Some class action settlements are highly questionable. Think of a case where, say, the victimized consumers get a stupid coupon, so they can purchase even more goods or services from the company that victimized them — while the lawyers representing the plaintiffs walk away with a big payday.
One man is out to change all that. Ted Frank — lawyer and blogger extraordinaire, from Overlawyered and Point of Law (and also Above the Law) — has left his perch as a resident fellow at the American Enterprise Institute (AEI). He’s starting a new public interest law firm that specializes in pro bono representation of consumers unhappy with class action settlements. Ted is already handling two class actions in California.
We caught up with Ted to discuss his new gig. Read more, after the jump.
[Ed. note: Yesterday's guest post about how Barack Obama's tax plan might affect Biglaw associates, authored by Ted Frank, generated a record number of comments on ATL: 564 (and counting). It also generated lots of reaction throughout the blogosphere (links collected below). So we thought we'd invite Ted to do a follow-up.]
Here it is. Ted wrote it in response to the following reader email, which makes many of the arguments that surfaced in the 564+ comments. From an Obama defender:
I’m sorry, but you are losing your credibility by posting this false propaganda on Obama. Look at Obama’s website. It clearly states, “Asked About Raising the Cap, Obama said, ‘You Might Have the Equivalent of a Doughnut Hole’–NOT That He Would Completely Remove the Cap.” Obama “has stated in various venues that ‘his inclination… has been for a ‘donut’ where the uncapping would take place above some threshold income level — probably around $200,000 or $250,000′ his economic adviser Austan Goolsbee said in an email. A donut would protect a certain portion of income (e.g., between $100,000 and $200,000) from the payroll tax and could be phased in over decades.”
In addition, that “$34,000 paycut” in the post title is misleading. Even if all your assumptions were correct (which they weren’t), the after tax pay cut under Obama is < $20,000. I love your site, but please correct this ridiculous false article before you lose all credibility.
And now, without further ado, Ted Frank.
* * * * * * * * * *
First, as I show in the spreadsheet, a $20,000 tax increase is the equivalent of a $34,000 before-tax paycut for a New York City resident, which would have the same after-tax effect. The $34,000 figure is accurate: that’s just math. The Obama tax plan would have the same effect on a NYC fifth-year associate being paid market as a $34,000 paycut.
Obama has never said he will have a doughnut-hole, only that his SS tax could include a doughnut-hole. When Hillary Clinton attacked Obama at the November 15 Nevada debate for wanting to eliminate the cap, Obama didn’t say that the attack was incorrect; he defended the policy because eliminating the cap would only affect what he called the “upper class.” The press has accurately reported that Obama has also proposed eliminating the cap; even Obama’s own website links to a thinktank’s analysis of the benefits of a cap elimination.
It would be really easy for Obama to promise to include a “doughnut-hole” or to not eliminate the SS-tax cap. He certainly hasn’t been afraid to promise drastically expensive programs of new spending or even tax giveaways to large swaths of the population who aren’t paying much tax now.
But when it comes to Social Security, Obama is suddenly vague; when he does discuss details, it is to cite examples (e.g., Warren Buffett) that could not be accomplished without eliminating the cap entirely. And the only reason a politician acts that way is because he supports the more drastic, politically unpopular plan, but doesn’t want to get tagged with it before the election, and will say after the election “I only said I would ‘consider’ a doughnut-hole.” How Barack Obama’s Tax Plan Will Affect You [Microsoft Excel file]
Additional discussion and links, after the jump.
[Ed. note: Today we bring you some "news you can use": a practical look at how political choices might affect your personal finances. This post is by Ted Frank, who blogs at Overlawyered.com and PointofLaw.com, and who has guest edited ATL in the past. Take it away, Ted.]
BigLaw lawyers love Obama. If one searches by law firm various databases on-line for campaign contributions, one sees an overwhelming sea of blue, and most of it to Obama.
But how will Obama affect BigLaw wallets? On Above the Law, we regularly see commenters threaten to abandon law firms for falling $5,000/year short of market. I therefore thought it worthwhile to examine the effects of Obama’s tax and spending plans on take-home pay.
We all know that Obama wants to end the Bush tax cuts. That is a 3% bump across the board to the bad old days when associates faced a marginal federal tax rate of 36%.
But the real hidden tax is that Obama plans to end the social-security tax cap. Right now, you may notice, sometime during the summer or early fall, your take-home pay suddenly goes up because they stop deducting FICA. Current law caps social security taxes: in 2008, the cap is at $102,000. Obama proposes to abolish this. That mid-summer bump will be no more: add about several thousand dollars to your annual tax bill.
But social-security taxes are not only on employees. The government also charges 6.2% to employers that you never see on your W-2s. But rest assured the partners see this, and will notice that the expense of keeping an associate has risen several thousand dollars a year when FICA taxes double and triple. Will they swallow that additional expense, or take it out of your bonus?
Find out, after the jump (or click here).
* Jose Padilla gets 17 years. [New York Times; Washington Post]
* A merger between Anderson Kill and Reed Smith? Maybe not. But 55 of Anderson Kill’s 126 lawyers have decamped for Reed Smith. [WSJ Law Blog; WSJ Law Blog]
* Ted Frank on yesterday’s Enron cert denial: Extortion, interrupted? [New York Sun]
* China shuts down “real-time” porn site, as part of its crackdown on online porn. [Reuters]
* Law tie (however tenuous) to Heath Ledger story: “Nicole Vaughan, 24, a law student at New York University, was in a seminar about Jesus when someone sent her a message about Mr. Ledger. She checked the Web, then walked to the apartment ‘because of the way our generation is; we sort of feel we’re a part of each other’s lives.’” [New York Times]
* Apparently Bill Clinton enjoys the Yale Law / Harvard Law rivalry: “I kind of like to see Barack and Hillary fight.” [NYDN via Drudge]
* How much will various law-related search terms cost you on Google? Adam Liptak has collected some interesting examples: “Asbestos attorney” = $51.68, “Pro bono lawyer” = $2.89. [NYT via WSJ Law Blog]
* Another day, another Republican politician in a gay sex scandal. [Green Bay Press-Gazette]
* Not law-related, but interesting to those who follow the blogosphere: Vanessa Grigoriadis’s detailed profile of Gawker Media. [New York Magazine]
* Blawg Review #130, presented on two attorney/mediator law blogs — a Southern Hemisphere edition from New Zealand, and a Northern Hemisphere edition from the USA — recognizes Blog Action Day and International Conflict Resolution Day. [mediator blah... blah... and Online Guide to Mediation, via Blawg Review]
Jessica Cutler, the former Senate aide whose online sex diary landed her a book deal and a Playboy photo spread but got her kicked off Capitol Hill, has filed for bankruptcy….
Cutler has spent much of her time [recently] fending off a lawsuit by ex-boyfriend and fellow DeWine staffer Robert Steinbuch, who claims Cutler’s blog publicly humiliated him. He is seeking more than $20 million in damages.
In court documents filed in the case Thursday, however, Cutler says she can’t even pay her American Express bill, legal fees and student loans. She submitted to the judge a copy of a Chapter 7 bankruptcy petition filed in New York dated Wednesday.
The lawsuit is being closely watched by online privacy groups and bloggers because the case could help establish whether people who keep online diaries are obligated to protect the privacy of the people they interact with offline.
Our advice to Jessica: retain William P. Smith to represent you in bankruptcy court. You can pay his fees in “Happy Meals.”
On a more serious note: How did the Washingtonienne wind up in this financial predicament?
We’re not so good with math, so please help us out. We run some numbers, after the jump.
When President Bush delivered the State of the Union last night, Justice Ruth Bader Ginsburg was not one of the four Supreme Court justices in attendance.
Oddly enough, however, Justice Ginsburg and President Bush aren’t as far apart as one might think. They share something in common:
Both Justice Ginsburg and President Bush were cheerleaders!!!
President Bush’s career as a college cheerleader is well-known. But did you know that Justice Ruth Bader Ginsburg was a cheerleader too, at Madison High School, in Brooklyn, New York?
We are not kidding. More details available from Ted Frank. It goes without saying that we would LOVE a copy of that yearbook photo.
UPDATE: Alas, the link to Ted Frank’s blog no longer works. But you can read about Justice Ginsburg’s cheerleading career, as well as her other high school activities, over here.
Look, anything is possible. If little Olive Hoover (Abigail Breslin) can be a beauty pageant contestant, in Little Miss Sunshine — which just snagged Oscar nominations for Best Picture and for Breslin’s performance, among others — then surely RBG can be a cheerleader.
Because this distinguished and brilliant jurist seems rather grumpy as of late. Last week, in a published opinion, he slapped around the IRS.
And now Judge Richard Posner — who, by the way, will be assuming virtual form later this month — delivers stinging benchslaps to lawyers for playing fast and loose with jurisdiction:
[T]he lawyers have wasted our time as well as their own and (depending on the fee arrangements) their clients’ money. We have been plagued by the carelessness of a number of the lawyers practicing before the courts of this circuit with regard to the required contents of jurisdictional statements in diversity cases.
It is time, as we noted in BondPro, that this malpractice stopped. We direct the parties to show cause within 10 days why counsel should not be sanctioned for violating Rule 28(a)(1) and mistaking the requirements of diversity jurisdiction. We ask them to consider specifically the appropriateness, as a sanction, of their being compelled to attend a continuing legal education class in federal jurisdiction.
Ouch. But query whether forced attendance at a CLE class on federal jurisdiction constitutes “cruel and unusual punishment” under the Eighth Amendment.
Continued commentary, after the jump.
The AEI panel discussion on Watters v. Wachovia Bank that we were liveblogging earlier has ended. Our quick thoughts on the question-and-answer session, after the jump.
In a land that is right here and in a time that is right now, a technology has arisen so powerful that it can replace basic human document review. Is it time to bow down before our new robot overlords?
First, here’s a little story about me: my life in the legal world began as a paralegal. My first case was a GIANT patent infringement case that was already six years old and had involved as many as five companies, multiple US courts, the ITC and an international standards committee. I knew nothing about any of this.
On my first day, my supervisor (a paralegal with at least eight other cases driving her crazy) sat me down in front of a Concordance database with a 100,000+ patents and patent file histories. “Code these,” she said. I learned that “coding”, for the purposes of this exercise, meant manually typing the inventor’s name, the title of the patent, the assignee, the file date, and other objective data for each document. I worked on that project – and only that project – for at least the first six months of my job. After a week or so, time began to blur.
What I know, in retrospect and with absolutely certainty, is that as time began to blur, so did my judgment. So did my attention to detail. If you could tell me that I did not make at least one mistake a day – one inconsistent spelling, one reversed day and month, one incorrectly spaced title – I frankly would need to see your evidence. I would not believe it. The human mind is trainable but it is not a machine.
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We currently have a number of active openings for associate roles at US and UK firms in HK / China, Singapore and two new in-house openings. As always, please feel free to reach out to us at asia@kinneyrecruiting.com in order to get details of current openings in Asia, as well as to discuss the Asia markets in general and what we expect for openings later this year. Our Evan Jowers and Robert Kinney will be in Beijing the week of March 25 and Evan Jowers will be in Hong Kong the week of April 1, if you would like to meet them in person.
The US associate openings we have in law firms are in the usual areas of M&A, cap markets, FCPA / white collar litigation, finance, and project finance. The most urgent of our top tier (top 15 US or magic circle) law firm openings in Asia (among many other firm openings that we have in Asia) are as follows:
• 2nd to 5th year mandarin fluent M&A associates needed in Beijing and Hong Kong at several firms;
• Korean fluent 2nd to 4th year cap markets associate needed in Hong Kong;
• 2nd to 5th year Japanese fluent M&A associates needed in Tokyo;
• 4th to 6th year mandarin fluent cap markets associate needed in Hong Kong;
• 2nd to 4th year M&A / cap markets mix associate needed in Singapore.
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Some class action settlements are highly questionable. Think of a case where, say, the victimized consumers get a stupid coupon, so they can purchase even more goods or services from the company that victimized them — while the lawyers representing the plaintiffs walk away with a big payday.
