Law Blog

It’s been estimated that companies with annual revenues over $1 billion spent more than $50 million in legal fees last year.  Although electronic discovery (e-discovery) costs have not been pinpointed, they are widely thought to comprise a huge chunk of overall legal fees; in fact, according to a study conducted by Fulbright & Jaworski, lawyers for companies with revenues topping $100 million listed e-discovery costs as their biggest concern.

In response, major companies, including Cisco Systems and Morgan Stanley, have begun outsourcing to India and other offshore countries, where foreign lawyers review documents at a lower cost.  Sure, we all understand the desire to cut costs, but if companies aren’t careful, they may incur costs far greater . . .   

Obvious concerns about outsourcing to foreign jurisdictions include quality control, issues of professional liability, breaches of attorney-client privileges, and facilitating the unauthorized practice of law.  Remember, China, India, and other popular offshore locations lack stringent U.S. data protection and information security laws; moreover, many also lack adequate judicial systems to remedy a problem once it occurs . . .  

Francoise Gilbert, of the Silicon Valley-based IT Law Group, recently commented on this issue in her lecture, The Law of Privacy and Data Security, hosted by the Bar Association of San Francisco.  Ms. Gilbert stressed that U.S. companies need to make sure their outsourcers abide by U.S. law, and U.S. companies need to closely supervise their outsourers.

For example, if an information security breach occurs at a U.S. company’s foreign call center, the U.S. company remains ultimately responsible; this would be true even if the call center signed a contract to adequately screen and supervise its employees.  It’s also important to realize that a breach could occur even if the call center acted in good faith to abide by the contract. 

A further example: a call center that conducts background checks on prospective employees might not discover criminal records due to limited search capabilities.  So, if an employee committed a crime in a neighboring county, this record would not turn up during the search, she would be hired, and if she uses customer credit card information for fraudulent purposes, guess who pays?

There are a lot of pretty crazy sheriffs out there, and they deserve to have their hard work appreciated by the public. In my search for the most fitting way to “honor” their accomplishments, I have decided to create an online “Wall of Shame.”

It is fitting, then, that my first entry to the Wall of Shame is none other than-a Wall of Shame! Apparently our friends in Nassau County decided the humiliation of being arrested, booked, spending the night in jail and then going through the criminal justice system was not good enough to deter the would-be criminals of their fine county. (Thanks to How Appealing for the story). In the name of “deterrence,” these law-breakers would also have their mugshots and criminal charges posted online for the world to see.

How ironic that one of these alleged “law-breakers” actually knows their Constitution better than the fine folks at the Nassau District Attorney’s Office. The arrestee, let’s call her “Jane,” was picked up for a DWI. (Her name is already all over the web, the least I can do is not contribute to the further destruction of her personal life). Her picture was plastered online, but she sued Nassau County to take down her photo and won. The New York State Supreme Court ordered the County to remove the picture, correctly pointing out that posting the mugshots and charges of innocent people violates due process, among other things.

Nassau County Executive Tom Suozzi insists he is in the right and the pictures are necessary to deter drunk driving. He will appeal the ruling, and in the meantime only post pictures of those actually convicted. (Which is another topic altogether.) Unfortunately, the pictures are still there (or they were there when this blog was originally posted – they have since been taken down) for the world to see thanks to the fine folks at Newsday.com, who in their pursuit of the highest echelon of journalistic integrity have decided the public deserves its legal peep-show. (They want to make super-extra sure you know that everyone is innocent until proven guilty though! Just look at the fine print!)

In May, 2008, the California Supreme Court held that same-sex couples have a right to marry in California.  Since that time, thousands of same-sex couples have married in the state.  Yet, now that Proposition 8 — which eliminates the right of same-sex couples to marry in California — passed in early November, what happens to those same-sex couples who have married since May, 2008? 

So far, the Court has declined to comment on whether Prop 8 would be retroactive, stating that “pre-election construction by courts in disfavored and there is enough uncertainty about the measure’s meaning that proponents and opponents are free to argue what they think it will mean.” 

Others are more outspoken.  According to Joan Hollinger, a professor at U.C. Berkeley’s Boalt Hall School of Law, “The amendment cannot be effective retroactively, so anyone married before November would be protected.”  California Attorney General Jerry Brown echoes this sentiment, declaring:  “I would think the court, in looking at the underlying equities, would most probably conclude that upholding the marriages performed in that interval (before the election) would be a just result.” 

However, not everyone agrees on the issue of retroactivity.  Brad Dacus of the Pacific Justice Institute, for one, asserts “It is clearly far too early . . . for the attorney general or for anyone to be pronouncing how the courts will be interpreting the amendment.” 

I agree with those who think that Prop 8 would not be retroactively applied.  First, most legislation is effective from the date of passage.  Second, the U.S. Constitution’s ex-post facto laws and protections against government interference with private contract pose obstacles. 

However, not applying Prop 8 retroactively would cause new problems too.  For instance, how would the law accommodate the small class of same-sex couples who have married between May and November?  It seems unlikely that those couples would be afforded exactly the same rights as married opposite-sex couples if the California Constitution explicitly forbids same-sex marriage; yet, domestic partnership law would not be adequate.

San Francisco has yet again come under the national spotlight, this time due to a federal grand jury investigation into whether city officials violated federal immigration laws against harboring illegal immigrants. The issue has not surprisingly sparked a heated debate over the controversial policy. 

Sanctuary laws are not unique to San Francisco. In fact, over 80 cities and states in the U.S. have various sanctuary policies. These include Chicago, Boston, New York, Los Angeles, Oakland, Miami, and Houston. Entire states such as Alaska and Montana have sanctuary laws protecting illegal immigrants.

Ever since their conception, these policies did not sit well with the federal government and anti-immigration proponents. (Lunatic fringe groups such as the Minutemen are particularly outraged, and show their displeasure with “rallies” that sometimes draw over 10 people.) Actually, state governments have no obligation to enforce federal immigration policy. Immigration has always been the exclusive province of the federal government.  States can, however, assist the federal government if they choose. Most of these policies merely remove that choice.

Threatening criminal sanctions is a new and almost desperate tactic, and in some ways San Francisco has already folded. Recent developments brought intense scrutiny upon the city’s sanctuary law, some of it in the form of subpoenas. In one particularly troubling development (from a legal standpoint), it was found that the city was not reporting juvenile felony offenders, and then flying them back to their home countries. This particular incident might be what Northern California United States Attorney Joseph Russoniello hinted at when he intimated the city may be violating harboring provisions of Title 8 of the US Code. Apparently to Mr. Russoniello, deporting illegal immigrants is only OK if the handcuffs say “property of the federal government.”

Many believe this non-reporting policy led to the tragic San Francisco triple homicide during the summer of 2008. It was discovered that the suspect Edwin Ramos-an illegal immigrant-was previously arrested as a juvenile, but was not reported to immigration officials. Many believed that had he been reported, he would have been deported and the murder would not have happened. The incident was nationally televised, but missing from the news was the fact that San Francisco reported Edwin Ramos to Immigration and Customs Enforcement (ICE) only months earlier on an unrelated charge, but was not asked by ICE to detain Ramos.

San Francisco Mayor Gavin Newsom has promised to report juvenile felony offenders and stop flying juvenile offenders back to their home country without reporting them to ICE. Such a policy would not be a far stretch from the city’s already long standing policy of cooperation with ICE as to illegal immigrant felons, as the city did with Mr. Ramos. (It might also be a troubling breach of privacy for juvenile offenders, but that has gotten lost in the fray.)

Ironically, intimidating local officials with criminal sanctions may make it harder for local officials to fight crime and pick up suspects like Ramos. Policies such as San Francisco’s have evolved into important guarantees ensuring local citizen cooperation with police officers. Police chiefs across the country, such as former San Jose Police Chief Joseph McNamara, cite the need for local police departments not to act as extensions of ICE: “There’s a real debate going on nationally in police circles, but in almost every large city I know of, police departments have the same attitude: We have to work with these communities; we can’t have them viewing the police as the enemy because then you get this ‘Don’t snitch’ policy.”

This Grand Jury may be nothing more than a not-so-gentle reminder to city officials that the feds have not forgotten about them. But local enforcement of immigration law, such as county police officers routinely demanding proof of legal residency from certain people, might sometimes conflict with local efforts to fight crime. Since ICE relies in large part on local police departments reporting apprehended illegal immigrants (picked up for other crimes), fostering distrust between local police and local residents may in fact hinder efforts to find illegal immigrants. If people in the community do not trust the police, it makes their job much harder. In that scenario, everyone loses.

According to a recent  report issued by the U.S. Chamber Institute for Legal Reform (IRL), 58% more securities-related class actions were filed in 2007 than were filed in 2006.  Further, according to a recent study conducted by Cornerstone Research and Stanford Law’s Securities Class Action Clearinghouse, 63 class action suits were filed against the financial services sector in just the first six months of 2008.  This number exceeds the total number of filings in 2007. 

The Stanford report also shows that about half of the 110 filings between Jan 1 and June 30, 2008 were related to the U.S. subprime mortgage crisis and global credit crunch; moreover, the increased filings have caused defendant firms’ market capitalization losses to skyrocket. 

Do these securities class action filings threaten average shareholders’ assets?  According to a recent report issued by the Institute for Legal Reform (IRL), compelling evidence shows that such filings are putting U.S. businesses in peril, and threaten the economic health of individual investors.  Lawsuit-related monetary losses in 2007 doubled since 2006, and settlement costs may even exceed litigation costs as more companies hope to salvage some of their stock price and reputation.  The ILR report urges Congress to investigate fraud and abuses in the securities plaintiffs’ bar, and suggests legislative changes.