Wednesday, January 13, 2010

Executive Compensation Re-Regulation: Congress, the Federal Reserve, and the Securities and Exchange Commission

A team I have been working with just fed updates on a research document to some journals >> I scored a new section on executive compensation re-regulation! Each piece of re-regulation described below focuses on localized risk reducing initiatives in the name of the greater financial system.

Congress

The Corporate and Financial Institutional Compensation Fairness Act of 2009. Introduced by Representative Barney Frank (D-MA) in July, and out of Committee and the House Floor that same month. It is currently sitting in the Senate Committee on Banking, Housing, and Urban Affairs. (Most of the commentary I read suggested it would be dealt with there in the Fall of 2009, however …).

The bill amends the '34 Act to give shareholders a nonbinding advisory vote on all issues of executive compensation. Interesting trick here: institutional investment managers that cast such votes are required to publicly disclose how they voted – each year. There is also some discussion about compensation committee members – rules preventing conflicts of interest (so a prohibition on taking any sort of consulting or advisory fees from the issuer). Second interesting trick: the bill directs nearly a dozen federal regulators to formally convene and create new compensation and disclosure rules. One piece of construction guidance offered in the bill: individuals' specific income should not be disclosed. There you go, Tea Partiers. Here is the text of the bill.

The Federal Reserve ("Fed")

The Fed has issued Proposed Guidance on Sound Incentive Compensation Practices. I was deceived when I first opened the Federal Register; it sounded aspirational, at best. On the contrary – I counted the number of times the Fed threatened a poor supervisory rating or an enforcement action for failing to remedy a deficiency - twice - and the number of times the Fed directed immediate effort by banking organizations to come into compliance – three.

Every banking organization under the Fed's supervision is required to come into compliance with the guidance. The guidance is applicable to both executive employees and lower-level employees; it is more targeted towards any employee whose work responsibilities expose the employer bank organization – and again, the larger financial banking system as a whole – to risk. Interesting here: rather than establishing one rule for twenty different types of banking organizations, the guidance states several principles the Fed wants all of the banking organizations to come into compliance with; how any one bank abides by the principles is self-determined. The principles focus on managing the relationship between incentive compensation and employee risk-taking. Broadly, incentive packages should not encourage employees to risk-take beyond the employer banking organization's internal ability to identify, manage, and support that risk. As a means of collecting best practices (maybe a structural means of pushing compliance?), the Fed has created a scheme to supervise compliance. There are two tracks: one for large complex banking organizations ("LCBOs") and a second for smaller, less structurally complicated banking organizations. LCBOs are expected to offer a compensation plan to the Fed; smaller organizations will be assessed on compliance as a part of their annual risk examination process. You can read the text of the Fed's guidance in the Federal Register here.

The Securities and Exchange Commission ("SEC")

In an effort to better enable investors trying to identify the internal risk assumption and reward of a company, the SEC has adopted amendments regarding the disclosure of all employees' compensation. The new disclosure rules are effective February 28, 2010.

Companies are expected to disclose compensation practices that create the risk of a "reasonably likely" "material adverse" effect on the company. Companies are in fact to list situations occurring with their pay practices and among their employees that illustrate when a compensation practice does in fact create a "reasonably likely" risk of "material adverse" effect. (It appears there was a give-and-take during the comment period on the language.) Stef commentary on the effectiveness of the forthcoming disclosure: the list is explicitly non-exhaustive … The disclosure will be made in a new paragraph in Item 402 of Regulation S-K.

Also as regards company disclosure of stock and option grants in the Summary Compensation and Director Compensation Table – use the aggregate fair value grant date and footnote performance awards to disclose an award's maximum value.

(The SEC also voted to approve amendments: creating greater transparency for investors in determining conflicts of interest as regards compensation consultants; and a variety of disclosures regarding the board of directors, as regards nominee and director qualifications, the board's diversity, and the board's structural leadership.)

The final version of the SEC's amendments can be found here.

Tuesday, January 12, 2010

ExeComp in the News: SEC Goes For the Kill, and then there's Attorney General Cuomo, AIG, and London Bankers

Bank of America. The core of the SEC charges to date (trial beginning March 1, 2010) focuses on the alleged improper BofA disclosure of the Merrill bonsues to its shareholders. The SEC has asked Judge Rakoff of the S.D.N.Y. to add an additional allegation – failure to properly disclose the Merrill 4Q 2008 losses! Rakoff has said the additional allegation can not be added to the current litigation, but the SEC can always file a new complaint. How many lawyers' kids can go through grad school on BofA's tab: check it out here, here, or here.

City of London bankers are threatening to leave town. (Really? You're going to have your spouse leave his job, pull your kids out of school, buy and sell property, and get vet paperwork done on the dog ... Really?) Though admittedly, this is a lot to handle at once: in addition to Darling's intent to levy a one-time 50% tax on bonuses equal to or greater than $ 40,700, the FSA announced recently that compensation for banking employees earning $1.6 million per year will have their compensation deferred - as much as 60% and for as long as three years! Check it out here or here.

In response to the potential 50% tax, financial firms have indicated they will just pay their employees more money (incidentally, at the cost of the shareholders). In this way, the tax will be spread out over the global resources of the organization. Okay. Or, you could just pay the one-time tax on bonuses. One-time. On a bonus.

Remember Andrew Cuomo? Yeah – he didn't think so either, so he's leveraged the Martin Act again and made a demand this week on eight companies that received government financing to disclose their 2009 bonus pool information. When is that election again? Hope it comes and goes before folks realize earlier Cuomo threats leveraging fraudulent conveyance allegations against AIG – which culminated in a very public AIG "we'll give almost all of it back" – has in fact only produced a fractional return of the bonuses. What's a candidate to do? Check it out here.

Speaking of AIG – a new GC is being named: Thomas Russo (previously with Lehman). Here's hoping he rolls with the Compensation Czar's style more easily than his predecessor. Or, maybe AIG could just pay the $183 billion in federal financing back.

Saturday, January 9, 2010

In Case You Missed It This Week

I didn't want to take the first screen of the front page from Emily's First Amendment post yesterday, so am posting my funnies on Saturday morning this week. Have a good weekend!

  • For people with too much money: alleged paraphernalia from Yale's Skulls and Bones Society is up for grabs. MSNbc.

  • The Jack Nusbaum has stepped down as Chairman of Willkie Farr. AmLaw.

  • Sucks to be H&R Block. WSJ.

  • Sucks even more to be an elephant in the circus. NYTimes.

Thursday, January 7, 2010

Academic Freedom: For / From Whom? by Emily Walsh

Academic freedom exists as a controversial, yet “special concern” of the First Amendment. Keyishian v. Bd. of Regents of the State of N.Y., 385 U.S. 589, 603 (1967). The purpose of academic freedom is to promote the free exchange of ideas in an academic setting, which many would argue is the cornerstone of democracy. The Supreme Court has recognized two kinds of academic freedom – academic freedom for the university as an institution, and academic freedom as a personal, individual right. Sweezy v. New Hampshire, 354 U.S. 243, (1957); see also Regents of the Univ. of Michigan v. Ewing, 474 U.S. 214 (1985). In Sweezy, the Supreme Court promulgated four essential freedoms of a university to determine who may teach, what may be taught, how it shall be taught, and who may be admitted to study. 354 U.S. at 262 (Frankfurter, J., concurring). The Court also recognized that the First Amendment protects the right of academic freedom for university scholars. Sweezy was a professor at a public university who resisted government inquiry into the content of his lectures. 354 U.S. at 236–38. The Court found that the government’s investigation “unquestionably was an invasion of [the professor’s] liberties in the areas of academic freedom and political expression” and cautioned against the government treading in those areas. Id.

As expected, the rights of the institution sometimes conflict with those of the individual, as professors and administrations clash over control of the classroom. The Courts of Appeals have split regarding the rights of individual professors to be free from excessive institutional influence. For instance, the Second Circuit recognized a public university professor’s academic freedom to discuss controversial topics in his classroom. Dube v. State Univ. of N.Y., 900 F.2d 587 (2d Cir. 1990). The Sixth Circuit found a public university’s ordering a professor to change a student’s grade compelled the professor’s speech, violating the professor’s First Amendment right to academic freedom. Parate v. Isibor, 686 F.2d 821 (6th Cir. 1989). On the other hand, the Third Circuit found that the assignment of student grades is not professorial speech, but instead part of a university’s essential freedom. Brown v. Armenti, 247 F.3d 69 (3rd Cir. 2001). Similarly, the Fifth Circuit found that an administrator who changed a student’s grade over a professor’s protestations did not violate the professor’s First Amendment right to academic freedom. Hillis v. Stephen F. Austin State Univ., 665 F.2d 547 (5th Cir. 1982).

The Seventh Circuit extended a professor’s right of academic freedom to researching, finding that First Amendment protection “extends as readily to the scholar in the laboratory as to the teacher in the classroom.” Dow Chem. Co. v. Allen, 672 F.2d 1262, 1275 (7th Cir. 1982). Likewise, the Eighth Circuit recognized two professors’ academic freedom as “a ‘special concern of the First Amendment.’” Burnham v. Ianni, 119 F.3d 668, 670 (8th Cir. 1997). Lastly, the Ninth Circuit found that a university’s application of a vague sexual harassment policy to classroom speech violated a professor’s academic freedom. Cohen v. San Bernardino Valley Colll., 92 F.3d 968, 971–72 (9th Cir. 1996).

When recognizing academic freedom for the individual, some Courts of Appeals also concede that institutional academic freedom does not supercede the academic freedom of professors. For instance, in Piarowski v. Illinois Community College District 515, the Seventh Circuit found that academic freedom is used to “denote both the freedom of the academy to pursue its ends without interference from the government, and the freedom of the individual teacher. . . to pursue his ends without interference from the academy.” 759 F.2d 625, 630 (7th Cir. 1985). Likewise, the Sixth Circuit observed that academic freedom thrives not only on the uninhibited exchange of ideas inside the classroom, but also on the “‘autonomous decisionmaking [of] . . . the academy itself.’” Parate, 867 F.2d at 826 (quoting Ewing, 474 U.S. at 216 n.12). Therefore, academic freedom of the institution, while important, does not supplant academic freedom of the individual. The right of the professor prevails because democracy depends upon the freedom of inquiry and expression, particularly in the academic setting.

Compensation Czar Feinberg is "Disappoint[ed]"

The biggest disappointment, I think, is that under the statute my jurisdiction is so narrow, and so circumscribed, that I have no real direct mandatory power over other Wall Street or other national companies.

Kenneth Feinberg to Bloomberg's Judy Woodruff.

Former BofA GC Mayopoulos Can't Get a Break

Sort of - he did receive nearly $ 3 million for his work 2009 work as Fannie Mae GC. That is several times the amount I owe in student loans ... several times several.

But Corporate Counsel is reporting this morning he's been pulled into the executive compensation fray. In light of the Christmas Eve announcement of federal backing for Fannie Mae, Mayopoulos' compensation is coming under discussion of "is this appropriate or not?"

Check it out here.

Photo credit: Corporate Counsel.

Wednesday, January 6, 2010

Bank of America, AIG, and Comverse

I have a post I am writing on dischargeable suits in business bankruptcy, but am right now pressed for time (and since we're all subject to the nightmare that is the first week back from the Holiday, am summarizing here articles I would have otherwise turned into a post >> thanks for your patience!).

AIG GC Anastasia Kelly's threat to walk in light of Compensation Czar Feinberg's December rulings on pay was real - she is in fact leaving, and with several million in severance compensation. This blawg's discussion of Compensation Czar Feinberg can be found here.

My most favorite legal actor right now, Bank of America!! As we all prepare for the March 1 trial date, Rakoff of the S.D.N.Y. ruled Monday that BofA would not be able to present expert testimony that media reports of the Merrill bonuses constituted disclosure to shareholders. This blawg's discussion of BofA can be found here.

Part of Comverse Technology Inc.'s $ 225 million stock option backdating settlement will include a $1 million contribution by former GC William Sorin (which in exchange will drop a pending suit waged against him by the company). Some of this blawg's discussion of stock option backdating can be found here.

Sunday, January 3, 2010

Introducing Guest Blawger Emily Walsh

I am quite happy to introduce Emily Walsh here as a Guest Blawger for the next month.

Emily graduated from St. John's University School of Law just this summer; she resides and is licensed in New York state. While in law school, Emily was a senior staff member of the New York International Law Review and has had her legal research and writing published. See Microsoft v. Commission: An Article 82 EC Analysis, 21 N.Y. INT'L L. Rev. 77 (Summer 2008). She also sat on the Executive Board of the Moot Court Honor Society and acted as Special Events and Budget Coordinator. Emily was a Semi-Finalist in the Judge Milton Mollen Moot Court Competition and a Quarter Finalist in the Roy L. Reardon Moot Court Competition. She has also excelled academically, qualifying for Dean's List during several semesters at St. John's, and completing her Bachelors with honors from the University of Mary Washington.

Emily's work experience includes her most recent summer at the law firm of Stroock & Stroock & Lavan. She was extended a post-graduate offer after working on matters including securities and litigation. Separately, Emily has worked as a Business and Legal Affairs Intern with RCA Music Group, researching and writing on matters of intellectual property and the performing arts.

Welcome Emily! Am happy you're here this month - have fun!

Friday, January 1, 2010

In Case You Missed It This Week

*Happy*New*Year's*!! Very Best Wishes in 2010!

  • Dow finishes year with 19% gain. WSJ.

  • Everyone loves 2009 recap videos - here's one from the infamous Jib-Jab. The Atlantic via ATL.

  • Notable federal wedding engagements with the Holiday Season: Orszag and Volcker. Cnn and BusinessWeek.

  • Tiger Woods' sex = $12billion loss. Examiner.

Photo credit: Semnoz at Wikimedia Commons.

Wednesday, December 30, 2009

UPDATE: executive compensation, corporate governance, and securities

I am so tired I want to scratch my eyes out. And so in lieu of going blind, I am only posting updates of some of what has transpired over the last two weeks regarding some of my pet issues. FWIW - presented here briefly to bring this blawg up-to-date. Thanks - have a *Great* New Year's!!

Bank of America

So with only two weeks left in the year, and right after they repaid their federal funding, BofA chose a new CEO ... who knew it would be the same guy who had a hand in the way the Merrill merger closed and who did not impress Congress while testifying about it. Oh, and FYI: the SEC has broadened its investigation.

Bank Closings

We're now up to 140 banks the FDIC has closed in 2009 alone. Good times.

Banker Bonuses

France follows the U.K. and levies a hefty tax on banker bonuses. Some call it "unfair."

Goldman is a veritable money machine, but there are rumblings inside that the "ethos" has changed ... which is largely of no importance to the demonstrators on the street who still want to see the firm burn.

Outgoing Morgan Stanley CEO John Mack has, for the third year in a row, rejected his year-end bonus. He noted the "unprecedented environment" and "extraordinary financial support" the federal government has used to buttress the banking industry. Morgan Stanley itself is modifying its compensation structure; nothing is definite yet, but rumour is that nearly 2/3rds of executives' pay will come in the form of stocks and will be subject to a clawback provision.

And whether you needed a rumour to confirm it: that all important meeting between banking heads and the President was more show than anything else. From whose perspective, I wonder ...

Compensation Czar

Citi Group and Wells Fargo got out from under TARP restrictions, including Kenneth Feinberg's executive compensation rulings. Good week for Citi - they also got a tax break.

It was announced just yesterday that GMAC will receive several billion more in federal funding.

And just as we learn about the inner turmoil AIG faced as it melted, we shouldn't be surprised bonuses promised to NYAG Cuomo to be be repaid are slow in materializing ... Oh, and Feinberg's recent rulings were modified in light of some fits thrown at AIG.

Re-regulation

The ABA is out to destroy it.

Barney Frank's Wall Street reform package includes significant regulation of the credit rating agencies, including offering investors the explicit right to sue the agencies.

Stock Option Backdating

Broadcom criminal suits are dismissed; all three. Just today, then, Broadcom antes up to settle outstanding shareholder suits.

Similarly, Comverse settles for a record amount, represented by our favorite counsel du jour, Wachtell.

Sunday, December 27, 2009

THE CORPORATE PRACTICE OF MEDICINE DOCTRINE

The Corporate Practice of Medicine Doctrine (the “CPMD”) prohibits non-physicians from the practice of medicine. The CPMD is manifested in three ways: (1) a non-licensed person or corporation cannot employ a physician to practice medicine; (2) entities that provide health care services cannot be owned or controlled by non-licensed persons or general corporations; and (3) a licensed professional may not share a professional fee with a non-licensed person or entity, because such an act is considered to be assisting an unlicensed person to practice medicine. Nicole Huberfeld, Be Not Afraid of Change: Time to Eliminate the Corporate Practice of Medicine Doctrine, 14 Health Matrix 243, 244 (2004). Its origin was based on public policy arguments for providing safe and effective medical services to patients.

During the nineteenth century, medical practice was not necessarily inferior, but it was “insecure and ambiguous.” Paul Starr, The Social Transformation of American Medicine: The rise of a sovereign profession and the making of a vast industry 81 (Basic Books, Inc., Publishers 1982); see id. at 85 (“The status of the medical profession, though insecure, was probably higher than its objective economic situation might suggest. . . . On the one hand, physicians felt a need to maintain an image of a cultivated, respectable, learned profession; on the other, the reality was that many doctors had little education and often, when starting out in practice, could barely support themselves.”). Physicians faced immense competition not only with themselves, but also with “’irregulars’—quacks and healing sectarians” who did not obtain a traditional medical education. Sara Mars, The Corporate Practice of Medicine: A Call For Action, 7 Health Matrix 241, 247 (1997).

The corporate involvement in medicine emerged in two forms: (1) “contract practice,” where corporations employed physicians to provide medical services to their employees, and (2) “corporate practice,” where physicians’ services were marketed to the public by corporations which either employed physicians or contracted separately for their services. Adam M. Freiman, The Abandonment of the Antiquated Corporate Practice of Medicine Doctrine: Injecting a Dose of Efficiency into the Modern Health Care Environment, 47 Emory L.J. 697, 701 (1998). The corporate involvement of medicine alarmed the leaders of the medical profession who maintained that such involvement would result in a lower quality of care to patients. Id. at 702. These “commercial intermediaries,” focused mainly on profit share and contracted with doctors to give treatment at low rates, which usually meant lower-quality medical services. Starr, supra, at 199. The American Medical Association (“AMA”) spoke out by adopting a statement urging physicians to resist the further expansion of contract and corporate practice. Freiman, supra, at 702. Over time, however, a conflicting efficiency rationale due to the rise of health care costs has been relied upon to chip away at the doctrine. The result is that the application of the CPMD varies considerably across the states with no clear indication of the doctrine’s future.

Various measures of health benefits like health promotion, rescue and relieving patient suffering are all essential features of health care. Einer R. Elhauge, Can Health Law Become A Coherent Field of Law?, 41 Wake Forest L. Rev. 365, 381 (2006). Therefore, the inception of the CPMD is based on valid grounds. However, the health care industry has changed significantly since the nineteenth century, particularly in regards to the need to contain the costs of health care services. These other essential features, costs and tradeoffs, raised by health care explain why the current scope of the CPMD is assorted. There must be a balance of both competing interests. States should try and balance both the economic and patient-centered goals when applying the CPMD and apply the doctrine in a consistent manner.

Friday, December 25, 2009

In Case You Missed It This Week

*Happy*Holidays*!! Have an excellent Holiday weekend!

  • What kind of great gossip has been going on at Dickstein Shapiro? AmLawDaily.

  • Susan Sarandon and Tim Robbins have split after 23-unheard-of-years as a Hollywood couple. Dlisted.com.

  • Nice change of pace here: positive advice being given to young attorneys. Law.com.

  • Michael Vick, who spent 18 months in prison for dog-fighting, is evidently now "courageous." Yahoo Sports.

  • "Man Sought by Police For Sniffing Butts." HuffPo.

  • "Unprecedented Ernst & Young Settlement." AmLawDaily.

  • Monica Lewinsky is back in the headlines. Politico.

Photo credit: HuffPo.

Monday, December 21, 2009

Heart Balm Actions: Does it protect the sanctity of marriage or is it destructive to family life?

I first learned of Heart Balm Actions while studying for the New York Bar exam. These antiquated laws, which are no longer valid in New York, date back to when a woman was considered property. There were five possible causes of action: (1) “breach of promise to marry,” a tort action for when an engagement was broken; (2) “seduction of an unmarried female,” an action belonging to an unmarried woman’s father against the seducer; (3) “criminal conversation,” a tort action in which the innocent spouse would sue the paramour for committing adultery with the other spouse; (4) “alienation of affections,” an action against a third-party interloper (sometimes a mother-in-law) who turns one spouse against the other spouse; and (5) “jactitation of marriage,” an action against someone who makes a widespread dissemination that the complainant is married to someone he or she is not married to.

While abolished in New York, there are still seven states that allow the suit of alienation of affection: Hawaii, Illinois, Mississippi, New Mexico, North Carolina, South Dakota and Utah. There has been recent focus on the laws of alienation of affection and criminal conversation because of the publication of extramarital affairs of public figures, such as Tiger Woods. See Wayne Drash, Beware cheaters: Your lover’s spouse can sue you (2009), http://www.cnn.com/2009/LIVING/12/08/cheating.spouses.lawsuits/index.html. Proponents of this law say that the threat of such legal action helps protect the sanctity of marriage. However, does it? Even the use of the word “balm,” defined as “a soothing restorative agency” suggests a different notion. http://www.merriam-webster.com/dictionary/BALM. Heart Balm actions do not protect the sanctity of marriage and/or deter extramarital relationships; rather, they simply offer the jilted spouse with a vengeful tool.

The tort of alienation of affection originated in the Teutonic tribes. Bruce V. Nguyen, Hey, That’s My Wife! – The Tort of Alienation of Affection in Missouri, 68 Mo. L. Rev. 241, 243 (2003). In their culture, a wronged husband could kill his wife’s lover if he found the lover and his wife engaging in adulterous acts. Id. As time progressed, however, such extreme measures were no longer allowed. Id. Instead, the husband could extract a financial penalty from the lover, which would be used as a means to purchase a new spouse. Id. As successors to the Teutonic tradition, the Anglo-Saxons provided a cause of action for tortious interference with the marital relationship. Id. at 244. The basis was that the wife was considered to be the husband’s property, the loss of which permitted the husband to seek compensatory damages. Id. Eventually, English common law created what are now known as the modern-day torts of criminal conversation and alienation of affection.

Over the course of the second half of the twentieth century, however, most states have eliminated the tort of alienation of affection because the tort failed to preserve marriages and merely “invite abuse.” Id. at 248 (Wyman v. Wallace, 615 P.2d 452, 455 (Wash, 1980) ( holding that the tort failed to preserve marriages, the court system could not effectively police out-of-court settlements, the tort promoted blackmail, no standards for assessing damages existed, and successful prosecution of the suit amounted to little more than the sale of the spouse’s affections); see also Fundermann v. Mickelson, 304 N.W.2d 790, 791 (Iowa 1981) (stating that the tort failed to preserve the family unit and that no party could recover for the loss of affection from the other spouse)); Hoye v. Hoye, 824 S.W.2d 422, 427 (Ky.1992). Plaintiffs are often able to extract generous settlements by threatening to bring the defendant’s reputation into question. Nguyen, supra, at 248. Such settlements amount to legally sanctioned blackmail. See id.

Friday, December 18, 2009

Published! Allen and I scored a Special Feature on Law.com

(Gratuitous self-congratulations - please forgive! - but wanted to drop a quick post: Allen and I have been working hard to get several short articles into legal publication, and one of our pieces was picked up this week. Very exciting!)

Executive Compensation at a Turning Point >> please check it out if the topic interests you!

In Case You Missed It This Week

  • This is only one of the many reasons law school was a dark, dark time. (Good luck with finals!) ATL.

  • "Weil's Lehman Legal Bill Reaches $127 Million." AmLawDaily.


Photo credit: Ananova.

Tuesday, December 15, 2009

How to protect copyrights in choreography: Registration with the U.S. Copyright Office

Intellectual Property ("IP") is not my practice interest, but I was helping a non-profit with a project and wanted to share some of the bigger chunks of information I found. The non-profit is a dance company that wanted to know how to protect the IP rights of their performances.

The IP involved with choreography, or more broadly performing arts, is protected by copyright under the Copyright Act of 1976. Copyright owners have the (mostly) exclusive right to perform, display, and publish their work. A copyright owner could be the individual author, a separate claimant by agreement or employment, or an organization. Although copyright attaches at the authorship of a work, registration with the U.S. Copyright Office ("Office") is required prior to the pursuit of any infringement litigation. Unless a copyright is a work made for hire, a copyright endures for the life of the author plus seventy years. Unless a copyright is renewed, when the copyright period comes to an end the work will enter the public domain and will be available at anytime to anyone be used in anyway (without permission and without paying fees).

Published and unpublished dramatic works can be submitted for registration via electronic process at eCO. eCO's interface is enormously user friendly and has advantages over paper filing: quicker turnaround (approximately nine months contrasted to twenty-two), cheaper ($35 contrasted to $50), and allows the user to track the status of the application for registration. During the electronic application a copy of the work must be sent to the Office. In the case of choreography, the copy should either be a video or precise description of the work. If the work is published, two physical copies must be sent to the Office after submitting the electronic application for registration (eCO will produce a shipping slip to be included with the physical mail). If the work is unpublished, only one copy is necessary and can be submitted electronically via eCO.

After the application is submitted, the fee is paid, and a copy of the work (or copies in the case of a published work) is appropriately submitted to the Office, the Register of Copyrights ("Register") reviews the application and work. The applicant will either receive a certificate of registration with an official seal, or a notice of refusal. If the applicant receives a certificate, the registration is effective the day the application, the fee, and the copy of the work were received in acceptable form to the Office.

"Publication" vs. "Performance." While a dance recital with a public audience is a performance, it is not a publication. "Publication" in this regard requires the performance to be released in a medium to the general public without any knowledge of what that public's intent is as regards the distribution. So for example, if performances were to be placed on a DVD and sold online; this is publication. "Publication" is not satisfied, however, by releasing the performance in a medium to a known group of limited size which has a known and limited purpose for that distribution (that, in fact, is called a "limited publication").

A "Work Made for Hire." The duration of the copyright is slightly different, but who owns the copyright is completely different. To determine if a work is made for hire, first determine if the author is an employee or an independent contractor. An author might be an employee if the employer has control over the work and over the author. If the author is an employee, you must determine if the work was created within the scope of the author's employment. If you answered yes to both inquiries, then the work is probably a work made for hire. Alternatively, the author may be an independent contractor whose work was especially commissioned under an agreement where the work is exchanged for compensation, etc. If so, it must be determined if the work satisfies one of several statutory categories: "for use as a contribution to a collective work, as a part of a motion picture or other audiovisual work, as a translation, as a supplementary work, as a compilation, as an instructional text, as a test, as answer material for a test, or as an atlas." Again, if both inquiries are satisfied, then the work is probably a work made for hire. Unless an agreement exists saying otherwise, works made for hire give the both the authorship and the copyrights to the employer. Works made for hire are protected by copyright for ninety-five years from the date of publication or one hundred and twenty years from the date of creation (whichever occurs first).

The U.S. Copyright Office help line is accessible at (202) 707-3000 (M-F, 830a-5p EST).

Library of Congress ("Library"). Among the published works sent to the Office for registration, the Library has discretion over what it will include in its collection. The Library does not take unpublished works. Any published works accepted by the Office for registration that are not chosen by the Library will be retained on file with the Office for the life of the copyright.

Missing school? Free online lectures and podcasts

I was forwarded this information last week via a LinkedIn group, and thought someone out there might find it interesting. It is a collection of links that host videos of well-known professors giving lectures.

Proviso: Forward Movement makes no claim about the quality, authenticity, or permissions involved as regards the following links. (Though many of the organizations hosting the video are of fair repute, so am assuming they have addressed all the legal P and Qs).

FWIW, in no order or format apart from that contained in the original document. Enjoy!

http://academicearth.org/

http://ocw.mit.edu/OcwWeb/web/courses/av/index.htm

http://worldlibrary.net/Collections.htm

http://freevideolectures.com/

http://videolectures.net/

http://lecturefox.com/

http://www.ted.com/

http://ocw.nd.edu/
Courses include detailed lecture notes, a calendar of teaching assigned for each class, and a description of major assignments.

http://ocw.tufts.edu/
Offers student-made documentaries about social issues as well as a list of weekly readings.

http://itunes.stanford.edu/
Professors Martin Evans and Marsh McCall lecture on great works by Virgil to Voltaire.

http://itunes.berkeley.edu/
Berkeley's lectures online.

http://webcast.berkeley.edu/
Alternate site for Berkeley lectures.

http://scholarspot.com/

http://www.varsitynotes.com/

http://www.learnerstv.com/

Entrepreneurship podcasts:
StandfordeCorner http://ecorner.stanford.edu/authorMaterialInfo.html?mid=1554
Harvard Business School http://www.hbs.edu/entrepreneurs/


http://oedb.org/library/features/236-open-courseware-collections

http://www.careervoyages.gov/education-videos.cfm

http://www.sba.gov/tools/audiovideo/deliveringsuccess/index.html

http://www.sba.gov/training/index.html

http://www.sba.gov/tools/audiovideo/Podcasts/index.html

http://www.openculture.com/2007/07/freeonlinecourses.html

http://www.videomd.com/featured_videos.aspx

http://www.freesciencelectures.com/

http://streaming.discoveryeducation.com/

http://education.usgs.gov/common/video_animation.htm

http://www.nachi.org/advancedcourses.htm

http://education-portal.com/video_library/index.html

http://www.serve.org/nche/ibt/aw_video.php

http://www.practisinc.com/interactive/patient-education-videos.php

http://scholarspot.com/

http://www.varsitynotes.com/

http://www.learnerstv.com/

http://www.ovguide.com/education.html
Other educational video links.



Hat-tip: JD Velasquez.
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Monday, December 14, 2009

David vs. Goliath: Even New Lawyers Can Change the World



Everyone has a different reason for going to law school. Many see it as a generalist degree on the way to a career in business, journalism, writing, or teaching. Others are lured by the prospect of prestige, wealth, or at least job security. Then there's always that small subset of lawyers who go into the practice because they want to have a lasting impact on the world. They imagine themselves championing for the rights of the downtrodden and using the courtroom as a venue to right the wrongs of others.

Many lawyers attempt to accomplish this last objective by accepting lots of pro-bono cases and arguing for one lost victim of the legal system at a time. The world needs more dedicated lawyers who accept these cases. But individual justice is a hard way to make a difference, and the root causes of our clients' problems--poverty, family circumstances, addictions, and poor health, often don't go away just because we solved their immediate legal needs.

The great civil rights lawyers of the 1950s and 1960s had the sort of cases that we can only dream of winning today. Their eloquence led to opinions such as Brown vs. Board of Education, a single case that smashed through the barriers of institutionalized racial segregation and changed the way a nation treated millions of its own citizens. As modern lawyers, we study their struggles and admire how their seemingly small cases could affect so many. But is it still possible to find such cases, or have the most important civil rights battles already been decided?

No, there are still plenty of good fights left. However, the new frontier of discrimination has shifted from obvious and blatant acts of racial hatred to more subtle acts of omission in areas such as disabilities accommodation. For the last nine years, I have been involved in such a case, and I'm proud to have played a role in litigation that will ultimately make a difference to thousands of disabled citizens in the South.

Identifying the discrimination.

The case started innocently enough at McNeese State University, a public university of more than 8,000 students in South Louisiana. Only a few months after I started practicing law, an old friend who attended McNeese in a wheelchair called seeking legal help. She had recently been forced to urinate on herself and injured her arm in a McNeese restroom which didn't meet accessibility guidelines for the disabled, even when it was built back in 1967. She only wanted help recovering her expenses and lost time from school, and it didn't sound like a complicated case.

Incidentally, she mentioned that she had a lot of trouble on campus due to a lack of accessible restrooms, doorways, ramps, sidewalks, elevators, etc., that she had been treated poorly by the college administration when she complained, and that she had been forced to drop most of her classes each semester for the last five years because she so often could not get to them. She went on to tell me about other students in wheelchairs who had simply given up on their dreams of a college education because of the many accessibility problems at McNeese. I listened to her and promised to examine these problems as well.

Since I knew the president of McNeese, I expected us to be able to clear up the compliance issues and get accommodations for her with a simple letter and a few phone calls. That simple request evolved into litigation which has persisted for nearly a decade and counting.


McNeese fights change.

Unfortunately, McNeese took the position that it did not have to accommodate students in wheelchairs and dismissed my client's accommodation requests by telling her that she simply shouldn't attend college if she had trouble fitting her wheelchair into restroom doors. A string of opposing counsel who worked for the State (all of whom are personally very nice) didn't realize that these statements alone, much less the condition of the campus, constituted discrimination. Indeed, one of my opposing counsel even advised me (politely but with great conviction) that I couldn't possibly sue for discrimination, because he had discovered that my client, "isn't even black."

That steadfast position didn't change for years as the litigation climbed its way through the Louisiana judicial system (we filed in State court, and McNeese never removed). As we diligently researched the law and saved our pennies to hire experts, McNeese was taking a different approach. They began planting vehicles outside of my client's house so that investigators could spy on she and her 15-year-old daughter.

Ostensibly, McNeese's attorneys were trying to show that this lifelong epileptic who urinates into a catheter and has a bum knee and neurological problems had managed to fool her physicians into performing unnecessary surgeries on her so that she could fake her disabilities. It was a ridiculous position, but they seemed to believe that if they waited outside her house long enough with a video camera, they would catch her doing back flips in her front yard.


Interestingly, despite spending public money on this spy endeavor, McNeese never even bothered to depose her urologist or the physician who had prescribed her wheelchair and never even requested an independent medical examination as to her orthopedic, neurological, or urinary problems. Moreover, the spies didn't even try to conceal themselves, and my client, a single disabled mother, was always aware of and terrified by their presence. It seemed to us as if the spies were hired to intimidate her rather than provide any evidence.

Meanwhile, McNeese's ADA director testified at his deposition that he had personally been aware of my client's disabilities and remembers her making requests for accommodation long before her accident. Yet he still wanted more proof (more than the hundreds of pages of medical records already supplied) that she really needed her wheelchair. He even suggested, without much explanation, that part of his job is making sure that those in wheelchairs aren't purchasing their wheelchairs at "pawnshops" and faking their disabilities. McNeese's ADA director further admitted that McNeese historically deterred about 75 percent of its prospective disabled students from attending McNeese and that his office could not provide accommodations for physical disabilities (however, it could provide accommodations for academic disabilities, which my client did not need).


The legal and economic arguments.

The ADA requires that every "service, program, or activity" at a public university be made "readily accessible and usable" to the disabled. Thus, if someone shows up at a public university in a wheelchair, she should immediately be able to use the restrooms and other parts of the campus without too much red tape or unnecessary drama. The easiest way to make every "service, program, or activity" readily accessible and usable to someone in a wheelchair is to make often modest physical upgrades to the campus. This might involve making a toilet stall wider or replacing a narrow door with a wider one.

In our case, McNeese had estimated that it would only have cost about $4,000 to upgrade every restroom in the student union. This isn't much money to a school that receives $75 million per year from the state and had additional methods of raising money, from tuition assessments to parking fines. Furthermore, McNeese was one of the lucky schools located in a town with a casino that provided it with approximately $2 million per year in bonus discretionary funds. Indeed, McNeese's budget documents demonstrated that it was flush with cash and routinely spent hundreds of thousands of dollars on campus beautification projects, such as a $300,000 life size statute of a cowboy riding a horse. Despite having more than adequate resources to do so, McNeese refused to upgrade any of its restrooms out of principle.

Instead, McNeese argued that every student, prospective student, visitor, guest, friend, family member, or transient who appears on its campus has a duty to carry their medical records with them, bring them to McNeese's ADA coordinator, and "register" themselves as disabled, to the satisfaction of the ADA coordinator. Of course, the ADA coordinator admitted that his office was located in an inaccessible building that the disabled often couldn't reach. And even if the disabled were able to make this trek, the ADA coordinator admitted that it was not his responsibility to do anything for them. Indeed, one of the strangest moments of the case occurred when the ADA coordinator said that he was unable to investigate my client's accident because, after six years on McNeese's payroll, he did not know where the student union was located (hint: it was about 100 feet from his inaccessible office). Yet, because of the mere presence of this coordinator, McNeese argued that it had satisfied its obligations to the disabled.

The most dramatic testimony in the case occurred when the president of the university admitted in his video deposition that he did not consider it "fundamentally important" for the disabled to have access to certain buildings (such as the student union and cafeteria) on his campus and, therefore, he did not regard it as a "high priority" for the disabled to get into those buildings. If you transpose the word "disabled" with the word "black", "Catholic", "Jewish", "foreign", or any other term of race or religion, you get an idea of how offensive that is. Would you allow your client to testify that it's not "fundamentally important" for black students to be able to access a campus cafeteria?

Essentially, the other side admitted everything that we needed to prevail on summary judgment and establish that my client had been discriminated against. We filed for summary judgment, attaching hundreds of pages of exhibits. McNeese continued the hearing for nearly a year.


Landmark summary judgment.

When we finally had our day in court, we presented a Powerpoint explaining the law and showing video clips of the McNeese president testifying that it was not "fundamentally important" or a "high priority" for the disabled to access his campus. The trial judge, himself a McNeese alumnus, responded by stating on the record that he knew the president of McNeese and considered him to be a "good" president. The judge's own daughter worked for McNeese. He delayed ruling on our summary judgment three times and stated in open court each time that he wanted McNeese to come back with additional evidence so that he could deny our summary judgment. But there wasn't much that McNeese could say, and on the third hearing, the trial court reluctantly granted our summary judgment.

McNeese filed a contentious appeal, in which it twice tried to strike our arguments as being "discourteous". The appellate court carefully considered the law and issued the longest civil opinion of the year. The opinion was as strongly worded as it was long. Some of the highlights include:


We cannot fathom that McNeese felt no need, regardless of whether it was required by law, to upgrade a single women's restroom into ADA compliance in a building that houses, inter alia, the two main student cafeterias on campus, offices for student government and activities, and a state-of-the-art computer laboratory. McNeese's decision to ignore a federal mandate is reminiscent of the intolerance of the past. We had hoped that the days where a court has to step in to ensure that people were treated equally under the laws of this country were gone. Yet, still, McNeese is emboldened enough to bring such a case to an appellate court where a published, written opinion will forever memorialize its discrimination against this country's disabled citizens. It is hoped that McNeese will reassess its attitude toward its disabled students. It is also hoped that McNeese will prepare and publish a transition plan as required by the ADA. [emphasis added]. Covington v. McNeese State Univ., 996 So. 2d 667 (La.App. 3 Cir. 2008); rehearing denied, 2008 La. App. LEXIS 1688 (La.App. 3 Cir. Dec. 10, 2008); writ denied.



Furthermore, the appellate panel referred to McNeese's arguments as “frivolous”, a “concoction”, “completely irrational”, “indefensible”, having “audacity”, and “absurd”. I'm proud of these judges for saying what needed to be said, and I will always be grateful to them for their courage in speaking up against a powerful and beloved local institution (and the only public four-year university in Louisiana for 70 miles).

After this opinion was published, McNeese moved for rehearing and appealed to the Louisiana Supreme Court, which unanimously upheld the appellate court. Around this time, the U.S. Department of Justice Civil Rights Division launched its own investigation of McNeese, adding further pressure to an institution that ran out of defenses for its actions years ago.
Analysis.

How did McNeese allow itself to get into such a bind? I think it did several things wrong. First, those advising McNeese relied on their considerable experience and confidence as litigators. But they were not familiar with the ADA, which didn't even exist when most of them became lawyers. The attorneys simply couldn't believe that a solo-practitioner right out of law school knew something that they didn't.

Second, McNeese always regarded itself as above the law, and its attorneys and even members of the public frequently warned me that I would never be able to convince a judge or jury to rule against McNeese. Moreover, if I did, it wouldn't stand up on appeal. McNeese didn't count on having objective judges who were unmoved by tales of the school's baseball and football exploits. But these judges were fair and courageous, and their words will make a difference to thousands of disabled students for generations to come.

Finally, the McNeese officials probably never considered themselves to be discriminators, because they erroneously believed that discrimination always has to be an affirmative act and failed to realize that statutes such as the ADA impose affirmative duties on them. In other words, it was easy for McNeese officials to blame "that door" or "those stairs" for keeping the disabled from receiving an education, but they never realized that they were responsible for making "that door" wider. And when they finally admitted (after nine years) that they did have obligations, they immediately started blaming someone else (such as the State) for not fixing their problems for them. This probably made it easier for McNeese to rationalize its actions and take a hard-line approach to this case and unyieldingly fight to the bitter end.

Current status of the case.

I wish I could say that the case was completely over, but we're at year nine and counting. The U.S. Department of Justice Civil Rights Division has launched its own investigation of McNeese, and I have six motions to compel and a motion for injunctive relief pending. The injunction is being sought to put McNeese under a court order to bring certain buildings into compliance with the ADA. These hearings were supposed to heard in October, but the State of Louisiana Criminal Division of the Attorney General's Office (which has nothing to do with our case) intervened 48 hours before the hearing and filed a motion to recuse the trial judge (the McNeese alumnus whose daughter worked for McNeese).

McNeese now argues that this judge, whose opinions against McNeese were broadened by a unanimous appellate court and Supreme Court, cannot be objective towards McNeese. Why? Because the judge ostensibly has a poor relationship with the Criminal Division of the Attorney General's Office and made comments about that office two years earlier in an unrelated criminal case. You couldn't ask for much more logic than that.

But even while the State continues to play procedural games, there is some good news. McNeese has hired new counsel, who has represented to us that the State of Louisiana is evaluating 16 public universities for ADA compliance. Furthermore, the State admits that it is now aware of another 10,000 buildings that it should (that's the key word) evaluate for compliance. I have been told that the Louisiana Legislature has allocated tens of millions of dollars in emergency funds to ADA compliance as a result of this case, although I haven't yet seen the proof.

Most importantly, there is now a strong precedent set in State court to allow additional suits to be filed by other disabled students. And, while my client has lost nine years of her life, she no longer cries every day and no longer sees the dark suburban that used to camp outside her home and take her video. When she talks about her legacy, it will always include what she accomplished for herself and others in Covington vs. McNeese.

What lessons can a young lawyer learn from this experience? Never give up, because you can make a difference. You may find yourself litigating against much more experienced lawyers, and you may find yourself fighting an establishment with much more resources than you have. Don't let that deter you, because that's the only way that change ever occurs.

Don't forget that every big case starts as a small case. Rosa Parks' legal problem didn't start as landmark litigation; it started as a request for a bus seat. My client didn't come to me asking to change the way Louisiana treats its disabled; she came asking for a way to be able to get to her classes and not get hurt on campus. I never imagined that my first real client out of law school would land us in the Louisiana Supreme Court, would involve the U.S. Department of Justice, and could result in the State being compelled to spend millions of dollars to help its most vulnerable citizens. Most importantly, I never imagined that as a young lawyer, I would have the opportunity to fight a case that made a difference in the lives of people who need it the most.

If you're one of those people who went to law school to make a difference in the world, you'll get your chance. Just remember that the civil rights battle never ends; its borders just shift.


Friday, December 11, 2009

In Case You Missed It This Week

  • Send photos from your accident - during your accident, truthfully - to your personal injury lawyer. TimesOnline via RollonFriday.

  • A third year at Boies could snag a bonus of up $150,000. ATL.

  • Is this a policy we should be encouraging? Quadriplegic hunting. MSNbc.

  • Only 2,900 legal jobs loss in November. AmLawDaily.

(Are you reading the rulings right now?)

Thursday, December 10, 2009

Goldman only awarding equity bonuses to executives in 2009 (stock cannot be sold for five years!)

Pretty hot in light of the British move yesterday. Check the WSJ alert that just came up on my handheld:

Goldman Sachs says its top executives won't get cash bonuses in 2009 and will instead receive stock that cannot be sold for at least five years. In addition, shareholders will have an advisory vote on the firm's compensation of executives at the annual meeting in 2010.

The investment bank saw its third-quarter profit soar as rallying equity markets led to trading gains and strong investment performance. The firm had set aside $5.35 billion for benefits and compensation during the quarter, putting bonuses on track to set a record this year.

Wall Street has come under severe criticism in the wake of last year's financial crisis, with critics saying that the Street's compensation regime led its players to focus excessively on short-term gains.