Legal Ethics Forum

Volkswagen's Lawyers

Last week Richard Painter posted on "Where were the Lawyers" in thinking about the Volkswagen scandal.  In a column for slaw.ca today I consider that question, but also whether in asking it we ask the wrong thing: http://www.slaw.ca/2015/09/30/the-volkswagen-scandal-when-we-ask-where-were-the-lawyers-do-we-ask-the-wrong-question/ 

My main point:

But how surprised ought we to be that people didn’t [speak out]? We have any amount of evidence – experimental and historical – that most people fail to rise above their moral circumstances. When circumstances and institutional structures encourage bad behaviour, people are more likely to act badly then to act well. We properly assert the lawyer’s obligation to respect and facilitate the rule of law, particularly when advising clients. Lawyers not only have a personal moral obligation to address Volkswagen’s conduct but also – if they were asked for advice – a professional one. But we should also acknowledge that lawyers are only likely to fulfill those personal and professional duties when circumstances at least somewhat support them doing so. Lawyers have special duties. But they aren’t special – they are ordinary people, likely to respond in the ways ordinary people do to the circumstances in which they find themselves. So when a lawyer fears a client’s disapproval (or wants the client’s approval), where the lawyer works in an environment in which certain kinds of misconduct become normalized or excused, where conformity is valued, or, conversely, creativity in “interpreting” rules is, it is not really that surprising that that lawyer does not act to prevent misconduct, even where satisfaction of his personal or professional obligations should lead him to do so.

This isn’t an excuse. Everyone who participated in the Volkswagen deception acted wrongfully. But it is an explanation for the failure of lawyers to prevent wrongdoing, and one that suggests that when you ask the question, “where were the lawyers?” the answer is almost always going to be: where everyone else was.

Which means that if our goal is to prevent corporate misconduct then asking where the lawyers were isn’t the right question or, at least, isn’t a sufficient one. It focuses on individuals and their professional obligations, rather than on the circumstances in which those individuals acted as they did. And that limited focus will never fully explain the failure of those individuals to meet their obligations.

We have to ask tougher and more intractable questions. About the power structure of the lawyer-client relationship, particularly where lawyers work in-house. About the nature of corporate decision-making, and its potential to encourage or discourage moral conduct. About the potentially corrosive effect that lawyer advocacy has on lawyer advising.

In short, we have to ask not only where were the lawyers, but also about where the lawyers were.

Bernie Sanders on Judicial Selection

In a speech to an overflow crowd in Portland, Oregon, Bernie Sanders reiterated what he described as one of his few campaign promises: “My nominees to the U.S. Supreme Court will in fact, have a litmus test and that test will be that they will have to tell the American people that their first order of business on the Supreme Court will be to overturn Citizens United.”

While ideological screening of Supreme Court nominees by Presidents is the norm and privately administered litmus tests probably not uncommon, Senator Sanders goes one step further. He would require that nominees publically commit to case outcomes. Presumably, nominees would “tell the American people” about their specific commitments at a press conference or other public event, or at least in a signed statement made available to the press. 

Sitting judges in jurisdictions that have adopted Rule 2.10(B) of the ABA Model Code of Judicial Conduct may have difficulty making the commitment required by Sanders. Rule 2.10(B) prohibits a judge from making pledges, promises, or commitments inconsistent with judicial impartiality in connection with cases, controversies, or issues likely to come before the court. But President Sanders could easily select a judge from a jurisdiction that has not incorporated Rule 2.10(B) into its judicial code or nominate a lawyer employed outside of the judiciary. And that nominee would be under no legal or ethical duty to refrain from making commitments on any number of issues, controversies, and cases. There is no code of judicial conduct applicable to Supreme Court Justices much less a code applicable to nominees for that office.

Of course, once on the Court the new Justice would be subject to the federal disqualification statute which requires recusal from cases in which a judge’s impartiality might reasonably be questioned. But this should not be much of a roadblock since Supreme Court Justices decide their own recusal motions.

Although under President Sanders’ proposal judicial impartiality in fact and in appearance will suffer, there is a bright side. If President Sanders filled a majority of seats on the Court with pre-committed Justices, lawyers before the Court could significantly reduce the time and effort expended on the argument sections of their briefs.

Pope Francis needs a Vatican Super PAC to get any of it done

“As soon as the coin in Congress rings, the bill from purgatory springs.” 

Thus goes a contemporary American reiteration of what Jonathan Tetzel is alleged to have said about the Church’s sale of indulgences at the time of the Reformation. ("As soon as the coin in the coffer rings, the soul from purgatory springs").  The Church has not sold indulgences for centuries, but the United States Congress does.  And indulgence is a very good word for what goes on at both the giving and the receiving end of the transaction.

The Pope’s speech was eloquent and insightful.  That might have been enough to get something done at the time of our Country’s founding.  But today, if you want legislation, you must pay to play.

To turn any of his ideas into reality, Pope Francis needs a Super PAC. 

But isn’t it illegal for a foreign power -- including the Vatican -- to contribute to United States political campaigns?

Yes. It is also illegal in most states for anyone to drink under the age of 21.  

Getting foreign money – especially foreign corporate money – into US political campaigns is easier than getting alcohol onto the typical college campus.  More and more US companies are owned by or are in joint ventures with Chinese, Middle Eastern, Russian, and other interests around the globe.  Sovereign wealth funds invest billions in US Companies.   

When the Supreme Court equated corporate political speech with individual political speech, and said it was worthy of equal protection under the Constitution, the door was opened to world government in the United States.  The Vatican might as well be part of it.   Join the party -- or both Parties if you will.   Start a Vatican Super Pac.

The Pope's Speech: preservation of human life and the family, conservation of the environment, welcoming immigrants and much more

The text of the speech is here:

https://www.washingtonpost.com/local/social-issues/transcript-pope-franciss-speech-to-congress/2015/09/24/6d7d7ac8-62bf-11e5-8e9e-dce8a2a2a679_story.html

Liberals will point to what they like and conservatives to what they like.  Much of the speech embraced values that I would call conservative but that also welcome social progress and change.  Moral principles can transcend politics just as they can transcend particular faith traditions. 

The one thing that was missing was a frank discussion of the role of money in American politics -- the money changers in the temples of our democracy.  This problem may make much of what the Pope talked about very difficult to accomplish.

For many Americans, including those of us who are not Catholic, this was an opportunity to hear from a man who has inspired millions of people inside and outside his Church.

On to Philadelphia and New York, where I assume he will bypass the Trump Tower.

The 2015 VW Scandal: Where were the lawyers?

We hear this from the Executive Committee of the VW oversight board:   http://www.volkswagenag.com/content/vwcorp/info_center/en/news/2015/09/AR_Erklaerung.html   Note how they discuss the Chairman, his resignation and the issue of what he knew about cheating on emissions tests.  Investigation of this matter is apparently only beginning but the Board already comes to conclusions about the Chairman's knowledge.   How about the lawyers?   While VW stock is traded in Germany, and not in the United States, the company also has "American Depository Receipts" (ADRs) that are traded in the United States (ADRs can be converted into VW stock and trade similarly to the stock).  This means that the company is a 1934 Act reporting company with respect to the ADRs and its lawyers who work on disclosure to the ADR investors are subject to SOX 307, including mandatory up the ladder reporting under the statute and SEC rules.   Lawyers who work only on disclosures made to the investors in the stock traded in Germany, however, presumably are not subject to SOX or other US rules.  Also, the lawyers working on disclosures to the ADR holders may say that they relied on disclosure documents prepared by other lawyers responsible for disclosures to holders of the underlying stock subject only to German law.   All of the VW lawyers may deny that they knew anything about what was going on with the emissions tests.  But is this plausible? If some of them did know, what were their professional obligations?   Some of the best securities plaintiffs lawyers in the US are already looking into all of this:   http://www.businesswire.com/news/home/20150921006185/en/TheGrantLawFirm-PLLC-Investigates-Volkswagen-AG-Potential-Violations#.VgLjDqMo7cs   What should the corporate lawyers have done to prevent it from happening?

The original VW corporate ethics scandal: crowdfunding, wartime conversion of corporate assets, slave labor and more

The official “history” section of the VW company website is here: 

http://en.volkswagen.com/en/company/history.html

Here are some other accounts of what happened in the first eight years of the company's history, including the "five marks per week" crowd-funding plan for car buyers paying in advance, the cars that were never made, and the promoters who had other intentions all along. 

https://en.wikipedia.org/wiki/Volkswagen

http://www.pre67vw.com/history/

https://books.google.com/books?id=SP7Sx5ps2F0C&pg=PA64&lpg=PA64&dq=volkswagen+five+marks&source=bl&ots=rNJIRUDfVD&sig=4-dOEkK7sAgAWPuNpMT0jJ61JjI&hl=en&sa=X&ved=0CEUQ6AEwBWoVChMIopbV6caNyAIVkwiSCh14qg-o#v=onepage&q=volkswagen%20five%20marks&f=false

Enough with the racism -- have you no sense of decency Mr. Trump?

That is what somebody should have said last night.  Enough is enough.  Many Americans, including many of us who are Republicans, are fed up with the xenophobic and racist rhetoric in this campaign.   We learned sixty years ago from Senator Joe McCarthy (R WI) that the longer we allow someone like this to stir up the lowest and most irrational emotions in our society, to play on fear and hate, the harder it will be to put a stop to it. 

https://www.youtube.com/watch?v=K1eA5bUzVjA

The time to stand up to Trump and other politicians who use similar rhetoric is now.

Governor Bush said something, but not enough.  When somebody makes offensive and racist remarks about a man’s wife, a request for an apology does not resolve it.  What I wanted to hear was “Mr. Trump, if you have something to say about my wife, we can step outside after this debate . . . .” 

Former Governor of Minnesota Jesse Ventura -- who has made clear his opposition to racism and xenophobia -- should moderate the next debate if that is what it takes to restore some sense of decency in the arena.

Why are the Democrats shutting Larry Lessig out of the debates?

Lessig apparently has to reach 1% in the polls to join the Democratic debates.  But many polls don't even mention him as a choice even though he has raised $1 million and has entered the primary.

I will not endorse any candidate on Legal Ethics Forum (I am not even a Democrat), but I and many people of different political views, strongly support what Lessig is trying to do about our corrupt system of campaign finance.    

The Republicans have 16 candidates with most of them participating in the debates.  Is there any reason the Democrats can't open up their debates to include more candidates, particularly when until recently a single candidate was on top of the polls and faced no serious challenge for the nomination?   Perhaps the problem is that top Party donors would be upset with some of what Lessig has to say about campaign finance, particularly if the other candidates were forced to acknowledge that it is true.

Perhaps Lessig should switch parties if the Democrats aren't willing to take this issue seriously:

http://www.huffingtonpost.com/derek-cressman/why-lessig-should-run-for-president-republican_b_8004224.html

 

More information here:

 

 

Lawyers and Slavery

The “Colored Hero” of Harper’s Ferry: John Anthony Copeland and the War against Slavery was released by Cambridge on Thursday, September 10.  The book tells the story of John Copeland, of Oberlin, who was one of only five African-Americans who enlisted in John Brown’s attempt to free the slaves of Virginia in October 1859. (You can see a short video trailer here.)  Although he was only 25 years old, Copeland already had a significant history in the abolitionist movement.  He had been a leader of the Oberlin-Wellington rescue the preceding year, and he had escorted a fugitive slave to freedom in Canada.  In defense of another runaway, he had once clubbed a slave-hunting deputy marshal to the ground.  Ten of Brown’s men were killed in the fighting, five escaped, and seven were captured, including Copeland and Brown himself.

Copeland was brought to trial in nearby Charlestown, on charges of murder, treason, and inciting servile insurrection.  He was represented by an extraordinary Boston lawyer named George Sennott.  All of the other attorneys in the Harper’s Ferry trials attempted to avoid challenging the legitimacy of slavery – including Brown’s counsel, although not Brown himself, whose speech at sentencing was a ringing condemnation – but Sennott confronted it head on.  He boldly announced that it was an honor to represent a black man in Virginia, and he audaciously declared to the court that “the system of Slavery is illogical and absurd.”  That claim caused outrage in every corner of the Old Dominion, where no such “Abolition harangue” had ever before been heard in a court of law. 

Sennott’s trial tactics would soon cause even more uproar, which I cover at length in the book.  After the jump, you can read about the background of this truly exceptional lawyer.

The Chief Justice of the Supreme Court of Canada on the Legal Profession in the 21st Century

On August 14, 2015, Chief Justice McLachlin addressed the Canadian Bar Association annual plenary in Calgary . In her remarks entitled The Legal Profession in the 21st Century, the Chief Justice suggested that the legal profession must ask itself three questions:

• First, where does the profession stand as it enters the second quarter of the 21st century?
• Second, what are the forces that have led to the challenges the profession is facing?
• Third, against this background, how can the profession move towards the newer world it seeks?

For more click here