Lauritzen v. Larsen case brief (International Law)

Lauritzen v. Larsen - Law of the Sea


FACTS
-Danish seaman brought suit under Jones Act to recover for injuries on the Danish ship, the Randa, while docked in Cuba.  
-Larsen based assertion of federal jurisdiction on board reading of Jones Act, that encompassed all sailors and on Lauritzen company’s significant NY business contracts.
Statute stated: Any seaman who shall suffer personal injury in the course of his employment may, at his election, maintain an action for damages at law, with the right of trial by jury, and in such action all statutes of the United States modifying or extending the common-law right or remedy in cases of personal injury to railway employees shall apply...

ISSUE
Should the Danish law apply or should US law apply?

HOLDING
Danish Law should apply.

RULES
Law of the Flag- Each state under international law may determine for itself the conditions on which it will grant its nationality to a merchant ship, thereby accepting responsibility for it and acquiring authority over it.
-Nationality is evidenced to the world by the ship’s papers and its flag.
-Law of the flag supersedes the territorial principle (even for criminal jurisdiction of personnel of a merchant ship), because it is deemed to be a part of the territory of that sovereignty (whose flag it flies), and not to lose that character when in navigable waters within the territorial limits of another sovereignty.  
-All matters of discipline and all things done on board which affected only the vessel or those belonging to it, and do not involve the peace or dignity of the country or the port’s tranquility, should be left by the local government to be dealt with by the authorities of the nation to which the vessel belongs as the laws of that nation or the interests of its commerce requires.

Federal Income Tax - Basis

Section 61 of the IRS Code provides that gross income means income from whatever source derived.  When determining Gross Income as far as a business is concerned, we look towards regulation 1.61-3(a) which states that "gross income means the total sales less the costs of goods sold." 

Section 61(a)(3) includes in income "gains derived from dealings in property." 
Section 1001 describes a gain as the excess of the amount realized from the sale over the taxpayer's basis for the property. 

What then is Basis?  I have a law school exam in only a couple of weeks, and in order to do well, I want to know everything about Basis. 

The term, Basis, is a term of art in the tax law.  Section 1012 states: "the basis of a property is usually its cost to the taxpayer, except as otherwise provided." 
-Basis is a mechanism by which taxpayers are allowed to recover their capital investment when they sell property.
-Accounting for gain or loss is generally postponed until property is sold, however. 
-IRS code generally only taxes realized gains.

There are three ways in which a taxpayer accounts for costs.
1.  Immediately deductible expenses. 
-If there is enough income to offset the deductions, the tax-free recovery of these income producing is immediate.
2.  Capitalized expenses.
-Purchase price or cost is taken into account only when sold.  (i.e., stock). 
-Dividend income received while the stock is held is taxed fully without any offset for the capital which was invested.
3.  Depreciated asset.
-Periodic deductions are allowed for the asset's cost.

Purchased Property = The basis of property is its cost, except as otherwise provided.
-If taxpayer receives property in exchange for services, basis = fair market value of property received.
-Basis is cost even if the taxpayer has underpaid or overpaid for the property.

Property in exchange for other property = Generally equal value.
-Exchange is generally a realization event and any gain/loss on either side will be 'recognized'. 
-"Where the value of the property given up differs from the value of the property received, the taxpayer's basis in the property received is its value."

Basis of Property Acquired By Gift
-The basis of property for computing gains in the hands of a donee = basis in the hands of the donor.
-If donee can not acquire donee's basis, basis = FMV at the date the property was acquired by the donor. 

Commissioner v. Tufts case brief

Commissioner v. Tufts

FACTS
-Clark Pelt, was a builder and owned Clark, Inc.
-He and Clark, Inc. formed a general partnership in 1970 in order to construct 120 unit apartment complex.
-Partnership entered into a mortgage loan agreement with the Farm & Home Savings Association for $1,851,500.
-It was a non-recourse loan - neither the partnership nor any of its partners had any personal liability for the loan.
-Other general partnerships later joined and are also respondents in this case.
-In 1971 each partner made small capital contributions to the partnership.
-In 1972 only Respondent made a contribution.
-The partnerships rental income was less than expected and they were unable to make the mortgage payments.
-Each partner sold his partnership interest to an unrelated third party. As consideration, the third party assumed the non-recourse mortgage.

PROCEDURAL HISTORY
-The Commissioner of Internal Revenue determined that the sale of the partnership resulted in a capital gain of approximately $400,000 arguing that the partnership benefited from the third party assuming the non-recourse mortgage.
-Tax Court upheld the Commissioner but Court of Appeals reversed.

ISSUE

-Is the amount of the non-recourse mortgage considered a gain when it exceeds the fair market value of the property?

HOLDING

-Yes, respondent must account for the proceeds of obligations that he has received tax-free and include in the basis.

RULES

-The gain or loss from a sale or other disposition of property is the difference between the amount realized on the disposition and the property’s adjusted basis.

DISCUSSION

-When a taxpayer sells or disposes of property, he is required to include the outstanding amount of the obligation as an asset realized.
-It is not relevant that this was a non-recourse loan or that the loan was in excess of the fair market value of the property at the time.

Capital Gains - Law School

From Wikipedia:  A capital gains tax is a tax charged on capital gains, the profit realized on the sale of a non-inventory asset that was purchased at a lower price. The most common capital gains are realized from the sale of stocks, bonds, precious metals and property.

A capital gain is a profit that results from investments into a capital asset, such as stocks, bonds or real estate, which exceeds the purchase price. It is the difference between a higher selling price and a lower purchase price, resulting in a financial gain for the investor.  Conversely, a capital loss arises if the proceeds from the sale of a capital asset are less than the purchase price.

NOTES:
-Code requires a taxable event that causes the taxpayer to realize a gain or loss (taxation is limited to realized gains).
--No definition of "realized".
--No realization occurs when property merely appreciates in value; the property must be sold or otherwise disposed of for a taxable event to occur.
---Capital gain or Ordinary gain?
-Taxpayers generally prefer capital gains because they are taxed at lower rates, but prefer ordinary losses, which are deductible in full from ordinary income.  Capital losses generally are deductible only to the extent of capital gains plus (for individuals) a limited amount of ordinary income.

From Wikipedia:  In the United States, individuals and corporations pay income tax on the net total of all their capital gains just as they do on other sorts of income. Capital gains are generally taxed at a preferential rate in comparison to ordinary income. This is intended to provide incentives for investors to make capital investments, to fund entrepreneurial activity, and to compensate for the effect of inflation and the corporate income tax. The amount an investor is taxed depends on both his or her tax bracket, and the amount of time the investment was held before being sold. Short-term capital gains are taxed at the investor's ordinary income tax rate, and are defined as investments held for a year or less before being sold. Long-term capital gains, which apply to assets held for more than one year, are taxed at a lower rate than short-term gains.

Noncorporate Taxpayers
-Holding period is 12 months.
--Taxpayer must have held property for more than 12 months before any gain from its sale qualifies as a long-term capital gain subject to the lowest rates (currently 15% or 5% if the gain otherwise would be taxed at 10 or 15 percent).
Process
1.  must separate short-term gains against short-term losses.
--Short-term gains > Short-term losses = net short term gain.
--Short term gains < short-term losses = net short term loss.
2.  Do same for long-term gains/lossses.
3. Short-term gain or loss is netted against long term gain/loss.
--If: short-term capital gain > net long term capital-loss = excess (net capital gain) taxed at preferential capital gains rate.
--When the taxpayer has both a net short-term gain and a net long-term gain, the former is taxed in full as ordinary income, and latter is subject to favorable rate. 
-Do losses exceed gains? 
--Excess capital loss offsets up to $3000 ordinary income each taxable year.
--Any excess not allowed in one taxable year is carried forward indefinitely until it is completely realized.


Examples:

Taxable income = $100,000 (excluding capital gains/losses)
Long term capital gain = $5000
Long term capital loss = ($1000)
-Net Long term capital gain = $4000 ($5000-1000)
Short term capital gain = $2000
Short term capital loss = ($3,500)
-Net Short term capital loss ($1,500) ($2000-3500)
Net Capital Gain = $2,500 ($4000-1500)

Taxable income of $100k (excluding capital gains) is taxed at the ordinary income rates.  Net capital gain of $2,500 is taxed at a 15% rate.
---
Taxable income = $100,000 (excluding capital gains/losses)

Long term capital gain = $5000
Long term capital loss = ($1000)
-Net Long term capital gain = $4000 ($5000-1000)
Short term capital gain = $2000
Short term capital loss = ($500)
-Net Short term capital gain $1,500 ($2000-500)

Taxable income of $100k plus the net short-term capital gain of $1500 is taxed at the ordinary income rates.  The net long-term capital gain of $4000 is taxed at a 15% rate.
---
Example: net capital loss of $2,500
-Taxpayer is permitted to net the capital loss up to $3,000 of ordinary income.  If the taxpayer has a taxable income of $100,000 for the taxable year excluding capital gains and losses, the taxpayer would have $97,500 taxable income taxed at ordinary income rates.

Commissioner v. Flowers case brief

Commissioner v. Flowers

FACTS

The taxpayer lived and practiced law in Jackson, Mississippi for a railroad.
-The railroad’s home offices were in Mobile, Alabama.
-The taxpayer was offered a job in Mobile (185 miles away), but was unwilling to move from Jackson.
-The taxpayer arranged, with the railroad, to stay in Jackson on the condition that he pay his own traveling expenses between Mobile and Jackson and his own living expenses in both places.
-The taxpayer deducted the amounts incurred to travel between Jackson and Mobile as traveling expenses under §162(a)(2) of the Internal Revenue Code.

ISSUE

-May the taxpayer deduct the costs incurred to travel between Jackson and Mobile?

HOLDING

-No.

RULES

-26 U.S.C. § 162(a)(2): Traveling expenses (including amounts expended for meals and lodging other than amounts which are lavish or extravagant under the circumstances) while away from home on the pursuit of a trade or business.
-In order to deduct the expense of traveling under §162, the expense must be incurred while away from home, and must be a reasonable expense necessary or appropriate to the development and pursuit of a trade or business.

ANALYSIS

-The Supreme Court held that the expenses could not be deducted on the ground that the expenses in question had been incurred by the taxpayer for his own convenience rather than for business reasons.
-The relevant test for deductibility was whether the travel had been motivated by “exigencies of business” or by considerations of personal preference.
-The court stated: the facts demonstrate clearly that the expenses were not incurred in the pursuit of the business of the taxpayer's employer, the railroad.
-The court further held that the expenses in question were incurred solely as a the result of the taxpayer’s desire to maintain a home in Jackson whole working in Mobile, a factor irrelevant to the maintenance and prosecution of the railroad’s legal business.
-Relevant test for deductibility is whether the travel had been motivated by “exigencies of business” or by considerations of personal preference.
-The attorney in question could only deduct traveling expenses from her gross income when the railroad's business forced attorney to travel and live temporarily at some place other than the railroad's principal place of business.
-Where attorney preferred for personal reasons to live in a different state from the location of his employer's principal office, and his duties required frequent trips to that office, the evidence sustained Tax Court's finding that the necessary relation between expenses of such trips and the railroad's business was lacking.

Eisner v. Macomber case brief

Eisner v. Macomber

FACTS

-Mrs. Macomber owned 2,200 shares in Standard Oil. Standard Oil declared a 50% stock dividend and she received 1,100 additional shares, of which about $20,000 in par value represented earnings accumulated by the company—recapitalized rather than distributed—since the effective date of the original tax law.
-Current statute expressly included stock dividends in income, and the government contended that those certificates should be taxed as income to Mrs. Macomber as though the corporation had distributed money to her.
-Mrs. Macomber sued Mr. Mark Eisner, the Collector of Internal Revenue, for a refund.

ISSUE

-Whether in legal or accounting terms the stock dividend was to be regarded as a taxable event.

HOLDING

-This stock dividend was not a realization of income by the taxpayer-shareholder for purposes of the Sixteenth Amendment

RULES
-"We are clear that not only does a stock dividend really take nothing from the property of the corporation and add nothing to that of the shareholder, but that the antecedent accumulation of profits evidenced thereby, while indicating that the shareholder is richer because of an increase of his capital, at the same time shows he has not realized or received any income in the transaction."

ANALYSIS
-In Towne v. Eisner, court stated that stock dividends were not income, as nothing of value was received by Towne - the company was not worth any less than it was when the dividend was declared, and the total value of Towne's stock had not changed.
-Although the Eisner v. Macomber Court acknowledged the power of the Federal Government to tax income under the Sixteenth Amendment, the Court essentially said this did not give Congress the power to tax as income anything other than income, i.e., that Congress did not have the power to re-define the term income as it appeared in the Constitution:
-Throughout the argument of the Government, in a variety of forms, runs the fundamental error already mentioned, a failure to appraise correctly the force of the term "income" as used in the Sixteenth Amendment, or at least to give practical effect to it. Thus, the Government contends that the tax "is levied on income derived from corporate earnings," when in truth the stockholder has "derived" nothing except paper certificates which, so far as they have any effect, deny him [or "her" — in this case, Mrs. Macomber] present participation in such earnings. It [the government] contends that the tax may be laid when earnings "are received by the stockholder," whereas [s]he has received none; that the profits are "distributed by means of a stock dividend," although a stock dividend distributes no profits; that under the Act of 1916 "the tax is on the stockholder's share in corporate earnings," when in truth a stockholder has no such share, and receives none in a stock dividend; that "the profits are segregated from his [her] former capital, and [s]he has a separate certificate representing his [her] invested profits or gains," whereas there has been no segregation of profits, nor has [s]he any separate certificate representing a personal gain, since the certificates, new and old, are alike in what they represent—a capital interest in the entire concerns of the corporation.

CONCLUSION
The Court ordered that Macomber be refunded the tax she overpaid.

Commissioner v. Glenshaw Glass Co. case brief

Commissioner v. Glenshaw Glass Co.

FACTS
-Two cases had same issue:
1. D, Glenshaw Glass Company had won an award of punitive damages in an antitrust lawsuit.
-D  did not declare this award as income or pay taxes on it, claiming that it was not subject to taxation.
The Internal Revenue Service brought suit to collect the tax.
2.  William Goldman Theatres, Inc. neglected to report punitive damages as income. Again, the Internal Revenue Service sued to collect the tax.

ISSUE
-Was the award of damages taxable income?

HOLDING
-The award of treble damages was taxable income.

RULES
-Section 22(a) (the predecessor of current section 61(a)) was employed by Congress in order utilize "the full measure of its taxing power," as provided for under the Sixteenth Amendment.
-Amounts received by taxpayers that are instances of undeniable accessions to wealth, which are clearly realized and over which the taxpayers have complete dominion are taxable.

ANALYSIS
-Congress, in enacting section 22(a), intended to tax all gains except those specifically exempted.
-The Court then held that the amounts received by the taxpayers in this case were "instances of undeniable accessions to wealth, clearly realized, and over which the taxpayers have complete dominion."
-This three-part "test" for determining income is broader than the earlier test employed by the Court in Eisner v. Macomber, and is to this day the preferred test for identifying gross income.

DEEPER ANALYSIS

-Congress, in enacting income taxation statutes that comprehend "gains or profits and income derived from any source whatever," intended to tax all gain except that which was specifically exempted.
-Income is not limited to "the gain derived from capital, from labor, or from both combined."
-Income is realized whenever there are "instances of [1] undeniable accessions to wealth, [2] clearly realized, and [3] over which the taxpayers have complete dominion."
-Punitive damages qualify as income even though they are not derived from capital or from labor.

Commissioner v. Kowalsky case brief

Commissioner v. Kowalsky

FACTS
-NJ instituted a cash meal allowance for its state police officers in July 1949.
-Before that, troopers were provided a mid-shift meal at one of several meal stations located throughout the State.
-The State decided system was unsatisfactory; required troopers to leave their patrol areas unattended for extended periods of time. New system provided troopers with a cash allowance, which troopers could use to purchase a meal at a location within their patrol area, thus making it unnecessary for them to leave the area unmonitored.
-Allowance was paid bi-weekly in advance and was included, although separately, with a troopers salary. -The money was also separately accounted for in the State’s accounting system, and funds from the meal allowance account were never mixed with the salary accounts. Troopers were not required to spend the allowance on mid-shift meals, nor were they required to account for the manner in which the money was spent. This meant that troopers were allowed to eat at home if their home was within their patrol area, or to bring a meal with them to eat in or near their patrol cars.
-Kowalski, a state trooper, reported wages for 1970 that included only a portion of his meal allowances (he included $326.45, which omitted $1,371.09 in allowances).
-The Commissioner believed that this amount should have been included in income, and determined a tax deficiency. Kowalski argued that the cash meal allowance was not compensatory, but was furnished for the convenience of the employer and therefore wasn’t income under I.R.C. §61(a), and that alternatively, it was excluded under I.R.C. §119.

ISSUE
-When Kowalski's employer designated a cash payment as a meal allowance:
1.  Is that payment excludable from gross income under §61(a) of the Internal Revenue Code of 1954, 26 U.S.C. §61(a)?
2.  If not, is it excludable under §119 of the Code, 26 U.S.C. §119?

HOLDING
1.  No, it is a part of income as all clearly realized accessions to wealth except where expressly excluded. 
2.  Not excludable under 119.

RULES
§119 was intended to exclude only meals in kind. The Court found that Congress intended the exclusion to refer only to meals furnished in-kind.
-By its own terms, the text of this section applied only to "meals" -- not "cash" reimbursements for meals. (The statute excludes "the value of any meals ... furnished to [an employee] by his employer for the convenience of the employer, but only if ... the meals are furnished on the business premises of the employer.")
According to Senate Report No. 1622 (1954), "Section 119 applies only to meals...in kind...Any cash allowances for meals...received by an employee will continue to be includable to the extent that such allowances constitute compensation."
 
ANALYSIS
§119 was intended to end the confusion of the common law "Convenience of the Employer" doctrine. 
-Court rejected the argument that §119 incorporated the doctrinal exclusion for benefits that were noncompensatory (or for the convenience of the employer) under lower court and administrative rulings. 
-The drafting process of §119 shows that Congress intended to "end the confusion as to the tax status of meals and lodging furnished an employee by his employer" under prior law.
-Section 119 must therefore be construed as its draftsmen obviously intended it to be—as a replacement for the prior law, designed to end its confusion.

Benaglia v. Commissioner case brief

Benaglia v. Commissioner
36 B.T.A. 838 (1937)

FACTS
-Petitioner managed hotels in Honolulu.
-He and his wife occupied a suite and received meals at and from the hotel, but did not report their value in his income.
-Commissioner added $7,845 each year to gross income as compensation from Hawaiian Hotels, Ltd.

ISSUE
-Whether the residence and meals at the hotel were compensation and therefore part of petitioner's gross income for which he could be taxed.

HOLDING
-No. The petitioner lived at the hotel solely because he could not otherwise perform the services required of him.

RULES
-Was the occupation of the premises imposed for the benefit of the employer?  If so, not compensation.

• A taxpayer employee may exclude the value of food and lodging received from his employer, if he receives it solely for the convenience of his employer and as a necessary incident of the proper performance of his duty

The meals-and-lodging exclusion has been formalized as §119

ANALYSIS
-The occupation of the premises was imposed upon him for the benefit of the employer.
-This is not to say that anytime an employee is fed or lodged by the employer that it is not taxable income.
-The court also looked at the intent of the parties and decided the employer never intended the room and board to form part of his compensation.

DISSENT
-The living quarters and meals were included in a letter forming the employment contract and therefore was intended to be compensation. He was relieved of having to pay for lodging and meals, therefore he was enriched. The majority thinks the question is one of convenience, but the real issue is whether the petitioner benefited financially. If it was necessary to live on the premises, occupancy at the Moana (another hotel owned by Hawaiian Hotels) would have been equally essential, yet he did not have living quarters or meals there.

Class:  Federal Income Taxation

Myhaver v. Knutson case brief

Myhaver v. Knutson
(942 P.2d 445)

FACTS
-Car collision caused when D served to avoid an oncoming vehicle but crossed the yellow line and hit an oncoming car (P).

ISSUE
-Is a "sudden emergency instruction" ever appropriate?

HOLDING
-Yes, in this case the court said the trial judge did not abuse his discretion in giving the Sudden Emergency instruction.

RULES
-The Sudden Emergency instruction should be confined to cases in which the emergency is not of the routine sort produced by the impeding accident but arises from events the driver could not be expected to anticipate.
-Ask: Could the party have reasonably anticipated the events that took place?

ANALYSIS
-There are cases in which the instruction may be useful or may help to explain the need to consider the emergency and the consequential reflexive actions of a party when determining reasonable care.
-Rule is not favored, however. 

Wal-Mart Stores, Inc. v. Wright case brief

Wal-Mart Stores, Inc. v. Wright

FACTS

-P was walking in Wal-Mart when she slipped on a puddle of water in the lawn department. 

-P alleged Wal-Mart (D) was negligent in the maintenance, care and inspection of the premises. -Wal-Mart said she was also negligent. 

PROCEDURAL HISTORY

-Jury found for the plaintiff and awarded damages. 

-D appealed that the instruction given to the jury was erroneous.

ISSUE

Were the D's employees held to a higher standard of care because they had an employee handbook of procedures?

HOLDING

No, the standards were set higher than the law prescribed.

RULES

-You can set standards for yourself that exceed ordinary care and the fact that you've done that shouldn't be used as evidence tending to show the degree that you believe is ordinary. 

ANALYSIS

-The law has long recognized that failure to follow a party's precautionary steps or procedures is not necessarily failure to exercise ordinary care. 

-The instructions to the jury were incorrect because they told the jury to hold Wal-Mart to a subjective view rather than objective view of ordinary care.

CONCLUSION

Reversed and Remanded 

Class: Torts

Summers v. Tice case brief

Summers v Tice

FACTS

-P and D were members of a hunting party.  

-Both Ds negligently fired, at the same time, at a quail and in the direction of the P.  

-P was struck in the eye by a shot from one gun. 

ISSUE
-Whether one or both of the Ds are liable for negligence from the injury to PL?

HOLDING

-Both of the Ds were liable.

RULES

1) Duty, 

2) Breach of Duty 

3) causation, and 

4) damages.  

-The causation element requires proof of both cause in fact and proximate cause. 

 

ANALYSIS

-Where a group of persons are on a hunting party and two of them negligently fire a gun in the direction of another, who is thereby injured, both of those firing are liable for the injury suffered.  

-Both parties were negligent toward the P. 

-They each brought about a situation where the negligence of one injured the P, it should rest with them each to absolve himself, if he can.

Plaintiff’s Argument: Each D placed P in jeopardy of peril in a negligent manner which resulted in an injury. 

Defendant’s Argument: Only one D caused an actual and proximate injury.

Byrne v. Boadle case brief

Byrne v. Boadle

FACTS

-P was walking down a public street, past the D's shop, when a barrel of flour fell upon him from a window above the shop.  

-The D was a dealer in flour. 

ISSUE
Without affirmative proof of negligence, can a D automatically be liable for prima facie negligence?

 
HOLDING

Yes

PROCEDURAL HISTORY

Nonsuited the P, lack of evidence.  

Leave of Ct of Exchequer.  Reversed.  

Concluded unless PL shows cause on appeal. 

RULES
Exercise of ordinary care and prudence a person would observe under similar circumstance. 
Res Ipsa Loquitor - The thing speaks for itself.  Proof that the instrument causing the injury was under the exclusive control of the df and the injury does not ordinarily happen unless negligent.

ANALYSIS

There is no evidence that anyone other than a servant or dealer had control over the barrel.  The presumption is that a barrel could not roll out of the warehouse without some negligence.  The barrel of flour was in the custody of the dealer of flour, who is responsible for his servants, and the PL is not bound to show that the barrel could not fall without negligence.

P argued: had no duty to exercise any more care than another walking down the street. D had control over the barrel of flour.

D argued: had no knowledge that the barrel fell as a result of his servants or as a result of his own volition.

Class: Torts

Thomas M. Cooley School of Law

There is a lot of information out there about a law school called Thomas Cooley School of Law, also known as "Cooley Law" which, to be honest, gets a bad rap on many law school forums.  Why is that though?  Is the poor reputation deserved?  Is a third or fourth tier law school that much worse than a second or first tier school?  What about a top 14 school?  Is a fourth tier law school worse than a top 14 law school?  Maybe not. 

One must ask themselves when they go to law school if it is something that they really want to do.  Many people go to law school for different reasons.  Some go merely to learn.  They figure that the education they will receive will help them intrinsically in some way.  However, this is not the common student.  The common student plans to work after law school.  Many will be taking on huge amounts of debt.  I was one of those people. 

Some common law students go with the goal of working in a big firm or corporation while others want to open their own law firm or work in public interest.  This is where the distinction between law schools becomes clear.  If you want to work in a large firm or in a corporation, you may want to be more concerned (but not completely concerned) about rank.  And, yes, you can do that from any accredited law school, even Thomas M. Cooley School of Law.

Many will say the law profession is at a weak or low point.  Others say that you should never go unless it's a top school and even if so, you should not take out many loans.  However, that should not stop a person from going to law school if that is what they want to do.  One school that people often shy away from is Thomas Cooley.  However, as a law student who started out in the fourth tier, I would recommend Thomas M. Cooley school of law for someone who was serious about law school, and this is why.

First, if you are serious you will probably do well.  My blog provides the tools you need to excel in law school, and for no cost at all.  I realized, that while going to law school, that there are people who will work hard and smart, and will desire to actually learn the law while they are there, and there are other students who will subsist, sitting around during class like a blob, avoiding being called on while surfing the internet and updating their Facebook (consider leaving Facebook while at law school, see http://www.facebookdetox.com).  I was not one of these students, and you, if you want to excel, should not be either.

My goal during law school was simple: to learn as much as I could, and to understand everything.  If you do that, with an honest desire to gain knowledge, you will succeed.  That's the secret.  But how do you learn the knowledge the best?  By reading everything over and over and taking notes, not missing classes, discussing it, applying it over and over in your mind, writing about it, copying your notes over and over, memorizing every tiny thing that the teacher says should be memorized or will be on an exam.  When the professor asks a question to anyone in the class, even if it is not the case you are being asked to discuss, aim to answer that question faster than the person who is on the hot seat.  Hell, aim to answer that question faster than ANYONE in the class.  At a school like Thomas M. Cooley, with huge classrooms, this is going to be a challenge.  But if you can answer it fastest, you can probably type it fastest, and you can probably get the coveted A. 

Also, if you do well you can transfer to a higher tier of law school.  There are people who have realized the importance of doing well and who have transferred from Cooley to top schools.  I am not saying your goal should be to transfer, even if you are at Cooley, but I am saying if you want to go to law school, your LSAT blew (like mine did -- even though I wish I would have retook it), then you should consider any accredited law school if it jives with your goals.

So say you got into Thomas M. Cooley and you are scared because you keep reading on top-law-schools that TMC is not the best school or is the worst.  Who are they to judge you?  There are people at Boston University School of Law, St. John's University School of Law, University California Hastings School of Law, and University of Los Angeles School of Law, University of San Francisco School of Law, and many more who have all transferred from Cooley.  These are all fine schools, highly respected in the legal field.   Honestly, you are going to be a lawyer, who cares of what others think of where you went to school.

One thing I have realized is that people often care too much about where they went to school, when after a few years in practice, that doesn't even matter.  So many people are quick to say "Cooley is not worth it" when in a few short years nobody even cares where you went, and instead cares on how talented you are.  And, truth be told, you can gain the same talents at either Cooley or Harvard or even Yale.  It all depends on YOU.  There are slackers at Stanford as well as Cooley.  You just have to focus on yourself, your goals, and what you want out of life.  Don't listen to people who say Cooley Law School is a joke.  If I would have listened to people who said Western New England School of Law sucks I would have been wondering what to do with my life.

The question is now, do you want to go to law school?  Have you only been accepted into a fourth tier school?  Does that really matter to you, and if so, will you let it interfere with your goals?

Think hard about it, because with the right aim, you can be a success no matter where you go.  Be it Cooley or Yale.  Thank you.

Omnicare Inc. v. NCS Healthcare Inc. case brief

Omnicare Inc. v. NCS Healthcare Inc.

818 A.2d 914 (Del. 2003)
 

FACTS
-NCS shares dropped in value and in 2001, invited Omnicare to discuss with it possible transactions.
-Independent committee was formed to discuss possible transaction options for NCS, wanted to obtain the highest possible value in any transaction.
-In 2001, Genesis proposed a transaction to acquire NCS, and provided an exclusivity agreement.  Wanted to preclude bids from Omnicare.  Omnicare had outbid Genesis at the last minute on another acquisition.
-Omnicare faxed NCS a proposal, NCS used that fax to negotiation with Genesis.
-Genesis improved offer, but stated that transaction had to be approved by next day or would terminate.
“Outstanding voting power would be required by Genesis to enter into stockholder voting arrangements with the signing of the agreement and would agree to vote their shares in favor of the agreement.

This would prevent NCS from engaging in any alternative/superior future transactions.

-Merger did not provide a Fiduciary Out Clause.

Provision in the merger agreement providing that another provision, which restricts the discretion of the board of the corp. that is to be acquired, does not apply if the restriction would result in a breach of the board’s fiduciary duties to corp. or shareholders.

-Entered into voting agreements with Genesis.
-Omnicare had a superior proposal

RULES
-Board management decision to enter into and recommend a merger transaction can become final only when ownership action is taken by a vote of stockholders.

-Merger transactions a shared enterprise, balance between boards/stockholders.

-Conflicts of interest arise when a board of directors acts to prevent stockholders from effectively exercising their right to vote contrary to the will of the board.  
 

ANALYSIS
-Court looks to see if the defensive measures are either preclusive or coercive.
-Here the court said it was both.  

“A stockholder vote may be nullfied by wrongful coercion where the board or some other party takes actions which have the effect of causing the stockholders to vote in favor of the proposed transaction for some reason other than the merits of that transaction.

-Defensive measures cannot limit or circumscribe director’s fiduciary duties.
 
HOLDING
The court holds that the merger agreement is invalid and unenforceable.  
 
DISSENT
-Certainty itself has value.
-Coercion here was meaningless, because controlling votes were already cast.



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Blasius Industries, Inc. v. Atlas Corp. case brief

Blasius Industries, Inc. v. Atlas Corp.

564 A.2d 651 (Del. 1988)
 

FACTS
-Blasius started buying up shares of Atlas, and ended up with about 9% of the stock. They suggested that Atlas liquidate most of their assets and give the shareholders a large dividend.
-Atlas' management did not like the idea.
-Blasius sent Atlas' management a precatory resolution saying that they should restructure, double the size of the board of directors, and elect Blasius' candidates to those positions.

A precatory resolution, is a letter sent to a board of directors from a powerful shareholder threatening them to acquiesce to a particular policy or else they would try to get their way through a shareholder vote.

-In response, Atlas management held an emergency meeting of the board, amended the by-laws to add a few more directors, and appointed Atlas-friendly people to those new directorships. Blasius sued.

Blasius argued that the directors do not have the authority to act for the primary purpose of thwarting the exercise of a shareholder vote.

Blasius argued that Atlas' action were selfishly motivated in order to protect the incumbent board from a perceived threat to its control.

Atlas argued that the Business Judgment Rule prevented the courts from looking into the reasons for why the management voted to increase the size of the board of directors.

ANALYSIS
The Trial Court found for Blasius and undid the directors' actions.

-The Trial Court found that Atlas' management was not acting selfishly because they were worried they might lose their jobs, but acting in what they perceived to be the best interests of the corporation because they honestly believed that Blasius' goals would harm the corporation.

-However, the Court found that even when an action is taken in good faith, it could constitute an unintended violation of the duty of loyalty that the directors owes to the shareholders.

The directors are in effect agents of the shareholders. If the purpose of an action is to obstruct the shareholders' reasonable control over their business, that is inequitable. Basically, the directors work for the shareholders, so if there is a disagreement between the shareholders and the directors, the directors have to defer to the judgment of the shareholders.

The Court noted that there might be some possible "compelling justification" for the directors' action (so the directors actions aren't necessarily per se forbidden).

-Compelling justification might be:

1.  When stockholders are about to reject a third-party merger proposal that the independent directors believe is in their best interests;

2.  When information useful to the stockholders' decision-making process has not been considered adequately or not yet been publicly disclosed; and

3. When if the stockholders vote no the opportunity to receive the bid will be irretrievably lost.

NOTES
After this case, Blasius sold off their interest in Atlas. A few years later Atlas declared bankruptcy and all the shareholders lost their investments.

Course: Corporations
Subjects: Duty of Loyalty, Business Judgment Rule, threat of control.


Blasius v. Atlas brief