Thursday, November 7, 2019
The US Supreme Court is now in session and the list of “hot button” cases to be decided this term will undoubtedly cause considerable discussion if not social unrest. My crystal ball is sufficiently cloudy that I cannot predict the outcome of any particular case, but I am interested in the impact of those cases on the rule of law and its preservation for our future.
The discussion of the rule of law was popularized in modern times by an English Victorian era law professor named A.V. Dicey. He wrote of the rule of law in England, and provided a number of lectures in the U.S. There have been others such as Aristotle, John Locke, Montesquieu, FA Hayek, and Lon Fuller all of whom have written on the subject. The debate around the rule of law is quite lively and, I think, quite necessary to keep it thriving.
There are four universal principles for the rule of law: (1) Accountability; everyone including government is accountable under the law, and no one is above the law; (2) Laws are clearly written, publicized, and applied evenly to protect fundamental rights; (3) open government insures a process by which laws are enacted, administered and enforced fairly and efficiently; (4) a dispute resolution process is present to allow accessible and impartial resolution.
Historically in the US, laws had two sources: (1) the legislatures of the federal government and the states; (2) the evolution of the common law through the courts. For the legislatures, the impetus for the creation of laws was by feedback from their constituents, the voting public, and now, unfortunately, through the persuasion of special interests. The common law evolved through interpretation by the courts, in particular cases, of vague phrases found in the constitution such as due process, equal protection of the laws or cruel and unusual punishment, and in vaguely written legislative mandates through executive regulations thought to be necessary to protect public health and safety.
Legislating from the bench has become a popular political trope, heralded from the left, condemned from the right. I would submit that the evolution of the law through the courts now comes from the same pressure points that prompt legislatures to enact laws.
Public polling is a measurement of public opinion. Polls generally take one of two forms: standard quantitative methods which collect superficial responses and qualitative methods that places people in focus groups who may or may not share backgrounds or views. Both have their strengths and weaknesses that add to their credibility or critique.
So, allow me to discuss the polls on three “hot button” issues: gun rights, abortion and immigration. You can decide for yourself the validity of each poll.
#1: Days after the shootings in Dayton, Ohio and El Paso, Texas, President Trump announced that he saw a very strong appetite for background checks but no appetite for a ban on assault type weapons. An NPR/Marist poll held shortly thereafter revealed that 81% of Americans favored requiring background checks, 59% favored banning assault type weapons and 60% stating they believed it was possible to enact new gun regulations while maintaining the right to bear arms. Congress has created no new laws with a few states adopting new legislation.
#2: Citing the NPR/Marist polls on abortion, 75% of respondents want to keep Roe v Wade in place, while 66% voiced displeasure with the current status of abortion regulations throughout the country. Congress has done nothing; a few states have enacted more restrictive abortion policies.
#3: On immigration, a CBS poll found that 70% of Americans approve the idea of welcoming people from different cultures and felt it was very important to the overall health of our country. In a February 19, 2019 Gallup poll, 30% said they wanted to increase immigration levels, 37% said levels should remain the same, and 31% said they favored a decrease in immigration levels. The President has proposed regulations to reduce the immigration numbers, Congress has not acted.
Such is the effect of public opinion as measured through polling on the legislative process.
The evolution of law through the courts while agonizingly slow and tortured presents a different picture. The courts did not seek cases involving rights, instead citizens brought them forward. Of late, statistics show that the press of cases currently being brought in the courts have special interest backing. Segregation and Jim Crow were overturned when African Americans had no real representation in the legislatures. Roe v Wade was passed when the voices of women could be heard more forcefully in support of abortion rights. The grammar of the second amendment was used to stymie gun regulation when the voices, not of citizens but of special interest, were raised to influence the Supreme Court.
Such is the effect of public opinion on the evolution of law through the courts.
Both the legislative process and the judicial process are necessary to the vitality of rule of law as it relates to all of us on a day- to- day basis. The discussion of the rule of law as it applies to what is going on in Washington, DC today is the subject of another article.
What are your thoughts on the impact of public opinion on modern day legislation or the Courts? I look forward to hearing from you.
Wednesday, February 13, 2019
Happy New Year to everyone. Beginning last year and well into this new year, I have been pondering why, if we live in an increasingly transparent, social, and interdependent world, do I feel like we are evermore polarized, uncivil, and frustrated with the world around us. It is truly a multifactorial problem.
One perspective has me looking at binary thinking. Binary thinking is a way of organizing thoughts and seeing the world as either/or, one thing or its supposed polar opposite. Binary thinking assumes something is either true or false, right or wrong, good or evil, democrat or republican, liberal or conservative, secular or religious... Binary thinking can feel simple and comfortable, it does not require much thought or need for analysis. It is easier to adopt group think or binary thinking than to delve into the details.
The danger of binary thinking is that binaries are often false dichotomies, and it is extremely limiting, forcing people, behaviors, or thoughts into limited extreme positions without looking at the middle or the gray area. So, if one is a republican and a democrat offers a solution, the only binary choices are as republican versus democrat response. Since identify as republican in this scenario, one then slips into the binary. In my opinion, it is the gray areas that offer more potential, more richness and subtlety at revealing workable solutions and may even hold the truth. It would seem that binary thinking and truth-seeking should have a long-term relationship, but it now seems as though to protect one’s group, tribe, or affinity group, one needs to shut out not only the “other side” but the middle ground as well. Identification with a group position is now more important than a middle ground solution. Fealty to ideology is now more persuasive than a nonperfect but workable solution.
Binary thinking does not and should not work for lawyers. Examples follow.
As most of you know, I started the practice of law as a public defender in Denver. The criminal law binary paradigm is guilt or innocence. Then, as now, that binary is not reality. More than 90% of criminal cases are plea bargained somewhere between guilt and innocence. In the federal regulatory world enforced by the SEC, FDA, and other agencies, those companies accused of wrongdoing pay a huge fine but never admit doing wrong or guilt and yet are not declared innocent. In drafting contracts, hardly is there ever a transaction where there is not some escape clause or mitigation of damages clause, i.e,. a middle ground between performance and breach. Lawyers must dwell in that middle ground between the binaries if they are to truly serve their clients.
What really got me interested in the topic of binary thinking is what I see as the continued assault on the rule of law. Examples amongst our elected politicians, corporate executives, and boards of directors is that they consistently find ways around compliance to the strict letter of the law, let alone the spirit of the law, and spin around in that gray area. More pointedly, our judicial system (the last bastion of defense for the rule of law) seems immersed in a thicket of contradictions. The White House and Senate seem to be obsessed with appointing “conservative” judges who espouse a philosophy of Originalism or Contextualism. Originalists argue that courts should say what the law is and not what it should be, suggesting that the related doctrines of originalism and contextualism offer greater certainty to preserve the rule of law than competing principles such as interpreting the Constitution as an evolving document. Originalism is a form of binary thinking that says that if it is not in the Constitution, it is wrong or unconstitutional. Contextualism seems to be a theory which allows the introduction of politics into judicial reasoning, by perhaps looking into the political discussions adopting the law as recorded in the statutory history.
Remember, the constitution is not written is stone, it has been amended 27 times and the Supreme Court has been interpreting the Constitution since its inception to make comprehensible or meaningful rulings related to the Constitution, an evolving society and, at times, to conform to the prevailing political winds. There are those that also suggest that agents of change in American la, should be legislators not judges, again the binary of the legislature versus the courts. Given what is happening in our legislatures, both federal and state, are you confident that our elected officials act as agents for change to fulfill the preamble of the Constitution, which provides: “…to insure the domestic tranquility, provide for the common defense, promote the general welfare and secure the blessings of liberty to ourselves and our posterity...”?
What are your thoughts?
Tuesday, September 25, 2018
Until recently, I thought I was a pretty private person who minded my own business and foolishly believed that no one was really interested in my private life. To paraphrase Bob Dylan, you learn that privacy is something you can sell or give away, but you cannot buy back or retrieve. Today’s world seems not to take privacy very seriously. Loss of privacy worries me. The level of intrusiveness that loss of privacy can lead to was brought to light recently in case I was handling. But before I get to the case, I want to provide a bit of background.
In 1974, Congress passed the Privacy Act (5 USC S552 a). In summary, it provides some protections for citizen privacy when the government obtains personal data. It also created 12 exceptions to the meagre protections it offered. Since then, there have been additional exceptions added, most notably for the Homeland Security agency in the form of Passenger Name Records (PNR) and the Arrival and Departure Information System (AIDS). There are other examples too numerous to review. The government threat of abuse is real and as Ben Franklin said: “They who give up essential liberty to obtain a little temporary safety deserve neither liberty nor safety.” Recall, if you will, the breach of privacy of thousands of Government employees that occurred in 2017.
In addition to the risk of loss of privacy by the government is the risk posed by the private sector. In light of the Equifax breach one year ago, 145,000,000 people’s data history was put in jeopardy. The news cycle was hot for about a week; the Senate said it had to do something (although nothing has been done). The consumer protection board has also done nothing. A year later, the public at risk seems to be in a coma about breaches of privacy. Some writers call this “breach Fatigue” due to the frequency of incidences. Even the recent US Census Bureau survey indicates that fewer people are concerned about loss of privacy today than 3 years ago.
The European Union and the states of Colorado and California amongst other have enacted privacy laws to protect individuals from not only government but also from predatory businesses trying to capitalize on “Big Data” or, more pertinently your personal data. In general, personal data is any data that can be used to identify you. The state enacted privacy laws are a step in the right direction but fall way short of the goal of actual protection of personal data.
Part of my concern stems from the indiscriminate use of social media, like Twitter and Facebook, which leaves trails of information back to the individual. Posting pictures on Facebook is the groundwork for digital facial recognition that may have all kinds of consequences. Or think about your use of LinkedIn where you provide your resume of life details including your employment record. It is not only social media that is concerning. Credit card companies now have data on where you are, where you are traveling to, your buying preferences and how much you spend on a monthly basis.
As a result of the various recently enacted state statutes, business must now adopt policies and procedures that “safeguard” the personal information they collect intentionally or unintentionally. They must also report leaks or breaches of security in a timely manner. As an example of this new requirement for business, a multinational heavy equipment manufacturer has, over the years, collected personally identifiable information about the maintenance people who would maintain their equipment for their customers. The manufacturer did so to align their warranty programs with the proper persons on the customer’s side. The manufacturer had no real interest in who these people were, but they must now adopt robust policies and procedures to protect the privacy of those people.
In the case I previously mentioned, I was retained to collect an overdue account. I went to my standard sources and found the incorporators of the business, its standing with the Secretary of State and the address of the business. I checked the business Facebook and LinkedIn pages where I found a bit more information on the owners. The icing on the cake, however, was a search service. For $29.95 and in less than one hour, I was able to do a criminal records search, a property ownership search including liens, which led to a form of credit search, nearest relatives and their addresses, litigation history, judgments and outstanding warrants. The debtor is a small mom and pop business and what I have learned, all derives from public record. These poor people, I suspect, would be aghast at what is of record, their record, in advance of any litigation without their knowledge or consent.
I am also appalled at the false sense of security peddled by companies that claim that they can protect your credit card and bank account, or at least notify you when there is a breach. They essential do what I did and check some internet traffic on the web for a lot more than $29.95.
So much for privacy.
Do you have a data privacy story?
Tuesday, June 12, 2018
Attendance at a series of recent funerals, jump started my thinking on a variety of subjects, from estate planning to business planning and finally to concerns over seniors.
Before I dive into these thoughts, a quote attributed to Yogi Berra. “Always go to other people’s funerals, otherwise they won’t come to yours.”
The first subject is the recent passage of the federal tax bill which raises the taxable floor on estates from approximately $5,000, 0000 to $10,000,000 per person. The non-partisan Joint Committee on Taxation estimates the number of taxable estates would drop from 5,000 under current law to 1,800 under the new law. By comparison, 52,000 estates paid the tax in 2000 when the exemption was $675,000. Separately, the annual exclusion amount that an individual can give to any number of individuals without eating into the lifetime gift tax exemption was not changed by the new tax law. It will be $15,000 for 2018, up from $14,000 in 2017, thanks to indexing for inflation.
For decades lawyers have been creative on strategies designed to move assets out of estates, using tools like charitable gifts and trusts. While gifts and trusts are still useful tools in certain situations, I think that as a lawyer doing estate planning I can now get closer to the notion of the “simple will.” We should be able to provide directives for the disposition of assets to survivors in a simpler and cost-effective non-probated manner.
Now I realize that thinking about estates is not the most uplifting of subjects, so I switch gears to think about doing business in today’s economy.
A recent ride through Cherry Creek stimulated some nostalgia and additional thinking on this second topic.
Cherry Creek used to be chock-a-block filled with successful mom and pop stores, now long gone. I am the third generation who benefited from ownership of a small retail operation. Now, those mom and pop stores have all been replaced by national chains and franchises. In fact, my family’s store was put out of business by the big box highway stores. In the days of my family’s operation, store owners were a class of entrepreneurs that took pride in building businesses that involved and supported whole families. Those entrepreneurs did not need MBA from colleges. They often attended schools of hard knocks. They built something to last and were the bedrock of middle class America. They were pillars of communities and succeeded or failed in large part on the trust they built with the communities they served. As businesses, they might have been sole proprietorships or maybe corporations. They paid their taxes with much less hand wringing than what seems to go on today. Those small business existed in a less litigious time, but from memory they always had a trusted lawyer adviser upon whom they could call when needed. Seems that in today’s world of DIY everything, this is less the case. Yet, with today's more complicated business atmosphere of taxation, regulation and litigation, the need for experienced counsel could not be greater.
The recent tax legislation reduced the effective tax rate for corporations from approximately 30% down to 21%. The thinking was that reducing the tax rate would make US corporations more competitive globally (not necessarily locally), would allow corporations to do more for their employees, and it would eventually stimulate the economy. There were also some aspects of the bill which were designed to benefit pass through entities like limited liability companies and partnerships.
SBA data from the last census indicates that small business (500 employees or less) represent 99.7% of US Employer firms with 27.9M small business within this class. Large business with at least 500 or more employees represent 18,500 firms. Over three quarters of small business are non-employers with 73.2 % classified as sole proprietors. In the last two decades, about 60 percent of the private sector’s net new jobs have been created by existing establishments and about 40 percent from the churn of startups minus closures. While firm births account for many new jobs, job losses from firm closures are equally important in accounting for net effects to employment levels. So who really benefits from the recent tax bill?
For decades, lawyers have been creatively designing business structures which can take maximum advantage of the tax code and offer maximum protection against liability. Given my strong interest and experience in representing small businesses and startups, I am not seeing much tax benefit from the recent legislation, nor am I seeing increased liability protection, nor am I seeing an increase in accessible capital, the lifeblood of startups, and the recent failure of the farm bill will also hurt the family and small business farmer. On the other hand, well healed real estate partnerships, REITS and other special entities may well benefit.
The third topic that weighed heavily on my mind relates to seniors and crime. The FBI Internet Crime Complaint Center released its yearly internet crime report, which states that over 300,000 consumers reported cyber-fraud and malware attacks in 2017, costing over $1.4 billion.
The threats that were at the top of the list reported by consumers include phishing, ransomware and whaling, as well as tech support fraud, non-payment scams and extortion.
Sadly, but indicative of reality, senior Americans are the most targeted demographic for cyber fraud. Over 50,000 complaints were lodged by consumers over the age of 60 with an estimated loss to these individuals of almost $350 million. Good data, yet few prosecutions were made for all of this crime.
As a patriot and practicing attorney passionate about upholding the law, I am concerned. My point in reviewing these three topics is that it seems that the current government has gone to great lengths in protecting the 1% of wealthy individuals and large business without commensurate concern for the majority of the population, for core of US businesses or protecting the most vulnerable segments of the population. Whether there will be any trickle-down benefit is yet to be determined. Early indications are not promising.