Law on Rice

When they wrote Federal Rule of Bankruptcy Procedure 1001, the rule writers said,

The Bankruptcy Rules and Forms govern procedure in cases under title 11 of the United States Code. The rules shall be cited as the Federal Rules of Bankruptcy Procedure and the forms as the Official Bankruptcy Forms. These rules shall be construed to secure the just, speedy, and inexpensive determination of every case and proceeding.

A few aspects of Rule 1001 jumped right off the page to me. First, I noticed that Rule 1001 does not mention bankruptcy courts. The term “courts” is avoided by the writers in favor of the more generic term “cases.” As such, I guess the rule writers wanted to stay flexible in case the Supreme Court declares the jurisdictional scheme unconstitutional (again).

The last sentence was the most interesting, however. That sentence uses the strictly mandatory term “shall.” The rule writers did not say “should” or even “may,” they said “shall.” All lawyers know and shall fear the word “shall,” and I think it means more than what Norton’s Bankruptcy Rules say about it. Norton’s says

[t]he last sentence of the Rule is a restatement of a policy expressed by the previous Rules and also by the Federal Rules of Civil Procedure that the Rules are to be construed to achieve a just, expeditious, and economical administration of cases filed . . .

But Rule 1001 isn’t a mere policy because it uses the fearsome mandatory five-letter word “shall.” And it doesn’t use that old language, “just, expeditious, and economical,” it plainly, and more energetically, says “just, speedy, and inexpensive.” The Federal Rules of Civil Procedure do too, but the Federal Rules of Civil Procedure use permissive language (i.e., “should”), not mandatory language.

Speaking of differences between the Federal Rules of Civil Procedure and the Federal Rules of Bankruptcy Procedure, the Civil Rules (Rule 1) advise the District Courts to not only construe the rules in a just, speedy, and inexpensive manner, but also administer the Civil Rules in that way. By contrast, the mandatory Bankruptcy Rule 1001 language only applies when bankruptcy courts construe the rules.

I wrote twelve essay answers in six hours, so I’m not in the biggest writing mood.  Still, I thought I should record a few initial impressions.  At first, I was kind of disappointed.  Before the break, I was kind of pleased with myself.  I thought my preparation was pretty good and that I analyzed the issues pretty well.

Then, after lunch, the questions suddenly got a lot harder and far more specific.  They asked much narrower questions than I expected, like “can the judge rightfully deny the criminal defendant’s request to give an opening statement after the close of the prosecutions case?” And “does a minority shareholder of a closely held corporation have to make a demand for dividends before he can bring suit?”  They aren’t hard questions if you are prepared for them, but I expected much broader, general issue spotting questions–not narrow, focused questions.

Oh well, tomorrow is the multiple choice.  Off to rehearse more bubbles.

Some people take a big trip to Australia or Topeka, but I’m coming back to the Ross-Blakely law library.

I’m going to randomly grab three bound law review journals off the shelves, and I’m just going to sit and read a few articles.  I’m going to read them on my terms, and pay attention to the details I care about for a change without worrying about what I think the professor or the bar examiners want me to study.

I am going to read selfishly for the first time in years.

I don’t know if I was just there on a good night, but something about this Waffle House made a tired student grin from ear to ear.

I went to the Waffle House on an anonymous strip mall on an anonymous intersection on the anonymous border between Tempe and Mesa because I figured it would be a good place to study late Friday night–at least before the bars closed.

I took a seat at the loners’ counter, looking for an anonymous place to sit and study in a place bathed in alarmingly white fluorescent lights.  The humming of those lights was all I could hear, at first… well, that and the buzzing of the refrigerator and that sizzling sound coming from the kitchen.

Then there was noise.

The girls were talking about who baby daddy doin’ what and what not and then the jukebox.  Michael Jackson, to be precise.  The entire restaurant sang along softly.  I mean, everyone including the customers (well, except me).

It compelled me to post this over the top tweet.

The desert is quiet, especially at night when you can often hear nothing more than buzzing refrigerators and the servo click of air conditioners turning on down the street.  I hate silence.  I’ve had way too much of it in my lifetime.  But places like this so-called anonymous Waffle House fill the desert with sound and light.  And that makes me happy.

I don’t have time to really comment on this embedded video, but I wanted to share it with you because it’s a revealing glimpse into how one celebrity lawyer operates (from the junk on the credenza in the back to the low budget 790 AM drapes surrounding it).

Gloria Allred fascinates me.  Say what you will about her, but you can’t deny that she’s an advocate.

Ok, back to the Uniform Commercial Code and the bar exam.

My bar exam study materials say that the multistate bar exam (“MBE”) test writers “love” to give the following fact pattern: Anders promises CharterBank that if CharterBank will give credit to BabyCo, then Anders will pay CharterBank if BabyCo defaults. This situation is known as a suretyship.

CharterBank neglects to tell Anders that it advanced the credit to BabyCo. What result?

Technically, Anders can’t be forced to pay if BabyCo defaults. That’s because Anders made an offer for a unilateral contract to CharterBank, and under most states’ law, the offeree (CharterBank) must give prompt notice to the offeror (Anders) that it accepted the offer by full performance. Failure to give notice means that a court should discharge the contract.

In reality, I think Anders would have a hard time arguing he didn’t have notice because he would likely be a BabyCo insider, but still… it’s not hard to imagine a real life situation where it could work out like this.

I just got done burping the best thing that’s ever happened to me when I came across this quote from the President spotted by Meaghan O’Connell:

In the aftermath of disaster, we are reminded that life can be unimaginably cruel. That pain and loss is so often meted out without any justice or mercy. That “time and chance” happen to us all. But it is also in these moments, when we are brought face to face with our own fragility, that we rediscover our common humanity. We look into the eyes of another and see ourselves.

Not even twenty four hours after the news about the earthquake in Haiti first broke, I saw a picture on my television of a man not much older than me running with a child not much older than mine, making his way through the rubble, holding his child closely.  I understand fragility better than I ever have.  I’ve never felt so human.

At the same time, I am studying torts for my upcoming bar exam.  It would seem like it would be hard to do.  I know so many people who see law as a dry, technical field.  For me it’s always been much more, but even after I’ve studied it for the better part of four years, I still lack the words to explain why or how.  Right now, after all this, law seems like it’s the least we can do to make sure we treat each other better than the natural world does, better than we might if left to live in a natural state, better than Haiti.  Even tort law.

A consumer just won a Fair Debt Collection Practices Act (“FDCPA”) claim because the collection firm failed to include a FDCPA disclosure on its complaint when it sued to collect a debt.   The consumer won not only $1,000 in statutory damages, but also attorneys’ fees.

In a nutshell, Citibank referred a delinquent account to Solomon and Solomon, an upstate New York collection firm.  The firm sent a letter to the consumer including the language of the so-called validation letter required by 15 USC 1692g(a), (b).  That letter told the consumer that she had a right to dispute the debt and ask for verification within thirty days.

Before those thirty days expired, however, Solomon filed a complaint against the consumer.  The complaint did not remind the debtor that the thirty day period and her concomitant right to ask for verification was still in effect.  The consumer later sued the collection firm in federal court alleging violations of the FDCPA.

This Court affirmed the trial court, and it held that debt collectors should remind consumers that a lawsuit does not trump the consumer’s rights under the FDCPA.

It noted that Congress codified the common law gloss that “collection activities and communications must not ‘overshadow’ or ‘contradict’ the validation notice.”  The Court argued that there was a “real potential for confusion when a consumer is served with a lawsuit during the validation period.”

After a state of almost 40 million people not only voted for a statute, but voted to amend their constitution, a single federal court judge will decide whether or not the federal Constitution permits the people to do what they did.

In Judge Walker’s federal courtroom in San Francisco, attorneys will argue whether or not a 200 year old sacred document, the Constitution, can trump the will of the people.  That the Constitution can rule us from the Framers’ graves is a fascinating idea that few other countries follow–even in Europe!

But don’t get me wrong just because I’m just trying to make a nuanced point.  I believe that we need to uphold the Constitution, and that it probably should trump whatever current political winds that may blow–especially given the fact that the Supreme Court has  been interpreted in a way that’s favorable to my own political interests, at least up until very recently.

That said, the Supreme Court is always in flux, so it might not be a bad idea for us to remember that the Constitution has not always been “the good guy.”  Just over 100 years ago the very same Constitution stood in the way of progressive movements such as, for example, labor unions. See, e.g., Lochner.

A state court found Ormsby liable to his old employer for $732,075.16 after he copied real estate title records to start his own title agency.  In response, Ormsby filed a chapter 7 bankruptcy case.  Undaunted, the creditor, FATCO, filed an adversary alleging that its claim was nondischargeable under either 523(a)(4) or (6).  FATCO won at the bankruptcy court, the district court, and now wins again in the Ninth Circuit.

Section 523(a)(4) says that a debtor cannot discharge a debt incurred under “fraud or defalcation while acting in a fiduciary capacity, embezzlement, or larceny.” Larceny was at issue in this case, and it’s defined generally as a “felonious taking of another’s personal property with intent to convert it or deprive the owner of the same.”  Even though the Nevada state conversion law does not include an element of fraudulent  intent, this Court satisfied itself that Ormsby did act with a fraudulent intent.

Section 523(a)(6) is also an exception to the broad discharge granted by the Code.  It says that a debtor cannot discharge a debt incurred by “willful and malicious injury by the debtor to another entity or to the property of another entity.”  Even though the state court did not enter a finding of willfulness, this Court decided that the misappopriation and conversion was willful.

A malicious injury requires the debtor to commit (1) a wrongful act, (2) intentionally, (3) which necessarily caused injury, and (4) was done without just cause or excuse.  Because this former employee knew his conversion would injure FATCO and because he knew a legal way to obtain the information, the Court was satisfied that section 523(a)(6) was met as well.

The Court concluded that the debt was nondischargeable under either theory.

Opinion of Judge Roth, sitting by designation from the Third Circuit.  Helga A. White, Esquire, Auburn, California, for the appellant; James A. Tiemstra, Esquire, Law Offices of James A. Tiemstra, California, for the appellee.