This sounds too good to be true.
Apparently Citigroup is willing to support the right of homeowners to reduce the mortgage debt on their primary residences in bankruptcy court. The banks have fought this idea tooth and nail for years. It was likely the real reason that Congressional Republicans refused to support the first iteration of the TARP bailout last year. I will be pleasantly shocked if this goes through. It would immediately alter the playing field for borrowers negotiating to modify their home loans.
It would also (thankfully) obviate a writing project I’ve been working on for awhile, a primer on a possible loophole in California law that would allow homeowners to “cram down” their mortgage debt under existing bankruptcy law. Anyone interested in nerding out on this subject as much as I have over the past year should first read Nobelman v. American Savings Bank, Clarence Thomas’ tortured reading of various bankruptcy code sections that placed residential homeowners at the bottom of the totem pole in terms of rights in bankruptcy court.
Existing law, as framed by Nobelman, states that distressed mortgages can only be modified in bankruptcy court to reflect a collapse in the underlying property’s value when the property is not the debtor’s primary residence. Everyone else–speculators, house-flippers, landlords, owners of vacation homes–gets a break. If it seems like backwards public policy, that’s because it is.
Well, it is now.
For years banks have argued that they needed to restrict the rights of homeowners to adjust their mortgages in bankruptcy so that they could continue to offer attractive interest rates to homebuyers. Allowing homeowners to cram down mortgage debt would have represented a greater risk to lenders, they argued, resulting in higher rates for all.
It would have slowed the steady rise in residential real estate too. Can’t have that, can we. Don’t wanna erode that ownership society.
At least Citi is succumbing to reality. We will see if it’s too little, too late.
Filed under: Criminal Defense
This stunning footage taken with cell phones by passengers on a BART train in Oakland, CA shows a police officer shooting an unarmed man in the back. The victim, 22-year old Oscar Grant, died later that morning.
The shooting took place at the Fruitvale station in Oakland on New Years’ Eve, after BART police had been summoned to intercept a train coming from San Francisco. Police were called because two groups of young black men were fighting on the train. The police believed Oscar to be a participant in the fight.
Initial media reports claimed that the shooting happened in the midst of a scuffle that the officers tried to break up. BART authorities have since backtracked, probably because of the video footage, which only surfaced today. It appears from the footage that there was no need for the officer, 27-year old Johannes Mehserle, to draw a gun on Oscar.
The officers appear to be easily-provoked hotheads who needlessly subdue Oscar in response to something he says. In the process of subduing Oscar, Mehserle draws his gun, and it goes off. He quickly replaces the gun while looking around at the other officers. The officers are dragging Oscar’s body when the train door closes on the witness recording the incident. Chaos ensues on board the train, and the video ends.
There are a couple different interpretations of the events that people have taken from the videos:
Officer Mehserle takes out his weapon, thinking it’s his taser, and fires it without knowing he is using lethal force.
This sounds reasonable at first glance, but it is probably not the case. If Mehserle intended to fire a taser, he would have waited for the other officer to release the victim. Otherwise, the other officer would have been stunned by the taser as well. Additionally, a taser is much lighter than a handgun and would presumably have been stowed in a different spot on Mehserle’s belt.
On these facts, Officer Mehserle should be charged with criminally negligent homicide.
Mehserle draws his weapon in an attempt to subdue Oscar, and accidentally discharges the weapon into Oscar’s back. In shock, he looks around at the other officers on the scene as if to say, “that didn’t just happen, did it?”
This will probably end up being the official story. There does not appear to be a need for Mehserle to draw his weapon here. Oscar is fully restrained, with another officer’s knee pressed to the back of his neck. Mehserle should have been pulling out handcuffs, not his gun. Additionally, pulling a gun on someone who is pinned down and facing the opposite direction doesn’t exactly have a deterrent effect. If Mehserle drew his weapon for that reason, he wasn’t thinking clearly.
On these facts, Officer Mehserle should at least be charged with manslaughter, and possibly murder as his actions were reckless and may have constituted a reckless disregard for Oscar Grant’s life. It will be interesting to see what he is charged with, assuming these facts constitute the official finding of the District Attorney.
Mehserle shoots Oscar intentionally in a fit of frustration, then quickly re-holsters his weapon while looking around as if to make sure no one has seen what he has done.
From the video alone, it is unlikely that the Alameda District Attorney will make this finding of fact. If we look at this incident in the context of that evening, however, the puzzle pieces tend to fit. Reports have surfaced indicating that Mehserle’s unit was at the tail end of a highly stressful New Year’s Eve, having confiscated a weapon and broken up a fistfight in earlier incidents that evening. It’s not a stretch to conclude that Mehserle had reached his breaking point.
On these facts, the charge should depend on Officer Mehserle’s general disposition. If he has a reputation as a hothead, he should be charged with murder. However, if he is a normally cool-headed cop placed in an volatile situation, I can see a reduced charge of manslaughter as just.
I will be shocked if the Alameda County DA pursues a murder case, however, even if there is ample evidence to support it. There is a a long history of cops shooting African-Americans and getting off light.
This tragedy is compounded by the fact that Oscar Grant has a young daughter, and Officer Mehserle’s wife gave birth to her first child within a day of the shooting.
Update: This video is about ten minutes and doesn’t have a good angle on the shooting itself, but the camerawoman gives an interview after the raw footage explaining what she saw. To sum it up, it’s even worse than I described above. According to this witness, the cops were beating Oscar Grant while he was immobile, before shooting him. The camerawoman also claims that an officer demanded that she relinquish her camera.
Last Friday, the Ninth Circuit decided Sklar v. Commissioner of Internal Revenue, upholding the IRS’s favorable treatment of the Church of Scientology, and refusal to extend similar benefits to any other religion. The background of this bizarre case likely traces to the 1980s, and it appears certain to extend past this decade as well.
In 1993, Michael and Marla Sklar, Orthodox Jews with five school-age children, learned that the IRS had settled a longstanding dispute with the Church of Scientology. The Church, known to intimidate its oppressors with armies of lawyers, had so thoroughly annoyed and exhausted the IRS that the Service caved in, allowing Scientology members to deduct past and future expenses for Church classes. The Sklars promptly amended their prior-year returns, claiming tuition payments to their kids’ Orthodox day school as deductible. The IRS disallowed the deductions and the Sklars, of course, sued.
The Tax Court and the Ninth Circuit agree that the policy is facially discriminatory, meaning that the policy must be supported by a compelling governmental interest. This is otherwise known as strict scrutiny, a standard that it is almost impossible for the government to overcome in defending a discriminatory policy. So the Sklars should be able to get their deduction, right?
Wrong. The Ninth Circuit held that even though the religious discrimination here is unconstitutional, the Sklars have no constitutional remedy. More specifically, the court found that granting the Sklars their deduction would violate the tax code (as did the Scientologists’ deductions), and amount to further unconstitutional discrimination against other religions. In other words, the Ninth Circuit relied on this old chestnut:
Two wrongs don’t make a right. [citation needed]
Well, they didn’t really say that, but that’s how it would have appeared if published on Wikipedia.
What they really said is much more appalling:
“…We would be reluctant ever to presume that Congress or any agency of the government would intend that a general religious preference be adopted, by extension or otherwise, as such preferences raise the highly sensitive issue of state sponsorship of religion. In the absence of clear expression of such intent, we would be unlikely to consider extending a policy favoring one religion where the effect of our action would be to create a policy favoring all.”
Great. So that means government agencies have a safe harbor to discriminate as long as they don’t come out and announce that they’re being discriminatory?
What this amounts to, logically, is that a policy that discriminates based on religion can survive strict scrutiny because the government has a compelling interest in being able to settle cases involving vexatious litigants. Observing that the Sklars have been pursuing these claims for over 15 years, how much more annoying do they have to be to get the IRS to cave?
Today marks the 75th anniversary of the ratification of the 21st Amendment, which repealed Prohibition.
Ethan Nadelmann, Executive Director of the Drug Policy Alliance Network, writes about it in relation to the current war on drugs in the Wall Street Journal today.
Apparently the Mumbai commando terrorists were hopped up on coke and LSD so they could stay awake during their three day rampage. I guess President Bush was right–the war on drugs really is related to the war on terror!
Or not. Here’s evidence that that the war on drugs undermines the war on terror. And an excerpt:
“…the misguided US poppy eradication campaign in Afghanistan has enabled the Taliban to earn enormous profits from the illegal drug trade. Most of these profits are only possible because the US and its allies have prevented competition from legal suppliers by targeting their poppy fields.”
This is the most compelling reason to end the war on drugs: the Taliban will have to tighten its belt.
Please take a moment to check out the Drug Law Blog.
And this brilliant post from a couple years ago: How to Make Drugs Boring, In Five Simple Steps. Here’s an excerpt:
Tell People What Will Actually Happen If They Take Drugs
Would you sit through a whole football game or an episode of American Idol if you already knew how it was going to come out? Well, some people might if they had a big bag of chips to eat, but a lot of people would find that really boring. The drama is deflated when you know the outcome in advance. It can work the same way with drugs, which will ruin most of the fun. If mysterious, metaphorical ad campaigns that compared drug use to scrambling an egg were replaced by detailed descriptions of what effects drugs actually produce, how long their effects last, possible health risks, and so forth, it would be a heck of a lot harder to have any kind of drug adventure at all. You would know what was going to happen before you even started, which is not interesting. And if drugs were produced in a way that kept their quality and potency uniform over time, taking a regular dose of some now-exotic drug like cocaine or methamphetamine might not be so risky. It might be like drinking a six pack of Miller Lite, which is not sexy or chic. Miller Lite is boring.
Now, go read the whole post.
During settlement negotiations in a pro bono case I took last month, I reached a deal with the other side over the phone. My client’s landlord had threatened to evict her because she had a cat in violation of her lease. I persuaded the landlord to let my client pay a $50 pet deposit, sign a pet agreement, and keep the cat. I hung up the phone happy that I’d saved my client a huge headache.
The next day the landlord faxed me the pet agreement, specifying a $250 pet deposit. Angrily, I immediately phoned the landlord for an explanation. He denied offering me a $50 deposit, of course.
I stuck to my guns, and after some bluffing and arm-twisting, got my client an even better deal than before. But the encounter left me wondering if I couldn’t have saved myself and my client a lot of trouble if I had just tape-recorded my phone calls with the landlord. I shared this thought with SS, a dear friend and former classmate of mine, and she gave me a look of amusement. “Sean, I’m pretty sure that’s illegal,” she declared.
I thanked her for the legal advice and replied that as someone who put himself through college by working at Radio Shack (which sells telephone recording devices), I was fairly certain that tape-recording phone calls in California was perfectly legal as long as one side of the conversation knows that the call is getting recorded. She told me to do my research and get back to her.
After doing my homework, I found that after I moved on from my college job, the sands had shifted under this area of California law. Although recording your own phone calls is legal under Federal law and in most U.S. states, California Penal Code 632(a) prohibits recording “without the consent of all parties to a confidential communication….” An injured party under the statute can sue for presumed damages of $5,000 per phone call.
Prior to 2002, California’s narrow definition of a confidential communication would have allowed me some wiggle room to tape my phone conversation with the landlord. The appellate courts split on whether certain conversations were subject to a reasonable expectation of privacy.
One line of authority, Frio v. Superior Court (1988) 203 Cal.App.3d 1480, held that a conversation was confidential if both parties have reason to expect that the conversation is not being overheard or recorded. Two years later, a competing theory arose from O’Laskey v. Sortino (1990) 224 Cal.App.3d 241. That case established that a conversation was confidential if both parties had reason to expect that the content of the conversation would not be divulged to third parties.
The distinction between the two holdings is huge and irreconcilable. Frio burdens the party who tape-records a conversation to inform the other party that the conversation is being taped. O’Laskey burdens a party who is being surreptitiously tape-recorded to show that both sides intended to keep the content of the conversation a secret.
Under the O’Laskey standard, I would have no problem tape-recording the landlord’s settlement offer, since it was clear that I would be communicating the substance of that offer to my client anyway. However, under Frio, I would have to inform the landlord that our conversation might be recorded or overheard.
The O’Laskey reasoning gained momentum in the 1990s. In Deteresa v. American Broadcasting Companies (9th Cir.1997) 121 F.3d 460, a flight attendant working O.J. Simpson’s flight from L.A. to Chicago after he allegedly committed double homicide spoke to an ABC reporter on the phone, and the reporter taped the call. The Ninth Circuit recognized the Frio-O’Laskey split of authority, predicted that the California Supreme Court would eventually go with O’Laskey, and held that the flight attendant could not reasonably expect that a journalist covering the O.J. case could keep a secret even if his life depended on it.
The tide turned in 2002, after I’d quit Radio Shack and entered law school, when the California Supremes decided Flanagan v. Flanagan (2002) 27 Cal.4th 766. In Flanagan, a manicurist recorded her phone calls with a customer after the customer confided that she was trying to kill her wealthy, cancer-stricken husband by injecting him with water instead of his prescribed medication. Meanwhile, the murderous wife, paranoid that her husband would try to cut her out of the will, recorded phone conversations between her husband and stepson. Eventually, the parties gathered enough incriminating evidence to confront each other with it, and everyone sued everyone under the statute in question.
The case went to trial and the jury rejected the wife’s claims against her manicurist, but found her liable for surreptitiously recording her husband’s conversations with her stepson. That made the case easy for the Supremes, who were clearly disgusted by the gold-digger’s plot in holding her liable for taping her stepson’s calls. The only way the Court could meaningfully punish her was by rejecting O’Laskey, because only two of the twenty-four calls she recorded were deemed “confidential” under O’Laskey. Under Frio‘s reasoning, all of the phone calls were confidential. At $5,000 a pop, the Court’s adoption of the Frio standard cost the gold-digger $110,000.
And that’s how it became effectively illegal to tape-record your own phone calls in California.
The morals of the story:
1. Hard cases make bad law.
2. Don’t tape your phone calls unless you can prove the other person knows about it. In fact, just don’t record your phone calls at all. It’s creepy.
3. Don’t listen to legal advice from Radio Shack employees.
Filed under: Uncategorized
I have been steadily collecting contingency fee cases. There will be much debauchery in downtown LA on the evening of my first settlement.
It would be nice if someone would pay me up front to take a case. I take credit cards…
Filed under: Uncategorized
I am on the verge of making a deal with either Lexis or Westlaw. This means that I will soon unleash my wicked legal research skills upon the world. Readers of this blog will soon see substantive articles by me (or other attorneys/legal pros for that matter, guest contributions are most welcome!) on legal developments I find interesting enough to write about.
Here are some of the topics you will see frequently here:
-Controlled substances and drug policy reform, especially the tension between state legalization movements and federal crackdowns, and the impact of the Religious Freedom Restoration Act on laws criminalizing peyote, psilocybin mushrooms, and other hallucinogens.
-Practice tips and legal developments related to modification of home loans under the recently passed borrower relief legislation, and the possible use of Chapter 13 proceedings to reduce a debtor’s principal owed on a home mortgage in California.
-Policy discussions on what to do about “criminal street gangs.”
-Discussions of ongoing impact litigation related to human rights abuses by multinational corporations.
But for now I am craving some lengua tacos and horchata from the 24/7 taco stand on Broadway across from the Eastern. If you’ve never had a pile of steaming hot cow tongue wrapped in a fresh corn tortilla from Tacos Mexico, you are missing out on one of life’s great pleasures.
The Fig Street Firm 