Around the Blawgosphere

Consulting the NBA's constitution | Big lawsuit over gift cards | Experience and lawyer discipline


BlawgWhisperer

Donald Sterling, the owner of the Los Angeles Clippers, was suspended for life from the NBA on Tuesday over recorded racist remarks that were made public. NBA Commissioner Adam Silver stated that he would ask the NBA Board of Governors to force a sale of the Clippers.

Tuesday was the first time that the NBA released its previously secret constitution and bylaws (PDF), Winthrop & Weinstine lawyer Derek Allen wrote at DuetsBlog. And “while many people parsed the document to determine what type of punishment Commissioner Adam Silver could dole out to Donald Sterling, I immediately jumped to the part that explained how I could fulfill my lifelong dream of owning an NBA team, or at least receive a rejection letter from that NBA that I can frame and put in my office.” He started poring through the relevant articles.

“First, under Article 4(a), I have to ‘make a written application to the commissioner specifying the city that the applicant wishes to represent in the Association,’” Allen wrote. “I love you, northeast Minneapolis, but Las Vegas here I (and my team) come!”

But Article 4(e) has dream-killing potential. It says that “each application for Membership shall be accompanied by a certified check in the amount of $1,000,000 (the ‘Application Fee’).”

To which Allen responds: “Well then. Steve, it looks like I’m going to need to insist on getting paid for these posts, and I’m going to need a salary advance. Don’t worry, it’s for a good cause.”


Massive unclaimed property suit unsealed

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Image from Shutterstock.

“An unusually exciting” massive whistleblower lawsuit involving unclaimed gift cards has been unsealed in Delaware, Venable lawyers Melissa Landau Steinman and Erin Elizabeth Warren report at All About Advertising Law.

A former officer of the primary defendant, Card Compliant, originally filed the suit (PDF), and 33 other major retailers—including Netflix, Overstock.com and Shell Oil Co.—were also named. Delaware state prosecutors independently investigated the claims and joined the case in March.

The suit says the defendants violated the Delaware False Claims and Reporting Act by knowingly failing to report and remit the value of unredeemed gift card balances, depriving the state of hundreds of millions of dollars owed to it under its unclaimed and abandoned property laws.

“The consequences of this lawsuit could be significant for the named defendants and the entire gift card industry,” the lawyers wrote. “Delaware has been extremely aggressive and unfriendly when it comes to auditing for unclaimed gift cards. Indeed, Delaware has been criticized in the past for its use of third-party auditors as ‘bounty hunters’ to perform such audits on the state’s behalf in return for a percentage of the amount recovered; the plaintiff in the Card Compliant action, William Sean French, reportedly worked for one of those third-party auditors, Kelmar Associates, after working for Card Compliant. In joining a whistleblower with ties to a third-party auditor in a suit against a large group of companies incorporated in the state, the Attorney General’s Office seems to be sending a decidedly hostile, anti-corporate message.”


Why does experience matter?

At Attorney at Work, attorney ethics practitioner Megan Zavieh asks the question: How should the duration of a lawyer’s time in practice be factored into legal ethics sanctions? “Should mature attorneys have known better and be sanctioned more harshly? Or having gone so long in practice without discipline, should they be cut a break?”

Jurisdictions are inconsistent on this point, she notes. In Nevada, “substantial experience in the practice of law” is an aggravating factor when it comes to lawyer discipline. But in California, “there is no aggravating factor related to length of time in practice, but there is a mitigating factor of absence of prior discipline when combined with ‘many years of practice’ and the misconduct at issue in the case not being particularly serious.”

If the intent of lawyer discipline is to protect the public, Zavieh writes, then the amount of practice experience shouldn’t be of any consequence. “The attorney who has practiced longer in Nevada before making a mistake is no more of a threat to the public than the attorney who practiced for a short time before making an error. Yet Nevada would punish the mature lawyer more severely. California gives the mature lawyer a break if other factors are present, but the public is no less threatened because the lawyer took longer to mess up.”


Not living up to their innovation reputation

“When it comes to contracts, don’t believe the innovative-general-counsel hype,” contract drafting consultant Ken Adams wrote at Adams on Contract Drafting. He recounts having sent unsolicited emails explaining his services to two different general counsel with reputations for innovation. One GC wrote back, but then referred him to another individual who never followed up.

For the other GC, who he said he’d briefly met, he “went online and copied a PDF of his company’s standard terms of sale. I then spent a couple of hours of airplane time adding dozens of comments to the first page and a half. I didn’t go any further, because that was enough to show me that as a piece of contract drafting, it was embarrassingly bad. And this was the company’s terms of sale! Perhaps their most important contract!” He never heard back from this GC.

“I’m not delusional enough to assume that busy people have any obligation to give me the time of day,” Adams wrote. “But when people appear to go a little out of their way to ignore me, that suggests to me that we’re dealing, yet again, with inertia and fear of change. If someone bears a message that’s inconsistent with an image of innovation, ignore the messenger.”

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