Think you're having a bad day? Consider being Uber's counsel: today, it was revealed that not only did Uber hide evidence, Uber's counsel knew about it. Since April 7 of this year. And the counsel sat on discoverable evidence, which evidence is terrible for their client.
It may have been inadvertent, but with Uber's own history, how much of the benefit of the doubt do they get?
My hope is that my current car will hold out until my next one drives itself, which is the only reason I know about the fight between Alphabet/Google/Waymo ("Waymo" for short), which makes self-driving cars, and Uber, which wants to make self-driving cars. Waymo lost an employee, who started his own self-driving car company, which was bought by Uber. Waymo sued Uber, claiming trade secret violation.
And Uber, allegedly, ignored court orders to turn over documents plainly requested in discovery. Apparently the document/s include proof of Uber efforts to impede government investigations, which, probably not great to put in writing if you're going to do that.
Disclose. Disclose, disclose, disclose. If you're not sure, put it in a privilege log, but disclose. And I hope, if it turns out Uber did hide documents, and their lawyers knew about it, both Uber and the lawyers are amply punished.
Update: the best thoughts - which I would only adopt in part - are Matt Levine's. Quoted in part below, and more on 'norms arbitrage' later.
Lawyer: We don't have to give that email to the other side in this lawsuit; it is marked "Privileged and confidential" and was sent to a lawyer.
Engineer: Wait that's how it works?
Lawyer: Well there are many factors --
Engineer: So if we mark all our emails "privileged and confidential" and always cc a lawyer, no one will ever be able to see them?
Lawyer: I mean not --
Engineer: I've put that in the training manual and written code to automate it.
It feels weird if you are used to subtler and more genteel forms of legal optimization. But of course this is kind of Uber's schtick. Raising prices when demand is high is totally normal human behavior, the sort of thing that is blandly explained early on in economics textbooks. Writing an algorithm to do it automatically, and bragging about that, and calling it "surge pricing," is ... a little ... unseemly? One thing that Uber is doing is a sort of norms arbitrage, a bet that it can get away with doing openly and always things that other people do quietly and occasionally.
Coast Guard detention of international drug smugglers.
In the unlikely event any of my former students are reading: another data point about where US jurisdiction does or should end.
I am privileged to work with some people who make my life much easier. And who are just great people. Good working relationships are a wonderful and rare thing. I'm fortunate to have had many over the years. In thinking about it, I thought it worthwhile to write down guidelines to facilitate better relationships, keeping in mind that big organizations run by rules, but smaller ones by guidelines.
I also think transparency is important. In that vein, I offer the first written policy:
Harry Morse LLC Workplace Policy: Be good to each other
We all want to be valued and respected, both as people and for the work we do. To facilitate that, the following are guidelines to make sure that happens at our office. This is a work in progress and I really encourage input from everybody.
10/11/2017
When I was interviewed for the bar in Maryland, the attorney interviewing me asked me why I wanted to be a lawyer. I mumbled something but I didn't have a good answer because I worry law is a zero-sum game, and in that circumstance lawyers take, but they don't add. Every time I do great work for my client, I'm taking away from yours. (Note this is litigation. Transactional work still adds value.) I've been working on an answer to that over the past decade and I hope it's been improving. One answer: lawyers are like Charon, guiding litigants across the Styx/judicial system, and although that's a little dark I think there is some truth to it.
I have been privileged to do some pro bono work over the last year and that has helped give me a better answer. Lawyers solve problems - sometimes the hard way; more often the easy way - but the goal of a lawyer is to see what the outcomes could be to help guide clients to solutions. If that's the case, I think it is important that lawyers vigorously represent their clients, but just as important that they have an eye toward justice.
What's different about pro bono work is these clients are not people with experience in litigation or deep knowledge of the law. It's a little bit of a heady responsibility, but it provides a novel perspective on what lawyers can do, and how lawyers are (or should be) guided toward results, yes, but also toward good results.
This is the price of oil since 2006:
One of these drops is easy to explain: the financial crisis, circa 2008, which devastated the economy. With no material threat of growth, oil prices collapsed from $125+/barrel to about $35.
But then the price rebounded to the $80 - $100 range. Why? Not sure. Why did it crater again around 2014? The easy explanation is fracking, and I could tell a convincing story that fracking is why the price of oil is $55, not $105.
But the number of rigs working in the US hit 1200 in 2012.
That's two long years where fracking is going along while the price of oil isn't affected. Or, if you say fracking was figured out around 2010 (again, see the graph), four years where (a) people knew the number of US land rigs was going to escalate, yet (b) the price of oil didn't do much.
Maybe it's the inflow of Iranian oil? Maybe it's the slowdown in growth in China? Maybe it's solar power? Or maybe it's all these, plus more I don't know about or haven't considered.
Those of us who failed to predict the price of oil would fall in 2008, and those of us who failed to predict it would rise again shortly thereafter, and those of us who failed to predict it would fall again in 2014 are all ill-suited to predict what will happen next.
Why does this matter? If you own an offshore supply vessel, or an offshore rig (or an onshore rig), your utilization is based principally on the price of oil. I could weave a convincing story that there is a hard cap to oil at the marginal price to frack the next barrel. I wouldn't have explained the past, though, so I'm not sure I would use that to explain the future. I cannot imagine the risk taken to put down major capital for a project based on such uncertainty. Thank God for optimism.
Returning to a frequent topic on account of new developments:
A family was out boating on Louisiana waters when the boat's hydraulics malfunctioned, ejecting then killing a passenger. Teleflex made the hydraulics, and, the court found, it failed to warn buyers adequately that the loss of hydraulic fluid could result in passenger ejection and worse.
Bizarrely, the Louisiana Supreme Court analyzed punitive damages under Gore v. BMW, an earlier case where the Supreme Court said punitive damages shouldn't be above a 9:1 ratio of compensatory damages, instead of Exxon v. Baker, a later Supreme Court case where the Court held under general maritime law, the ratio should be 1:1. The distinction makes sense: in Gore, the issue is due process - the constitutional boundary - while in Exxon, the issue is general maritime law, which is about the only area where federal courts still make law. In Gore, the Court isn't saying what's advisable; only what is permissible. But in Exxon, the Court is saying what is permissible. So why is this bizarre? After all, it's a claim brought under the Louisiana Products Liability Act - it stands to reason it'd be under Gore, not under Exxon. The LPLA doesn't allow punitive damages, and Louisiana law doesn't either except for drunk driving. So the only reason punitive damages are allowed is styling the claim as part of general maritime law, which should be under Baker. Near as I can tell, the Supreme Court notices this issue . . . then returns back to looking at Gore.
And under Gore, while referencing Exxon, the Court says punitive damages should be limited to 2:1 compensatory damages under those specific facts. From the Court's opinion, it seems Louisiana would allow a higher ratio if there were worse facts.
The case seems to be more than a little results-oriented, but now it's the law.
One lemma: the Court says that the jury can look at the wealth of the defendant in determining punitive damages, because the idea is to punish, and you have to know how wealthy the defendant is to soak him, her, or it adequately. Fair enough. But if that's the case, then how on earth are we going to allow insurance for punitive damages? Yet we do, at least in Louisiana.
1. Feckful. I had to double check and learn it is, in fact, a word. I loathe the overused "feckless" so I am happy to see "feckful" is a thing. From now on, "less feckful" will be my replacement for "feckless" (though I have no plans to use either if I can help it).
2. Staunch versus stanch. Per Garner, "stanch" is preferable as the verb (to stop the flow, eg of blood); "staunch" as the adjective (a staunch and stalwart friend).
3. Scaramuccian, which, I guess, defines itself.
This article about Judge William Alsup of the Northern District of California is excellent, the thesis being that Judge Alsup, maybe unique or at least exceptional on the federal bench, has experience in coding. So it works out well that a lot of tech-heavy cases end up on his docket.
When I teach my class, the second discussion regards different judicial approaches, and I use a series of articles back and forth between Garner & Scalia on the one hand, and Posner on the other. Garner and Scalia argue a judge only needs to know commonsense application of rules to reach the right result; Posner takes the position you need to know the underlying facts. And I return to this repeatedly (for instance, asking whether administrative agencies reach better results than judges because of their expertise). I confess to thinking judges need to keep an eye toward results - also, but not only, process - and therefore experience is material. To put it in other terms, a judge once told the audience, during oral argument, that it was his first foray into marine insurance, and he hoped it would be his last. My heart sank a little because experience matters.
The article takes the position that experience matters, and it matters a lot in matters of code. It's hard for me to consider that wrong. For every legal conclusion, there are a number of factual conclusions, and even the legal conclusions are informed by facts. It is, after all, a dispute between parties over a certain set of facts that leads to a lawsuit and a judicial determination. How can somebody say where on the idea/expression dichotomy something falls if they aren't familiar with the underlying facts?
Marine world - even marine insurance - is nowhere near as complicated as LIDAR. For one thing, I can talk about marine stuff for ages, but I can't talk about JAVA or LIDAR or GNU for five minutes without revealing my ignorance.
Thereare a few cases pending that will be added either to successes or to failures soon enough. But in the vein of acknowledging failures, I thought this article about Google Project X, a/k/a the Moonshot Factory, was interesting and worthwhile. To wit:
Recently, X has gone further in accommodating and celebrating failure. In the summer of 2016, the head of diversity and inclusion, a Puerto Rican–born woman named Gina Rudan, spoke with several X employees whose projects were stuck or shut down and found that they were carrying heavy emotional baggage. She approached X’s leadership with an idea based on Mexico’s Día de los Muertos, or Day of the Dead. She suggested that the company hold an annual celebration to share stories of pain from defunct projects. Last November, X employees gathered in the main hall to hear testimonials, not only about failed experiments but also about failed relationships, family deaths, and personal tragedies. They placed old prototypes and family mementos on a small altar. It was, several X employees told me, a resoundingly successful and deeply emotional event.
The first of November is nearly upon us, and I will take the opportunity to expound a little further on the idea of celebrating failure. Though I'm not quite to celebrating death yet.
I reflexively put a confidentiality clause in every settlement agreement. I am benefiting my client (which would rather not have evidence of payment be used as proof of fault as opposed to compromise) and the confidentiality clause plays an important role. It doesn't really hurt the other side, who is, I would think, mostly interested in getting compensated.
There is real public benefit when more information is in the public though. To take settlements, for instance - if I knew what the going rate is for settlements under X, Y, and Z circumstances because there were a database of the facts of every claim and the amount of the settlement, I'd have much more information. (This is also an argument in favor of the value to the public from trying more cases, which creates a written record of who is at fault and how much certain claims are worth, and the benefit of justice being done - and being seen to be done.)
And cases where there is private benefit but public harm sound a lot to me like market failure. If the market isn't going to reach the right result, courts ought to be more willing to step in.
I don't know what that would look like: when a non disclosure agreement or a protective agreement would be so burdensome, or the public interest so great, that it would be preemptively void, or that the consequences of violating it would be lessened. I do know that the rules should be clear enough that someone who is writing, or signing, a confidentiality agreement knows ahead of time what is and isn't covered, and that the parties know ahead of time whether and what sort of a breach would be permissible or punishable. Evidence of a crime? Hard to say that should be confidential (though I should note here attorney-client privilege is a whole different animal). What about evidence of noncriminal but awful conduct? How do you draw clear lines? And if you say a non-disclosure agreement that includes evidence of crimes is presumptively void, what if the would-be criminal defendant isn't charged, or if she or he isn't convicted? At that point, was there a violation of the NDA? Or do you say that you'll consider the public interest in determining penalties? That is cold comfort to somebody planning to come forward with evidence.
Louisiana law allows insurance for punitive damages. This is wrong, and bad, and it should stop.
I'll accept that Louisiana is unlikely to have a lot of case law on this issue because punitive damages are now limited to driving under the influence and child pornography - not really the hotbeds of appellate jurisdiction. But general maritime law applies the law of the adjacent state in the absence of controlling maritime law, so it matters a lot to marine insurance.
I'll also accept that, absent the maintenance and cure context where decisions are more often made with an eye toward their likely consequences, the insurability of punitive damages is not likely to affect conduct significantly. If suddenly punitive damages are insurable and companies have such cover, they are, I suspect, not much more likely to act recklessly. Reckless conduct often enough has a built-in penalty in the form of a likelier accident. (With regard to M&C, insuring punitive damages would certainly make companies more willing to face the consequences of denying M&C. Whether that's good or bad depends on your stance.)
But punitive damages should be uninsurable because insuring them undercuts the whole purpose: to punish. If insurance is had, punishment will not be had. And the second effect of insuring punitive damages is a likely erosion of the "gross negligence" or "arbitrary and capricious" standard. If the judge knows she or he is soaking an insurer, she or he is more likely to find punitive damages, for a broader range of conduct, and to blur the line between punitive and compensatory. It's hard to see how much good is done there.
To put it in Kantian terms, we punish crimes not just to obtain justice against the criminal, but also to re-establish the moral world, and to tell the world that the criminal conduct was wrong. We want not just to punish wrongful conduct, but to be seen punishing wrongful conduct. Conduct warranting punitive damages is a world apart from criminal conduct, of course, but it is also supposed to be a world apart from ordinary negligence. Negligence is understandable; arbitrary or gross negligence shocks the conscience enough that we seek to punish the company - not just for the benefit of the plaintiff, but because we want to tell the world such conduct will not be tolerated. (In a number of jurisdictions, punitive damages go in part to the state precisely because they aren't meant to compensate the plaintiff, so the plaintiff has, it is thought, a thin claim to them.) If punitive damages are insured, we're not telling the world that we're punishing culpable conduct. We're telling people that it's a business transaction. That shouldn't be.
"The trouble with most of us is that we would rather be ruined by praise than saved by criticism." Thus spake Norman Vincent Peale, and its accuracy is probably best-proved by the knowledge we all have that we, the reader, are somehow different from those rubes.
About which, it's worth reading anything by today's economics Nobel laureate, Richard Thaler, and looking at every other way that we delude ourselves, knowingly or (more often) unknowingly. (His work is really approachable and well-written.) Recognizing our shortcomings has to be a necessary step toward correcting them.
I should admit upfront that I have two books by Bryan Garner - legal usage, and modern american usage - on my end table, within arm's reach. The third book is the Chicago Manual of Style.*
Today he writes that lawyers are bad writers. This is probably true in part. Take any sample that's big enough and you can probably distribute it on something that vaguely resembles a bell curve. There are a lot of lawyers who aren't good at writing. There's a lot of any [profession] that aren't good at [supposed core competence of profession].
But the wrong part: lawyers are bad writers because law schools fail them, and colleges fail them. Per Garner: "Writing standards have consistently fallen over the last century in secondary and higher education."
Really? There is more good writing available right now than ever before. I have at my fingertips and in front of my eyeballs writing about nearly any topic. It's really good! When I'm looking for inspiration, I'll go back and read Lincoln. Don't tell me he was emblematic of his times though. I could just as easily look a little more recently and find a hundred wonderful authors and journalists. How have writing standards fallen? Where's the proof? Come on. If you want legal examples, I will grant that maybe our current justices can't match Holmes or Brandeis. But look a little deeper and there are a lot of judges on the federal district and appellate benches whose writing ranges from lucid to exceptional. So too for lawyers.
* The book ends are (a) a glass polar bear, which I got with my older sister in Italy, and (b) a brass propeller nut with some barnacles, which was briefly evidence in a case, which case is a different story for a different day.
Now, for an issue in the wheelhouse: OPA-90, pollution cover, 12(b)(6) motions, and appeals. It's like Christmas morning.
The US Government owned a military transport, the FISHER. It spilled 11,000 gallons of fuel near Boston harbor. Ironshore, a pollution underwriter, paid for cleanup, then it pursued the US and Amsea .Amsea was responsible for crewing and maintaining the FISHER.
The district court dismissed the case on the pleadings, finding that Ironshore can't go after the government or Amsea under OPA-90, and that OPA-90 provides all the possible remedies for an oil spill like this. Ironshore appealed, and it won.
The First Circuit ruled Ironshore could not proceed against the government or against Amsea under OPA-90. OPA-90 exempts "public vessel," and although that term is not defined in OPA-90, it is, conveniently, defined in case law following the well-named Public Vessels Act of 1925 (which waives sovereign immunity for public vessels). That case law establishes that public vessels certainly include US government and military vessels, even when they are crewed by third parties. The First Circuit held:
The strict hierarchical relationship between the Military Sealift Command and AMSEA establishes, as the district court concluded, that AMSEA crewed the FISHER under the operational control of the United States. AMSEA did not lease the FISHER from the United States, nor was it permitted to use the vessel for its private gain. Rather, all of AMSEA's work on the FISHER benefited the Military Sealift Command and the United States directly. Under the OPA, the United States both owned and operated the FISHER
As the vessel was a public vessel, it is exempt under OPA-90.
But wait, there's more!
OPA-90 does not occupy the field. Its language leaves general maritime remedies in place. Therefore, Ironshore gets to go after the US under general maritime law / the Public Vessels Act. But when pursuing a government vessel under the Public Vessels Act, a party can only go after the government, not an agent like Amsea. End result: Ironshore gets to go after the US government, but not after Amsea.
This seems like clearly the right result. Congress waived sovereign immunity for public vessels, but exempted public vessels under OPA-90. Therefore public vessels are still subject to all other remedies. Meantime Ironshore and its assured were responsible for cleaning up the spill in Boston harbor; it would be less than ideal if they didn't have a remedy against a party with assets. I would be surprised if the Amsea/government contract didn't make Amsea responsible for its own fault (as was here), so it is likely - or certainly should be likely - that Amsea is ultimately responsible for the damages caused by its own fault. As it should be.
I will not offer comments about the Supreme Court case on gerrymandering being argued today, except to comment that when I bring up gerrymandering in my class, it is briefly and to acknowledge it is not my expertise.
But I found the New York Times article on the topic to be worthwhile.
EDIT
Oral Argument transcript is here. I won't hazard a guess about the outcome.
This week has been a little bananapants crazy, but normal will return with the weekend and with normal, more frequent updates, including insuring punitive damages. Scintillating!
Your author cares much more about district court judges than he does about Fifth Circuit judges because (a) every appellate case starts as a district court case, and the profound majority end that way, and (b) most district court cases are decided on the facts, so review is on an abuse-of-discretion standard, where, pretty well everything gets affirmed.
So it is without much comment that I point out the nomination of Kurt Engelhardt, Stuart Duncan, James Ho, and Don Willett to the Fifth Circuit. I will say that Judge Engelhardt has always been reasonable in my not-too-frequent interactions with him, and reading Willett opinions is fun - which, good writing is hard. I couldn't pick Mr. Duncan or Mr. Ho out of a lineup, as we don't run in the same circles.
More interesting (for me) is Barry Ashe at Stone Pigman being elevated to the Eastern District. I've never had a case with soon-to-be-judge Ashe, but it is interesting that Judge Ashe isn't a maritime guy, like the three Obama appointees. He is a federal court litigator, which is encouraging. He's 61 (+/-), which is a little more experienced than expected, but I suppose that's the advantage of being a district court judge: more of the important work, less of the spotlight.
That general damages should be about three times medicals is both tired and wrong. Presented as evidence: Kelvin Dunn v. Marquette, a recent bench trial in front of Eldon Fallon in the Eastern District of Louisiana, where general damages are less than medicals. Off duty, Captain Dunn awoke to find his tug, with its tow of two chemical barges, was having some issues. He slipped in the engine room on diesel, and he 'severely fractured' his femoral head. He underwent an emergency surgery and facet joint injections; he will require two total hip replacements.
He was thirty-nine years old, making $124,000 a year before fringe benefits; he could only return to work making $18,000 a year. (The defense expert suggested he could make $125,000 a year if he opened a tattoo parlor. Judge Fallon said LOL no.)
Total damages:
(1) Past wage loss: $234,360.00;
(2) Past fringe benefits and meal loss: $38,760.88;
(3) Future wage loss: $1,665,121.00;
(4) Future fringe benefits and meal loss: $280,041.10;
(6) Future medical expenses: $641,435.89;
(7) Past pain and suffering: $100,000.00;
(8) Future pain and suffering: $400,000.00
Total: $3,359,718.87. This is a massive judgment. But general damages are less than past and future medicals, and the plaintiff was severely injured as a result of the accident. $500,000 strikes me as hardly crazy for these sorts of injuries and surgeries. Wage loss makes up two thirds (66% on the nose) of the entire judgment. The lesson to learn, I would submit, is that cases are going to be fact-specific, and that emphasis has to follow concern: where wage loss is the biggest worry, more emphasis should go there.
In my little world, some ink has been spilled on the Naquin v. EBI case, which expanded Jones Act status and limited a cause of action for negligent infliction of emotional distress.
But there's another opinion coming out of the loss that's just as important, regarding insurance. Mr. Naquin was using a land-based crane to load a vessel. The crane collapsed, injuring Naquin and killing another employee. Naquin was found to be a Jones Act seaman - a topic for another day.
Does the P&I policy respond? The P&I policy is limited to liabilities incurred "as owner of the vessel[s]" listed in the policy. Naquin wasn't working on a vessel. The vessel didn't have anything to do with the accident. So how could liability be vessel-based? The Fifth Circuit followed this logic and held the P&I policy does not provide coverage.
What would provide coverage? An MEL policy is the obvious choice, and it stands to reason Jones Act employers need both. P&I covers any incident that occurs on the vessel. MEL covers everything else. Injured on the way to the vessel? Or on a rig at which the vessel is tied up? There is still possibly Jones Act exposure, and certainly M&C, but those are MEL risks. It follows, I think, that it may be useful for a P&I underwriter to add MEL cover to address the gap.