Criminal lawyers who want to get their resident alien clients off, advise them to plead guilty and then misadvise them a guilty plea will not result in automatic deportation.

Padilla v. Kentucky, 559 U.S. ___ (2010).

• Corporations are people too; at least when it comes to the First Amendment and spending money in election campaigns.

Citizens United v. Federal Election Commission, 558 U.S. ___ (2010).

Professor Chemerinsky has a unique ability to keep participants attentive with not only his distinctive style of speech, but with his humorous side notes and commentary.  This year I noticed that not only do more questions get asked in Professor Chemerinsky's CLE lectures, but the questions are generally the sort one would have asked in one's Constitutional Law class in law school to impress the professor, i.e., statements of opinion or analysis disguised as questions:  "Well, is it your opinion professor that this case modifies the (insert obscure reference to case law not being discussed) case?"

But, I have to admit, listening to my fellow attendees attempt to impress Professor Chemerinsky is almost as much fun as listening to his lecture.

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Finding That Elusive Legal Niche Is Not Always A Good Thing

The ABA Journal reports that a young Las Vegas attorney was so successful after opening his own practice two years out of law school, he had a "breakdown" from the sheer volume of clients.  Citing the RJ, the ABA Journal reports that Jorge Sanchez launched his own bankruptcy practice catering to Spanish-speaking clients just two years out of law school.  Apparently,Mr. Sanchez quickly became inundated with clients, and unable to keep up, struck a deal with Las Vegas attorney Joseph Scalia.But the deal between the two attorneys soured, resulting in what the ABA termed Mr. Sanchez's "breakdown."  The ABA Journal reports that last week the Nevada Supreme Court temporarily suspended Mr. Sanchez's license.
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Ninth Circuit Rules Lower Court Appropriately Considered Award of Attorney's Fees Under ERISA To Plaintiff After Grant of Summary Judgment Against Plaintiff's Claims

On June 24, 2010, the Ninth Circuit Court decided an ERISA case entitled
Simonia v. Glendale Nissan/Infinity.  Where a plaintiff's claim under ERISA 
has achieved "some degree of success on the merits," the plaintiff may seek
attoreny's fees under section 1132(g) under ERISA.

In this case, Plaintiff's claim for continuing disability benefits was dismissed on
summary judgment, and Plaintiff's "degree of success" amounted to Defendant
Hartford agreeing to dismiss its counterclaim for overpayment of benefits due
to retroactive SSDI payments received by Plaintiff, after Plaintiff informed
Hartford that the Social Security Administration subsequently retroactively
reduced his SSDI award.

The Ninth Circuit, relying on the recent Supreme Court case Hardt v.
Reliance Standard Life Insurance Co., 560 U.S. ___ (2010), concluded 
that in exercising its discretion to award attorney's fees, a trial court must apply
the factors enumerated in Hummell v. S.E. Rykoff & Co., 634 F.2d 446
(9th Cir. 1980), to guide the trial court's decision as to whether to award
attorney's fees a determination that the plaintiff has acheived "some degree of
success" under ERISA..
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Federal Court, Rather Than Arbitrator, Had Authority to Rule on Enforceability of Arbitration Clause In Employment Agreement

Last week the United States Supreme Court decided a case originating out of Nevada,

Rent-A-Center, West, Inc. v. Jackson, 561 U.S. ___ (2010).  An employee of Rent-A-

Center filed an employment discrimination suit in federal court, and the employer filed a

motion to compel arbitration.  On Certiorari from the Ninth Circuit, the Supreme Court ruled

that under the Federal Arbitration Act, codified in Title 9 of the United States Code (FAA),

the courts could decide the enforceability of an arbitration clause in an employment agreement 

that stated the arbitrator must decide the enforceability of the agreement as a whole,  

whereas only the arbitrator could decide whether the employment agreement as a whole

was enforceable.

In opposing the motion to compel arbitration, Jackson argued the arbitration clause was unconscionable under Nevada law.  The federal trial court dismissed, stating the arbtration clause prevented it from deciding Jackson's unconscionable argument. Jackson appealed to the Ninth Circuit, which reversed, stating the courts decide the threshold question of whether the agreement was enforceable, affirmed the trial court's finding against Jackson on part of his unconscionable argument, and remanding for the trail court to decide the remainder of Jackson's unconscionable argument.

Justice Scalia delivered the opinion, and pointed out that Jackson's challenge was not to the validity of the agreement but to his manifestation of intent to the arbitration clause based on his unconscionability agrument.  Additionally, Jackson's briefs argued the entire agreement was invalid.  Based on those observations, Scalia concluded that Jackson's challenge was to the validity of the agreement as a whole versus the validity of the arbitration clause, and reversed the Ninth Circuit's decision.

Relying on First Options of Chicago, Inc. v. Kaplan, 514 U.S. 938 (1995), Justice Stevens dissented, reasoning that the arbitration clause at issue did not "clearly and unmistakeably" evince Jackson's assent to arbitration because of his unconscionability argument.  Stevens characterized Scalia's opinion as a "'fantastic' and likely erroneous decision" because it went beyond what the parties asked the Court to decide.  Stevens also asserted that the majority opinion expanded the holding in Prima Paint Corp. v. Flood & Conklin Mfg. Co., 388 U.S. 395 (1967), where the challenge was to the validity of the agreement due to fraud in the inducement, and not to the embedded arbitration clause.  Thus, Stevens would have affirmed the Ninth Circuit's decision.

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There's An App For Bar Exam Torture

It was only a matter of time that the iPhone would be used for evil. The ABA Journal reports that bar review courses are now available as an app in the iTunes store, with, sadly, the same four figure price tag as the live course. Sigh, there goes all the fun out of owning an iPhone if you are a recent law school graduate.
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Does Harry Reid Really Need to Resign?

Okay, so there is no court action on which to report here. But I feel compelled to weigh in (along with scores of others) on the present flap surrounding Harry Reid's unfortunate comments about then presidential hopeful Barack Obama, memorialized for all time in the upcoming book Game Change. I won't bore the reader with quoting Reid's comments once again--if anyone really needs reminding, Google "Harry Reid" and "Game Change" and his comments will be readily found.

The most interesting thing about Reid's comments isn't that the comments were made, because people of color know that racist comments still lurk at every corner and pop up even in their own backyards. What is interesting is that Reid was actually trying to say something positive and those were the words he chose to use. Reid was trying to discuss the reasons he felt his party had a good chance of winning the presidential election. In fact, what Reid said is probably true. It probably was a lot easier for a lot of (white) Americans to cast their vote for Obama because (all things being equal) he came across as more mainstream than, say, Al Sharpton or Jesse Jackson.

But, of course, "mainstream" is not the adjective that Harry Reid used. Even if Reid was trying to make a valid point, his words betray an old-time way of thinking. His words echo a time in our history when it was common to hear racist remarks in polite company and no one batted an eye. Really, this is the way a lot of "old white men" (for lack of a better stereotyping, pigeon-holing descriptive phrase) still talk today behind closed doors and amongst themselves. Remember the Texaco scandal from the late 1990's? If not, click here. So, is Reid a racist? After all, Reid was actually trying to complement Obama rather than denigrate him.

Let's look at it from a different angle. If a Republican Senator had made the exact same comments about a Republican candidate, (hypothetically, say, RNC Chairman Michael Steele), would they sound any more or less racist? Would the public or the media be more inclined to forgive a Republican for making the same remarks? Would we chalk it up to ignorance or insensitivity, but not racism because the comments were an attempt, albiet a poor one, at a compliment of a fellow Republican who just happened to be an African-American?

Let's change the angle again. What if Reid had commented on a different hypothetical African-American candidate from the Republican party and had speculated, hypothetically, that the hypothetical candidate had little chance of winning because America was not ready for a president with dark skin color and strong dialect? Let's face it; those conversations probably took place somewhere in the Republican party when Al Sharpton and Rev. Jesse Jackson were campaigning for the Democratic nomination. Perhaps, by itself, that concept may not be objectionable because perhaps it was true. But let's not forget the specific words Reid used, and this hypothetical discussion takes on a more racist feel.

Let's make that angle even more acute. What if a Republican had made the above hypothetical comments about a hypothetical Democratic candidate? It is not as though the Republican party has the reputation of championing racial equality. Now those hypothetical comments sound even more racist. Now it sounds more like the comments made at that Texaco corporate boardroom.

I guess my point is this: Racist comments are made by all kinds of people all the time, whether the comments are about African-Americans, Asian-Americans or even Native Americans. But what makes the speaker a racist is a lot more complicated. Racism in the United States hasn't gone anywhere except underground, which only makes it harder to accurately point out the racists. Reid apologized profusely, appeared contrite and President Obama accepted his apology. So, is Harry Reid a racist? Who knows. Should he resign? Probably not.

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My Afternoon With Erwin....Chemerinsky, That Is.

During my last minute marathon in December to get all my Continuing Legal Education credits before the year's end, I had the pleasure of landing in a CLE lecture given by Erwin Chemerinsky at the Boyd School of Law. Chemerinsky, is of course a reknowned law school Professor of constitutional law, and is the founding Dean of the University of California at Irvin School of Law. Chemerinsky's unique vocal cadence and his particular brand of humor always makes dry legal subjects sound more interesting. Of course, Chemerinsky's area of law is far from dry; who isn't interested in the nuances of the sexy parts of constitutional law? The CLE did not disappoint as Chemerinsky recapped the most interesting and significant U.S. Supreme Court decisions for 2009. Here are summaries of three of the Supreme Court decisions he discussed that have particular relevance to Nevada.

A Complaint Can No Longer Rely on the Notice Pleading Standard to Avoid Dismissal.
Ashcroft v. Iqbal, 129 S. Ct. 1937 (2009). Despite being less than one year old, Ashcroft is on the verge of being the most cited case in history, according to Chemerinsky. The reason it is so important is that the circuit courts are treating Ashcroft as a new standard in pleading requirements. Notice pleading is no longer sufficient to avoid dismissal. The plaintiff must allege facts that make his claim "plausible," not just a recital of the elements, and the reviewing court may draw on common sense and its experience within the context of the allegations to determining plausibility.

Litigants May Not Contribute to the Presiding Judge's Election Campaign.
Caperton v. A.T. Massey Coal Co., 129 S. Ct. 2252 (2009). Where a judge receives substantial campaign contributions from a litigant, and does not recuse herself, due process is violated. Being that Nevada elects its judges, this ruling has the potential to put a monkey wrench in the Nevada Judiciary. As was reported in depth by the Los Angeles Times back in 2005, Nevada is still a relatively small business and legal community, and it is not unheard of for litigants to contribute to a judge's campaign, even to the judge before which they are appearing. Caperton may change that practice. Even better, Nevada may finally adopt another system for choosing judges.

Certiorari Granted To Decide If Second Amendment Applies to State Governments.
McDonald v. City of Chicago, 129 S. Ct. ___ (2009). According to Chemerinsky, between the years 1791 - 2008, not one law was ever invalidated as violating the Second Amendment. Last year the Supreme Court invalidated a gun control law in Washington DC as barred by the Second Amendment. Now the Court will decide if the Second Amendment applies to state and local government.

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