Wednesday, October 19, 2016

The New Class Action Regluators

Professor Adam Zimmerman presented at the University of Kansas' 50th Anniversary Perspectives on the Modern Class Action. An excerpt from his presentation, "The Intersection of Agencies and Class Actions," appears below.

Federal agencies have quickly become some of the most important regulators of class actions and court access—particularly as stalemates, splits and institutional constraints limit the Supreme Court and federal rules committees from reforming class actions. But we have yet to appreciate how powerful agencies really are in regulating court access or what, if anything, courts should do about it.
Agencies have many different tools to regulate class actions, and in turn, private enforcement of law. Relying on varying degrees of authority—statutes, funding, licensing and litigation positions—agencies can enable, disable or de-stablize litigation.

First, agencies may enable litigation in several ways. They may bar companies from mandating arbitration with others; create evidentiary presumptions or require disclosures that minimize the number of individual issues required to group together cases in federal courts; and they may even hear class actions and other kinds of aggregate litigation, themselves, reducing backlogs and improving opportunities for judicial review. 

Tuesday, October 11, 2016

Should the Education Department Hear Class Actions when Colleges Collapse?

By: Professor Adam Zimmerman

This op-ed originally appeared on RegBlog.

Last month, ITT Educational Services—one of the nation’s largest for-profit colleges—announced that it was shutting its doors in the wake of several state and federal fraud investigations. The closure comes as the U.S. Department of Education cracks down on shady colleges that lure unwitting students with false promises of money and jobs. But behind the controversy over “predator schools” lies a more vexing problem: how the government will handle thousands of claims by ITT’s former students seeking federal loan forgiveness.

Federal law has long entitled students to federal loan forgiveness when they are left in the lurch by colleges that commit fraud or go bankrupt. The principle behind this rule is that students are doubly punished when they rack up crippling debt in schools that can never provide them with a marketable degree. But after the closure of Corinthian Colleges, a for-profit educational institution that collapsed two years ago under similar circumstances to those involving ITT, the backlog of claims brought by students seeking debt relief from the Education Department swelled to over 25,000. If another 30,000 ITT students go down the same road, it could be years before the Department decides whether these students are entitled to relief under federal law. As important, no existing process ensures that students with similar claims will be treated in the same way and that independent experts will make these determinations.

Monday, October 3, 2016

Prof. Lazaroff Sees O'Bannon Decision as Casualty of Smaller Court

Today, the U.S. Supreme Court announced that it would not review the case of O’Bannon v. NCAA antitrust case. The decision lets stand a Ninth Circuit Court of Appeals ruling that the NCAA is subject to antitrust scrutiny but that schools are not required to compensate student athletes with money “untethered to educational purposes.”

Professor Emeritus Dan Lazaroff, former director of the Sports Law Institute at Loyola Law School, Los Angeles, is available for commentary. Of the decision, the antitrust expert says:

“This is not a surprising result, given the fact that other antitrust cases against the NCAA are pending in the Ninth and other federal circuits. Some of the ongoing litigation sweeps more broadly than O'Bannon, so it makes sense for the court to consider these issues down the road with a more complete picture of where the lower federal courts stand. The court likes to take up cases when there is a conflict in the circuits, so waiting increases the likelihood of that. Being down one justice might have been a factor. My sense is that any vote by the eight could easily break down 4 -4, and that would make for a big waste of everybody's time.”

Monday, September 26, 2016

A Conversation with Dean Michael Waterstone

On June 1, 2016, Michael Waterstone became the 18th dean of Loyola Law School, Los Angeles. Waterstone, who also is senior vice president at Loyola Marymount University, is a nationally recognized expert in disability and civil rights law. He has consulted on projects for the National Council on Disability, authored a case book, and worked with foreign governments, non-governmental organizations and academic institutions on disability rights laws. He also is an associated colleague with the Harvard Law School Project on Disability.

Waterstone first joined Loyola's faculty in 2006, teaching civil procedure, disability law and employment law. He served as Associate Dean for Research and Academic Centers from 2009–2014, chairing the employment committee. In 2014-2015, he was a visiting professor at Northwestern University School of Law, where students selected him as the Outstanding First Year Professor.

Prior to his tenure with Loyola Law School, he taught at the University of Mississippi Law School. He also worked as an associate in the Los Angeles law firm of Munger, Tolles & Olson, LLP for three years, focusing on commercial litigation.

A native of Los Angeles, Waterstone earned his law degree in 1999 from Harvard Law School and his B.A. in political science from UCLA.

We sat down with Dean Waterstone at the law school’s Frank Gehry-designed campus located in downtown Los Angeles to talk about Loyola, his experience, and his new role as Dean.

What is special about Loyola Law School?
Our Jesuit tradition teaches us the importance of educating the whole person. One of the things that distinguishes Loyola Law School is our commitment to social justice. Our students are using their legal education to help make the world a better place, however they define that. That has always been a key part of who we are and always will be. Our pro bono commitment is a longstanding reflection of that fact.

As a lawyer at private firm you also did pro bono work.
I was a commercial litigation lawyer for three years, and I found the work interesting and I liked solving problems. At the same time, I also had a pro bono practice in disabilities rights law.

What drew you to disability rights law?
I had a cousin with muscular dystrophy. I think when you have a family member with a disability you tend to see some things differently. I wrote my third-year paper on the Casey Martin case — the professional golfer who sued [the PGA Tour for the right to use a golf cart during competition] under the Americans with Disabilities Act. I felt like there was so much up for grabs in this area. People with disabilities are a diverse community that has tended to be excluded from society and not had full rights in a number of areas. It has been a wonderful professional journey to try to use law to change that, and we’ve come a long way but there is certainly still a long way to go.

Thursday, September 22, 2016

Do Lawyers Make Better Presidents?

What do the following Presidents have in common: Thomas Jefferson, Abraham Lincoln, Woodrow Wilson, and Franklin D. Roosevelt? All are frequently voted by historians as amongst the 10best U.S. Presidents – and all were lawyers or law school graduates.

And what do the following Presidents have in common: Millard Fillmore, Franklin Pierce, James Buchanan, and Richard Nixon? All are frequently voted by historians as among the 10 worst U.S. Presidents – and all were lawyers or law school graduates.

Combined with the fact that many highly regarded presidents were not trained in law – including George Washington, Harry Truman, and Dwight Eisenhower – these lists suggest that legal training is not necessarily correlated with the good judgment, political acumen, and leadership skill necessary to excel in the Oval Office. But there’s more to the story than the best-and-worst rankings.

The most important number may be that 25 out of 44 presidents graduated from law school or practiced law. (The two are not the same thing, especially in earlier times when most lawyers entered the profession through apprenticeship.) Lawyers represent only 0.36% of the U.S. population, but over 56% of presidents. The electorate, it seems, considers legal training a useful characteristic in presidents – or least not a disqualifying one.

It stands to reason that legal credentials would be common among the people who excel at politics and public service. People with an interest in government tend to gravitate toward law, since most government posts involve law in one capacity or another, whether it be making it, interpreting it, or enforcing it. As a result, the pool of credible presidential candidates is more lawyer-heavy than the public at large. This helps explain why three out of four of this year’s presidential and vice-presidential candidates – Hillary Clinton, Tim Kaine, and Mike Pence – were practicing lawyers before running for public office. And why one former president – William Howard Taft – and one serious presidential candidate – Charles Evans Hughes – later became chief justices of the U.S. Supreme Court.

The modern J.D. degree builds knowledge and skills useful for office-holders even if they never represented clients. President Barack Obama, for example, never had a private practice comparable to that of First Lady Michelle Obama. But like President Bill Clinton before him, he taught constitutional law at a law school (where one eye could also be kept on political opportunities). For which of our past lawyer-presidents was the daily practice of law a major part of their personal and professional identity? President John Adams considered one of his greatest professional accomplishments to be his successful defense of some very unpopular criminal defendants: British soldiers charged in the Boston Massacre. President Abraham Lincoln was a self-taught lawyer renowned for his courtroom skills. His “country lawyer” persona remains a defining part of his legacy. Rounding out this list of presidents whose outlook on life may have been shaped by their legal practice is Richard Nixon, who practiced law both before entering Congress and during his mid-1960’s political hiatus. Nixon’s most well-remembered statement – “I am not a crook” – interacts poignantly with Lincoln’s advice to young lawyers: “Resolve to be honest at all events; and if in your own judgment you cannot be an honest lawyer, resolve to be honest without being a lawyer.”

A law degree is of course no guarantee that today’s student will win tomorrow’s election. It does not guarantee how history will remember future lawyer-presidents. But as a credential that is both relevant for the job and respected by the voting public, a law degree seems to be a sound political investment.

Friday, September 16, 2016

Pro Bono Bill Veto Was a Shock

By Cindy Thomas Archer
Associate Dean, Clinics & Experiential Learning

This op-ed originally appeared in the Friday, Sept. 16, 2016 edition of the Daily Journal.

On Aug. 29, Gov. Jerry Brown vetoed Senate Bill 1257, which would have required those seeking admission to the California State Bar to complete 50 hours of free legal services for those who could not otherwise afford to pay a lawyer for her services.

I was shocked, as were most of the lawyers I knew, by Brown’s veto because for years there have been signs that such a requirement seemed inevitable.

Let’s go back a few years. In 2012, the State Bar Board of Trustees approved the appointment of the Task Force on Admissions Regulation Reform. For almost four years, TFARR studied proposed competency training requirements for admittees to the California Bar. The seemingly least controversial of its proposals was the requirement that those seeking admission complete 50 pro bono service hours. I spoke with law school public interest and pro bono project directors across the state and, while other aspects of the TFARR recommendations were hotly contested and debated, everyone thought this requirement would easily be instituted.

Further, I have spent the last 16 years at Loyola Law School, Los Angeles, the first ABA-approved law school in California with a pro bono legal service hours graduation requirement. It’s an extension of Loyola’s social justice mission from its founding. It is part of our identity and a tool for helping to address the access to justice gap in the community. In fact, many students choose Loyola recognizing and appreciating the school’s commitment to service. And our students annually contribute 60,000 hours or more in pro bono services. Similarly, as of Aug. 23, the ABA Standing Committee on Pro Bono and Public Service reported on its website that of the 184 law schools responding to the survey, 41 have a pro bono or public service requirement for graduation. Another 127 have formal voluntary pro bono programs; 16 others have independent student pro bono projects.

Then State Sen. Marty Block entered the conversation with SB 1257, an answer to the access to justice gap for the masses who cannot afford a lawyer. A no-brainer, right?

Tuesday, August 30, 2016

In New Law Review Article, Prof. Guttentag Urges Supreme Court to Update Insider Trading Law

Loyola Law School, Los Angeles Professor Michael Guttentag’s newest law review article, “Selective Disclosure and Insider Trading: Tipper Wrongdoing in the 21st Century” discusses the first Supreme Court insider trading case in almost twenty years. In Salman v. United States, which is scheduled for oral argument on October 5th, the Supreme Court will consider when an insider’s tip to a friend or relative can trigger insider trading liability. Professor Guttentag, a securities law expert, provides background and context about what is at stake in this Supreme Court consideration of when tips can violate federal securities statutes. The article will be published in the Florida Law Review.

“I am hoping the Supreme Court will be bold enough to admit that the old rules about what counts as an illegal tip, developed in the era of the fax machine, are pretty much obsolete now,” said Guttentag, John T. Gurash Fellow in Corporate Law & Business. “In 2016, company policies and securities regulations strictly prohibit leaking confidential information. Insider trading law needs to reflect this new reality.”


The Supreme Court in deciding Salman v. United States should update a confused and increasingly obsolete aspect of insider trading doctrine: the rule that the selective disclosure of material nonpublic information can only trigger insider trading liability if “the insider personally will benefit, directly or indirectly, from his disclosure.”

When it was introduced in Dirks v. SEC in 1983 this “personal benefit” test represented an imperfect effort to balance four competing rationales for determining when providing a tip should trigger insider trading liability. Two developments since Dirks was decided have made problems with this personal benefit test insurmountable. First, the SEC’s enactment of Regulation Fair Disclosure in 2000 supplanted federal common law regulation of selective disclosures by public companies and, more pointedly, prohibited public companies from making precisely the types of selective disclosures to Wall Street analysts that the Dirks personal benefit test was designed to protect. Second, the adoption of the misappropriation theory of insider trading in United States v. O’Hagan greatly expanded the types of deceptive conduct that might lead to insider trading liability with important ramifications for how to identify tipper wrongdoing.

After Regulation FD and O’Hagan, the best approach going forward for identifying tipper wrongdoing would be to go back to the underlying statutory prohibition against deceptive conduct. Receipt of a personal benefit should be a sufficient, but not necessary, condition for finding that a selective disclosure is sufficiently deceptive to trigger insider trading liability. Based on this updated standard, the Salman conviction should be upheld.