Unlimited FDIC insurance on IOLTA accounts likely to expire

Lawyer IOLTA accounts that help fund civil legal aid and other legal programs are likely to lose their unlimited federal insurance coverage on Jan. 1.

The ABA Governmental Affairs Office says it appears unlikely that lawmakers will act this year to extend the unlimited coverage provided by the Federal Deposit Insurance Corp., according to an ABA statement.

If Congress does not act, the amount of FDIC insurance available will be $250,000 per client, per financial institution, as long as the account is properly designated as a trust account and there is a proper accounting of each client’s funds.

IOLTA grants totaled $125 million last year.  About 90% of the money supports legal aid offices and pro bono programs.

via Unlimited FDIC Insurance on IOLTA Accounts Likely to Expire; $250K Will Be New Client Coverage Limit – News – ABA Journal.

Alito Defends Citizens United

ustice Samuel A. Alito Jr. says opponents of the Supreme Court’s Citizens United decision have waged a successful public relations campaign, even if their point is misguided.

Opponents have targeted Citizens United for its holding that corporations have a First Amendment right to expressly support political candidates with independent spending. Speaking on Thursday, Alito pointed to the public relations campaign against free speech rights for corporations that has gathered steam since the decision, report the Associated Press and The BLT: The Blog of Legal Times.

“It is pithy, it fits on a bumper sticker, and in fact a variety of bumper stickers are available,” Alito said at a Federalist Society dinner. He pointed to two examples: “End Corporate Personhood” and “Life does not begin at incorporation.”

Alito said there may be arguments for overturning Citizens United, but not on the basis that corporations lack First Amendment rights. Media corporations already have such rights, the court has made clear, when they were fighting libel suits or seeking the right to publish the Pentagon papers, Alito said.

Alito also did some reminiscing during the speech as he talked about his constitutional law class at Yale Law School with Charles Reich, who had written several books about the decline of society. Reich thought “redemption could be found in the college hippie,” Alito said. Reich spent lots of time on the difficulties of legal practice, but little time on constitutional law, Alito said. “I was forced to teach myself.”

via Alito Defends Citizens United, Says Opponents’ Bumper Stickers Are Pithy but Misguided – News – ABA Journal.

Stericycle vs Novotel at NLRB

In Stericycle, Inc., the Board reversed its Novotel rule for dealing with union-backed employment law suits before an election.

At issue is whether union assistance with such suits constitutes an improper grant of benefit that might warrant re-running the election if the union wins. Under Novotel, a union may give employees free legal services to investigate, prepare, and file a lawsuit during the critical period before an election. However, the D.C. Circuit has refused to enforce that rule, prompting the majority in Stericycle to reverse it and conclude that such assistance is objectionable conduct.

The key ruling in the decision, which Members Becker, Hayes, and Pearce joined, is that:

we hold that a union engages in objectionable conduct warranting a second election by financing a lawsuit filed during the narrow time period—known as the “critical period”—between the date of the filing of the representation petition and the date of the election, which States claims under Federal or State wage and hour laws or other similar employment law claims on behalf of employees in the unit.

The Board acknowledged the importance to employees’ collective rights that education about their workplace rights, attorney referrals, and funding for lawsuits provides. But those interests were outweighed by the need to avoid the grant of benefits before an election (Novotel distinguished funding extraneous benefits with funding lawsuits directly related to the workplace problems that lead to the union campaign). The Board also argued that the harm to employees’ collective rights was minimal because of the critical period was only for a limited amount of time. Further, funding a lawsuit before the critical period remains unobjectionable conduct.

The Board, with Liebman, Becker, and Pearce signing on, also tried to define the boundaries of permissible and impermissible assistance.  According to the Board, is is OK for a union during the cirtical period to “inform employees about their rights [under labor and employment laws], assist them in identifying violations, urge them to seek relief, and even refer them to competent counsel [which may file suit during the critical period as long as there is no union funding] without casting into question subsequent election results.”

via Workplace Prof Blog.

 

 

 

 

Is a debt ceiling constitutional?

From ABA Journal Daily News:

On Friday, President Obama rejected the idea, the New York Times reports. “I have talked to my lawyers,” he said. “They are not persuaded that that is a winning argument.”

At issue is this provision: “The validity of the public debt of the United States, authorized by law, including debts incurred for payment of pensions and bounties for services in suppressing insurrection or rebellion, shall not be questioned.”

The sentence was intended to ensure the payment of Union debt after the Civil War, though it was more broadly written, the Times says. The newspaper interviewed law professors about the implications. Some said the provision does, indeed, allow Obama to ignore the debt ceiling. Others said it bars Congress from an actual default on existing debts. Some said Obama has power to act in an emergency, no matter what the 14th Amendment says.

Many raised the issue of whether the courts would be willing to decide the issue, if Obama ignored the ceiling and a suit were filed. “This is largely a political question,” said Yale law professor Jack Balkin.

U of MN considers leaving public funding behind

Minnesota Lawyer Blog had an interesting entry explaining the predicament that many public-funded organizations face: a decline in public funding.

The Universityof Minnesota Law School is considering abandoning public funding, and focusing on private funding.

U of M law school gets no state funding

U of M law school ready to go it alone

Patrick Thornton over at Minnesota Lawyer Blog reports:

The administration at the University of Minnesota Law School is preparing for some bad news when a state budget is finalized: No state funding. None. Zero.

Approximately 12 percent of the law school’s funding, just over $5 million of its $42 million budget, came from the state last budget cycle.

School officials are preparing to be self sufficient soon.To offset the state money, the school is in the midst of an aggressive fundraising campaign. The school hopes to raise $30 million with much of the money going to scholarships for needy students.

The drive is chaired by Twin Cities attorney Bruce Mooty, one of the founding partners of Gray Plant Mooty and a law school graduate.

via U of M law school ready to go it alone – MinnLawyer Blog.