What Every Harvard Law School Student Should Know About Deciding What Kind of Law to Practice

A bright law student whom I mentor recently asked for advice in determining which field of law she should practice.  She articulated the stress that she experienced in struggling to narrow her focus in the legal sector with little actual experience or exposure to different aspects of law.  This situation is one that law students routinely face, and below are some suggestions to help you in your journey.  

You are not alone.  If I had a dollar for every law student (and lawyer) with looming uncertainties regarding what area of law to practice, I could probably afford to retire right now (not that I would, because I actually found a job that was the right fit and honestly love practicing law, and if you follow this advice, you hopefully will as well). Continue reading “What Every Harvard Law School Student Should Know About Deciding What Kind of Law to Practice”

Deborah Beth Medows is a Senior Attorney in the Division of Legal Affairs at the New York State Department of Health. She can be reached at dbmedows@gmail.com.

What Every Harvard Law Student Should Know About Juries

Juries are in crisis.  The jury trial exists today unloved, neglected, and largely avoided in legal practice.  Procedural barriers and civic apathy have combined to gut one of the central tenets of America’s constitutional structure.

The civil jury trial is dying.  In federal courts, less than 1% of civil cases are resolved before a jury.  In state courts, the percentage of jury trials is only slightly higher.  Lawyers can leave law school, make partner, and become a judge without ever trying a case before a jury.  Arbitration, mediation, and settlement dominate litigation practice.  Take a look at almost any long form contract (from your smartphone to your rental car agreement) and you (and everyone you know) likely will have signed away the right to a jury trial.  Fine print waivers have shifted a system of public justice to a process of private settlements.  And, even if you retain the right to sue, you still face daunting odds overcoming legal roadblocks (narrowed pleading and class action rules) and financial realities (lawyers cost more money than most law students can afford).  Going to trial is simply not an option for most individuals.  Continue reading “What Every Harvard Law Student Should Know About Juries”

What Every Harvard Law School Student Should Know About Appleseed

Among the many public service endeavors of Harvard Law School graduates, one lasting institution stands out:  Appleseed.  Recent Harvard Law School students may have seen the Appleseed conference room, on the fourth floor of Wasserstein Hall and wondered, what’s the Appleseed Foundation?

Appleseed is a network of 17 public interest justice centers in the United States and Mexico, with a national headquarters in Washington, DC.  At the 35th reunion for the Class of 1958, Ralph Nader, Ed Levin, Ralph Petersberger, Bert Pogrebin and other distinguished lawyers asked how they could make a lasting difference.  They didn’t do a day of service or make a huge reunion donation to the law school; rather, they decided to create a foundation whose mission would be to create other local institutions that would address systematic injustices…in short, to spread the seeds of justice, much as Johnny Appleseed planted apple orchards throughout the Ohio River Valley, Midwest and Canada. Continue reading “What Every Harvard Law School Student Should Know About Appleseed”

What Every Harvard Law Student Needs to Know About Corporate Crime

When can a corporation be prosecuted for a crime?  One of the most remarkable stories in all of American criminal law is the recent rise of the corporate prosecutions.  From last week’s announcement of new Department of Justice policies on corporate prosecutions, to the billions of dollars of currency fixing settlements in prosecutions of major banks, to the campaign trail speeches of candidates calling for more prosecutions of bad corporate actors, to the concern that “too big to fail” institutions can avoid justice for the harm they caused to our economy, corporate crime has never been more central to the national debate.  It should be a greater part of the law school discussion too and there is wonderful work that law students can get involved in. Continue reading “What Every Harvard Law Student Needs to Know About Corporate Crime”

What Every Harvard Law Student Should Know About Solitary Confinement

On any given day in the United States, supermax prisons and solitary confinement units hold tens of thousands of men, women, and children in conditions of extreme isolation and sensory deprivation, without work, rehabilitative programming, or meaningful human contact of any kind. These people are confined to small, often windowless cells with solid steel doors, where their only interactions with prison staff take place through “feeling slots,” and their only respite may be one hour a day to exercise alone in a walled or fenced “dog runs.” They may remain in solitary for anywhere from weeks to decades. This massive experiment in total human isolation is one of the nation’s most pressing human rights issues. Continue reading “What Every Harvard Law Student Should Know About Solitary Confinement”

What Harvard Law Students Should Know about the Popular Roots of Law in Massachusetts

On August 27, 1774, a Saturday, Timothy Paine (Harvard 1748, fifth in class, ranked at the time by “dignity of family”) received some visitors at his home in Worcester. Two thousand militiamen had gathered on the town common, they told him, to obtain his resignation from the Council. King George III had just appointed Paine and 35 others to serve on that powerful body, taking the place of council members who had been duly elected in May, and each of these appointees, like Paine, now had to face the people’s wrath. Continue reading “What Harvard Law Students Should Know about the Popular Roots of Law in Massachusetts”

What HLS Students Should Know About the Law Firms Recruiting Them…and What the Law Firms Won’t Disclose

In the movie The Firm, there’s a moment when Tom Cruise realizes the job he accepted fresh out of Harvard Law School (“HLS”), with the apparently staid tax law firm of Bendini, Lambert & Locke, has one major drawback: the Morolto crime family is the firm’s biggest client, and most of its lawyers are heavily involved in money laundering and tax fraud. This raises a question. Could that really happen? John Grisham thrillers are best enjoyed when such doubts are set aside, of course, but the question is a serious one nonetheless, because the plot of The Firm springs from the very real imbalance of power that exists between law students and the law firms that hire them. When law students graduate, they are in the position of apprentices, with little or no experience in the actual practice of their profession. At the same time, the average “apprentice” now starts a career in the law with more than $100,000 in student debt.[1] This combination of inexperience and financial need creates a powerful incentive for law students to seek employment with large corporate law firms, which may pay double or triple the starting salary of a job in government or the non-profit sector. Suppose, then, that such a firm violates the law or rules of professional conduct. Would it be required to disclose that fact as a condition of its participation in the On-Campus Interview (“OCI”) program at HLS? And if not, what safeguards are in place to ensure that students don’t wind up like Tom Cruise, inadvertently agreeing to work for a firm that engages in unethical or even criminal conduct?

Continue reading “What HLS Students Should Know About the Law Firms Recruiting Them…and What the Law Firms Won’t Disclose”

What Harvard Law Students Should Know About the Recent Supreme Court NC Dental Case: Arguably the Most Important New Precedent for Public Interest, Administrative, Antitrust, and State Government Law Since 1943

Is that title the product of ubiquitous attorney hyperbole? Or accurate? I believe the decision maybe the seminal example of the “King Wears No Clothes” lesson. Indeed, it has spawned no recognition within the popular press, and is apparently not comprehended by any editorial board from the Wall Street Journal to USA Today.

The U.S. Supreme Court case of North Carolina Dental Board v. FTC last month is, for antitrust and state regulatory law, the equivalent of Brown v. Board of Education for education and civil rights. To explain, in 1943 the same Court decided the seminal case of Parker v. Brown. It held that federal antitrust law applies, as a matter of supremacy, to matters affecting interstate commerce (pretty much everything). But an exemption was made for what is termed “state action.” That is, a state regulatory agency could arrange what would otherwise be an antitrust offense. Such a protective status require two conditions: it must be a restraint that was affirmatively articulated by the sovereign state — and it must be subject to “ adequate state supervision.” That second prong is critical. The state may not delegate sovereign power to restrain trade without that independent review. Another subsequent case (Midcal) by the Court made clear that this “supervision” may not be a general or pro forma review. It must be specific and real, and examine the anticompetitive implications of each public decision before implementation.

Since this 1943 decision, much has happened to the political reality of our “democracy.”

Continue reading “What Harvard Law Students Should Know About the Recent Supreme Court NC Dental Case: Arguably the Most Important New Precedent for Public Interest, Administrative, Antitrust, and State Government Law Since 1943”

What Harvard Law Students Should Know About the Torture Lawyers: What Will They Tell Their Children?

In Robert Bolt’s play, Man for All Seasons, Sir Thomas More is condemned to death for denying the legitimacy of the king’s divorce. The only witness against him is Richard Rich, an ambitious young lawyer who, by false swearing, dooms More and damns his own soul for all eternity. As More struggles to understand why, he learns that Rich has just been appointed Attorney-General for Wales. “For Wales?” he asks the young man. “Why Richard, it profits a man nothing to give his soul for the whole world . . . But for Wales?”

I think of Richard Rich each time I read of another lawyer who has disgraced himself for power or preferment. Indeed, I have invented the “Richard Rich Society” in my mind for just such people. Their numbers include the Justice Department lawyers who authorized the kidnapping, torture, indefinite detention, and assassination of alleged terrorists by the Bush and Obama administrations. Others abetted these lawyers, or shielded them from exposure or prosecution. No one today would ask if these disgraceful lawyers fear the wrath of a righteous God. However, it is not too much to ask what they will tell their children when asked: “Daddy, what did you do in the war against terrorism?”

Their practiced answer, of course, will be “I kept America safe from terrorists.” However, history books will tell a different story, and the children will learn how their fathers twisted the law to give CIA agents and military guards legal cover so that they might kidnap and torture often innocent “enemies,” and hold them without trial for more than a decade in CIA and military prisons, including Guantanamo – the American Devils Island.

Continue reading “What Harvard Law Students Should Know About the Torture Lawyers: What Will They Tell Their Children?”

What Harvard Law Students Should Know About Reining In Corporate Welfare

First, the bad news: there is a serious public policy problem at which lawyers, when swinging for the fences, have repeatedly struck out. Now the good news: lawyers, when working with community organizers and labor leaders, are winning terrific precedents.

The policy problem is corporate welfare, especially when states and localities (not counting Uncle Sam) spend an estimated $70 billion per year on “economic development incentives” that are all too often windfalls extracted when companies exploit federalism to whipsaw states against each other.

In a Darwinian corporate version of rising inequality, the problem has gotten much worse the past decade, with the soft economy creating more desperate politicians. Whereas we used to count about 10 “megadeals” per year (essentially deals costing taxpayers nine or ten figures each) for a total of $3 billion annually, we are now counting about 20 megadeals per year costing more than $6 billion.

Continue reading “What Harvard Law Students Should Know About Reining In Corporate Welfare”

What Harvard Law Students Should Know About the Rights of Employees to Litigate Claims of Wrongful Discharge

The common law followed by most states is the so-called “employment at-will” doctrine – that employees can be terminated for any reason. There are many exceptions to the “at-will” doctrine. Discharges in violation of federal or state statutes, for example non-discrimination statutes such as Title VII of the Civil Rights Act, are forbidden. Further many employment agreements, for example collective bargaining agreements applicable to union shops, forbid discharges without “just cause”.

Victims of discriminatory discharge because of race, gender etc., and protected by statute can often enforce their rights by filing charges with the appropriate governmental agency, for example the Equal Employment Opportunity Commission (EEOC) or National Labor Relations Board (NLRB).

Continue reading “What Harvard Law Students Should Know About the Rights of Employees to Litigate Claims of Wrongful Discharge”

What Harvard Law Students Need to Know About the Commons

Over the past twenty years in American politics, it has become increasingly clear that even conventional liberals (or “progressives”) are not going to produce the kinds of transformative change that our society really needs. Conventional public policy and law have been largely captured by the two major political parties, which themselves are both in tight collusion with business elites. I call it the Market/State duopoly, the incestuous alliance of the two great forms of power in our country, in a tacit collusion against genuine democratic participation and citizen control.

To be sure, we can’t simply walk away from politics, policy and law; they remain vital arenas of engagement. But our politics today is too structurally compromised to produce much significant change. As Senator Elizabeth Warren has said, the game is rigged. We live in a time of predatory business organizations, poorly performing government institutions, moribund democratic participation, and slow-motion ecological collapse.

So how to move forward?

I have come to see great value in seeing our political and legal challenges through the lens of the commons. One general way to understand the commons is as everything that we inherit or create together, which we must pass on, undiminished, to future generations. Our common wealth consists of countless resources that we share such as public lands, federally funded research, the atmosphere, the oceans, the airwaves used by broadcasters. The commons should be understood as a social and political system for managing that shared wealth, with an emphasis on self-governance, fairness and sustainability. The commons is also a worldview and ethic that is ancient as the human race but as new as the Internet.

If you mention “the commons” to someone today, the first idea that usually comes to mind is “the tragedy of the commons.” That idea was launched by biologist Garrett Hardin in the journal Science in 1968. In his now-famous essay, Hardin said, Imagine a pasture in which no individual farmer has a rational incentive to hold back his use of it. He declared that each individual farmer will put as many sheep on the pasture as possible, which will inevitably result in the over-exploitation and destruction of the pasture: the tragedy of the commons. Over the past two generations, economists and conservative ideologues elevated the “tragedy parable” into a cultural cliché because they saw it as a powerful way to promote private property rights and so-called free markets, and to fight government regulation.

But Hardin was not really describing a commons. He was describing an open-access regime that has no rules, boundaries or indeed no community. In fact, the situation he was describing – in which free riders can appropriate or damage resources at will — is more accurately a description of unfettered markets. You might say Hardin was describing the tragedy of the market.

The late Professor Elinor Ostrom of Indiana University powerfully rebutted the whole “tragedy of the commons” fable in her landmark 1990 book, Governing the Commons: The Evolution of Institutions for Collective Action. This book and hundreds of other case studies by Ostrom and her colleagues showed that it is entirely possible for communities to manage forests, fisheries, farmland, irrigation water, wild game and other natural resources as commons, without over-exploiting them.

How? People talk to each other, negotiate rules, build systems to identify and punish free riders, develop community norms, etc. An estimated two billion people around the world depend on these commons for their everyday survival – something that most economists ignore because this self-provisioning takes place outside of conventional markets. For her pioneering work in studying the role of cooperation in generating value, Ostrom won the Nobel Prize in Economics in 2009 – the first woman to win the award.

Another development in the 1990s – the emergence of the World Wide Web – persuaded me that the commons has a bright future. Within a few years after the Web went public, it became clear that cyberspace is a highly generative realm in which neither the state nor the market is the driving force. The Internet is really a massive hosting platform, a new lightweight infrastructure for cooperation that is fantastically generative, because it lets people self-organize their own commons.

By the early 2000s, it was clear that something very new and different had arrived: a new sector of commons-based peer production. This world consists of such powerful forces as free and open source software, which dominate the software world; the great Wikipedia project in dozens of languages and hundreds of wiki offshoots; the estimated 882 million documents and creative works using Creative Commons licenses; and the more than 10,000 open access scholarly journals that bypass the exploitations of commercial publishers. The rise of this Commons Sector simply cannot be explained by mainstream economics and its fictitious model of human beings as selfish, rational, utility-maximizing materialists.

Another noteworthy development in recent years has been the rise of an eclectic international movement based on the principles of commons. It consists of food activists trying to rebuild local agriculture; software programmers building free software and open source software; artists devoted to collaborative digital arts; and scientific communities sharing their research and data on open platforms. It can be seen among seed-sharing farmers in India practicing a kind of open-source agriculture, and among urban activists in Europe who demand a “right to the city” for citizens, as opposed to developers.

The commons movement also consists of many people who are fighting the privatization and commodification of their shared wealth by the “free market.” The “enclosure of the commons” is arguably one of the core dynamics of neoliberal capitalism – to collude with the state to take and marketize the people’s shared resources, whether they be elements of nature, culture and information.

In the US, we have seen timber companies seize great swaths of forests and wilderness that belong to the American people….federal drug research for which we taxpayers have paid billions of dollars, only to see Big Pharma claim monopoly patents….and the corporate privatization of public universities through “partnerships” that essentially annex publicly funded scientific research. Most recently, we have seen the fierce attempts by telecom and cable companies to seize control over access to the Internet in order to convert that great commons into a closed marketplace. Enclosures amount to a massive theft and dispossession of common wealth for private gain.

Market enclosures have provoked the rise of a large movement of commoners seeking to reclaim what is theirs. They include indigenous peoples trying to preserve their ethnobotanical knowledge from the biopiracy of big pharmaceutical and ag-biotech companies. Subsistence farmers and fishers whose livelihoods are being destroyed by industrial harvesting. Latin Americans fighting the neo-extractivist agenda of multinational companies plundering oil, minerals and genetic knowledge.

A whole other realm of commoners is engaged in the creative construction of new commons. You can see them in localities that use alternative currencies, such as the Bangla-Pesa in Kenya, which has made it possible for poor people in slum neighborhoods to exchange value with each other. You see the commons in the explosion of open design and manufacturing – design that is globally shared but manufacturing that is local, inexpensive, accessible to anyone, and modular, in the style of open source software. This movement has produced the Wikispeed car that gets 100 miles per gallon of fuel….the Farm Hack community that has produced dozens of pieces of affordable farm equipment…. and specialized open-source prosthetic limbs that major medical suppliers don’t have the creativity or profit incentive to make.

What unites these highly diverse communities? They are all asserting a different universe of value. They all share a basic commitment to production for use, not market exchange. They are asserting the right of communities to participate in making the rules that govern themselves, and the importance of fairness and transparency in governance. As commoners, they assert the responsibility to act as long-term stewards of resources.

In the 1980s, when Margaret Thatcher was insisting that Great Britain adopt the neoliberal agenda of privatization, deregulation, budget cuts and new privileges for capital, she insisted, as the European Union now insists to the Greeks, “There is no alternative!” The phrase that was later shortened to its acronym, TINA.

Looking around at contemporary commons and the many companion movements bursting out all over, it is clear that the more accurate acronym is TAPAS – “There are plenty of alternatives!” The only question is whether we have the eyes to see them and the courage to commit to them.

The great British critic Raymond Williams put it well: “To be truly radical is to make hope possible rather than despair convincing.” That is the real challenge that we face, to overcome cynicism and hopelessness, and to quicken the many serious alternatives awaiting our creativity.

David Bollier is cofounder of the Commons Strategies Group, cofounder of Public Knowledge, the Washington public-interest group, and author of Think Like a Commoner. He blogs at Bollier.org and lives in Amherst, Massachusetts.

20 Things You Should Know About Corporate Crime

Twenty-eight years ago, Corporate Crime Reporter, a weekly print newsletter, was launched. The Harvard Law School Library was one of our first subscribers. From the beginning, the most popular feature of Corporate Crime Reporter has been a weekly question/answer format interview. Over the years, we’ve interviewed hundreds of prosecutors, defense attorneys, law school professors, reporters, and activists. Our first interview, which appeared in Volume One, Number One on April 13, 1987 was with the premier corporate crime prosecutor of his day.

That was Rudolph Giuliani, then U.S. Attorney in the Southern District of New York. At the time, he was prosecuting the likes of Michael Milken, Ivan Boesky and Marc Rich. President Bill Clinton later pardoned Marc Rich. Apparently Marc Rich’s wife was dumping big cash into the Clinton library. Rudy is now solidly in the hands of the corporate crime lobby. He prosecuted corporate crime as a way to achieve higher office. Then he learned one of the key lessons of corporate crime prosecution.

You can achieve higher office by prosecuting corporate crime. But as you move up the ladder, you have to make nice with the corporate powers that be. And so you turn your attention and rhetoric to various forms of street crime.

Corporate crime lesson number one – prosecute corporate crime to achieve higher office, then get tough on street crime to protect your political position.

Or to simplify it, corporate crime is all about power politics.

Number 20

Corporate crime inflicts far more damage on society than all street crime combined. Whether in bodies or injuries or dollars lost, corporate crime and violence wins by a landslide. Last year, Credit Suisse pled guilty to helping thousands of Americans file false income tax returns. The company was fined $2.6 billion. Last year, BNP Paribas pled guilty to violating trade sanctions and was forced to pay $8.9 billion.

The costs of just those two crimes dwarf the yearly out of pocket yearly costs of all the burglaries and robberies in the United States ($4.5 billion in 2014 according to the FBI).
Health care fraud alone costs Americans $100 billion to $400 billion a year. (For more on this, check in with your neighbor, Harvard’s own Malcolm Sparrow and his corporate crime classic — License To Steal: How Fraud Bleeds America’s Health Care System (Westview Press, 2000).

The savings and loan fraud – which former Attorney General Dick Thornburgh called “the biggest white collar swindle in history” – cost us anywhere from $300 billion to $500 billion. And then you have your lesser frauds: auto repair fraud, $40 billion a year, securities fraud, $15 billion a year – and on down the list.

No comparison.

(For an incisive analysis on the double standard embedded in the U.S. criminal justice system — street crime versus corporate crime – check out — The Divide: American Injustice in the Age of the Wealth Gap by Matt Taibbi (Random House, 2014)).

Number 19

Corporate crime is often violent crime.

Recite this list of corporate frauds and people will immediately say to you: but you can’t compare street crime and corporate crime – corporate crime is not violent crime.

Not true.

Corporate crime is often violent crime. The FBI estimates that, 14,000 Americans are murdered every year. Compare this to the 54,000 Americans who die every year on the job or from occupational diseases such as black lung and asbestosis and the additional tens of thousands of other Americans who fall victim every year to the silent violence of pollution, contaminated foods, hazardous consumer products, and hospital malpractice. These deaths are often the result of criminal recklessness. Yet, they are rarely prosecuted as homicides or as criminal violations of federal laws.

The April 2010 Upper Big Branch mining disaster in West Virginia – cost 29 lives. A Labor Department report found that the company’s unlawful policies and practices were the root cause of the disaster. Yet, the company was given a non prosecution agreement. (More on deferred and non prosecution agreements to settle corporate crime cases below.)

The company’s former CEO, Don Blankenship, is currently facing federal criminal charges in West Virginia in connection with the deaths of the miners. (For the best coverage of his trial — and the politics of corporate crime in West Virginia, follow Charleston Gazette reporter Ken Ward Jr. (Twitter handle: @kenwardjr)

Number 18

Corporate criminals are the only criminal class in the United States that have the power to define the laws under which they live.
The mafia, no.

The gangstas, no.

The street thugs, no.

But the corporate criminal lobby, yes. They have marinated Washington –from the White House to the Congress to K Street – and all fifty state capitals — with their largesse. And out the other end come the laws they can live with. They still violate their own rules with impunity. But they make sure the laws are kept within reasonable bounds.

Exhibit A – the automobile industry.

Over the past 30 years, the industry has worked its will on Congress to block legislation that would impose criminal sanctions on knowing and willful violations of the federal auto safety laws. Today, with very narrow exceptions, if an auto company is caught violating the law, only a civil fine is imposed.

Number 17

Corporate crime is under-prosecuted by a factor of say – 100. And the flip side of that – corporate crime prosecutors are underfunded by a factor of say – 100.

Big companies that are criminally prosecuted represent only the tip of a very large iceberg of corporate wrongdoing.

For every company convicted of health care fraud, there are hundreds of others who get away with ripping off Medicare and Medicaid, or face only mild slap-on-the-wrist fines and civil penalties when caught.

For every company convicted of polluting the nation’s waterways, there are many others who are not prosecuted because their corporate defense lawyers are able to offer up a low-level employee to go to jail in exchange for a promise from prosecutors not to touch the company or high-level executives.

For every corporation convicted of bribery or of giving money directly to a public official in violation of federal law, there are thousands who give money legally through political action committees to candidates and political parties. They profit from a system that effectively has legalized bribery.

For every corporation convicted of selling illegal pesticides, there are hundreds more who are not prosecuted because their lobbyists have worked their way in Washington to ensure that dangerous pesticides remain legal.

For every corporation convicted of reckless homicide in the death of a worker, there are hundreds of others that don’t even get investigated for reckless homicide when a worker is killed on the job. Only a few district attorneys across the country have historically investigated workplace deaths as homicides.

White collar crime defense attorneys regularly admit that if more prosecutors had more resources, the number of corporate crime prosecutions would increase dramatically. A large number of serious corporate and white collar crime cases are now left on the table for lack of resources.

Number 16

Beware of consumer groups or other public interest groups who make nice with corporations.

There are now probably more fake public interest groups than actual ones in America today. And many formerly legitimate public interest groups have been taken over or compromised by big corporations. Our favorite example is the National Consumer League. It was created to eradicate child labor.

But in the last twenty years or so, it has been taken over by large corporations. It now gets the majority of its budget from big corporations such as Pfizer, Bank of America, Pharmacia & Upjohn, Kaiser Permanente, Wyeth-Ayerst, and Verizon.

Number 15

It used to be when a corporation committed a crime, they pled guilty to a crime.

So, for example, so many large corporations were pleading guilty to crimes in the 1990s, that in 2000, we put out a report titled The Top 100 Corporate Criminals of the 1990s. We went back through all of the Corporate Crime Reporters for that decade, pulled out all of the big corporations that had been convicted, ranked the corporate criminals by the amount of their criminal fines, and cut it off at 100.

So, you have your Fortune 500, your Forbes 400, and your Corporate Crime Reporter 100.

With the advent of deferred and non prosecution agreements, corporate guilty pleas are down significantly. But corporate crime, by all reports, is up significantly.

Number 14

Today, corporate criminals don’t have to worry as much about pleading guilty to crimes. Three new loopholes have developed over the past five years – the deferred prosecution agreement, the non prosecution agreement, and pleading guilty a closet entity or a defunct entity that has nothing to lose.

Number 13

Corporations love deferred prosecution agreements.

In the 1990s, if prosecutors had evidence of a crime, they would bring a criminal charge against the corporation and sometimes against the individual executives. And the company would end up pleading guilty.

Then, the Justice Department said – hey, there is this thing called a deferred prosecution agreement.

We can bring a criminal charge against the company. And we will tell the company – if you are a good company and do not violate the law for the next two years, we will drop the charges. No harm, no foul. This is called a deferred prosecution agreement.

And most major corporate crime prosecutions are brought this way now. The company pays a fine. The company is charged with a crime. But there is no conviction. And after two or three years, depending on the term of the agreement, the charges are dropped.

Number 12

Corporations love non prosecution agreements even more — like the one that Massey Energy got.

In 2007, I was sitting my office in the National Press Building. And into my e-mail box came a press release from the Justice Department. The press release announced that Boeing will pay a $50 million criminal penalty and $615 million in civil penalties to resolve federal claims relating to the company’s hiring of the former Air Force acquisitions chief Darleen A. Druyun, by its then CFO, Michael Sears – and stealing sensitive procurement information.

So, the company pays a criminal penalty. And I figure, okay if they paid a criminal penalty, they must have pled guilty.

No, they did not plead guilty.

Okay, they must have been charged with a crime and had the prosecution deferred.

No, they were not charged with a crime and did not have the prosecution deferred.

About a week later, after pounding the Justice Department for an answer as to what happened to Boeing, they sent over something called a non prosecution agreement.

That is where the Justice Department says – we’re going to fine you criminally, but hey, we don’t want to cost you any government business, so sign this agreement. It says we won’t prosecute you if you pay the fine and change your ways.

Corporate criminals love non prosecution agreements. No criminal charge. No criminal record. No guilty plea. Just pay the fine and leave.

(For a book length analysis of the trend toward deferred and non prosecution agreements, check out a corporate crime classic –Too Big to Jail: How Prosecutors Compromise with Corporations by law professor Brandon Garrett (Harvard University Press, 2014.)

Number 11

In health fraud cases, find an empty closet or defunct entity to plead guilty.

The government has a mandatory exclusion rule for health care corporations that are convicted of ripping off Medicare.

Such an exclusion is the equivalent of the death penalty. If a major drug company can’t do business with Medicare, it loses a big chunk of its business. There have been many criminal prosecutions of major health care corporations for ripping off Medicare. And many of these companies have pled guilty. But not one major healthcare company has been excluded from Medicare.

Why not?

Because when you read in the newspaper that a major healthcare company pled guilty, it’s not the parent company that pleads guilty. The prosecutor will allow a unit of the corporation that has no assets – or even a defunct entity – to plead guilty. And therefore that unit will be excluded from Medicare – which doesn’t bother the parent corporation, because the unit had no business with Medicare to begin with.

In May 2007, federal prosecutors brought a criminal prosecution of Purdue Pharma, the Stamford, Connecticut-based maker of OxyContin.

It was reported in the press that the company pled guilty to pushing OxyContin by making claims that it is less addictive and less subject to abuse than other pain medications and that it continued to do so despite warnings to the contrary from doctors, the media, and members of its own sales force.

In fact, Purdue Pharma – the company that makes and markets the drug –didn’t plead guilty. A different company – Purdue Frederick pled guilty. Purdue Pharma actually got a non-prosecution agreement. Purdue Frederick had nothing to lose, so it pled guilty.

Number 10

Corporate criminals don’t like to be put on probation.

Very rarely, a corporation convicted of a crime will be placed on probation. Many years ago, Consolidated Edison in New York was convicted of an environmental crime. A probation official was assigned. Employees would call him with wrongdoing. He would write reports for the judge.

The company changed its ways. There was actual change within the corporation.

Corporations hate this.

They hate being under the supervision of some public official, like a judge.

We need more corporate probation.

Number 9

Corporate criminals don’t like to be charged with homicide.

Street murders occur every day in America. And they are prosecuted every day in America. Corporate homicides occur every day in America. But they are rarely prosecuted.

The last homicide prosecution brought against a major American corporation was in 1980, when a Republican Indiana prosecutor charged Ford Motor Co. with homicide for the deaths of three teenaged girls who died when their Ford Pinto caught on fire after being rear-ended in northern Indiana.

The prosecutor alleged that Ford knew that it was marketing a defective product, with a gas tank that crushed when rear ended, spilling fuel.

In the Indiana case, the girls were incinerated to death.

But Ford brought in a hot shot criminal defense lawyer who in turn hired the best friend of the judge as local counsel, and who, as a result, secured a not guilty verdict after persuading the judge to keep key evidence out of the jury room.

It’s time to crank up the corporate homicide prosecutions.

If you would like to know more about criminal prosecutions for workplace and marketplace deaths and illnesses, check out a recent book by University of Maryland Law Professor Rena Steinzor. It’s called Why Not Jail?: Industrial Catastrophes, Corporate Malfeasance, and Government Inaction (Cambridge University Press, December 2014).

Number 8

There are very few career prosecutors of corporate crime. This despite the fact that universally, white collar lawyers would prefer to work in the public sector than in the private sector. They will tell you this straight up. And they have.

For years, I would raise the then rare example of Patrick Fitzgerald as a career corporate and white collar prosecutor. For more than 20 years, he was U.S. Attorney in Chicago. He put away Scooter Libby. He put away the Canadian media baron Conrad Black. He prosecuted powerful corporations and public officials alike.

But then alas, in 2013, Fitzgerald succombed to seductions of the criminal defense bar and joined his colleagues at Skadden Arps.

Number 7

Most corporate crime prosecutors see their jobs as a stepping stone to greater things.

Some, like Giuliani, prosecuted corporate crime as a way to move up the political ladder and then into private practice.

Most young prosecutors prosecute corporate crime as a step up into the lucrative corporate crime defense bar.

Number 6

Corporate criminals often turn themselves into the authorities.

The vast majority of corporate criminal prosecutions are now driven by the corporations themselves. If they find something wrong, they know they can trust the prosecutor to do the right thing. They will be forced to pay a fine, maybe agree to make some internal changes.

But in this day and age, in all likelihood, they will not be forced to plead guilty.

So, better to be up front with the prosecutor and put the matter behind them. To save the hide of the corporation, they will cooperate with federal prosecutors against individual executives within the company. Individuals will be charged, the corporation will not.

Number 5

The market doesn’t take most modern corporate criminal prosecutions seriously.

Almost universally, when a corporate crime case is settled, the stock of the company involved goes up.

Why? Because a cloud has been cleared and there is no serious consequence to the company. No structural changes in how the company does business. No monitor. No probation. Preserving corporate reputation is the name of the game.

Number 4

The Justice Department needs to start publishing an annual Corporate Crime in the United States report.

Every year, the Justice Department puts out an annual report titled “Crime in the United States.”

But by “Crime in the United States,” the Justice Department means “street crime in the United States.”

In the “Crime in the United States” annual report, you can read about burglary, robbery and theft.

There is little or nothing about price-fixing, corporate fraud, pollution, or public corruption.

A yearly Justice Department report on Corporate Crime in the United States is long overdue and long resisted.

Number 3

We must start asking – which side are you on – with the corporate criminals or against?

Most professionals in Washington work for, are paid by, or are under the control of the corporate crime lobby.

Young lawyers come to town, fresh out of leading law schools, 25 years old, and their starting salary is $150,000 a year. And they’re working for the corporate criminals.

Young lawyers graduating from the top law schools have all kinds of excuses for working for the corporate criminals – huge debt, just going to stay a couple of years for the experience.

But the reality is, they are working for the corporate criminals.

What kind of respect should we give them? Especially since they have many options other than working for the corporate criminals.

Time to dust off that age-old question – which side are you on?

(For young lawyers out there considering other options, check out Alan Morrison’s book – Beyond the Big Firm: Profiles of Lawyers Who Want Something More (Aspen Publishers, 2007))

Number 2

We need a 911 number for the American people to dial to report corporate crime and violence.

If you want to report street crime and violence, call 911.

But what number do you call if you want to report corporate crime and violence?

We propose 611.

Call 611 to report corporate crime and violence.

We need a national number where people can pick up the phone and report the corporate criminals in our midst.

What triggered this thought?

I attended the press conference at the Justice Department in 2007 announcing the indictment of Congressman William Jefferson (D-Louisiana).

Jefferson was the first U.S. official charged with violating the Foreign Corrupt Practices Act.

Federal officials alleged that Jefferson was both on the giving and receiving ends of bribe payments.

On the receiving end, he took $100,000 in cash – $90,000 of it was stuffed into his freezer in Washington, D.C.

The $90,000 was separated in $10,000 increments, wrapped in aluminum foil, and concealed inside various frozen food containers.

At the press conference announcing the indictment, after various federal officials made their case before the cameras, up to the mike came Joe Persichini, assistant director of the Washington field office of the FBI.

“To the American people, I ask you, take time,” Persichini said. “Read this charging document line by line, scheme by scheme, count by count. This case is about greed, power and arrogance.”

“Everyone is entitled to honest and ethical public service,” Persichini continued. “We as leaders standing here today cannot do it alone. We need the public’s help. The amount of corruption is dependent on what the public with allow.”

The amount of corruption is dependent on what the public will allow.

“If you have knowledge of, if you’ve been confronted with or you are participating, I ask that you contact your local FBI office or you call the Washington Field Office of the FBI at 202.278.2000. Thank you very much.”

Shorten the number – make it 611.

Number 1

And the number one thing you should know about corporate crime?

Everyone is deserving of justice.

So, question, debate, strategize, yes.

But if God-forbid you too are victimized by a corporate criminal, you too will demand justice.

We need a more beefed up, more effective justice system to deal with the corporate criminals in our midst.

Russell Mokhiber is editor of Corporate Crime Reporter and author of Corporate Crime and Violence: Big Business Power and the Abuse of the Public Trust.

What Harvard Law Students Should Know About For-Profit Colleges

I’m a Washington DC lawyer and policy advocate, and I spend a couple days a week trying to expose and end the abuses of a particularly bad industry: predatory for-profit colleges. I am regularly contacted by industry employees who no longer can live with being part of an immoral enterprise:

  • The marketer at a Utah “lead generation” company who is assigned to placing fake ads for non-existent jobs on the Internet, aimed at luring unemployed people to provide their contact information.
  • The telephone rep at a Florida call center, who grabs the leads that were generated, and tries to deceive these people – low-income single parents, veterans, and others struggling to get ahead – into buying high-priced, low-quality career training programs, many conducted entirely online.
  • The California college librarian, heartbroken because her school has admitted to its $80,000 criminal justice a program a mentally challenged man who reads on a third grade level and believes he is training to become a police officer.

These employees talk to me about feeling ashamed, degraded, disgusted with what they’re doing.

Yet their ultimate bosses, the CEOs of the big predatory for-profit colleges, seem to have no such shame. Nor do the many power brokers and celebrities, from Suze Orman to Colin Powell, Trent Lott to Dick Gephardt, Marc Morial to Mitt Romney, who have been hired, one way or another, to endorse and defend bad actors in this industry. Nor do the many graduates of Harvard Law and other premier institutions who get rich as executives and advisers with predatory for-profit colleges.

When you leave Harvard, you will have a world of opportunity. The question posed for you by the story of for-profit colleges is whether you want to be paid to shield the privileged even when they engage in blatant abuses, or whether you want to use your talents and creativity to help build a stronger, more just, more innovative, and more productive society that benefits everyone.

A for-profit college is a college that’s owned by a profit-making business, as opposed to the more traditional model of a college operated by a state or by as a non-profit.  Most for-profit colleges focus on training students for careers, in fields from information technology to health care to auto repair.  There’s a strong need for such training programs, and there’s nothing wrong in theory with the idea of having businesses run them, but in practice it has created a big problem for students and taxpayers.

Many for-profit colleges get about 90 percent of their revenue from federal government grants and loans provided to help students get an education.  These businesses hire lobbyists to loosen the government’s rules for getting such aid. They also spend heavily on campaign contributions that have helped buy the allegiance of almost all the Republicans in Congress, and many of the Democrats as well.

As a result, the rules are very weak, and for-profit colleges can maximize their profits by ripping off students – using deceptive advertising and coercive recruiting, charging very high prices, and spending far too little on teaching and helping students build careers. The victims of these abuses have seen their financial futures ruined by overwhelming student loan debts reaching over $100,000 in some cases.

Some for-profit colleges are honest and do a good job educating students, and there are good teachers and students at even some of the worst schools. But overall, the industry is hurting people and our economy, while making a small group of owners rich enough to buy their own yachts, private planes, and mega-mansions.  For-profit colleges have obtained as much as $32 billion a year from federal aid, and their lobbyists work every day to keep that money flowing.

For-profit colleges, like other kinds of colleges, are eligible to receive federal student grants and direct loans — if they receive approval from organizations called accreditors. Many accreditors apply fairly low standards. Some for-profit colleges, such as some local strip-mall beauty schools or the infamous Donald Trump University, still don’t bother to get accredited, and thus students are not eligible for federal aid.  Most for-profit colleges do get federal aid, but many of their students need more aid than that to pay the high tuition costs.  So for-profit colleges steer many students into non-federal private loans that come with very high interest rates that can reach 15 percent or more, as compared with 3.8 percent for federal loans.

For-profit colleges tend to have graduation and job placement rates at the low end of the scale, especially given their high prices.  Here is one key statistic that shows the poor performance overall of for-profits: According to the U.S. Department of Education, for-profit colleges now have about 13 percent of all US college students, but they account for nearly half of all defaults on student loans. The Department also found that 72 percent of the for-profit colleges it surveyed produced graduates who on average earned less than high school dropouts.

There are real challenges in figuring out how to provide quality career education to people at affordable prices. But instead of focusing on that important work, Washington education policy advocates and lawyers are caught up in a debate defined by the for-profit college industry using pressure to keep billions in federal dollars flowing with no accountability whatsoever. Because their wealth comes almost entirely from taxpayers, the for-profit college industry is a monster that Washington has created. It’s difficult to stop this monster.

But in recent years federal and state law enforcement agencies have launched extensive investigations of for-profit colleges for defrauding students and taxpayers. Many of the biggest for profit colleges – including University of Phoenix, EDMC, ITT Tech, Corinthian, Kaplan, Career Education Corp., and DeVry – are under investigation by federal agencies and / or state attorneys general.  Some for-profit colleges – including ATI Technical Institute and FastTrain College — have been shut down for their frauds, and some for-profit college executives have been sent to prison.

These law enforcement probes, coupled with an increasing volume of media exposes, have finally helped get the message to potential students that they might do better at a community or state college. But the for-profits continue to run deceptive ads endlessly on TV and the Internet; before he was killed in Ferguson, MO, Michael Brown had enrolled at for-profit Vatterott College, a school that has been punished in court for deceiving its students and leaving them worse than they started and whose executives received criminal convictions for defrauding the government.

President Obama is well aware of the scam. His Administration has sought to implement a new rule (called “gainful employment”) to channel aid toward programs that were actually helping students and away from programs that consistently leave students with overwhelming debt. But an army of industry lobbyists and lawyers have managed to water down the rule and then have it struck down in court, on the ground that the Department had failed to articulate a clear rationale for one component of the regulation.

Right now, APSCU, a trade association dominated by predatory for-profit colleges, is back in court trying to block a new version of this rule. I work with a coalition of student, veterans, labor, consumer, and civil rights groups urging the court to decide that the government has the right to demand at least minimal performance standards, that predatory companies do not have a permanent entitlement to take billions in taxpayer dollars without regard for the consequences for students and our economy. (This litigation, and many other aspects of this issue, are ripe for further exploration through your law school papers and law journal articles.)

When you consider a debate like this, think about your future as an attorney. Which side will you be on?

David Halperin engages in policy, advocacy, communications, and legal work in Washington DC. He is a Yale Law graduate who took his third year of classes at HLS. A former White House speechwriter for President Clinton, Halperin is the author of Stealing America’s Future: How For-Profit Colleges Scam Taxpayers and Ruin Students’ Lives (Amazon ebook). You can reach him through his blog: RepublicReport.org/contact .

 

On the Large Potential of Small Claims Courts

When I was in law school, I bought a laptop that turned out to be a lemon. It would overheat during class, sending the cooling fan into overdrive, and by the end of an hour it whirred loud enough to turn heads several rows away. Soon it started to crash. “System failure,” the screen would read upon rebooting. And then, two years after I bought it, the machine crashed for the last time: “massive system failure,” it said.

This was not a cut-rate computer. It was a Toshiba – supposedly one of the best brands – and I bought it from a reputable national retailer for $1,500. So I called the store. The manager’s response was as predictable as it was unsatisfactory. Since the warranty had expired, the store – OK, it was Micro Center on Memorial Drive in Cambridge, but it easily could have been another – wouldn’t even look at it unless I paid a “diagnostic fee” of $95. My only recourse now, the manager insisted, was to contact the manufacturer.

Just as predictably, Toshiba declined to accept responsibility for the defective machine, due to the expired warranty. But my call to corporate headquarters yielded an interesting fact: someone else had purchased the computer two months before I did, and registered it with Toshiba. That person had apparently returned the computer to Micro Center, and Micro Center then sold it to me as new.

Every state has laws that are intended to protect consumers from such abuses by prohibiting unfair and deceptive business practices. [1] In most states, including Massachusetts, the law provides citizens with a private right of enforcement by means of a civil action for damages. [2] The Massachusetts Consumer Protection Act, like many other state laws, also allows a prevailing plaintiff to collect treble damages for knowing or willful violations, plus costs and attorney’s fees. [3] But often no attorney is needed, because consumers can represent themselves in small claims court.

Small claims courts are the most accessible forum of law available to American citizens. States began to establish them in the early twentieth century, following publication of an influential article by Roscoe Pound, which argued that consumers should have a mechanism for pursuing relatively minor claims without incurring the expense of a full-fledged lawsuit. [4] Today small claims courts exist in every state, and although their rules vary, they share the same basic characteristics: costs are minimal, procedures are simple, and adjudication is lightning fast in litigation time. Filing fees range from $15 to $150, depending on the state, while the maximum claim value ranges from only $2,500 in Kentucky and Rhode Island to as much as $25,000 in Tennessee. [5] Massachusetts falls in the middle: filing fees are between $40 and $150, depending on the value of the claim, and the maximum claim value is $7,000 (except there is no limit on property damage claims arising from an automobile accident). Apart from those requirements, anyone with a grievance can have their day in court simply by filling out a complaint form and appearing at the scheduled hearing. Massachusetts also permits parties to be represented by an attorney, though some states do not.

Despite the original purpose of small claims courts, and the ease with which average citizens can access them, their dockets tend to be dominated not by consumer claims, but by debt collectors and other business interests pursuing claims against individuals. [6] A study of a California small claims court found, for example, that corporate or business plaintiffs filed 56 percent of all cases in 2002, while only 36 percent were filed by individual or private party plaintiffs, and the remaining 8 percent were filed by government plaintiffs. [7] The authors surmise that corporations are simply more familiar with the small claims court system than average citizens, and that collecting debts is a normal part of the corporate business structure. [8] But whatever the cause, they conclude, “the system has been over utilized by businesses and corporations.” [9] In other words, to some extent small claims courts have been functionally hijacked by the very interests they were intended to check.

This is not a new phenomenon. As early as 1972, a comprehensive legal study of small claims court referred to it as “the forgotten court,” because the spirit of reform that gave rise to it appeared to have moved on. [10] But the debt collectors have not forgotten. In 2006, an investigation by the Boston Globe concluded that small claims courts, with their relaxed procedures and evidentiary standards, “have mutated into a system that ignores individual rights and shows favoritism toward debt collectors and their lawyers.” [11]

To be sure, small claims courts may be subject to abuse by unscrupulous debt collectors – and that is just one of many valid criticisms. [12] But they can also be an effective forum for accomplishing exactly what they were originally intended to do. In my case, for example, a $1,500 lemon was more than I could swallow, and so I sent Micro Center a demand letter requesting restitution or some other reasonable resolution. Micro Center declined, and soon we were appearing before a magistrate judge in the small claims division of Cambridge District Court. I presented my evidence, which Micro Center didn’t dispute. Its representative also helpfully admitted that Micro Center routinely sold floor models and returned merchandise as new, without notice to the customer. Justice was swift – I was awarded treble damages, plus costs, for a judgment of more than $4,500.

Everyone, it seems, has their own “Micro Center” story. In today’s economy of mass produced goods and automated transactions, the consumer who has never been victimized by defective products, shoddy services, overcharges, hidden and unauthorized fees or other unlawful business practices is vanishingly rare. But all too often, consumers accept these abuses as a cost of doing business if they want cable television, cell phones, rental cars, airline travel, hotel rooms and all the other amenities or necessities of modern life. Some people may be unsure of their rights, or how to go about obtaining a remedy. Others may not even know they have a claim, because putative corporate defendants have become so adept at warding off litigation by citing boilerplate provisions of their fine print contracts.

Imagine if more consumers were willing to challenge corporate malfeasance in small claims court. Corporations might soon decide that unfair and deceptive business practices weren’t so cost-effective anymore. They might even start treating consumers with the kind of honesty and fairness that real people expect from each other in business. That’s the idea behind the Small Claims Action Center, a new non-profit organization launching in Washington, DC. SCAC will help ordinary people use consumer protection laws to obtain justice in small claims court, while raising awareness among similarly situated parties who also may have meritorious claims. The more individual plaintiffs who are made whole, the greater the deterrent effect small claims court will have against the abusive and unlawful corporate practices proliferating today.

Those who doubt that small claims court litigation can produce a meaningful deterrent effect may be surprised to learn that it has already done so, albeit in isolated instances. In the early 1980s, for example, more than 100 people filed separate small claims actions against the San Francisco Airport, seeking the jurisdictional limit in nuisance damages for excessive noise. The small claims court awarded judgment in favor of each plaintiff, and the appellate courts upheld the judgments. [13] In doing so, the Court of Appeals expressly rejected the city’s arguments that the claims were too “complex” or otherwise “inappropriate” for resolution in small claims court. [14]

The same thing can happen again. And again, and again, and again.

Oliver Hall is a public interest attorney in Washington, DC. He is founder and legal counsel to the Center for Competitive Democracy.

[1] See Carolyn Carter, Consumer Protection in the States: A 50-State Report on Unfair and Deceptive Acts and Practices Statutes, NATIONAL CONSUMER LAW CENTER (February 2009).

[2] See MASS. GEN. LAWS ch. 93A (2014).

[3] See id. at § 9(3).

[4] See Roscoe Pound, The Administration of Justice in the Modern City, 26 HARV. L. REV. 302 (1913).

[5] See NOLO, Small Claims Court: The Basics (visited February 20, 2015) <http://www.nolo.com/legal-encyclopedia/small-claims-court>.

[6] See Bruce Zucker and Monica Her, The People’s Court Examined: A Legal and Empirical Analysis of the Small Claims Court System, 37 U. SAN. FRAN. L. REV. 315, 341 & n.143 (Winter, 2003).

[7] See id.

[8] See id.

[9] See id. at 340.

[10] See Barbara Yngvesson and Patricia Hennessey, Small Claims, Complex Disputes: A Review of the Small Claims Literature, 9 L. AND SOC. REV. 2, 219 (Winter, 1975).

[11] See Michael Rezendes et al., Dignity Faces a Steamroller, BOSTON GLOBE (July 31, 2006).

[12] See, e.g., Jeffrey H. Joseph and Barry A. Friedman, Consumer Redress Through the Small Claims Court: A Proposed Model Consumer Justice Act, 18 B.C. IND. AND COMM. L. REV. 5, 839 n.2 (June 1977).

[13] See City and County of San Francisco v. Small Claims Division, 190 Cal. Rptr. 340 (Ct. App. 1983).

[14] See id. At 343-44.