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http://www.constitutionaldaily.com/index.php?option=com_content&view=article&id=1573:legal-reasoning-redux-5&catid=38:there-and-never-back-again&Itemid=65

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Steve Diamond just outright lies about SCU's historical employment rate claims

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This post has been updated. See the end for more ground breaking idiocy by Stephen F. Diamond.

We promise we're going to find something to write about other than Santa Clara law prof Steve Diamond just making shit up.

...And that'll happen just as soon as Steve stops making shit up.

In the newest post on his blag, he complains about Brian Tamanaha's statement at the Cato Institute that as the market was falling apart law schools were reporting employment rates of 90%+.

In fact, however, when I went back and looked, as one example, at what my own law school disclosed as employment statistics in 2008 and 2009 I was unable to find the 90% statement.

Our first thought was "To the Wayback Machine!" but Steve-o beat us to it:

Here is what SCU posted in the Fall of 2008 about employment. If one compares it with what we now post, in response to the new ABA guidelines, it seems to me there is not a dramatic difference. The much vaunted “bi-modal” distribution is clearly visible as is the fact that only about half the class reported salaries (form which any rational individual could conclude that that only half had employment at that point). The alleged “90%” statement is nowhere to be found, although someone better at using the Wayback machine may be able to do a more thorough search and find it. If they do, please let me know.

Those readers with more calendar savvy will note that Steve links to a July 2010 capture, and July 2010 didn't occur in the Fall of 2008. The data are however for the class of 2008, data which was collected in February 2009. The dates aside, let's see if we can find the 90% employment statement:

Total Private Sector: 83%

Total Public Sector: 16%

Hm... Where is that 90%+ figure hiding...

Wait! I think we've got it! The total employment rate for the class would be those employed in the private sector plus those employed in the public sector, and 83% + 16% = 99%

Get out your calculators and double check that.

Santa Clara also reported a 98% rate for its 2007 grads.

Update:

This post was picked up by Inside the Law School Scam and Lawyers, Guns and Money (Campos writes for both), and in response to that, Stephen has written another defense of SCU's numbers:

The fact is that SCU, perhaps as did many schools, made a reasonable effort to determine who is employed upon graduation and where. Not every student replies but of course 100% of the students who do report back, sure enough, adds up to 100% of the students who report back. And that’s why the school created a chart that has a column labeled “% of reported.”  The actual number who report back is on the same page and includes a heading that says “44% reported” and, two clicks away, is the number of actual students in the new entering class (233 day, 77 evening/part-time).

Of course 100% of the students who do report back adds up to 100% of those who report back. But the chart isn't of students who report back. It's of students who reported being employed. And yeah, 100% of students who reported being employed will add up to 100% students who reported being employed, but no where on the chart does it indicate that it's only outcomes for students with jobs. It's labeled "Statistics for Graduating Class of 2008," which plainly implies the entire class, or at least all those who responded. Except that it's not everyone who responded. 4.0% of students who responded said they were unemployed, and another 1.5% went on to pursue another degree.

Nowhere does SCU disclose these numbers, and nothing on the page indicates that the chart is just a cherry picked subset of the whole class. Depending on how you interpret it, the chart either purports to be for the entire class, or is intentionally ambiguous with the intent of giving the impression that the data represent the entire class.

California Civil Code Section 1572 provides:

Actual fraud, within the meaning of this Chapter, consists in any of the following acts, committed by a party to the contract, or with his connivance, with intent to deceive another party thereto, or to induce him to enter into the contract:

1. The suggestion, as a fact, of that which is not true, by one who does not believe it to be true;

2. The positive assertion, in a manner not warranted by the information of the person making it, of that which is not true, though he believes it to be true;

3. The suppression of that which is true, by one having knowledge or belief of the fact;

4. A promise made without any intention of performing it; or,

5. Any other act fitted to deceive.

Looks like Steve Diamond might not be the biggest fraud at 500 El Camino Real.

Finger poised to tip the first law school domino

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Back in mid-December, Law School Transparency wrote an article asserting that the financial structure of law schools was unsustainable and that if it continued on its present course we would begin to see the collapse of schools that rely heavily on tuition for funding and produce meager employment outcomes. Here's an excerpt from the article's introduction:

The personal disasters faced by recent graduates may be precursors to an industry-wide institutional disaster for legal education, as law schools struggle with their own economic challenges. Law schools have high fixed costs brought about by school-on-school competition, unchecked federal loan money, a widely exploited information asymmetry about graduate employment outcomes, and a lack of fiscal discipline masked by assertions of innovation. Tuition continues to rise at alarming rates, while both the number of legal jobs available and the salaries for those jobs decline. Skepticism about the value of a J.D. has also never been higher; law schools have already begun to see a drop in applications and enrollment.

If these trends do not reverse course, droves of students will continue to graduate with unsustainable student loan debt that greatly reduces their ability to fulfill traditional, important roles in American society. Programs unable to fall back on large endowments, fundraising, non-traditional sources of revenue, and other budgetary maneuvering may face a very rapid collapse. The exact point at which the law school crisis turns into a disaster for legal education is debatable, but the importance of preparation for it is not.

In response to this piece, UNC professor Bernie Burk posted on Faculty Lounge, saying that LST had "jumped the rails" for being too dramatic and crisis-mongering:

Don’t let your urge to be the center of attention distract from the ideas and their merits. To those of you who pointed out that this was a vice of my original post (most of you in the most understated and appropriate way): you were right, and thank you. This vice appears in “Disaster Planning” in the overused and overwrought rhetoric of crisis that pervades a certain class of commentary about the current state of the legal academy and the legal profession. LST’s title tells us its paper is all about “Disaster Planning” to address the “Crisis in Legal Education.” And indeed the word “disaster” appears three times in the first paragraph of the Abstract alone, with two “cris[e]s” thrown in for good measure. By the third page, “the law school disaster” has been erected as the foil against which the paper’s recommendations are defined.

So what is “the law school disaster” according to LST? I scoured over forty pages without finding an answer. While “Disaster Planning” trots out various inventories of misfortune, it fundamentally fails to identify the “disaster” it’s “planning” for, leaving us facing down that “disaster” armed only with the queasy uncertainty that we won’t know when we’re ready for it, how effectively we weathered it, or when it might be over.

LST doesn't go into too much detail about what exactly the disaster is, because plenty of other people have covered it, but it's not too hard to figure out. There's the personal disaster facing grads, and the looming institutional disaster that will follow when applications plummet and law schools are unable to generate sufficient revenues. And as DJM wrote on Inside the Law School Scam this week, law school applications are at an all time low.

Based on current application rates, it appears that only about 53,000 students will apply to law schools for Fall 2013. And despite some schools having very lax acceptance policies, not everyone will get in. Paul Campos spoke at the Cato Institute yesterday about this, and it's like there will be an overall acceptance rate of somewhere around 85% (down from roughly 50% a decade ago). That gives schools about 45,000 admitted students. Of that, schools historically have had a yield rate of about 85% (some people who get in decide not to go). That brings the number of enrolling 1Ls down to just over 38,000.

Here's the kicker: Law schools have been accepting 1Ls in excess of 50,000, and it's just through attrition that the number of grads gets down to 45,000. So that 38,000 number represents a shortfall of about 20-25%.

That's bad. It gets worse.

Law schools are not just going to see fewer total students, but competition for them will be fierce, and scholarship offers will be given out like candy. We can except that the students who choose not to go anywhere will disproportionately be the ones who would have had to pay full freight. (The most obvious reason not to go is you applied to schools that you'd only attend on scholarship and did not get one.) Schools will be looking at not just fewer students, but a lower average tuition revenue per student.

Schools that don't have large endowments or alumni annual funds will likely collapse. The rapid collapse of several law schools will gain a great deal of media attention which will further cause prospective students to (rightly) question the value of a law degree, and thus cause future applications to fall even further, and more students will refuse to attend law school without substantial scholarships. The collapse will move up the line and cause more schools to close.

The end point will, hopefully, be a new marketplace with many fewer schools, fewer grads, and lower prices, but the interim will be a period of upheaval for a number of schools, their faculty, and their students. That's the disaster, Professor Burk.

What do you think about law sch---ah, screw it, what do you know?

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Yesterday JD Journal reported some results from the annual Law School Survey of Student Engagement with a headline proclaiming, “Law School Students Increase Legal Skills with Professor Interactions.” The survey talked to over 25,000 law students at 81 schools and was based on students’ perceptions of their own gains. The surveyors determined that students who interacted more often with classmates and faculty members at their law schools improved their critical and analytical thinking, writing and research skills, and ethical development.

We suggest an alternative interpretation.

Having students self-assess positive, school-related qualities, while in school, and then using those assessments as the foundation for a purportedly objective conclusion is a risky move. While people are often their own harshest critics, how many current law students are going to say that their law school experience, allegedly supposed to prepare them for a legal career, decreased their legal skills?

There’s also no mention of how this improvement was measured (except by the student’s own opinion). We’re not entirely confident that law school grades are an appropriate measure of legal skill, but at least that measure is semi-quantifiable.

The surveyors concluded that “extra involvement” led to higher grades, but study group participation did not. “Extra involvement” was said to include joining student organizations, study groups and social events. So does that mean going to law prom + joining the Student Animal Legal Defense Fund = getting higher grades? Probably not, but you might think so based on the way the results were written. On the other hand, being a serious dedicated student likely leads to both higher grades and greater student organization participation. And nevermind that several organizations have high (or decent) grades as a prerequisite.

The biggest issue with the study is that it pretends the answers to the following two questions have any meaning at all: asking students to rate their law school as excellent, good, fair or poor; and asking if they would go to the same school again if they could start over.

The question "how satisfied are you with your law school/would you go here again?" is much different than "how satisfied are you with your decision to go to law school/would you do it again?"

It’s the cliché “If I could turn back time” question, and almost universally people say no. (We say almost because we know if Cher could, she would take back those words that hurt you, and you'd stay). We become married to the events that have happened in our lives and the experiences we believe shaped the development of who we are.

Hindsight can be 20/20, but it can also be rose-tinted. We’ve all worn the How I Met Your Mother Graduation Goggles at some point. We over-value our actual experiences and relationships compared to our imagination’s alternatives. The fact that people would go to their law school again doesn't mean that law school was good; it just means that they did in fact go to their law school.

The survey results don’t actually tell us anything. It’s another “law school isn’t so bad” puff piece. The lack of acknowledgement by the survey that a self-reported skill increase with no measureable quantifiers isn’t a reliable measure of causation suggests a lack of logical reasoning and incomprehension of causation even first semester 1Ls should see. Maybe the survey has some utility after all- interpreting its data is probably a more reliable test of skill improvement than any measures it used.

Steve Diamond Can Get You a Job at Wachtell and a SCOTUS Clerkship

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We'd like to leave Steve Diamond alone, but he just won't keep his freaking mouth shut. Last night he Tweeted this:

Why am I not surprised that #CatoInstitute is sponsoring the law school is a "scam" crowd tomorrow? http://www.cato.org/events/failing-law-schools

Let's gloss over the fact that he doesn't understand the difference between an "at" sign and a hashtag. We'll also not dwell on the fact that the event is discussing Brian Tamanaha's Failing Law Schools, and that Tamanaha isn't part of the law school scam crowd, and in fact predates the crowd. Yes, he's a critic and he and the scam crowd do agree on many points, but they're hardly the same camp.

We're actually not going to focus on the Tweet at all, it's just our reason for using another post to draw attention to his idiocy. Instead we're going to look at a prior statement he made which was examined yesterday on the Lawyers, Guns, and Money Blog:

In any case, that kind of disappointment has been part of the law school process for many decades. It has nothing to do with the 100 year storm that has left us with the overhang in the market today as it has in every other job market. It turns out, John, that for everyone just living in the United States for the last four years was a “horrible decision.”

But this is really not the point I was (trying) to discuss. I have only maintained that a student accepted at BOTH schools [Santa Clara and Stanford] would most likely have very similar opportunities once they graduated. I feel reasonably confident, in other words, that Wilson Sonsini Goodrich & Rosati would be interested in that student, assuming they performed well, whether they took me for securities regulation or Joe Grundfest. But whether that student should go to SCU or Stanford or another school is an entirely different question depending on values, career goals, and other factors. For example, I readily admit, if you play golf, I would recommend going to Stanford.

First let's recognize that students accepted to both Stanford and SCU may be an empty set. Stanfords 25th percentile LSAT and GPA were 167 and 3.72. Santa Clara's 75th percentile were 162 and 3.48. Not even close. Those 5 little LSAT points represent the difference between the 95th percentile and the 86th percentile. Anyone who can get into Stanford can also get a generous scholarship offer from another California school which is much better than Santa Clara, such as Berkeley, USC, UCLA, or UC-Davis, or a number of out of state schools which still have good California placement, such as Arizona and Notre Dame (seriously, Notre Dame puts more kids in California jobs than in the Alabama end zone).

But really the crux of Diamond's argument is that career prospects mostly come down to the student, and not the school. Let's be clear though what Diamond didn't argue. He didn't argue that the quality of education is the same. That's a legit argument though. Justice Scalia readily admitted that the top schools weren't necessarily full of great teachers, but that he recruits from them because "you can't turn a silk purse into a sow's ear." Silk purse in - silk purse out, shouldn't matter where you go.

Except of course that employers use schools as a filtering mechanism. They don't want to see your LSAT and undergrad GPA on your resume. Instead they want to see your law school, and based on that they'll make assumptions about whether you're more silk purse or sow's ear. Diamond could argue that they ought not to make such assumptions, but he doesn't. He claims that they in fact do not make those assumptions. And of course he's wrong. Law firms have a ton of applicants to sort through, and this necessitates using some quick and dirty filters, such as law school prestige.

 

The most disturbing part about this is that Steve Diamond is "reasonably confident" in his students having the same opportunities as Stanford grads. What is this confidence based on? It's certainly not based on fact. Yet, we see this confidence all over the professoriate. It seems to be that professors and deans and other law school apologists just imagine the best possible world for their students, and then assume this world must exist. There's no attempt to ground the fantasy in fact. If things can be good they are good, end of inquiry.

We can look at the facts though. The fact that over the last 3 years Santa Clara sent an average of just 0.6% to federal clerkships. Stanford sends more than 23% of its class to federal clerkships every year. From 2000 to 2010 Stanford sent 32 grads into Supreme Court clerkships. Santa Clara sent zero. But that could just be due to different students going to different schools. We don't know. So what can we look at to gain a greater degree of certainty about the differences in opportunities? How about the firms that attend OCI at Santa Clara.

None of the Vault 5 firms recruited at Santa Clara last year, and a search of their sites showed only one (2003) grad among their ranks. Only 32 of the Vault 100 participated in SCU's 2011 OCI, and of those 32, some will be recruiting for satellite offices that pay substantially less than the major markets, and others will walk away without giving any offers.

So, we've got a theory that seems wrong on its face, and all the evidence points to it being wrong ...yet Steve Diamond is "reasonably confident" in it. How much do you really want to trust things that he says in class? If you're at SCU, don't sign up for his classes. If you're already in one, drop it and sign up for something else. Someone so confident in his own bullshit is not fit to be training the next generation of lawyers. We wonder if tenure comes with a "bat shit crazy" clause.

See our prior coverage of Steve Diamond:

Santa Clara Prof Just Making Up Tuition Facts

Santa Clara Prof Steve Diamond Approaches Escape Velocity

WE WERE WRONG ABOUT PROFESSOR DIAMOND AND WE APOLOGIZE [Spoiler: We weren't really wrong, and we didn't really apologize.]

What could law schools have done in 2006?

http://www.constitutionaldaily.com/index.php?option=com_content&view=article&id=1899:santa-clara-prof-just-making-up-tuition-facts&catid=42:news&Itemid=71

Law prof released back into the wild

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Deans often defend the high salaries of their professors by claiming that they're required in order to entice brilliant scholars away from Big Law (as if someone who wants to be an academic would really be keen on the Big Law environment). The response from the reform crowd is largely that once away from Big Law, profs can't get back in the game. Maybe professors in certain specialty areas could, or ones with big names who are hired more for the prestige they bring than their actual skill, but rank and file profs teaching fox hunting cases and dormant commerce clause wouldn't find a junior partnership position in a Vault 50 firm.

But instead of theorycrafting, what if someone actually conducted an experiment? Release a law professor back into the wild, and see what happens.

Such an experiment was conducted. We have the video:

What if we put all the crazy in the same camp?

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Afraid Obama is going to take your AR15? Better move to The Citadel.

No, not the military college, but the right wing extremist compound in Idaho. Technically, it's just an idea so far, but as far as ideas go it's pretty stupid. It's planned to be a 1000 acre fortress city, housing 3500-7000 families, with another 1000-2000 acres of farmland outside the curtain walls. Here's the artist concept:

Yo dawg, I heard you liked gated communities...

 

The best part of The Citadel is that living there requires signing the Patriot Agreement. There's a bit of liberty talk in the preamble, but pretty quickly the agreement jumps into what the Citadel is really all about, guns:

Two: Every able-bodied Patriot aged 13 and older governed by this Agreement shall annually demonstrate proficiency with the rifle of his/her choice by hitting a man-sized steel target at 100 yards with open sights at the Citadel range. Each Resident shall have 10 shots and must hit the target at least 7 times.

Three: Every able-bodied Patriot aged 13 and older governed by this Agreement shall annually demonstrate proficiency with a handgun of choice by hitting a man-sized steel target at 25 yards with open sights at the Citadel range. Each Resident shall have 10 shots and must hit the target at least 7 times.

Four: Every able-bodied Patriot of age within the Citadel will maintain one AR15 variant in 5.56mm NATO, at least 5 magazines and 1,000 rounds of ammunition. The responsibility for maintaining functional arms and ammunition levels for every member of the household shall fall to the head of household. Every able-bodied Patriot will be responsible for maintaining a Tactical Go Bag or Muster Kit to satisfy the Minuteman concept. Details TBD and posted elsewhere.

These people are nuts. And not just normal "Obama's gonna take yer guns" nuts, but self-contradictory gun nuts. The requirement that you maintain a basic level of proficiency isn't that far out there. Many countries have mandatory military service for the purpose of creating a larger force that can be drawn from in times of war. Basically, everyone has to be part of the national guard here. What's ridiculous is the third requirement, that everyone be required to own an AR15. You have to both be a marksman, and be armed with a weapon designed for a mode of combat known as "spray and pray." That's like requiring everyone be able to cook and have proficiency in nutrition science, and also keep a stockpile of government cheese.

And then there's this bit of crazy nonsense:

Eight: All Patriots, who are of age and are not legally restricted from bearing firearms, shall agree to remain armed with a loaded sidearm whenever visiting the Citadel Town Center. Firearm shall be on-the-person and under the control of the Resident, not merely stored in a vehicle.

Yeah, that sounds like a place we'd want to hang out. Everyone is required to bring a gun with them. And since it's the big park in the middle of the community, it's probably the location where things like barbecues and wedding receptions and other celebrations will take place. And those events involve a lot of drinking. So no saying "I'm gonna drink tonight, and it's probably a good idea that I leave my gun at home." No siree! Gotta make all your bad decisions while armed.

While the requirements to own and be proficient with a weapon might mesh with the Citadel's general purpose, the requirement to carry a gun in the central park is just bizarre. Oh, and by the way, here is their general purpose, or specifically, the threat they want to prepare against:

The Citadel is primarily designed to defend against a grid-down, economic collapse scenario. When most people ask this question they are thinking in terms of defending against violent action but there are other aspects to defending ourselves. Self-sufficiency in terms of food, water and energy are also a form of defense against a collapse scenario, so these are a major part of our plan.

All sorts of rules about keeping armed, and there's another rule about being proficient in field medicine and basic survivalism, but if you really want to prepare against an economic collapse, you only need a small force of sharpshooters to defend against roving bands of thieves. What's more important to the long term survival of the community is renewable healthy foods. Citadel families are required to keep a year's worth of food stuffs, but it's all going to be canned, processed crap. Their farmland will likely be used for corn and potatoes, creating a diet of largely grains and starch. Odds are the society would collapse from a health epidemic long before the American economy and society collapsed.

We don't mean to discourage the Citadel or paranoid, heavily armed, poorly educated people who want to join the community. By all means, please do. Please, move to a secluded spot in Idaho behind high walls and towers where we can keep ourselves safe from you.

Can "kill all the lawyers" be a Kickstarter project?

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You know that reputation lawyers have for screwing people?

Yeah, that's not going anywhere. Quite the opposite actually, they're finding new ways to screw people, and for even more trivial reasons.

Seth Quest was a man with a dream. Or, a product idea. He designed an iPad stand, took his concept to Kickstarter, the crowd sourced fundraising site, and got over 400 investors to pool $35,000 to get his product launched.

Quest didn't really know what he was doing though, and had no experience in launching a business or producing a physical product, and the venture soon collapsed. After several months, Quest called it quits and returned the money to the investors. He may have been foolish for jumping in unprepared, but he sounds like a decent enough guy. It's not like he paid himself a salary with the money and left the investors empty handed.

That wasn't enough for Neil Singh though. You see, Neil is a lawyer, and by extension, an asshat. Neil was pissed that he didn't get the iPad stand he was promised (Kickstarter projects typically offer an incentive for funding, such as a copy of whatever is being made). So of course, asshat lawyer Neil sued.

The whole idea of Kickstarter makes it clear that if the project fails you won't get your funding reward, because, duh, the product never got produced. Kickstarter even explicitly says what happens if a project fails to be completed:

Is a creator legally obligated to fulfill the promises of their project?

Yes. Kickstarter's Terms of Use require creators to fulfill all rewards of their project or refund any backer whose reward they do not or cannot fulfill.

But, this was too confusing for Neil, a trained attorney. He even admits that the fault of not understanding the system was on his end:

To me, it looked like a cool thing you could buy. If you give me $70, I'll send you one of them.' I didn't do any due diligence. I didn't think I had to. I'm not investing. I'm not doing the same sort of things a potential shareholder would do. I'm just buying a product.

For a normal person, after "I didn't do any due diligence," would come "but I got my money back, so I'm not going to do something idiotic, like sue." Or even if you don't understand Kickstarter but really do just think you're buying a product, the mental process for a normal person is something like, "Too bad the product got called off, but I got my money refunded, so no harm done." But here's Neil's actual mental process, in his own words:

For me, this is why I became a lawyer. I guess I'm more of an idealist than anything else. It just ticked me off.

Really? This is why you became a lawyer? So when you get pissed off because you made a dumb mistake you can go screw someone else over? ...Sounds about right.

Neil did eventually drop the suit though. Too bad defending against it left Quest bankrupt.

[Inc. via Business Insider]

Scumbags regulating scumbags

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Last November, Los Angeles County approved a ballot measure (by about 55%) requiring the use of condoms during sex scenes in adult films. Los Angeles County is home to San Fernando Valley, where the vast majority of adult films in the US are filmed and produced because its geography allows it collect runoff from the Hollywood and Beverly Hills.

By and large, adult entertainment producers and performers were against the measure, claiming customers didn’t want to see condoms in porn. Porn production companies declared they would file suit against the measure if it passed. And so they did.

The suit was filed on behalf of Vivid Entertainment and two adult performers last week, asserting that requiring performers to wear condoms is a violation of their First Amendment rights. Chief advocate for the measure, the AIDS Healthcare Foundation, contends the measure is about safety in a commercial endeavor and the freedom of expression argument is hollow.

We don’t have any skin in the game, but we might encourage someone to consider the statutory ambiguity angle. The full text of Ballot Measure B can be found here, but in relevant part, says, “The use of condoms is required for all acts of anal or vaginal sex during the production of adult films to protect performers from sexually tramsmitted [sic] infections.”

What the measure doesn’t include are definitions for condom, anal sex, vaginal sex, production, performer, or sexually transmitted or tramsmitted infections. Sure, we could use common sense or a dictionary for some of those terms, but that’s the crux of the statutory ambiguity argument: the terms are vague or undefined.

Is cunnilingus considered vaginal sex? Does it matter how the condom is being used? If one dude is penetrating another dude’s ass, which one is required to wear the condom, or are both? What about sex with strap-ons?

Certainly seems a bit difficult to require performers to wear protection during certain acts when there isn’t a definition of those acts. No offense to porn stars, but these are porn stars, not experts in statutory interpretation.

It also seems a bit difficult to imagine the Los Angeles County Department of Health sitting down to hammer out the details of those definitions. At the next board meeting, are they going to put “10:00AM – 11:00AM: defining anal sex” on the agenda? How many times will they say “anus” before there’s no one left smirking? Not wanting to discuss a topic isn’t a defense against an ambiguity argument. If the legislature wants to walk the walk, they should have to talk the talk. And since they don't want to talk the talk enough to even run a spell check on their bill, it's probably best they concede defeat and learn a lesson from the Japanese. In Japan, genitalia in porn have to be pixilated. So what did the porn industry do in response?

Tentacle sex.

You can try to regulate it all you want, but porn will find a way.

If you don't cut that out, I'm gonna stop this car and dissolve you

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Earlier this week, a California traffic judge ruled that a corporation is not a person for purposes of the carpool lane. Well, duh. When the motorist was pulled over in the carpool lane, he handed the officer incorporation papers for a family charity. The officer was unconvinced, wrote the ticket, and sometime prior to showing up to court, the driver got an attorney.

At first we wondered how the driver got an attorney, and now we’re kind of wondering why he let this particular attorney represent him. The attorney is a man named Ford Greene, who has deprogrammed himself from brainwashing by the Moonie Cult, and has dedicated his life to exposing and suing large authoritarian organizations, like Scientology. Check out his website- even we can’t make this stuff up.

Apparently the driver and his attorney both struggle a little with understanding what corporate personhood is, and because we are such kind souls, here’s a little crash course (pun intended).

1 USC §1 holds that when interpreting an act of Congress, the term person shall include corporations. The Supreme Court has recognized since the 1800s that corporations have the same right to make and enforce contracts as natural persons. The issue gained attention in 2010 with the Citizens United case, where the Supreme Court held that political spending is a form of protected speech under the First Amendment, and the government can’t keep corporations from spending money to support or denounce individual candidates in elections. Essentially, corporations can own property, enter contracts, sue and be sued, and spend their money however they wish (so long as it’s not a violation of the business judgment rule or any other laws, but we’re not getting into that today).

The point the driver was trying to make is that there are problems with allowing corporations to be considered persons. He’s been waiting to have this particular “legal battle.” We won’t necessarily disagree with his point, but we will say he’s a moron if he thought a traffic ticket was going to overturn close to 200 years of legal precedent. To his credit, the California Motor Vehicle Code does define person to include corporations, and the carpool signs say “2 or more persons.” The argument that the sign is vague isn’t incorrect, but it is silly. A corporation couldn’t drive a car on its own, let alone drive all of its corporation friends to lunch.

Even if we pretend for a minute to buy this corporation as person for purposes of the carpool lane argument, what would be sufficient to represent a corporation? A sheath of incorporation papers wasn’t. If he’d had the board of directors, shareholders, or the registered agent in the car, this wouldn’t be an issue because he never would’ve gotten the ticket. Any of those would’ve been a second person, therefore meeting the carpool lane requirements. If a corporation gets sued, it’s represented by an attorney. If a corporation goes to court, a person shows up; no one’s putting incorporation papers on the witness stand and cross examining them.

The driver says he expected to lose and plans to appeal. Maybe months or years from now, we’ll find out that we were wrong, that higher courts do buy this guy’s argument. But for now, we’re giving this guy an A for effort, F for common sense, and a WTF for hiring that lawyer.

Actually, an F for effort, because you don't get an A for effort when that effort is going towards something that gets you an F for common sense.

What could law schools have done in 2006?

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Steve Diamond is at it again, this time with a 5,500 word rambling defense of law schools. He kicks off his blog post by first asserting that before the financial collapse, there was nothing law schools could or should have been doing differently.

The law school is a “scam” argument depends, in my view, on some tendentious ideas. A “scam” implies that law schools take people’s money and leave them with nothing. It is a serious charge. It is in my view unsustainable. It appears to depend on the idea that law schools bore some responsibility for the sudden and unpredictable collapse in the job market in post-08 period. But there is no disclosure language or data I am aware of that could have been provided to law students in, let’s say, 2006 that would have allowed students to plan for the waterfall towards which they were headed.

The scam argument is actually that law schools take students' money and leave them with something of much less value than advertised, not that they leave them with nothing. But, that's a side issue. What we want to take up is the question of what schools should have been doing back in 2006. Further down the post he hits this point again:

There was nothing I can think of that law schools could have done in 2006 to warn aspiring lawyers about the crash of 2008. An argument that law schools “should have known” the good times would not last forever reminds me of the old saying that a broken clock is right, twice a day. There is zero chance that a large complicated bureaucracy, which the modern university has become, can turn on a dime in response to vague fears of a future calamity.

This is a professor who is supposedly some sort of expert on corporate governance and finance, and he can't figure out what law schools could have done differently. It's not really that difficult to figure out. Three little words, really:

Minimize.

Risk.

Exposure.

For the 2004-05 school year, Santa Clara (Diamond's home turf) charged $30,750 in tuition. By the 2007-08 school year, tuition had increased to $35,250. That's a 14.6% increase in just three years.

Over that same period of time however, Santa Clara did increase the percentage of students receiving scholarships. In 2004-05, 26.9% of students received scholarships, while in 2007-08 the number was 39% [data is for full time students]. That single number doesn't tell the whole story though. Most of the additional aid went towards scholarships that were less than half of tuition. Of the 12.1% more students receiving scholarships, 8.8% went to scholarships of less than half tuition, while only 2.3% went to half or more. The median scholarship amount fell from $12,000 to $10,000 over this period.

For the 2004-05 school year, a student receiving the median award would pay $18,750. By 2007-08, that amount had increased to $25,250. So, for students receiving the median award, tuition increased by 34.7% in three years. And don't forget the 61% of the class receiving no award, for whom tuition rose 14.6%.

So what could law schools have done before the crash? Peg tuition increases to inflation to keep them from getting out of control. It wouldn't have prevented the crash, but it would man students finding themselves struggling in the market have $15,000-20,000 less of debt to worry about.

More importantly though, they could have cut class sizes. Steve thinks this is ludicrous though:

Any member of a board of trustees who heard a proposal from a law school dean in 2006 to reduce admissions likely would have asked for that dean’s resignation!

That's not necessarily the case. There are many schools of all sorts of sizes, and it's not likely that the dean of Yale regularly sees his head on the chopping block for not increasing their size up to that of Harvard. And since LSATs, GPAs, and selectivity go into a school's US News rank, a dean ought to be able to convincingly argue that by cutting class sizes the school can increase its rank and become a more elite, prestigious institution.

That's the self-serving political argument though. What the dean, if he's concerned about minimizing risk exposure to his students should have been arguing is that even in 2006 law schools nationwide were producing at least 10,000 too many graduates, and that tuition growth was unsustainable.

You don’t need to see the cliff to know to step on the brakes. All you need to know is that with this much fog it’s probably not a great idea to push the car from 90 to 100mph.

 

That’s what Santa Clara and other law schools should have done before the crash. Now let’s look at what they’ve done sense then, counting the 2008-09 school year as when schools could reasonable have begun responding.

In 2008-09, tuition was $36,750, and by 2011-12 it had risen to $41,790, a 13.7% increase. That’s just a little bit lower than the 14.6% increase in the three years before the crash. Doesn’t look like SCU really responded in terms of sticker price.

Since the crash, Santa Clara has greatly increased the number of students receiving scholarships. In 2008-09, 40.5% of full-time students received some award, and by 2011-12 that number had increased to 47.4%. But, just like with the pre-crash increase in scholarships, Santa Clara has focused on lower end awards. Students receiving an award of less than half tuition has increased from 31% to 43%, while students receiving awards of half or greater has shrunk from 9.5% to 4.4%. The median grant in 2008-09 had gone up to $12,000, but by 2011-12 it was back down to $10,000. Since a full ride at SCU is now 4x the median award, the added low-end scholarships probably don't make up for the lost high-end ones. Ouch.

A student with a median award in 2008-09 was paying $24,750. A student with a median award in 2011-12 was paying $31,790. That's $1000 more than a student receiving no scholarship in 2004-05. And of course, for the majority of current students receiving no scholarships, the situation is much worse.

While Steve Diamond can argue about hindsight bias and how it wasn’t reasonable to rein in tuition back in 2006, it’s clear that even knowing we were going over a cliff Santa Clara (just like pretty much every school) chose not to respond.

Before the crash, schools should have been working to minimize risk to students. After the crash, they should have been working on damage control. They did neither. And there’s a cynical, but likely true, reason why. Professors didn’t get laid off when the market crashed, and they didn’t see their salaries slashed by 15% over the next 3 years. They didn’t minimize risk exposure because for professors there was none. They’re not too worried about minimizing harm because they’re not being harmed.

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