Outliers: WASP and Jewish Lawyers

The Brooklyn Law School Library has added to its collection Outliers: The Story of Success by Malcolm Gladwell (Call # BF637.S8 G533 2011). The book identifies the qualities of successful people including the cultural, family, and idiosyncratic factors that can have a decisive impact on shaping high achievers. The book’s major theme is that success is shaped by environment, not genetics. The opening chapter uses the accidental birth dates of Canadian hockey leagues players to predict successful hockey players favoring players with January birthdays over those with September birthdays. The 299 page book, divided into Part One: Opportunity and Part Two: Legacy, addresses why some people succeed and other do not and has fascinating stories about the hidden factors for success in stories about hockey players, Jewish lawyers, computer billionaires, and Asian math students. Gladwell points out the complexities of success. The real truth is probably much more complex than the author suggests.

The chapter titled The Three Lessons of Joe Flom deals with successful trial lawyers. The author describes the New York law firm of Wachtell, Lipton, Rosen & Katz which does not bill by the hour. It simply names a fee as shown in the story of when Kmart was defending against a hostile takeover and the firm quoted a flat fee of $20 million. The portrait of a group of eminent New York Jewish lawyers, all of whom were born around 1930 is interesting. The author states that this accident of birth date gave them several distinct advantages. Thanks to demographic shifts, they went to under populated public schools, where they received more attention from teachers. They were then able to get inexpensive college and legal educations. Barred from mainstream firms, they were forced to specialize in proxy fights, an area of law that mainstream lawyers in which mainstream lawyers did not engage. This, in turn, gave them a huge competitive advantage 20 years later when hostile takeovers began to sweep across the corporate landscape. The chapter cites The Rise and Fall of the WASP and Jewish Law Firms by Eli Wald, 60 Stan. L. Rev. 1803 (2007-2008) a law review article well worth reading. Whether the book Outliers: The Story of Success offers any predictive measure of future success is questionable. It seems impossible to predict that postwar Jewish lawyers would be rewarded for their expertise 20 years down the road. Success, in these instances, may have been a product of luck.

Roosevelt Campobello International Park

Across the narrows from the most eastern point in the US is Roosevelt Campobello International Park in New Brunswick, Canada. The site’s two unique qualities are that it served as the summer home of US President Franklin Delano Roosevelt even though it is actually in Canada; and second, it the only park in the world owned by two countries and administered by a joint commission in their name. The park is owned, funded and staffed by the Roosevelt Campobello International Commission, established by the Roosevelt Campobello International Park Act (Pub.L. 88-363) on July 7, 1964 pursuant to an agreement between the United States and Canada.

Made up of five turn-of-the-century cottages, the Park centerpiece is the FDR summer home, a magnificent two story 34-room residence where as President, FDR returned to his summer home for three brief visits: in 1933, 1936, and 1939. Before that, Franklin, Eleanor, and their growing family spent summers from 1909 to 1921 the year he fell ill with the polio virus at the age of 39. This tragic event occured one year after the former New York State Senator and Governor ran unsuccessfully for vice-president. In that campaign, FDR, who had been Assistant Secretrary of the Navy, faced accusations by the publisher of the Providence Journal that he had mishandled the Navy's first national gay sex scandal. For more, see William N. Eskridge, Jr., Law and the Construction of the Closet: American Regulation of Same-Sex Intimacy, 1880-1946, 82 Iowa L. Rev. 1007 at 1049 (1997). On the eve of the election, FDR filed a $500,000 libel suit against the paper's publisher but did not pursue it.

In addition to the Roosevelt Cottage are the Prince, Hubbard, Wells-Shober and Johnston Cottages redone and furnished to provide overnight accommodations for conference participants in the Park. At the Edmund S. Muskie Visitor Center, there are panels, displays, and a short video of the Roosevelt story from the time Franklin Roosevelt and his parents first visited Campobello through his battle with polio, his presidency, and the establishment of the Park. There are also major flower gardens, and a network of wooded paths, including a 2,800-acre natural area with sand beaches, walking bogs and vistas from ocean headlands.

A passport or official photo ID is required to get back into the United States after visiting the park. More information about the park, including hours of operation and border crossing tips, can be found at the Roosevelt Campobello International Commission website.

Shuttle Politics: Houston v. NYC

NASA's Final Space Shuttle Mission: STS-135 is now history as the shuttle Atlantis lifted off July 8 on the final flight of the shuttle program for a 12-day mission to the International Space Station. NASA's official video of the final launch is available on its website at this link.

Earlier this year, NASA Administrator Charles Bolden announced the locations where the four shuttle orbiters will be displayed permanently at the conclusion of the Space Shuttle Program. Among the locations was the Intrepid Sea, Air & Space Museum in New York designated as the new home of the Shuttle Enterprise. In 1985, the Enterprise was ferried from the Kennedy Space Center to Washington, DC and became the property of the Smithsonian Institution. The Enterprise was built as a test vehicle and was not equipped for space flight. For background on the Enterprise, see NASA's website.

After NASA’s announcement, officials from Texas, home to the Johnson Space Center in Houston, questioned in a letter to NASA whether politics played a role in the decision. Rep. Jason Chaffetz (R-UT) introduced HR 1536 “To provide for the disposition of the retiring Space Shuttles.” The legislation would give the Johnson Space Center Shuttle Endeavour while the California Science Center, which was to get Endeavour, would instead get the Enterprise; the Smithsonian and the Kennedy Space Center would keep Discovery and Atlantis, respectively. The bill, now before the Subcommittee on Space and Aeronautics, faces an uphill battle. Language in §603 of the NASA authorization bill (Pub. L. 111–267) on the dispostion of the space orbiters improves New York’s chances, since it requests that NASA give preference to locations “with an historical relationship with either the launch, flight operations, or processing of the Space Shuttle orbiters or the retrieval of NASA manned space vehicles, or significant contributions to human space flight”. The Intrepid was involved in the recovery of Mercury-Atlas 7 and Gemini 3.

501(c)(4) Organizations and Campaign Activity

Crossroads GPS, a conservative 501(c)(4) political arm of American Crossroads, had been the subject of an Internal Revenue Service investigation for spending millions of dollars to air a nationwide ad blaming the President for rising unemployment, the national debt and a failed $830 billion stimulus. The IRS webite states for a 501(c)(4) group to be tax-exempt it must be a "social welfare organization described in Internal Revenue Code (IRC) section 501(c)(4), an organization must not be organized for profit and must be operated exclusively to promote social welfare." That means the group can engage in politicking, but it cannot be the majority of its activities. What brought about the IRS investigation was that Crossroads GPS has not disclosed who its donors are. Those donations are not tax-deductible, but under the tax law could be subject to a 35 percent gift tax.

As a result of a statement by the Internal Revenue Service, donors are now free to give money to Crossroads GPS to air more ads without paying the gift tax. The Internal Revenue states that it will not enforce a tax on large contributions to nonprofit advocacy groups while it studies the issue. The statement said:

Recently, questions have arisen regarding the applicability of the gift tax to contributions to 501(c)(4) organizations. The Internal Revenue Service has little history to draw from in this area and the limited guidance we previously issued on this matter is almost thirty years old.

While we review the need for additional guidance or legislation, we will not use resources to pursue examinations on this issue. Any future action we take will be prospective and after notice to the public.

As we consider this issue, it is possible that Congress may choose to clearly articulate through legislation the applicability of the gift tax to contributions to 501(c)(4) organizations.

In a memorandum referring to questions raised about the application of the gift tax to contributions to I.R.C. § 501 (c)(4) organizations and legal, administrative, and policy implications about enforcement, the Deputy Commissioner for Services and Enforcement stated that his office will work with the Office of Chief Counsel to study the issue.

The Congressional Research Service issued a 2011 report 501(c)(4) Organizations and Campaign Activity: Analysis Under Tax and Campaign Finance Laws updating its earlier 2009 CRS Report. For more, see Brooklyn Law School Library's 10th edition of The Law of Tax-Exempt Organizations by Bruce R. Hopkins (Call #KF6449 .H665 2011) with chapters: Introduction to the law of tax-exempt organizations; Fundamentals of the law of tax-exempt organizations; Tax-exempt charitable organizations; Other tax-exempt organizations; Principal exempt organization laws.

Episode 067 – Conversation with Prof. David Reiss

Episode 067 – Conversation with Prof. David Reiss.mp3

In this podcast, Brooklyn Law School Professor David Reiss discusses two of his most recent white papers, Fannie Mae, Freddie Mac, and the Future of Federal Housing Policy and Fannie Mae and Freddie Mac: Implications for Credit Unions. Prof. Reiss, who concentrates on real estate finance and community development, examines how the two companies should exit their conservatorship and conceptualizes the reform of the two companies and the manner in which the residential mortgage market is structured. He explores implications that will reach throughout the global financial markets that are of key importance to the future of American housing finance policy. For more of his writings, see the list at this link.

Independence Day

The Brooklyn Law School Library will be open 9am to midnight on Monday July 4th, the 235th anniversary of the Declaration of Independence. Patrons visiting the BLS Library on the Fourth of July can review the Annotated United States Constitution and Declaration of Independence by Jack N. Rakove (Call # KF4527 .A56 2009). This compact and easy to read book will help readers renew their appreciation for the genius of those who drafted the blueprints for America’s freedom and its republican form of government. This scholarly analysis of America’s founding documents makes clear the value of revisiting those texts and reviewing how they have been construed throughout US history. The famous first 110 words from Jefferson’s famous document read:

We hold these truths to be self-evident, that all men are created equal, that they are endowed by their Creator with certain unalienable Rights, that among these are Life, Liberty and the pursuit of Happiness. That to secure these rights, Governments are instituted among Men, deriving their just powers from the consent of the governed, That whenever any Form of Government becomes destructive of these ends, it is the Right of the People to alter or to abolish it, and to institute new Government, laying its foundation on such principles and organizing its powers in such form, as to them shall seem most likely to effect their Safety and Happiness.

Although rarely cited in contemporary case law, the Declaration of Independence has a role in how courts review legislation. A recent article Representative Self-Government and the Declaration of Independence by Alexander Tsesis analyses how the courts can use those famous words when ruling on the constitutionality of statutes. One such example is Citizens United v. Federal Election Commission, where the US Supreme Court prevented Congress from differentiating between corporations’ and citizens’ campaign expenditures. The article uses the Declaration’s phrase about inalienable rights of the people, particularly freedom of political expression, to analyze the Court’s equating of corporations and natural people for First Amendment purposes in Citizens United v. Federal Election Commission. It goes on to conclude that “by granting corporations equal First Amendment protections on campaign speech, the Court attenuated the people’s unique place in electoral politics.”

Film on Tort "Reform" Agenda

HBO is airing through late July the documentary Hot Coffee about the tort “reform” industry that used the famous 1994 case of Stella Liebeck v. McDonald's Restaurants, P.T.S., Inc. and McDonald's International, Inc. as a synonym for court abuse. The plaintiff sued McDonald’s for damages resulting from being scalded by hot coffee served at a temperature of 180–190 °F resulting in third-degree burns. The story may be familiar as it became symbolic for frivolous claims. But there is more to the story as the documentary shows the publicity campaign that influenced public opinion to view the case as a symbol of frivolous claims. The trailer is here.

“Hot Coffee” addresses complicated legal arguments in the Liebeck and other cases with greater detail than proponents of tort reform provide. For example, the Liebeck trial testimony showed that at 180 to 190 °, McDonald's coffee was hotter than that served by other restaurants, that it received at least 700 complaints about hot coffee in the previous decade and paid more than half a million dollars in settlements, as reported in a 1994 Wall Street Journal article A Matter of Degree: How a Jury Decided That a Coffee Spill Is Worth $2.9 Million --- McDonald's Callousness Was Real Issue, Jurors Say, In Case of Burned Woman --- How Hot Do You Like It?

Plaintiff's injuries included third-degree burns on her thighs and groin area for which she was hospitalized for a week and had to undergo painful skin grafts. Before suing, she wrote McDonald's requesting that it cover her uninsured medical bills and incidental costs of about $20,000. McDonald's offered $800. A mediator recommended that McDonald's pay a settlement of $225,000 but the company refused. After a seven day trial, jurors awarded the plaintiff $160,000 in compensatory damages and $2.7 million in punitive damages. After the verdict, the trial judge slashed the punitive damages by more than 80% to $480,000. The case settled for an undisclosed amount.

The BLS Library has in its collection Products Liability and Basic Tort Law by Martin Alan Kotler (Call # KF1296 .K68 2005) which discusses the effort to carve out separate spheres for tort and contract law and the (largely political) impetus for tort and products liability reform in the courts, state legislatures and Congress. Gerald L. Shargel, a Practitioner-in-Residence at Brooklyn Law School, recently wrote in a Daily Beast article titled Scalding Takedown on Tort Reform saying that the film maker Susan Saladoff shows that the aim of the “reformers” is to shield large corporations and medical professionals from being held accountable.