Author Archive for dave-hoffman

At CELS, Hoping to Blog

posted by Dave Hoffman

I’m at the annual Conference on Empriical Legal Studies, hosted by USC.  Though I’m not expecting a repeat of last year’s fireworks, if anything noteworthy happens I’ll be sure to blog it. In the meantime, if you are interested many of the panels (but not mine, sadly) will be webcasted here.  I imagine that the Law and Politics channels in particular will be of interest to those who like that sort of analysis.

  November 19, 2009 at 10:56 pm   Posted in: Uncategorized   Print This Post   One Comment

Corporate Lawyers as Sophists

posted by Dave Hoffman

Who said the following, and when?

“In many cities, however, and especially in Athens, the poorer citizens had towards the rich a double hostility, that of envy, and that of traditionalism. The rich were supposed – often with justice – to be impious and immoral; they were subverting ancient beliefs, and probably trying to destroy democracy. It thus happened that political democracy was associated with cultural conservatism, while those who were cultural innovators tended to be political reactionaries. Somewhat the same situation exists in modern America, where Tammany, as a mainly Catholic organization, is engaged in defending traditional theological and ethical dogmas against the assaults of enlightenment. But the enlightened are politically weaker in America than they were in Athens, because they have failed to make common cause with the plutocracy. There is, however, one important and highly intellectual class which is concerned with the defense of the plutocracy, namely the class of corporation lawyers. In some respects, their functions are similar to those that were performed in Athens by the Sophists”

The answer follows the jump.

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  November 11, 2009 at 1:38 pm   Posted in: Corporate Law   Print This Post   No Comments

Boastful Contract Lawsuit Is Dismissed

posted by Dave Hoffman

I’ve  posted on a lawsuit out of Texas, in which a law student plaintiff sued a lawyer defendant for failing to live up to a “promise” to pay $1,000,000 to any television viewer who could prove him wrong about his theory of a case.  I opined the case was a classic example of puffery, unlikely to reach the merits on that ground.   I challenged readers to prove me wrong.

Louis K. Bonham, counsel to the defendant, has done so.  He reports that the case has now been dismissed – but for want of personal jurisdiction.  According to the docket, Judge Miller’s decision issued on October 23.  It rests on the observation that the only contact that the defendant had with Texas was the airing of a television broadcast: personal jurisdiction on these grounds would make him subject to national jurisdiction where it wasn’t otherwise anticipated.

Incidentally, the underlying motion documents suggest that plaintiff’s claim was even weaker on the merits than I’d argued, as the unedited transcript of of the boast is different than the version in the complaint.  Here’s what plaintiff asserted was said:

NBC’s Ann Curry asked whether there was enough time for [Mason's client] to commit [a crime]. An unidentified person said, “The defense says no.”

“I challenge anybody to show me,” Mason said. “I’ll pay them a million dollars if they can do it.”

But here’s what was actually said:

… And from there to be on the videotape in 28 minutes. Not possible. Not possible. I challenge anybody to show me, and guess what? Did they bring in any evidence to say that somebody made that route, did so? State’s burden of proof. If they can do it, I’ll challenge ‘em. I’ll pay them a million dollars if they can do it.

NBC Transcript, p. 3

This kind of qualifying language makes it even more obvious that the statement was a mere puff. Congrats to Mr. Bonham on his win!

  November 9, 2009 at 9:58 am   Posted in: Contract Law & Beyond, Current Events, Law Practice, Law and Psychology   Print This Post   One Comment

The Length of the Health Care Bill

posted by Dave Hoffman

The folks over at the Computational Legal Studies blog have a great post about the Health Care Reform Bill. Among other findings, they point that there are fewer substantive words in the bill – derided by some for its length – than in most of the Harry Potter books.  The length of the overall bill is largely due to filler – - paragraph breaks, large margins, etc. (That doesn’t mean that the remainder is easily intelligible.)

  November 9, 2009 at 9:16 am   Posted in: Health Law   Print This Post   One Comment

No Loyalty to Dead Clients?

posted by Dave Hoffman

I know that this is all perfectly kosher – there’s no disclosure of any confidence, and any potential representation has long-since lapsed.  But watch the following and tell me if you agree that this is  more than a little bit unseemly?  (My sense is someone is trying to avoid a malpractice suit.)

(H/T: TNC)

  October 25, 2009 at 5:48 am   Posted in: Legal Ethics   Print This Post   10 Comments

What Factors Correlate With Veil Piercing Success?

posted by Dave Hoffman

If you’ve made it through the content of complaints, some data about who gets sued, and descriptive statistics about wins and losses, you basically are pot committed to this veil piercing project. In this post, I’m going to exploit that commitment by describing the results of our statistical analysis of two different kinds of success that plaintiffs may achieve in veil piercing cases: (1) on motions; and (2) at the case level. If you don’t care to follow me beyond the jump, here’s the bottom line (from our abstract):

“Voluntary creditor causes of action promote veil piercing; LLCs are in very limited circumstances better insulated from veil piercing claims than corporations; undercapitalization is strongly associated with success while conclusory grounds like “façade” and “sham” are not; and defendants’ legal sophistication is predictive of plaintiff failure. Extra-legal factors play a more striking and counterintuitive role. Plaintiffs suing companies with few employees are much more likely to win veil piercing motions, and obtain relief in cases, than plaintiffs suing companies employing many workers. This results holds even when controlling for legally-relevant variables. Contrary to both theory and previous empirical work, we also find that judicial liberalism is inversely related to the likelihood of plaintiff success.”

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  October 9, 2009 at 6:51 am   Posted in: Contract Law & Beyond, Corporate Law, Economic Analysis of Law, Empirical Analysis of Law, Law School (Scholarship)   Print This Post   One Comment

Law and Entrepeneurship at LSA

posted by Dave Hoffman

Gordon Smith, Brian Broughman, and Darian Ibrahim are organizing a “conference within a conference” at the  Law & Society Association annual meeting on Law, Entrepreneurship & Society.  The meeting will be in Chicago, Illinois on May 27-30, 2010 this year. I attended last year’s entrepreneurship panel at LSA, and it was great.  Gordon reports:

“This year the LSA is soliciting proposals for projects in the early stage of development that could be presented at work-in-progress sessions. We would be interested in developing a proposal for such a session focused on law and entrepreneurship, so please feel free to submit such projects to us.

You may submit a proposal to any of us via email, but as a default matter, please send your proposal to Gordon Smith by November 30, 2009.”

  October 8, 2009 at 2:25 pm   Posted in: Conferences   Print This Post   No Comments

A Sign of the (Academic) Times

posted by Dave Hoffman

From the lede of the most recent issue of SSRN’s Law and Psychology Abstracts:

To Our Readers:

The backlog of papers to be announced in this eJournal has become unacceptably large. To ensure that our readers and authors get rapid access to the current research in this area we are temporarily increasing the distribution of this eJournal to up to five issues per week. We know this puts a bigger burden on our readers to digest the material, but we also believe our readers and authors would rather have the information sooner than later.

Sincerely,
Bernard S. Black and Ronald J. Gilson
Directors, LSN

Law and psychology is hot!

  October 8, 2009 at 1:10 pm   Posted in: Uncategorized   Print This Post   No Comments

What Does Veil Piercing Success Mean Anyway?

posted by Dave Hoffman

If you look at opinions, winning in a veil piercing case is pretty easy to define: did the court agree to pierce the veil, reaching through an entity to its shareholders. If you were inclined, you could model success at those terminal moments in cases, asking which factors (described in the opinions) correlated with courts agreeing to pierce.

There’s value in this approach, not least because opinions shape reality. But there’s a problem too.  Not only are opinions unrepresentative, but they come late in cases.  The result is an extreme form of selection.  It’s not clear (to me, anyway) what the null hypothesis regarding the effect of independent variables  ought to be for late-stage dispositions.

Dockets offer the promise of a different approach: asking which factors correlate with success or failure early in cases.  Further, assuming that adjudicated motions teach the parties about the strength of their cases, and that they settle strategically, we can even start to learn from the timing and incidence of settlement.

In this post, I’m going to relay some descriptive statistics about the veil piercing successes that plaintiffs achieved in our data. (I’m continuing to pull the data and some text from our paper.)  To those who are getting annoyed by all of these posts, I’m sorry!  I’ve been living with this project for a long time — I’m excited to finally share it publicly.

Read the rest of this post »

  October 8, 2009 at 7:24 am   Posted in: Contract Law & Beyond, Corporate Law, Economic Analysis of Law, Empirical Analysis of Law, Law Practice, Law School (Scholarship)   Print This Post   2 Comments

A Proposed Study To Measure Law Clerk Influence

posted by Dave Hoffman

Citation studies as a proxy for judicial quality are all the rage.  I concur with Larry that the effort spent often seems disproportionate to the result.  Selection is the culprit here, not just academic modesty: it’s hard to imagine that any truly dramatic effects of judicial character, or legal rule, would not be washed away by parties’ ability to settle strategically.

Exogenous shocks open windows – of limited scope – which may help us penetrate this fog.  There’s one ongoing today that I think could in several years allow us to test one of the most important, but obscure, questions about judicial performance.  Although there have been a few studies about the usage, hiring, and quality of law clerks, I haven’t seen work that really convinces me that clerks change judicial performance (rather than match it).  That question of influence is pretty important for all kinds of reasons — not least because if law clerks were really influencing their judges, we might want to spend a little bit more time thinking about their roles, ethics, hiring, etc.

So what’s the shock?  I think that the period of 2008-2011 will prove, in retrospect, to be bumper years for clerk quality.  Anecdotally, I’ve heard that the clerkship market has never been more competitive: Yale grads have been encouraged to take state court clerkships (the horror); judges in popular jurisdictions are receiving literally four to five thousand applications per clerk year; individuals who before might have taken firm jobs are instead throwing their hats in the ring; magistrate judges are taking clerks previously destined for district judges; alumni in practice for five years are going back into the clerk market and competing with fresh-faced 3Ls.  As an organ of the government, the judiciary simply eats better brains when the economy stinks.

Assuming the effect is real (which we could test by looking at placement statistics), I’d propose that eight to ten years from now – in 2018 or thereabouts – we test whether opinions arising from this bumper-clerk period are cited at a higher rate than opinions from the ordinary market periods immediately preceding and following.  The hypothesis would be that if clerks influence judges to write better opinions, better clerks will produce to more citable opinions.  Notably, we can’t perform this same analysis on the effect of past recessions, as (1) they reportedly didn’t have the same effects on the clerkship market; and (2) opinion collection practices were really sporadic before 1995.  It’s 2018 or bust.  Mitu et al., I call dibs!

  October 7, 2009 at 8:34 am   Posted in: Behavioral Law and Economics, Economic Analysis of Law, Empirical Analysis of Law, Sociology of Law   Print This Post   12 Comments

Who Gets Sued in Veil Piercing Cases?

posted by Dave Hoffman

As I described yesterday, Christy Boyd and I have collected a representative sample of veil piercing complaints and have written up some of our analysis of that data in Disputing Limited Liability. Before talking about the meat of the project — the wins and losses — I’ll describe another piece of information that you can extract from complaints but not opinions: who gets sued.  In the 690 cases in our sample, plaintiffs sought to pierce the veil of 870 entities.  With the generous support of Temple’s Law Library, we purchased information about those entities from Dunn & Bradstreet, including the number of employees and revenues per firm, corporate structure, and organizational home.  After the flip, I’ll give you a taste of our findings.

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  October 7, 2009 at 7:28 am   Posted in: Corporate Law, Empirical Analysis of Law   Print This Post   No Comments

The Content of Veil Piercing Complaints

posted by Dave Hoffman

Over the last two years, Christy Boyd and I have been working to collect and analyze a representative sample of federal district court veil piercing cases.  (Previous blogging: here on ERISA and here on weird complaints.)  We now are ready to circulate the first paper arising from the data — there will be at least two others.  That paper, Disputing Limited Liability, is now up on SSRN and is forthcoming in the Northwestern Law Review.  I figured that having spent so much time collecting the data, I might as well get a few blog posts out of talking about our findings!  I’m going to start today with some information about the kinds of complaints that plaintiffs file.  In future posts, I’ll talk about who gets sued, how to model litigation in light of selection effects, the kinds of factors that influence plaintiffs’ success, and the larger implications of our findings for lawyers and scholars.

Read the rest of this post »

  October 6, 2009 at 1:45 pm   Posted in: Corporate Law, Empirical Analysis of Law   Print This Post   5 Comments

Umpires Don’t Make Law, Players Do.

posted by Dave Hoffman

Via Deadspin comes this great video of Joe Mauer, apparently reading the catcher’s signs and relaying them to batter Jason Kubel.

Putting aside Mauer’s denial, the interesting thing about this is whether it’s actually wrong to steal signs. There’s no rule against it, and so the answer is: it depends on the players’ perceptions of the situation. If you run afoul of the norm (i.e., a batter looking behind him) then you are likely to face informal sanctions in the form of a baseball to the body. Mauer’s sign-stealing, by contrast, seems acceptable: (1) it was a crucial game; and (2) the Tigers didn’t protect their signs despite knowing a man was on second. But it isn’t so acceptable that he can admit it publicly. That is: Mauer’s sign stealing was at once lawful, permitted in the social context, and publicly wrongful.

(H/T: Reader CDP. For more on the history of sign-stealing in baseball, check out The Echoing Green: The Untold Story of Bobby Thomson, Ralph Branca and the Shot Heard Round the World)

  October 2, 2009 at 8:49 am   Posted in: Criminal Law, Culture, Current Events, Sociology of Law   Print This Post   6 Comments

Every Day a Legal Revolution: The ATL Effect

posted by Dave Hoffman

David Post argues that heightened perceptions of political extremism are a function of more coverage, not more extremism.

I call it the ESPN Effect – mistaking filtered reality for reality . . .  My very, very strong suspicion is that there has never been a time when there weren’t truly crazy people on all sides of the political spectrum doing their truly crazy things. Maybe 1% or so, or even 0.1% — which is a very large number, when you’re talking about a population of, say, 100 million.  They didn’t get through the filters much in the Old Days, but they do now.  All this talk about how extreme “the debate” is becoming – how, exactly, does anyone get a bead on what “the debate” really is?  In reality?

I wonder if the same effect is in play with respect to complaints about law schools and the state of the employment market.  That’s not to say that the former are effective or the latter anything but abysmal.  But the question is whether law schools are worse today at their core mission than they were a generation ago, or the legal job market materially different than it was in the last bad recession (1991).  One possibility is that they are: the academic turn in law school, and the outsourcing turn in practice, combine to make today just worse than yesterday.   I don’t buy the former claim – at all – but am open-minded about the latter.

Another possibility: Above the Law didn’t exist in 1991.  Neither did the clerkship notification blog.  Or the Prawfs thread on the academic market.  Or various law school boards. Each site provides tons of useful information, but may enable us to mistake filtered reality — it’s the end of the law as we know it – for reality – it’s bad, but it’s not distinctly or structurally bad.  Call it the “ATL effect”: all legal market news will seem more dramatic today than it did in 1990.  From bonuses to layoffs, every day is more special than the last.

  September 29, 2009 at 5:28 pm   Posted in: Law Practice   Print This Post   8 Comments

If you do one thing today…

posted by Dave Hoffman

Read the last few dozen posts at the Temporary Attorney Blog.  I doubt there are more than a dozen law professors who’ve done temporary document work, so it ought to be a real eye opener.  Especially now that the market has changed.  From a recent job-opening.

“Counsel On Call is currently interviewing attorneys with at least one year of solid electronic document review experience for a contract assignment in downtown Chicago. Must have worked as a litigation associate in a large law firm 2+ years. Experience with products liability litigation strongly preferred. Full time, requires a three month commitment. Top tier school and top 1/3 of class required…”

Wow.

  September 28, 2009 at 2:33 pm   Posted in: Law Practice   Print This Post   20 Comments

Amendable, Illusory, Contracts

posted by Dave Hoffman

A set of golf club membership contracts provide that they “may be amended from time to time.”  Signatories, who plunked down $185,000 refundable deposits to join once the clubs were operational, want to exercise the refund clause.  The clubs respond that they can exercise their amendment ability and keep the deposits.  Lawsuits result.

This seems clearly wrong.  The amendment clause should be interpreted in light of commercial reasonableness, or the contracts are voidable as illusory.  If “may be amended from time to time” means that the Club has the sole discretion to change both signatories’ obligations to the detriment of the members, then we’ve got a pretty clear example of a contract in name only.  Rather, I imagine that the amendment language, reasonably interpreted in light of commercial norms, is limited to non-material terms -which would not include the refundability of the deposits.  Indeed, the members argue that refundability was a “relatively unusual stipulation [that] was a big part of the appeal of joining.”

What do you think?

(H/T Atrios)

  September 27, 2009 at 10:26 am   Posted in: Contract Law & Beyond   Print This Post   3 Comments

Growth and Entrepenuership

posted by Dave Hoffman

Quick: what percent of the U.S. manufacturing workforce labors in workplaces of twenty employees or less. What percent of all workers are self-employed?

No idea? Here’s some help.

• 18 percent of the British manufacturing workforce labors in small firms, and 15 percent of all workers are self-employed.
• 13  percent of the German manufacturing workforce labors in small firms, and 12  percent of all workers are self-employed.
• 31 percent of the Italian manufacturing workforce labors in small firms, and 26 percent of all workers  are self-employed.
• 18  percent of the French manufacturing workforce labors in small firms, and 9  percent of all workers are self-employed.

Answers follow the jump.

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  September 23, 2009 at 10:50 am   Posted in: Economic Analysis of Law, Social Network Websites   Print This Post   2 Comments

Ironic Dragons

posted by Dave Hoffman

Today in particular, who doesn’t feel wistful for this?

This decade’s version has its charms, however.

  September 17, 2009 at 10:06 am   Posted in: Current Events   Print This Post   One Comment

Lipson on Bankruptcy, the Inky and Irony

posted by Dave Hoffman

I asked Jonathan Lipson, who previously owned the credit crisis for us, for his thoughts on a really interesting story involving the Philadelphia Inquirer’s bankruptcy process.  His (pretty cool, even for non-bankruptcy geeks) thoughts follow:

Like other markets for company control, the one created by Chapter 11 of the Bankruptcy Code is largely about information:  If you control the story, there’s a good chance you will control the outcome.

So it’s not surprising that The Philadelphia Inquirer has used its own storied assets—the paper and website–to try to sell readers on management’s plan to save the company from rapacious hedge funds and, in their words, “keep it local.”

As you may recall, Brian Tierney, who owns an advertising firm in the Philadelphia suburbs, acquired The Inquirer and its related properties (The Daily News and Philly.com, their collective website), from the McClatchy papers in 2006 for about half a billion dollars.

Like several other newspapers, including The Chicago Tribune, The Inquirer could not service its massive acquisition debt.  Thus, in February 2009, the paper (and its affiliates) filed a Chapter 11 case in Philadelphia.  In August, management filed a proposed reorganization plan where Tierney (who manages the papers and owns some equity) and some of his supporters would buy the papers out of bankruptcy, for about $90 million, leaving most large creditors—i.e., the ones holding the acquisition debt–with a very small recovery.  The management buyout would be subject to higher and better offers.

According to the official Creditors’ Committee in the case, the Inquirer’s “keep it local” campaign is designed to make sure there are no better offers.  Management’s ad campaign warns of dire consequences “[i]f out-of-towners were to seize control.”  Allegedly hailing from such illiterate venues as New York, Beverly Hills “and even Lausanne, Switzerland, these out of towners would feel little commitment to, or understanding of, [Philadelphia’s] local non-profit needs.”

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  September 8, 2009 at 1:50 pm   Posted in: Bankruptcy, Corporate Finance, Current Events   Print This Post   One Comment

Ibrahim v. Secunda on Appropriate Lateral Etiquette

posted by Dave Hoffman

Who has the better approach to the lateral hiring “market”?

Paul Secunda:

[A]s long as you do not have concerns about people knowing your looking, you might as well go forward with all the approaches: get known, file a FAR, and target letters/emails to appointment committees. Although I think letters are by far the least effective method (no one wants to be added to a long stack of paper), you just never know.

And that, my friends, sums up the lateral market in general: you just never know – sometimes you try to put yourself “out there” without actually being “out there,” and other times you do nothing proactive and are “out there” anyway.

or Darian Ibrahaim:

To lateral candidates, do not write directly to schools you’re interested in, and do not go through the AALS process. You do not want to appear anxious to escape your current situation, even if you are. The best way to get the word out that you’re open to a move is to let your well-respected friends at other schools know that. These folks will inevitably be contacted by appointments committees looking for people who might be moveable. Also, the standard advice about going to conferences, publicizing your papers all holds true. If you’re doing good work, getting yourself out there, and are at a school from which one would reasonably assume you are extractable, you’ll get calls.

My view: Darian is correct on the tactics.  And he’s equally right about the appropriate move for entry-level faculty: “write directly to schools you’re interested in.”  This is a real change.  When I was on the entry market in 2003, I had no sense that it was appropriate to write to schools directly, though I lacked a mentor so I could have missed many tricks.  Now, writing directly to committees is apparently almost necessary (though not sufficient).

[Update: An earlier version of this post credited David Zaring for Darian Ibrahim's post.  I have no idea how I made that mistake.  Sorry guys!]

  September 6, 2009 at 12:14 pm   Posted in: Law School (Hiring & Laterals)   Print This Post   2 Comments

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