Wednesday, October 26, 2016

If it Sounds too Good to be True... is.  I've been hearing a lot about crowdfunding and have been asked about it be clients.  To put it mildly, I've been leery.  Basically just going out and asking people for money?  First, how do you honestly distinguish it from panhandling?  Sure, the solicitation says it will give you a return if it succeeds, but given the rate of success with start-ups, what are the odds?  Second, how can you even remotely provide adequate disclosure?  The whole thing sounds like a securities fraud charge waiting to happen, and that's what I've told clients.

Over the summer I had a chance to attend a lecture by Joseph Nowoslawski, who is an angel investor who has really dug into crowdfunding issues and the new SEC regs on the process.  His results?  Crowdfunding can work if you have the right circumstances, but compliance is expensive with a capital E, and as he and I discussed afterward, a good old Reg D offering under 506 still makes more sense for the overwhelming number of start-ups.

After the lecture, I overheard a discussion among a few of the other attendees, all of whom were involved in alternative medical treatments.  One was swearing up and down that his liver cancer was gone.  He had quit chemo, gone on some special diet (palm grass and who knows what all else) and was feeling great.  Of course everyone else in the discussion was affirming him all the way.  Folks, there is a very large difference between relieving symptoms and removing a cause.  He had reduced the load on his liver and so was no longer presenting the symptoms the weakened liver had caused, but that in no way means the tumor is gone or will remain gone.  Another issue I have with Orrin Hatch and his efforts to protect all the local alt-med outfits.

Quick fundraising and quick cancer cures.  They both sound too good to be true.  And they both are.

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What is Going on with the Washington State Supreme Court?

The Washington Supremes used to be a place you could count on for rational decisions.  Apparently things have changed.  First they come down with Deggs v. Asbestos Corp.  This case involved the estate of a man who died of asbestosis suing for wrongful death.  Washington has an odd wrongful death statute.  The survivors don't get to sue; the decedent's personal representative sues, not on behalf of the estate, but rather on behalf of the survivors.  By tautology, the survivors' wrongful death action does not accrue until there is a death.  The PR brought the action within three years of the death and should have been OK.  Not according to five members of the Washington Supremes.  They ruled that the clock started running when the decedent learned of his injuries.  This wholly conflates an assault or battery or negligence action the decedent could have brought while he was alive with a wrongful death action that of necessity could not accrue until decedent's death.  According to these five's ruling, the statute of limitations on the survivors' right of action ran before their right of action even accrued.  There is a great deal of pseudo-research and pseudo-reasoning in the majority's opinion, but the bottom line is it was written with a shovel.

But wait, there's more.  Last week they decided Newman v. Highland Sch. Dist. No. 203, with another five-member majority (albeit a different line-up) deciding to reject Burger's concurrence in Upjohn Co. v. United States, 449 U.S. 383 (1981), which effectively every other court has followed, and hold that attorneys' interviews of a client's former employees concerning actions taken during the course of their employment are not protected by the attorney-client privilege.  There is honestly no basis for ruling this way.  I invite you to read the majority's tortuous "reasoning" that it applies to justify its result and then read the laser-scalpel dissection of that "reasoning" performed by the dissent.

Two justices joined in both dissents: Justice Wiggins, who wrote the Newman dissent, and Chief Justice Madsen.  I hope they don't retire soon.


Wednesday, October 05, 2016

Breathless Bilge

I'm aware that marketing requires a certain amount of overstatement, but I sometimes have to wonder if PR people even have the capacity to read their releases with any objectivity at all.  Case in point: Avvo's latest CLE offering, If You're not on Facebook, You're Committing Malpractice.  Really?  I acknowledge that if, as they say in their example, I'm cross-examining a witness about social media and have no clue about social media, I'm in trouble.  But if I don't go dinking around on Facebook or Twitter on a regular basis I'm committing malpractice?  I really don't think so.

First, Avvo, I don't need to spend significant time cruising timelines or posting to figure out how Facebook works.  It isn't rocket science.  If I need specialized knowledge for a case, I'll go get it.  And promptly forget it thereafter.

Second, cruising and posting to Facebook is actually a huge waste of time.  Have you bothered to look at what people post there?  Have you bothered to figure out what people actually look for there?  There's a reason I call it "Wastebook."  Sure, if they're looking for an attorney, they may want to find some background there.  Frankly, that's a good reason to set up a site and keep it as lean as possible.  TMI is real, kids, and it isn't good.

Third, USING social media is likely to be the malpractice.  If you post some opinion, especially on Twitter, there is NO WAY you can post sufficient disclaimers to cover your butt.

So sorry Avvo, either this class is an absurdity, or your title is simply a lie.

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Monday, October 03, 2016

Bankruptcy Uptick

Most bankruptcy filings are down due to yet more easy financing allowing everyone to extend and pretend, but there is one area facing a big increase: oil and gas, including its myriad support industries.  Financing in this area is already hitting the wall, and when it does, the party's over.

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I've concluded they call it "Middle Age" because you're too old for birthdays to be exciting and too young for them to be an accomplishment.