By James Bowden

On June 28, 2012, the last day of the U.S. Supreme Court’s 2011 term, saw a surprising and important decision handed down in National Federation of Independent Business et al. v. Sebelius, Secretary of Health and Human Services, et al., the challenge to the Affordable Care Act (the “ACA”). While most of the news media was focused on the decision in the ACA challenge, the Supreme Court also issued an opinion in U.S. v. Alvarez on the same day overturning the Stolen Valor Act of 2005 in a decision likely to become a key piece of the Court’s First Amendment jurisprudence.

I’m not going to attempt to provide incisive legal commentary on the ACA opinion - there is plenty of good commentary available with far more insight than I can muster, and frequent readers know that “incisive legal commentary” isn’t really what I do. I will go ahead and say that my predictions on the outcome of the ACA challenge were wrong.  Being wrong in my predictions puts me in good company, however - the decision surprised most court watchers. In an opinion authored by Chief Justice John Roberts, the Chief Justice joined what is commonly understood to be the more liberal members of the Court in upholding the majority of the ACA. The individual mandate, a key provision of the ACA which was the primary lightning rod for conservative criticism, was held constitutional under the federal government’s power to tax but not under the Constitution’s Commerce Clause. Interestingly, in evaluating the applicability of the Anti-Injunction Act heard in oral arguments, the Court held that the penalty for not purchasing insurance was not a “tax” for purposes of the Anti-Injunction Act; curious, considering the foothold found for the constitutionality of the individual mandate was held to be that the penalty was a permissible application of Congress’s power to tax. The portion of the opinion that most surprised me was the holding that the Medicaid expansion, which required states to abide by the increase in eligibility under Medicaid or lose all Medicaid funding, was unconstitutional as excessively coercive. A former professor of mine at Vanderbilt University Law School must be quite pleased with this holding - James Blumstein’s students should expect the subject matter to come up on future Constitutional Law II exams.

The opinion is really worth a read, even if it is a bit long, mostly because of the intended audience both the opinion and the dissent are clearly written for. Unlike many Supreme Court opinions, which focus on obscure and esoteric areas of law, the ACA opinion is written for consumption by the most novice of court watchers. The introduction to Chief Justice Robert’s opinion (and the corresponding dissent) cite opinions that first year law students (and even high school students taking classes on American Government) would be familiar: Marbury v. Madison, Gibbons v. Ogden and Wickard v. Filburn are all discussed. Waller’s very own Judge Alberto Gonzales was interviewed on America Live with Megyn Kelly, Morning Joe, and Anderson Cooper 360 regarding the opinion. Judge Gonzales was involved with vetting John Roberts when he was appointed to his current position by President Bush. Note to whoever does CNN’s webpage addresses - it is “Gonzales” with an “s.”

I’m a bit disappointed that the ACA ruling took the spotlight away from the decision in the Alvarez case. The respondent, Xavier Alvarez, kicked off his first meeting as a member of the Three Valley Water District in Claremont, California by telling the assembly that “Back in 1987, I was awarded the Congressional Medal of Honor.” It seems that Mr. Alvarez is quite the fabulist, and the statement that he had won the Congressional Medal of Honor, much like many of his other life stories (including that he had played for the Detroit Red Wings) was a lie. Unfortunately for Mr. Alvarez, under the Stolen Valor Act of 2005, lying about earning a Congressional Medal of Honor carries a penalty of not more than one year in prison.

In holding the Stolen Valor Act unconstitutional, the Court provides a significant advancement of the Court’s First Amendment jurisprudence. The opinion distinguishes simple lies from statements that are not protected by the First Amendment, including fraud, “fighting words,” inciting violence, and defamation. There are a good number of quotes from this opinion worth remembering; the majority opinion even gives a nod to George Orwell:

“Permitting the government to decree this speech to be a criminal offense, whether shouted from the rooftops or made in a barely audible whisper, would endorse government authority to compile a list of subjects about which false statements are punishable. That governmental power has no clear limiting principal. Our constitutional tradition stands against the idea that we need Oceania’s Ministry of Truth.”

This is the core of the Alvarez opinion: that allowing the government to punish statements simply for the fact that they are false gives the government the power to determine what is true. It is also an excellent opinion for readers in an era, as mentioned above, in which Supreme Court opinions are too often inaccessible to most readers. Justice William O. Douglas would be proud. I think it is worth noting that the dissent filed in the case was written by Justice Alito, which is in keeping with his more restrictive views on the protections afforded by the First Amendment. Here are two more great quotes from the opinion in parting:

“The remedy for speech that is false is speech that is true. This is the ordinary course in a free society. The response to the unreasoned is the rational; to the uninformed, the enlightened; to the straight-out lie, the simple truth.” 

          and 

“The Nation well knows that one of the costs of the First Amendment is that it protects the speech we detest as well as the speech we embrace.”

By James Bowden

Well, it wasn't quite that bad. On Wednesday, I had the privilege of contributing to a podcast on eugenics and North Carolina's recently announced restitution program for victims of involuntary sterilization on the Legal Talk Network with Alfred Brophy, a professor of law at the University of North Carolina School of Law at Chapel Hill as moderated by J. Craig Williams. If you want to find out what happens when a law professor who has published two scholarly works on a legal issue discusses the subject with a blogger who wrote 300-odd words about a story he heard on National Public Radio while he drove to work, here it is.

Thank you to the Legal Talk Network for the opportunity to participate and to Alfred Brophy for, well, putting up with me.

By James Bowden

A large number of the clients I work with are for-profit healthcare companies, and a significant percentage of those clients focus on providing healthcare in non-urban areas. Nonprofit healthcare providers in rural America face a number of very significant challenges, including substantial difficulties in hiring and retaining good physicians and growing amounts of bad debt caused by an unfavorable ratio of patients receiving unreimbursed care to patients covered by private health insurance. For-profit healthcare companies are well-suited to alleviate theses problems. Three of the most notable benefits that for-profit healthcare companies can offer non-urban healthcare providers are (1) access to the capital markets to obtain working capital and cash for necessary capital investment, (2) economies of scale to diffuse back-office costs and management expenses, and, most relevant to this post, (3) more effective physician recruiting and retention programs.

A large amount of thought around recruiting and retention is built around physician compensation, which is a very difficult topic considering the restrictions on physician compensation presented by the federal Stark and Anti-Kickback laws. The impact of these restrictions are all the more important in non-urban healthcare recruiting. Put simply, the economics and the regulatory environment that non-urban healthcare providers operate under restrict the ability to draw talent with large compensation packages. That is why my ears perked up to this story about "mission-focused medicine" at a hospital in Ashland, Kansas. The logic is beautifully simple: physicians that are willing to be healthcare providers in rural America often aren't particularly motivated by money--they are happy to take a pay cut to work in a setting where their help matters to the community. The answer is similarly elegant: the Ashland Clinic now offers eight weeks off to do overseas missionary work. It looks like the plan is working--the clinic has physician staff where it had none prior to the implementation of mission-focused medicine.

What the Ashland Clinic is doing is interesting. Instead of asking how much they are willing to pay for the people that they want, they are instead asking what traits they are looking for in people they hire and what things those people are driven by and recruiting accordingly. The type of people that a company seeks to hire and the manner in which the firm compensates them can have profound effects on the behavior of the employees. I think the most profound example is presented by hotel staff at the Taj Mahal Palace Hotel in Mumbai, India. When that hotel was attacked by terrorists in 2008, hotel employees who had every opportunity to flee with their lives instead stayed to help the guests. The kitchen employees formed a human shield behind which hotel guests escaped to safety; in the process each was shot to death. The general manager kept working to save the hotel patrons even after his family died in the fire set by the terrorists. A Harvard business professor traced the selflessness of the Taj employees to recruitment and reward--the hotel is owned by a family that puts a high value on social justice, and employees are hired from small communities on the basis of their educator's recommendation that the recruits were respectful and empathetic. The employees are then rewarded promptly for acts of kindness towards guests. The unintended consequence appears to be that the Taj Hotel unwittingly hired a staff chock full of real heroes.

So how does this post have anything to do with young lawyers? Well, frankly, our recruiting model doesn't hold up quite as well as those of the Ashland Clinic and the Taj Hotel. I don't think I have to get too deep into it, either, but I think it is pretty safe to say that the lures large firms generally hold out to recruits are generally twofold: money and power. That may be dangerous in a profession where instilling trust and showing dedication are of paramount importance, and selfishness is an Achilles heel. It might also explain the old saying that the best students in law school end up becoming law school professors. 

By Kathleen Pearson

So you made it through law school finals and headed home for the holidays.  Congratulations!  The only problem now is that your CSO (and everyone else for that matter) keeps telling you that you need to "network."  Whether you have a job lined up or not, that word keeps buzzing around like an annoying gnat.  Don’t they know you are wiped out and the mere thought of having to do something else is going to send you right over to the edge?? 

"Networking" has become one of those insidious corporate buzz words that seems to be the panacea of all problems anyone might ever face. Because it has an official name, it seems unattainable by anyone that is not a perfect conversationalist or social butterfly. The word itself now seems filled with an undercurrent of wanting to get something from the other person – i.e. a job.  That's a lot of pressure for both you and the other person!

Relax.  The holidays should not be filled with even more pressure and tasks.  It should be about having fun, reconnecting with old friends and family, and making new connections with interesting people.  Instead of focusing on networking, focus on connecting.

Just in case you have forgotten, here is a quick reminder of how to connect with others and have fun over the holidays:

1. Go to a holiday party with friends and family. 
2. Talk about your experiences in law school with friends and family
3. Ask your friends and family what they have been up to
4. Meet new people at the party and ask them about their interests
5. Tell the new people about yourself and your interests
6. Promise to keep in touch with the people you just talked to!

By James Bowden

The United States' political system is controlled by two major political parties, one generally politically liberal and one generally politically conservative. That is the way we think of the political policy-making process: the left and the right fight for enactment of their policies and, ever so rarely, compromise. Query: what if the actual conflict implicit in the U.S. political and policy-making process wasn't the conflict between right or left, or rural versus urban, or racial, or any of the main dichotomies that we use to try to make sense of policy making. Here's the surprise: the main conflict is really generational. Presented in customary bullet-point format for your perusal:

• The Wealth Gap. Forget the 1% versus the 99%. Even the fact that the top 1% of wage earners own more of the nation's financial wealth than the bottom 50%, or that in 2007 the top 1% of all income earners in the U.S. made 23.5% of all income, more than the entire bottom 50%. The starkest statistic is the difference between the change in wealth of the old and the new generations over the past several decades. Since 1984, older people have seen a 42% increase in their net wealth while their younger counterparts have experienced a 68% decrease. I sure hope they aren't planning to take it all with them. 
• Debt and Taxes. For the past decade, tax increases have been the most-hated villain in Washington. Really, it goes back further than that. Since 1986, maximum marginal tax rates have been historically low, particularly compared to what the Greatest Generation paid. Over the same period, the U.S. debt has increased seven fold. The average baby boomer was between 22 and 40 in 1986; their prime income earning years have overlapped with an uninterrupted period of historically low taxation, over which period public debt exploded. Now the baby boomers are cashing out--the first of the baby boomers became eligible for Medicare and Social Security in 2011. They are retiring, and won't be paying in anymore. Guess who picks up the tab by default? 
• The Fiscal Battle. We saw a battle over raising the debt ceiling this summer, and are facing sequestration if the “supercommittee” that resulted from the compromise fails to agree on cuts to federal spending in excess of $1 trillion. What is on the chopping block? The big losers are defense (which is a large employer of younger workers), education (which is supposed to provide the younger generation with opportunities), and spending on programs designed to reduce unemployment (which, as discussed below, effects the younger generation inordinately). What are the sacred cows? The spending items that are bringing the committee to loggerheads are entitlement programs like Social Security and Medicare (which benefit the older generation effectively exclusively) and the possibility of raising taxes (which, as discussed above, has the effect of benefiting the older generation). 
• The Cost of Success. The saying goes that there are two kinds of good debt--debt the incurrence of which produces a positive net change in wealth. One is a mortgage and the other is student debt. The saying is getting pretty difficult to stand behind these days. Grad PLUS loans are not dischargeable in bankruptcy and guaranteed by the most credit-worthy institution in the world--the full faith and credit of the United States of America. They carry an interest rate of 8.5%. The interest rate on the last car I bought was 7.1%. That means that in 2007 a non-dischargeable, absolutely guaranteed debt carried an interest rate 140 basis points higher that a dischargeable loan secured by a depreciating asset which was likely underwater the moment it rolled off the car lot. Since then, it has gotten worse--most interest rates have dipped over the past few years, but student loan rates are fixed. A person's cost of capital for a fancy new car is lower than for an education, and the average indebtedness of a law school grad is $100,000, which buys a pretty fancy car. Or two. Or three. That is insanity. 
• The Tyranny of High Expectations. Just like every generation [allegedly] works to pass a better world on to their children, each generation is expected to make good use of the benefits they receive from the generation that went before them. I never thought I would do this, but I am going to paraphrase Cracked.com: members of the young generation were told they needed to go to school and work hard so they didn't have to flip burgers. Now that the younger generation has gone to school and worked hard, the economy is feeble, the impact of unemployment inordinately falls on them (young adults age 20-24 have an unemployment rate of 14% compared to 9% for the population overall and 7% for people over 55), and they are being criticized as entitled for ... you guessed it: not wanting to flip burgers.

By James Bowden

Welcome back, monetary policy sports fans. In round one, the U.S. clobbered the E.U. with its enlightened monetary and fiscal policies. But what about the political institutions that underlie the decisions that our combatants made when confronted by crises? Let’s take the gloves off and find out:

• Fiscal integration doesn’t work without political integration. The European Union is effectively a treaty system connecting the participating countries in an agreement to share a currency and not take on more than a certain percentage of GDP in debt, with one central bank. The United States is a politically and fiscally integrated federation of states, with one central bank. The difference is stark. Because the nations that make up the Eurozone have differing fiscal, political and social policies and positions, the only unifying factor is their currency – so if Greece’s economy falls apart, each individual nation has to perform its own risk assessment as to whether assistance is warranted. Conversely, if, say, Idaho’s failing economy was rending the social fabric of its communities, the United States would not seriously consider the possibility of doing nothing. That puts the U.S. on the board with one. 
• The Eurozone has no effective built-in checks and balances.  You know those wonderful, self-equalizing checks and balances that you learned about in grade school? The ones that balance competing interests of majority rule with individual liberty, the power of coequal branches of government, and the relationship between the states and the federal government? Yeah, the Eurozone doesn’t really have those. Since the only unifying factor is currency, the financial well-being of the constituents are directly tied to the whims of the economic center of gravity, which is Germany – an economy featuring a robust manufacturing industry, a trade surplus, and a borderline-psychotic fear of inflation. Beware, smaller European economies with real estate and tourism based economies, because the folks holding the purse strings don’t have the same interests that you do. Look at it in a constitutional sense: the U.S. apportions legislative power in a bicameral system, allocating representation by population in the House of Representatives and by equal representation per state in the Senate, with majority rule in each chamber (sort of). The Eurozone system effectively operates on a system that would be similar to California and New York making all monetary decisions for the country, and each state trying to maintain a functioning economy and government in the middle – unless the issue required unanimity, in which case Rhode Island could hold up the policy making process completely at its whim. Doesn’t sound very democratic, does it? Hurray for democracy, and hurray for the U.S.A. We win this one. 
• It isn’t your tax rate; it’s your tax collection rate. I know that Americans hate taxes, and the only good taxes are no taxes (or, alternatively, the taxes someone else pays that you get the benefit of). But the U.S. actually has an excellent collection rate; despite the relative rarity of audits and enforcement action, almost all taxes due are collected. Fraud is exceedingly rare. In Greece, tax evasion is a national pastime. No kidding – leading up to their collapse, the Greeks collected somewhere around 66% of the total taxes legally due. That’s a 33% evasion rate, and a 100% inability on the part of the government to realistically project the level of debt that the country’s economy can realistically service. Maybe it isn’t a question of law – maybe it is an issue with implementation, but either way Greece was doing it wrong. So that’s a big thumbs up to the U.S. tax system. Rare praise, I know.
  

By James Bowden

It appears that the Eurozone may have, at least temporarily, staved off the possibility of rapidly collapsing into a debt-lined, lava-filled hole in the earth with a new, comprehensive strategy to deal with the mounting E.U. debt crisis. I thought this would be a perfect opportunity to look at some of the differences between the U.S.’s and the European Union’s fiscal, political and legal systems to illustrate why the same financial crisis has led to such different results, in convenient bullet-point format: 

By  James Bowden

Pop Quiz: does a hotel blatantly oppress an individual or a group’s right to freedom of speech by canceling a contract with an anti-Islamic organization seeking to hold a conference on the basis that it may cause interruptions to the hotel’s business? 

a)       No.

b)       Yes

c)       Both A and B

d)       Wait, what? 

If you went to law school and you answered B or C, you should probably seek a refund of your tuition money. Fact: private persons cannot violate the First Amendment guaranty of freedom of speech. The restriction only applies to state actors. But thank you for playing.