Kinsella Law

The Supreme Court’s March 26, 2003 decision, Brown v. Legal Foundation of Washington, addresses the constitutionality of state IOLTA (interest on lawyers’ trust accounts) programs. In these programs, attorneys are required by their state bar rules to deposit client funds that are too small to earn a “positive net return” into a pooled interest-bearing IOLTA account with the interest paid to groups that provide legal services for the indigent.

Certain clients whose funds were put into IOLTA accounts sued, claiming the Washington IOLTA program resulted in an unconstitutional “taking” of their property (namely, the interest on the IOLTA account) without just compensation, in violation of the Fifth Amendment. The Fifth Amendment requires (a) that any governmental taking of private property must be for a “public use,” and (b) that “just compensation” must be paid to the owner. (IMO, the Fifth Amendment should not even apply to state laws, but due to the bogus incorporation doctrine (link2, link3) built up around the Fourteenth Amendment, it does.)

In a 1998 decision, Phillips v. Washington Legal Foundation, the very same Justices held that any interest earned on client funds held in IOLTA accounts belongs to the owner of the principal, not the State or the State’s designated recipient of the interest. Despite this ruling, the court in Brown held that there is no unconstitutional taking (Justice O’Connor, in the majority in Phillips along with the four dissenters in the current case, apparently flip-flopped). The majority reasoned (sic) that there was no failure to pay just compensation, since the amount of just compensation was zero because without the mandatory pooling arrangements of IOLTA, the petitioners’ funds could not have generated any interest in the first place.

In a powerful dissent, Justice Scalia (joined by Chief Justice Rehnquist and Justices Kennedy and Thomas) shows how nonsensical and poorly reasoned the majority’s opinion is (i.e., how inexplicable it is that O’Connor joined the majority opinion in Brown, despite its clear inconsistency with Phillips). He concludes,

Perhaps we are witnessing today the emergence of a whole new concept in Compensation Clause jurisprudence: the Robin Hood Taking, in which the government’s extraction of wealth from those who own it is so cleverly achieved, and the object of the government’s larcenous beneficence is so highly favored by the courts (taking from the rich to give to indigent defendants) that the normal rules of the Constitution protecting private property are suspended. One must hope that that is the case. For to extend to the entire run of Compensation Clause cases the rationale supporting today’s judgment–what the government hath given, the government may freely take away–would be disastrous.

The Court’s judgment that petitioners are not entitled to the market value of their confiscated property has no basis in law. I respectfully dissent.

Two cool websites (courtesy of a recent PATNEWS newsletter): “The first is www.californiacoastline.org, where you can view 10,000 photographs of the coastline of California from the Oregon border to the border with [Mexico].

The second site is www.Keveney.com/Engines.html, where you can see animations for 19 types of historical and modern engines.”

This guy Andy Foulds‘ website is one of the coolest and most impressive I’ve seen. Check out his web designs, and his cool applets, such as “Leader of the Free World” and “The Economists.”

I’m used to people pronouncing nuclear “nuke-ya-ler” (hey, as long as you are for nuclear power, I don’t care how you pronounce it). But it’s always bugged me that people pronounce realtor “re-luh-ter”. Uhh, do you pronounce real “ree-la”? And of late, I’ve notice journalists, reporting on the Iraq war, referring to the Army’s Cavalry division as the “Calvary”–i.e., the hill on which Jesus was crucified. Well, I guess I’ll always have a job.

Sarcastic cartoon in Reason magazine lampooning recent debates about intellectual property.

Thanks to my good buddy Russ Lindenfeldar, patent lawyer with Engelhard, who was in town the other night and with whom I did some carousing, along with another patent lawyer buddy, Mark Gilbreth, I’ve discovered a new beer: Chimay, made by the Trappist monks in Belgium. Comes in three flavors, red label, blue label, and triple, and are top fermented and refermented in the bottle. The large bottle has a champagne type cork that pops when you uncork it. Meant to be served in a wide-mouthed glass, it’s wonderful. (Okay, this has little to do with law or IP, but I love beer so much I had to tell.)

While I’m on the topic of alcohol, my former patent-lawyer boss Bill Norvell introduced me to the truly fine Blanton’s bourbon (and several varieties of tequila, but that’s another story). The Mises Institute’s Joe Stromberg gave me my first Elijah Craig bourbon experience. And my PhD EE former co-worker, Jim Baillargeon, initiated me into the world of scotch, especially his favorite, Lagavulin. My fellow patent lawyer Warner Delaune of Baton Rouge gave me some additional cigar and scotch tips.

And while I’m on this topic–I love the politically-incorrect site SmokeThis!, by “Cigar Dave”, who hosts the Smoke This! radio talk show. I particularly like his sense of humour and the Cigar Dave Motto: “Live the good life. Drink, smoke, gamble, feast, joke, fornicate and be tolerant of those who do. Take risks and thrive for the good challenge. Work hard and play hard without going over the edge. Live in the moment. Believe in moderation in all things, including moderation. Live it up!” You gotta love this guy. He calls cigars “sticks,” his female fans his “harem,” his listeners “Cigar Lieutenants,” and opens his show with the greeting “Long Ashes.” His site has features like Cigar Dave’s “Babe Magnet” Cologne Selections, Living Like Bond (Interview with author of the “Complete James Bond Lifestyle Seminar”), and Top 10 Cities for the Hottest Delicious Dames. His message to a “whiney” email that complained he “advocates” cigars: “My show does not ‘advocate’ cigar smoking. My show advocates enjoying life’s great pleasures. Amongst them: cigars, spirits, dames, diversions, and the right to be politically incorrect. I advocate treating yourself after a long stressful day or a hard week.”

*** Update: Man, am I am amateur! Here’s an email from a Belgian friend, whose knowledge of the suds puts me to shame. Oh well, something to look forward to… “So you like a Belgian beer! Chimay is not my favourite. It isn’t even the best Trappist beer on the market. If you’d ask me, the best Trappist is Westmalle, with Sixtus coming close. Right now Leffe is very popular. Anyway, is it the same quality you get over there that we serve here in the home of the abbaye-beers? […] [Other good Belgian beers include]: a Duvel (devil), Judas, Delirium Tremens, Verboden Vrucht (forbidden fruit), Kasteelbier (castle beer), Geuze, Hoegaarden, Graal (grail) or one of the other 200 or so Belgian beers.”

***Update: at the advice of my Frog friend Alex Padilla, check out www.realbeer.com, where you can order Belgian beer delivery.

Well worth reading: Warner-Lambert Co. v. Apotex Corp., 2003 U.S. App. Lexis 594 (Fed. Cir. Jan. 16, 2003); and commentary, Generic Drug Maker Wins a Big One.

Recent patent: Semen taste-enhancement dietary supplement. What will they think of next.

Google-Opoly: The Game No One but Google Can Play: Fascinating article in Slate about “The strange Google lawsuit over its page-ranking monopoly.”