The Los Angeles County Bar Blog

More Layoffs, Supremes Side with Musician, Election Results

—Orrick Lays Off 100 Associates, 200 Staff. O'Melveny & Myers to Lay Off 90 Lawyers and 110 Staffers. AmLawDaily.
—U.S. Supreme Court "sides with musician in ruling against drug company." Christian Science Monitor.
—Villaraigosa wins reelection, Jack Weiss wins city attorney, Wendy Gruel wins controller, Measure B still in doubt. Spreadit.

Now Latham

Above the Law reports: "Records are being set this morning at Latham....managing partner Bob Dell sent out an email announcing that the firm is laying off 190 associates and 250 staff."

Rulings against Nacchio, Ra

—The Tenth Circuit has upheld the insider trading conviction former Qwest CEO Joseph Nacchio. WSJ, 10th Cir.
—Where is your god now, Corky Ra? The U.S. Supreme court has ruled against Summum, a religious group that sought to have its Seven Aphorisms placed on a monument in a public park. Althouse, PrawfsBlawg.

Pro and Con: Prop. 8, Deportation

—California's Supreme Court will hear Prop. 8 arguments. ACS Blog. The WSJ proclaims: "Set Your Tivos to the California Channel."
—Two views of the same story: Patterico and Witness LA offer two opposing interpretations of an LA Times story about a former gang member with a master's degree in English. 

In re Gomez May Alter California Sentencing

—With In re Gomez, the California Supreme Court has ruled on criminal sentencing issues in the wake of the U.S. Supreme Court's Blakely and Cunnignham decisions. Perhaps 500 California prisoners may be eligible for sentence reductions. Sentencing Law and Policy.
—Nancy Killefer, Tom Dasachle, and Timothy Geithner's tax problems, on the Tax Prof Blog.
—In case anyone was worried, Joe Francis has been found and placed under house arrest after missing his court date. SF Chron.
—According to Law.com, "Southwestern University School of Law has partnered with California State University, Dominguez Hills (CSUDH) on a joint J.D./M.A. program and another program that allows students to earn a bachelor's degree and juris doctor degree in six years."

Joe Francis Skips Court

—Purveyor of Girls Gone Wild videos Joe Francis did not appear in court today in Los Angeles for his federal tax evasion case. He was to appear pro per after firing his attorneys. AM Law Daily, Tax Prof. 

Dreier, Stein Partners Leave for Robins, Kaplan

Legal Pad LA indicates that Dreier, Stein partners have left the firm for Robins, Kaplan, Miller & Ciresi.

The 100-0 Basketball Game and Carona's "Win"

—An employment law slam dunk? A school coach was fired for refusing to apologize after his basketball team won 100-0. The details on Jonathan Turley's Res ipsa loquitur.
—A thoughtful summary of the Carona case on Police Issues.
—The Phil Spector retrial: Does a suicidal woman buy shoes? Legal Pad LA. Marky Ramone wears Converse tennis shoes to court. Trials and Tribulations.
—The LA Times tells the story of the Ucars, a family that committed suicide. Even after extensive investigation, no one knows why.
—The 2008 Bar exam results are out. TaxProf Blog.
—The U.S. Supreme Court has ruled in a case with local origins (Van de Kamp v. Goldstein) that affirms immunity for prosecutors preparing criminal cases for trial. The SCOTUS Blog discusses this and other recent criminal law cases from the Court.

Cooley Cuts, Ervin Cohen Hires, Carona Jurors Complain, Taxes May Go Up

—Obama signs order to close Guantanamo in a year. How Appealing.

—Cooley cuts 52 lawyers and 62 staff. Law.com. And Ervin Cohen hires 13 from Moldo Davidson. Legal Pad LA, via Daily Journal.

—Will California Republicans allow a tax increase? And will California's credit rating be downgraded? Rough and Tumble.

—Two Carona jurors claim they felt pressured to acquit. LA Times.

—Does Twitter Improve Legal Writing? Discuss, in 140 characters or less, at Legal Tweets.

Under Water...Under Arrest?

The U.S. government has begun to take ownership interests in large banks such as Bank of America and Citigroup. This poses a few interesting problems. The first is "moral hazard."  If you are a large company, and you know the government will bail you out of any bad decision you make, you become less careful and make more bad decisions.

This mis-prices risk. Normally, if some business action (i.e. lending, expanding, etc.) has an amount of risk attached to it, you will put an appropriate amount of money at stake. Poker is a good analogy: You do not know what the other players hold, but you can calculate your odds of winning, and the amount of money you stand to make, and risk (bet) an amount of money based on that information. Now, the government is saying that if you have the most money at the table, it is OK to bet it all on every hand, or certainly bet more than you normally would, because if you lose, the government will give you money. 

The government's rationalization is that if they do not give you more money when you lose, you will have to leave the table, but you are so vital to poker that if you leave the table not only will the other players be forced to stop playing but the entire casino will come to a halt. People will realize that the poker chips are only made of plastic, and the cashiers will close their windows so you can't turn those pieces of plastic into real money. This will (naturally) lead to riots, fire, and brimstone, and poker will never be played again.

Clearly, the government has this all figured out.

The second interesting problem is that you, as a borrower, now owe money to the government instead of a private institution. So, if you do not pay your loan, whether it is in the form of a mortgage or credit card, you have now defaulted to big brother. In addition to normal collections procedures, the federal government also has the police power. In other words, you are no longer in default to a large corporation that can sue you; you are now in default to an entity with the power to arrest you.