Welcome to "On the 50 Yard Line" The Blog of Stuart L. Pardau, Attorney, Professor and Observer of Political Economy; It’s not just about football.

Wednesday, August 31, 2011

Blogger Gets Nailed for $60,000 Damage Award for "Telling the Truth"

Interesting posting in the Volokh Conspiracy about a blogger who got tagged with a $60,000 damage award (tort-based theories) for telling, what apparently was the truth about someone, though it resulted in adverse consequences for that person (termination).


Tuesday, August 30, 2011

Electronic Frontier Foundation Studies Regarding Redirection of Search Traffic of U.S. ISP's

The EFF recently published a piece about the redirection of search traffic at a number of US ISPs. The company involved, Paxfire, contacted EFF to discuss its practices. 

Paxfire admits that it sends users' searches through its proxy servers and that while the proxies look at the searches for specific things, Paxfire maintains that it does not retain logs of these queries unless the user is searching for specific trademark terms using the search box in the browser. In those cases, the search and IP address are logged and the user is sent to the brand’s website directly, rather than to the search engine, and Paxfire and the ISP collect a fee for the referral. Lawsuits are probably not far behind...


Victory for Employers in California Meal Break Case

An important case to help roll-back some of the the "meal break" requirements imposed on California employers...here, the Court is saying meal breaks are still required of course, but employers fulfill their obligation by offering the breaks; the employees can elect to waive them. I have not yet read the opinion, but it seems to me that the waivers will need to be determined to be express and voluntary.

Friday, August 26, 2011

BNA Acquired by Bloomberg

Bloomberg paid close to $1 billion, which according to the WSJ , BNA which reported earnings of approximately $30 million, which makes it a valuation of 33x earnings. I like BNA and its content, but 33x earnings sounds excessive.


To VAT, or not to VAT?

Wednesday's Wall Street Journal (cited in link below) had an excellent op-ed on the consequences of an imposition of a value-added, or "VAT" tax. The thesis of the piece was that a VAT would be a huge job-killer, that would slow economic growth. All that may be, but I what I found most interesting was the startling numbers around how much money it would actually raise. For example, each percentage increase in VAT raises close to $100 billion. In other words, a 15% VAT, assuming all things are equal, would erase the current budget deficit. The fact that it might also erase the prospects for any future economic growth is another story. What is interesting to me, is how compelling and tempting this must seem to some politicians in Washington. The logic would go like this: In Europe VAT rates range from 15% to 25% already (the U.K. now has a 20% VAT and France's is almost that percentage). What makes the U.S. think it is so different? By the way, I do not agree or accept this line of thinking at all (it's a subset of the shoddy thinking that arises out of the premise that, "well, if the 'other guy' is doing it, it must be ok"). That said, I recognize its allure and superficial appeal. As such, I think if budget problems persist (a reasonable likelihood), expect the debate around the introduction of the VAT (or its cousin, a national consumption tax) to gain greater traction.


ABA Ethics 20/20 Committee Supports Alternative Business Structures (ABS) re Non-Lawyer Ownership in Law Firms

While this is still working its way through internally at the ABA, this is a huge development. With deregulation of the Legal Services market in the U.K. coming this Autumn, could the U.S. be far behind?


Thursday, August 25, 2011

Steve Jobs and the Lessons of Failure

It is axiomatic that one learns far more from one's failures, than one's successes. But it bears regular repetition and reminder. And no better example than Steven Jobs, who certainly had his share of business failures.


German State (ULD) DPA Orders Closing Of Businesses Facebook Page

This seems like it might be huge. The more detailed explanation on the ULD website  is imbedded in link below.  It deals with privacy concerning arising out of Facebook's "Like" feature. Since I do not read German, I cannot comment much further.


Also, see this:


Dollar gaining against Yen, but the Yen is still only Two Yen Off Historic Highs

It seems modest gains in dollar are attributable to Bernanke's guidance that QE3 may not be coming; also looks like there have been interventions from the Japan and Swiss Central Banks that support the dollar.


But the central banks can, in terms of direct intervention, only do so much; the markets drive most of this. If and when QE3 does come, expect the Yen to gain more.

Wednesday, August 24, 2011

Addressing the "Justice Gap"

Editorial http://www.nytimes.com/2011/08/24/opinion/addressing-the-justice-gap.html from the New York Times highlights the fact that the vast majority of Americans have no access to meaningful legal representation. (While I don't have the numbers "on the ready", the explosion in the number of pro se plaintiffs would appear to support this assertion.)

As the editorial points out, all this comes at a time when in 2010, only two-thirds of law school graduates nationwide were able to obtain employment for which a law degree was actually required. In addition, budgetary pressures have resulted in big cuts to government funding to organizations like the Legal Services Corporation. The Editorial also  has the obligatory call to practicing lawyers to devote more time to pro-bono work.

From my perspective, here are some suggestions to help address the "justice gap":

1) As the NYT editorial suggests, have the ABA and state bars modify Rules of Professional Conduct to attenuate what I believe are antiquated "unauthorized practice of law"restrictions. There is a large pool of talented non-lawyers (paralegals and others) who can provide valuable advice and support in areas such as basic contracts, family law, and basic real estate transactions.

2) Legitimize so-called Alternative Litigation Financing ("ALF"), which is estimated to be a $1 billion industry, in many jurisdictions, but operates in a kind of murky and uncertain regulatory and legal environment. ALF providers, while taking many shapes, typically offer litigation financing in the form of non-recourse loans, to plaintiffs. If the plaintiff loses the case, the ALF provider receives nothing. If the plaintiff wins, the ALF firm receives the principal of their loan, plus a pre-determined (often high) interest payment on that principal. ALF has been widely criticized, including by the NYT, as taking advantage of unsophisticated plaintiffs and charging excessive interest rates.

3. Encourage larger and mid-size law firms to "lend" their junior attorneys to public interest and other advocacy groups for periods of 1-2 years. The law firm could pay, say 30-50% of the attorney's regular salary coupled with a limited student loan reimbursement program effective the duration of the young attorney's secondment. This is great way for junior attorneys to get good experience, for firms to have better, more seasoned lawyers upon completion of the attorney secondment and for  the legal needs of the broader society to be met. Such programs could be encouraged by the ABA, state bars, law schools and would be a marketing advantage in the law firm recruiting process.

Stanford Researcher Identifies Microsoft's Use of Persistent or "Super" Cookies

This comes on  the heels of a similar report/finding by a UC Berkeley study, concerning Hulu and which I blogged about at an earlier date. Here, Microsoft, on its MSN.com and other sites, utilized so-called "Super" Cookies to continue tracking web users web viewing activities, even when those very users took the affirmative step to "disable" cookies in their browser settings. Based on this article from Computer World, Microsoft did not deny any of this and immediately stopped the activity.


A few thoughts:

1. Is this an issue of Microsoft, channeling the Captain Renault character from the movie Casablanca (Claude Rains) being "shocked, shocked that cookies have been persistent on the MSN site?

2. The privacy statement/privacy policy on the MSN.com site takes you straight to the Microsoft corporate website policy http://privacy.microsoft.com/en-us/fullnotice.mspx#EBCAC.  In relevant parts, here is what it says about the ability of users to disable cookies:

"You have the ability to accept or decline cookies. Most Web browsers automatically accept cookies, but you can usually modify your browser setting to decline cookies if you prefer...(emphasis added)
If you choose to accept cookies, you also have the ability to later delete cookies that you have accepted. In Internet Explorer 8, you can delete cookies by selecting “Tools”, “Delete browsing history”. Then select the control box “Cookies" and click the “Delete” button. If you choose to delete cookies, any settings and preferences controlled by those cookies, including advertising preferences, will be deleted and may need to be recreated."
3.  Based on the foregoing language, isn't Microsoft violating its own privacy policy? Haven't they mislead consumers?  While the damages analysis is always difficult in cases like this, can a class action suit be far behind? What about an FTC Section 5 action?
4. Ironically, Microsoft prominently displays that it is certified as by Truste, as being compliant with its own privacy policies and statements. Does this give rise to a set of independent claims?

The High Cost of Textbooks and Its Consequences

While I have many students express concerns about the high cost of textbooks, few, to my knowledge, have failed to actually purchase them due to the high cost. (That said, any number of students have opted for e-book versions and/or electronic versions of selected portions of the assigned materials, all of which can result in substantial savings.)


And to the darker side of this, it looks like a relatively new site has come up (ala the P2P sites in music) where infringing content from copyrighted textbooks are widely shared:


Tuesday, August 23, 2011

U.S. Debt Clock

I have linked to this site in previous postings and tweets. Every time I view it (and each time, of course, it only grows), I am recall Mark Twain's adage (and I paraphrase) that "statisticians lie, but statistics don't".

These statistics don't lie. The numbers are what the numbers are.  National debt of $14.6 trillion. State and local debt of another $3 trillion. Throw in non-governmental debt -- personal debt, credit card balances, and mortgage debt combined $32 trillion. And then the biggest category of "Unfunded liabilities" (Medicare, Social Security, and Prescription Drugs, which comes to $115 trillion. All in we are at close to $165 trillion. I calculated this earlier and my recollection is that it comes to about $1 million per taxpayer.


More Data on the "Education Bubble"

In just a little over 10 years, student loan debt has grown by 511%.  Even as personal debt has exploded during this same period, it is dwarfed by the growth of the student loan debt. The chart on the link is very compelling.


Consider as well the "for profit" higher education sector (Kaplan, Devry, University of Phoenix), a mere 2 years ago, the veritable darling of the market now, as a sector, appears to be in serious trouble. Originally propelled by a high-number of students taking on debt guaranteed by the Federal government, enrollments are dramatically down, with prospective students less willing to take on the massive debt. The industry has also been attacked for low graduation and high loan default rates. Go short.


More Data on the "Education Bubble"

In just a little over 10 years, student loan debt has grown by 511%.  Even as personal debt has exploded during this same period, it is dwarfed by the growth of the student loan debt. The chart on the link is very compelling.


Truth On the Market Blog Will Sponsor Symposium on Deregulation of the Legal Profession

This is Professor Larry Ribstein's blog. Also a link to yesterday's WSJ op-ed piece on the same subject. The symposium is later in September. I will continue to post on this over the coming weeks.


2011 Best Value Law Schools

The metrics appear to include such factors as, one might expect,  tuition and legal employment opportunities, post-graduation. Again, consistent what one might have assumed, higher tier state schools across the country fare best in this Study.


Legal Zoom Settles Class Action Suit re Unauthorized Practice of Law

Not much in the way of details yet, but it will be interesting to see what "modifications"/"changes" to the Legal Zoom business will be the outcome of this settlement.

Monday, August 22, 2011

For First Time, Tuition costs now are more than what California contributes to UC System

I take no particular delight in this fact, but it is a reflection of the current budget realities. The situation is mirrored in the California State University system, the institution that I am privileged to be a part of. Interestingly, the $13K tuition for UC students, even "all in" with the state matching, could, at $26K per year, arguably still be a bargain compared to most schools of similar prestige across the country. If there is any silver lining, it is that.


Recent Developments re Law Firm Spending Money on Training to Develop Associates

I have recently posted on how some large in-house law departments are spending a lot on training for development of their junior attorneys. Today the Wall Street Journal Law Blog reported on how some large New York law firms (Debevoise, Milbank and Skadden) are taking some steps in this regard.

I think it is about time that law firms finally started spending some of some of their money and invest in a serious way in their own people. As I posted previously, I am skeptical that most law firms will do this in any meaningful way and believe that in fact in-house law departments are much better situated to commit the resources needed (both from a financial and cultural point of view). Nevertheless, per the above link,  I did take a look at the website for one of the training firms (Fullbridge) retained by Debevoise for the training and they look quite impressive.

Saturday, August 20, 2011

The No Frills Law School

Check out this very interesting post regarding a hypothetical law school that would charge 50% of today's average tuition and offer what would likely be a superior education. See also my comments in the comments section in the link. With some of my suggestions I think we can reduce cost even more than 50%.


How Software Will Ensure American Strength in the 21st Century

Founder of Netscape and technology investor, Marc Andreessen, wrote a must read piece in today's Wall Street Journal.


It is a "must read" on many levels. First, Andreessen makes a compelling case that we are entering (or more  precisely, have already entered) an era where "software" has primacy over, and ubiquity within, every industry. Second, Andreessen points out that America is the leader in software, due not only to both the abundance of human and financial capital within our borders, but directly correlates to the American spirit of risk-taking and the innovation it breeds. Third, a not surprising conclusion of Andreessen's piece is that, while the U.S. has many problems to be sure, key factors are in place to ensure a bright future and continued opportunities for this exceptional country.

Thursday, August 18, 2011

Law Offices of Stuart L. Pardau Announces Strategic Alliance With Lev & Berlin, P.C.

I am pleased to announce that my law firm has established a strategic alliance with Lev & Berlin, P.C.


 I have known Duane Berlin, the Principal of Lev & Berlin, for over a decade and have worked with him on a series of regulatory and legal initiatives concerning the market research industry. I am honored to call Duane a friend and colleague and believe that our firms, given our respective expertise and experience, are uniquely situated to provide a compelling value proposition for clients, specifically those in the market research industry,  including in the content areas of drafting and negotiation of commercial agreements, IP licensing, M&A and data security/privacy.

The Coming Burst of the Higher Education Bubble

PayPal Founder and Billionaire Investor, Peter Thiel has written quite convincingly about the "Higher Education Bubble."

This most recent posting in Above the Law highlights a scenario of imminent mass defaults of student loans, due to the poor job market and over leveraged students.


Do Law Firm Salaries Track Rises in Law School Tuition?

See this posting from the always excellent Volokh Conspiracy. The correlation  between the rise in Big Law salaries for first year associates seems to track increase in tuition increases. (In rough -- and actual, non-inflation adjusted numbers, both starting salaries for First Year Associates and annual tuition have  essentially doubled since I graduated from law school almost 20 years ago.)

 The Volokh Conspiracy makes this very point, however one essential item is missing from that analysis: What about those vast majority of law students who don't go to top 10 or even top 20 law schools. To be sure, those tuition rates have climbed just as rapidly, if not more than the elite law schools. For most of the graduates of these "non-elite" schools, the notion that a First Year associate can be expected to earn $160K a year is reserved only for the very top of the class, and even then, possibly not all, especially as one delves into those Tier 3 and below schools.


Wednesday, August 17, 2011

Top Ten Myths Regarding Ratings/Reviews

As someone who, for close to ten years, was with the ratings company, J.D. Power and Associates, the subject-matter of market research and rankings still remains of great interest to me. Earlier today, I stumbled on this very interesting posting on LinkedIn, by an executive at Reevoo.com. I have no connection or previous experience with the firm or the author of the posting, but the longer-form research article (accessible through the link below) nails most of the key issues.


Tuesday, August 16, 2011

Goldman Sued by AllState Over Mortgage Backed Securities

Allstate has filed similar suits against other financial institutions seeking recovery of $2 billion in losses.  Thus, for those who follow these matters closely, the filing of this particular suit in New York state court should not come as a surprise. However, with the recent investigation of Goldman's dealings with the Libyan Sovereign Investment (and the shockingly poor documentation around those dealings), this is just more bad news for the house of Goldman.


How Self-Regulation and Professional Rules of Conduct Kill Innovation in the Medical and Legal Fields

Very interesting post on self-regulatory and cultural impediments in the world of Medicine (and commonalties with the legal profession) on Professor Ribstein's "Truth on the Market" blog.


Connecticut Passes Law Restricting Use of Credit Reports in Employment Application Process

Connecticut, is now the fifth state (following Hawaii, Illinois, Oregon and Washington), in placing restrictions on employers' ability to require credit checks of prospective employees in connection with the job application process. Late last year, the EEOC filed a charge against Kaplan Education (a division of the  Washington Post) on this very issue, alleging disparate impact against minority applicants. Apparently several other states, including California, are considering similar legislation. All is apparently not lost for employers in that most of the legislation contemplates key exceptions to the prohibition, which includes business necessity/job requirement. Initially these and other exceptions, will be interpreted broadly by Courts, but I suspect over time will create a new distinct area of employment and privacy law.


Friday, August 5, 2011

HP and In-House Corporate Legal Departments Training Programs for Junior Lawyers

I had heard about HP's internal training program for lawyers before and always found it a potentially compelling proposition: Firms that actually invest in their lawyers and do not pass that learning curve (with all of its associated costs) to clients. With much larger scales than even the biggest law firms and without pressure to bill hours, it seems to me in-house Corporate Legal Departments are particularly well-situated to handle to take on this mission of internal training.  http://law.hukuki.net/uncovered-hps-in-house-counsel-training-program-part-4.htm

The Post-Partisan University: An Affirmative Action Program for Conservatives?

University of Virginia Professor says liberal bias in Academies adversely impacts quality of research across the full range of disciplines. Recommends active recruitment of conservatives in Faculty hiring decisions. http://www.insidehighered.com/views/2011/08/05/martin_on_the_post_partisan_university_and_classroom_bias

MGA Awarded Over $135 Million Dollars In Attorneys' Fees and Costs By District Court Judge

In what has got to be one of the most remarkable turn-arounds in modern copyright litigation history, Van Nuys, CA-based toy maker, MGA, in a copyright infringement case brought by Mattel over the Bratz doll properties,  has just been awarded over $135 million in legal fees and costs by Judge Carter of the Central District in California. In the first trial, Mattel prevailed over MGA;  in addition to having damages assessed against it, the District Court judge in that case took the extraordinary remedy of requiring MGA to transfer over the Bratz properties to Mattel. All this was reversed on appeal in a stinging rebuke by Judge Kozinski. On retrial MGA won on the merits, but with this massive award of attorneys fees and costs, it now gives MGA enormous leverage to negotiate a favorable settlement if they so choose.

Wednesday, August 3, 2011

Bubba Smith -- RIP

Legendary Baltimore Colts defensive lineman, Bubba Smith passed away at his home in Los Angeles. With his 6 feet seven inch height and 300+ pound size, which was huge compared to the peers of his day, he was truly a force on the field. He later parlayed that force and iconic image in his TV commercial and movie career. RIP. http://www.sfgate.com/cgi-bin/article.cgi?f=/c/a/2011/08/03/SPKQ1KJ2PO.DTL&type=49ers

McDermott Will Hit with Malpractice Suit In Connection with Work Done By Temp Attorneys

Looks like McDermott is hit with a malpractice suit in connection with document review by temp attorneys.  Allegations are that privileged documents were turned over that should not have been. http://law-us.blogspot.com/2011/08/objection-lawsuit-slams-temp-lawyers.html

Vanity Fair Expose on Cyber Attacks: We Know It's From Somewhere In China

Excellent article in Vanity Fair about massive increase in cyber-attacks over the past 5 or so years, against U.S. companies and the U.S Government (and many key allies such as Germany, the U.K., Japan and South Korea.) Culprits almost certainly emanate from China. Key motives: Certainly industrial espionage, theft of military secrets, and possibly even more nefarious motives such as dry runs for cyber attacks that would precede a "hot" war. http://www.vanityfair.com/culture/features/2011/09/chinese-hacking-201109?printable=true

Tuesday, August 2, 2011

Web tracking may continue despite deletion of cookies

A class action suit was recently settled, but it looks there are a new round of offenders. Hulu immediately pulls web tracking service. More suits likely. http://www.wired.com/epicenter/2011/07/undeletable-cookie/

Monday, August 1, 2011

The Deal No One Seems to Like, But Most Still Wanted

With passage by a comfortable margin in the House (and all but certain 60+ votes in the Senate), it appears the country has averted a major financial crisis, at least temporarily.

The fact that disparate voices such as Maxine Waters on the left and Michelle Bachmann, from the right,  both strenuously opposed the bill may be affirmation enough to support it. (In fact, I do support the bill and if I were a member of the Congress, in my view,  the only responsible approach would have been to vote "yes".)

All that said, there are major questions. The CBO estimate for projected savings from deficit reduction over 10 years comes in a bit below what Boehner has advertised http://firstread.msnbc.msn.com/_news/2011/08/01/7218559-cbos-score-21-trillion-in-deficit-reduction. Specifically, the particular line items for the first round of $1 trillion cuts in discretionary savings is sketchy at best. The likelihood that the bi-partisan group of Congress members empaneled to find an additional $1.8 trillion in savings over 10 years will actually get it done seems unlikely; instead, the probable outcome is that it will revert to the automatic cuts scenario, which I understand expressly excludes Social Security and Medicare. So where exactly is the money coming to come from? Defense spending for sure, but where specifically? And cuts in defense spending alone don't come to close to getting us where we need to be.

One additional thought as well: The lifting of the debt ceiling to provide the additional 2.2 trillion takes us past the 2012 election and into 2013. The general cuts in the neighborhood of call it 2 to 2.8 trillion are over the next ten years. How, then,  is it that we get a dollar spending reduction for each dollar increase in the debt ceiling? That was the Republican idea, I thought.  Shouldn't the dates at least roughly correspond? All this looks like fuzzy math to me.

In the end, it really is the deal no one seems to like, but most still wanted.  It had to be done to calm the markets and show the world that Washington can actually get something done. Spending is out of control and it has been for a long time.  But passage of this bill is a step in the right direction, but only a very small step.  It will be a very long and perilous road ahead.

Twitter Delicious Facebook Digg Stumbleupon Favorites More

Powered by Blogger