January 11, 2021

Columbia Law honors Hong Yen Chang

[Cross-posted from ImmigrationProf Blog]

By Kevin R. Johnson

In 2015, more than a century after Hong Yen Chang, a Chinese immigrant who had graduated Columbia Law School, was denied a license to practice law in California because of laws that discriminated against Chinese immigrants, the Supreme Court of California granted him posthumous admission to the bar.  The efforts of UC Davis School of Law students and UC Davis law professor Jack Chin led to the court's decision.  Students in the law school's Asian Pacific American Law Students Association petitioned the court on behalf of Chang, pointing out that the laws that prevented him from practicing as an attorney have been discredited and repealed and asking the court to "right this historic wrong." In "a candid reckoning with a sordid chapter of our state and national history," the court granted Chang posthumous admission to the California bar.

Kimmy Yam for NBC News reported on the latest on the story of Hong Yen Chang.   Columbia has honored Hong Yen Chang.  In December 2020, the law school announced that its Center for Chinese Legal Studies will be named for Chang.  Chang in 1886 was Columbia's first Chinese law graduate.

August 3, 2020

Rural California suffers a painful shortage of lawyers

[Cross-posted from the Daily Journal]

By Lisa Pruitt and Kelly Beskin ‘21

Rural America lags behind the rest of the nation in access to health care, broadband, quality of education and nearly every other measure of well-being. On July 28, the American Bar Association hosted an online program featuring leaders and scholars of the legal profession discussing ways to address another rural deficit: the painful shortage of lawyers.

Although about a fifth of the nation's population lives in rural areas, these places are home to only 2% of small law practices. These so-called legal deserts are significant barriers to justice for their residents.

This access to justice crisis is also playing out in rural California. While the statewide ratio of attorneys to residents is 1:626, just over 3% of lawyers have addresses in "rural" and "frontier" areas as those terms are defined by California's Office of Statewide Health Planning and Development. The ratio of lawyers to residents thus varies dramatically from region to region, county to county, and from city to town to unincorporated area.

Read more … 

March 26, 2018

Digital Realty Trust, Inc. v. Somers: Bad News for Employers, Lawyers and Internal Compliance

by Dennis J. Ventry, Jr.

[Cross-posted from JURIST]

In Digital Realty Trust Inc. v. Somers, the U.S. Supreme Court voted 9-0 to narrow the definition of "whistleblower" under the Dodd-Frank Act of 2010. In particular, the Court ruled that whistleblowers are only protected against retaliation from employers under Dodd-Frank if they report allegations of an employer's securities law violations to the Securities and Exchange Commission (SEC or Commission). Alternatively, whistleblowers who report alleged violations through an employer's internal compliance program without also reporting to the SEC, like Mr. Somers, cannot avail themselves of Dodd-Frank's protections against retaliation.

To date, commentary on the Court's decision has focused on (i) how it will reduce both the absolute number of whistleblowers (by removing the assurance of legal protections against retaliation ) and the percentage of whistleblowers protected against employer retaliation (because the vast majority of whistleblowers report wrongdoing internally before, if ever, reporting to the SEC ); (ii) how the Court refused to defer to the SEC's rulemaking authority pursuant to which it had defined "whistleblower" differently for persons seeking a monetary award under the Dodd-Frank whistleblower statute (which expressly requires reporting to the Commission) versus seeking protection from employer retaliation under the statute (which does not expressly require such reporting) ; and (iii) how the Court summarily declared the statute unambiguousness in a short, two-sentence paragraph.

While these implications of the Court's ruling in Digital Realty Trust deserve highlighting, this blog post explores two unexamined, though no less important, aspects of the Court's ruling. First, while the decision was a win for the employer-defendant in this particular case, it will negatively affect employers more generally and undercut companies' internal compliance programs. Second, the ruling unequivocally harms employee whistleblowers who are obligated by law to report legal violations of employers internally before reporting outside the organization. Chief among these employees are lawyers, duty-bound to report legal violations up the ladder before, if ever, reporting to outside authorities.

Harms Employers and Legal Compliance Programs

The SEC and the companies it regulates have long expressed support for robust internal compliance programs to which employees can report suspected securities law violations.

From the SEC's perspective, deputizing regulated companies to police internal misconduct and promote internal reporting makes eminent sense. Internal reporting, the government argued in Digital Realty Trust, "enables the private sector to screen out meritless claims, and thereby improves the quality of whistleblower tips later brought to the Commission"; it "gives business the opportunity to self-correct without the need for intrusive Commission investigations"; and it "promotes efficient use of both corporate and government resources." The SEC felt so strongly about the benefits of internal reporting that its regulations provided larger awards for whistleblowers who utilize internal compliance procedures, and smaller awards for whistleblowers who interfere with those procedures.

Companies, too, have a vested interest in employees reporting internally before reporting to the Commission. Internal reporting allows employers to (i) remedy improper conduct at an early stage, perhaps before it rises to the level of a violation; (ii) self-report actual violations to the SEC, which can result in leniency in subsequent enforcement actions; (iii) gather sufficient information of the alleged violation in the eventuality of an enforcement action; (iv) promote and reinforce a culture of compliance within organizations; and (v) highlight the significant value that whistleblowers can add to organizations.

As Congress crafted Dodd-Frank and as the SEC drafted regulations to effectuate Congressional intent, support for internal compliance regimes reached a fever pitch. In part, support among regulated entities reflected concern that Dodd-Frank's financial incentives to report wrongdoing would motivate employees to bypass internal reporting channels and go directly to the SEC. Whether motivated by fear of employees reporting out suspected securities-law violations without first alerting the company or a genuine desire to bolster the effectiveness of internal compliance programs, companies rallied around Dodd-Frank's protections against retaliation.

In fact, regulated entities and their representatives urged Congress and the SEC to reinforce internal reporting by providing explicit comfort to whistleblowers that the law would protect them from retaliation. "We recognize the valid concern that some employees will fear retaliation for blowing the whistle," the Association of Corporate Counsel told the SEC. "The solution to that problem is not, however, a scheme to undermine important and effective internal compliance and reporting systems; rather, employees who fear retaliation may rely on the anti-retaliation provision contemporaneously enacted by Congress."

Companies backed internal reporting to such an extent - and Dodd-Frank's complementary anti-retaliation protections - that they pressed Congress and the SEC to make internal reporting mandatory before an employee could report to the Commission. "An internal reporting requirement is unlikely to have a negative effect on the proposed rules," a prominent law firm wrote on behalf of its corporate clients, "as companies would be given a more immediate opportunity to cure or mitigate potential violations and the whistleblower would remain protected by the anti-retaliation provisions in the Dodd-Frank Act."

Ultimately, Congress and the SEC decided not to make internal reporting mandatory. But they included robust protections against retaliation in the Dodd-Frank whistleblower statute.

Or so they thought. The Court's ruling in Digital Realty Trust delivered a blow to internal reporting and internal compliance programs. Its decision that Dodd-Frank whistleblowers must report out allegations of securities-law violations to the SEC to be covered by the statute's anti-retaliation provisions will result in untold numbers of whistleblowers bypassing internal reporting systems and going straight to the Commission.

From the government's perspective, less internal reporting will reduce voluntary compliance and require more enforcement actions. It will also result in over-reporting of alleged violations to the SEC, including a surge in meritless claims that were previously screened out by internal compliance systems. In turn, over-reporting to the SEC will squander precious government resources.

Companies regulated by the SEC are harmed even more directly by the Court's ruling. Indeed, the decision will render companies' internal compliance programs ineffective, undermine the demonstrative benefits of self-policing, increase the number of resource-intensive and intrusive government investigations, and expose employers to rising costs and liability due to undetected securities-law violations.

Harms Employees Duty-Bound to Report Internally

Employees report misconduct through their employers' internal compliance programs for various reasons. Many employees act out of loyalty and want to give their employer an opportunity to vigorously investigate, root out, and remedy the perceived legal violation. Some of these employees are either unaware of or unmotivated by potential financial rewards for reporting legal violations outside their organization. Other employees are required to report internally under their company's code of conduct. And still others are duty-bound to report internally by law and professional ethics.

In the context of U.S. securities law, this last category of employees--those obligated to report legal violations up the corporate ladder--is expansive. Lawyers representing public companies, for example, must report up evidence of a material violation of federal or state securities law or a material breach of fiduciary duty ; registered public accounting firms and their employees must report illegal acts discovered during audits to the audited public company's management ; a mutual fund's chief compliance officer must report material compliance matters to fund's board ; a broker-dealer's auditor must report material inadequacies to the broker-dealer's chief financial officer ; and investment advisers must adopt code of ethics requiring supervised persons to report violations to the chief compliance officer.

The Court's ruling in Digital Realty Trust harms all of these professionals. Specifically, it prohibits them from invoking the anti-retaliation provisions contained in Dodd-Frank in the event they are retaliated against for reporting legal violations internally but before they have a chance to report the violations to the SEC.

For lawyers, the harm is conspicuous and significant. Under the Sarbanes-Oxley Act of 2002 [PDF], lawyers are not just obligated to report certain legal violations up the corporate ladder. They are also required, in the event they receive an inadequate and untimely response from higher-ups, to report to the company's audit committee, an independent committee of the board of directors, or the board itself. Such exhaustive internal reporting takes time. Indeed, plenty of time to be fired for reporting--and continuing to report - the perceived illegal conduct. Worse, studies indicate that retaliation against whistleblowers occurs quickly, typically immediately after whistleblowers report internally.

Meanwhile, lawyers must wait for their clients to respond. And wait. And sometimes wait some more. Even then, their options are limited. Under Sarbanes-Oxley, lawyers can report out evidence of an employer's legal violation only after exhausting all reporting up obligations and, furthermore, only in the event the lawyer reasonably believes necessary to prevent or rectify substantial injury to the employer or investors. Moreover, ethics rules for lawyers in a majority of states provide similar procedures and requirements before a lawyer can disclose a client's legal violation.

In addition, the ethics rules in a minority of jurisdictions further restrict lawyers' reporting out options. In fact, some jurisdictions prohibit lawyers from reporting out financial crimes or non-criminal frauds, leaving lawyers the sole option of withdrawing from the representation. And while there is a good argument (indeed, from the perspective of this commentator, a winning argument) that the rules for attorneys promulgated under Sarbanes-Oxley preempt state ethics rules, that still-unsettled question might offer inadequate assurance for lawyers wishing to blow the whistle on a client's illegal acts by reporting to the SEC.

In the end, the decision in Digital Realty Trust harms lawyers for fulfilling their legal and ethical obligations. By removing statutory remedial protections against retaliation for reporting legal violations internally, it exposes lawyers to retaliatory acts without legal recourse. It thereby undermines Congress's mandate in Sarbanes-Oxley that lawyers report up "evidence of a material violation of securities law or breach of fiduciary duty or similar violation." And it undermines the Dodd-Frank whistleblower statute, which, by way of SEC rulemaking authority, explicitly incorporates Congress's mandate that lawyers report up certain legal violations.

Dennis J. Ventry, Jr., is a Professor of Law at the UC Davis School of Law. His research and academic specialties include tax policy, tax practice, tax filing and administration, legal and professional ethics, whistleblower law, family taxation, and U.S. economic and legal history. Professor Ventry also serves as the chairman for the Internal Revenue Service Advisory Council (IRSAC).

October 3, 2017

Aoki Center Screens 'Cruz Reynoso: Sowing the Seeds of Justice'

The Aoki Center for Critical Race and Nation Studies presented a screening of Cruz Reynoso: Sowing the Seeds of Justice, filmmaker Abby Ginzberg's documentary on the life of Professor Emeritus Cruz Reynoso, at King Hall on September 26. 

The film presents the story of Professor Reynoso's life and career as it intersects with key moments in the history of California and the nation, including the fight for legal services for farm workers during the 1970s, the 1986 political campaign by death penalty advocates against Reynoso and two other California Supreme Court justices, and the U.S. Commission on Civil Rights' investigation of voting irregularities in Florida during the 2000 Presidential election. 

A member of the UC Davis School of Law faculty since 2001, Professor Reynoso was awarded the Presidential Medal of Freedom, the nation's highest civilian honor, in 2000 by President Bill Clinton in recognition of his "compassion and work on behalf of the downtrodden." 

The screening was part of the Aoki Center's Fall 2017 Interdisciplinary Research Seminar Series. To view a trailer for the film click here.

 

May 19, 2017

Guest Blogging on Concurring Opinions about Whiteness, Class, Rurality

I've been guest blogging for the past few weeks over at Concurring Opinions and invite you over to that blog, on "the law, the universe, and everything" to see what I've been writing.  I've done a four-installment review/commentary on J.D. Vance's Hillbilly Elegy:  A Memoir of a Family and Culture in Crisis.  Spoiler Alert:  I'm not a big fan but, in the end, suggest that the book can help law profs better understand the low-income white students who (thankfully, yes, thankfully!) show up in our classrooms from time to time.  My posts are:

On Donald Trump, J.D. Vance, and the White Working Class

Hillbilly Elegy as Rorschach Test

The "Shock and Awe" Response to Hillbilly Elegy:  Pondering the Role of Race

On Ree Dolly, J.D. Vance and Empathy for Low-Income Whites (or, What Hillbilly Elegy is Good for)

I've also done a bit of writing about rurality, with these posts:

Rurality and Government Retreat

Local Journalism as Antidote to Echo Chambers and Fake News

Also related to rurality are these posts about spatiality and abortion access. 

Did You Hear the One About the Alaska Legislator Who Said ... 

Sanger's Tour de Force on Abortion (with a Blind Spot for Geography)

Carol Sanger of Columbia Law responded to my post about her new book, About Abortion:  Terminating Pregnancy in the 21st Century, here.  I love the fact she says I get the "last word" in our exchange over the significance of geography.

I expect to post another item or two before my term as a guest blogger expires in about a week. 

January 10, 2017

The strangest thing happened at the AALS last week

I have attended the Association of American Law Schools annual meeting for many of the 17+ years I have been a law professor, but I experienced something at last week's annual conference in San Francisco that I had never before seen or heard, something that came as a pleasant surprise.   Attendees were actually talking about rural people and places--including in a plenary session on the future of the legal profession.

For more than a decade now, I have worked to establish as a sub-discipline what I call "law and rural livelihoods" (I've taught a seminar by that name for eight years), and my Legal Ruralism blog is part of that effort.  One of my overarching arguments is that most legal scholarship implicitly embraces an urban norm--and that some legal scholarship is explicitly urbanormative.  Yet in all my years of attending gatherings of law professors, I have consistently been the only person in the room talking about rural people and places--I've literally been the only person using the word "rural."  I've often joked that I'm the "rural lady," perhaps analogous to SNL's "church lady," a character with a one-track mind who keeps showing up and making the same overarching point. Over the years, this approach has attracted a lot of eye-rolling, ongoing marginalization.  But it has remained the case that rural people and places have been omitted from so many scholarly conversations about law--and from so many scholarly works on topics that, to my mind, have an obvious rural or spatial angle, e.g., reproductive justice, poverty.

So, imagine my surprise when, following the plenary on "Preparing a Diverse Profession to Serve a Diverse World," with key note by Brad Smith, President and Chief Legal Officer of Microsoft Corporation (and, incidentally, my boss at Covington & Burling London in 1992 and later my client, from 1996-98, when I returned to Covington and he was in house at Microsoft),  Lauren Robel of Indiana University School of Law asked the first question, which was essentially "what about rural?"  She noted that she had recently been in southern Indiana, which is quite rural, and that shortages of broadband and lawyers are two challenges plaguing the region.  She also referenced the recent NPR story about the "epic" shortage of rural lawyers, a story that quoted me and mentioned the work I have done on the rural lawyer shortage.  After Robel broke the ice with a reference to rural Indiana, several others referenced "rural" in the ensuing conversation.  This was interesting in part because Smith had, early in his talk, referenced a small town in southwest Virginia where Microsoft has a server farm, but he had not used the word "rural."  As the conversation unfolded, however, the word became part of the discussion in a way that seemed, well, natural.

This was somewhat similar to what had happened the day before in a discussion session in which I participated:   Community Development Law and Economic Justice--Why Law Matters.  About a dozen scholars were invited in advance to participate in this discussion, including me.  Because I don't "do" community development law or work as such, I assumed I was invited to participate because of my work on rurality, including rural poverty, thus implicating issues of economic justice.  Once I got the ball rolling by talking about my rural-focused scholarship, several other participants mentioned "rural," including "rural and urban," as in referencing the prospect of intra-regional CED collaborations and such.  (Let me be clear that this usually doesn't happen; when I'm on a panel talkig about "rural," I typically remain silo-ed as such).  I commented that I thought much of the attention to "rural and urban" was racially coded (though it is not necessarily accurate to conflate rurality with whiteness, it is a common phenomenon), as a way to get at cross-racial collaborations, which I very much support (indeed, cross-racial cooperation among low-income folks is a big focus of my scholarship right now).  I also joked that I had not heard as many mentions of "rural" in my entire 17 years of attending law prof. conferences as I had in that 1.75 hour-long session!  Perhaps colleagues in this session--where I was invited to the conversation because I am a ruralist--were humoring me. 

So, is this attention to rurality among legal educators the wave of the future?  or just a temporary dalliance, a moment of intrigue and curiosity, as we absorb the results of the 2016 election and the role that rural America apparently played in Trump's win?  I'm hoping for the former because mainstream (even liberal! highly educated! elite!) attention to rural issues and rural people might help us avert another electoral disaster in two years, or four.  

Cross-posted to Legal Ruralism.

February 4, 2016

California Legal History: A King Hall Issue

The 2015 issue of California Legal History could easily be titled the King Hall issue. A publication of the California Supreme Court Historical Society, it is an annual journal that publishes scholarly articles and the oral histories of prominent figures of the bench and bar of California.

Here are some of the articles in the new issue:

A tribute to Hon. Joseph R. Grodin by our own Cruz Reynoso.

My contribution on "Justice Cruz Reynoso: The People's Justice."

An oral history of Cruz Reynoso.

A student symposium on three intersections of federal and California law (which I blogged about previously).

The symposium features an introduction by Professor John Oakley and contributions by Kelsey Hollander '15, Megha Bhatt '15, and Elaine Won '16!

October 28, 2015

Campus Community Book Project and Addressing "The Divide"

Is this the "Age of the Wealth Gap?"

Investigative reporter and Rolling Stone contributor Matt Taibbi says yes. His New York Times bestselling book, "The Divide: American Injustice in the Age of the Wealth Gap," is the featured work in this year's UC Davis Campus Community Book Project.

It was my pleasure last week to take part in the first of three book events at the School of Law: a panel discussion titled "Addressing 'The Divide' - 'If You Cannot Afford One...': Access to Legal Counsel in the Age of Inequality." Speakers included Yolo County Deputy Public Defender Ronald Johnson '04, Legal Services of Northern California (LSNC) Executive Director Gary Smith, and LSNC Deputy Director Julie Aguilar-Rogado.  As lawyers and professors involved in serving, researching and/or teaching about low-income populations and access to justice issues, we all agreed that little about Taibbi's book surprised us, even though Taibbi wrote as if he were shocked by his findings.  


Ron Johnson '04, Gary Smith, Julie Aguilar-Rogado, and me

Among the topics we discussed were the civil justice gap between wealthy folks and those who qualify for legal assistance from legal aid organizations such as LSNC, which is funded in part by the Legal Services Corporation.  Smith and Aguilar-Rogado described how LSNC is not only providing direct services to low-income populations in the 23-county area they serve in Northern California, but how they are also pro-actively seeking enforcement of many laws that can assist the poor.  In a sense, LSNC is acting as a private attorney general in advocacy to compel counties to live up to statutory mandates that would benefit low-income populations.  I talked about the rural-urban justice gap, including the shortage of lawyers serving rural counties generally, and low-income rural residents in particular.  Our talented alum Ron Johnson spoke about his decade of experience as a public defender.  In particular, he talked about some of the particular struggles facing many who are caught up in the criminal justice system, problems including joblessness, poverty, and mental illness.  Johnson observed that we need to devote more attention to such root causes of crime and mentioned that his office has social workers -- and not only lawyers -- to assist the clients.  

Two more Campus and Community Book events will be held at King Hall. On November 2, the clinical faculty will discuss the human impact of criminal and immigration detention. Then, on February 1, Professors Elizabeth Joh and Thomas Joo will discuss structural inequality in American policing and prosecution. 

For a full list of the book events across campus, visit http://occr.ucdavis.edu/ccbp2015/events/index.html. The events will conclude with an appearance by author Matt Taibbi at the Mondavi Center on February 3, a talk I am very much looking forward to hearing.

March 16, 2015

Breaking News: California Grants Law License to Hong Yen Chang

Today, the California Supreme Court today issued its opinion in In Re Hong Yen Chang. The first line says it all: "We grant Hong Yen Chang posthumous admission as an attorney and counselor at law in all courts of the state of California." (emphasis added).

More than a century ago, Chang was denied the opportunity to practice law in California because of his race.  Professor Jack Chin, a leading civil rights law professor, has been working on the case with the Asian Pacific American Law Students Association students and the law firm of Munger Tolles & Olson LLP.

Congratulations to all involved in this important effort to right a historic wrong. Congratulations, too, to the family of Hong Yen Chang, many of whom are lawyers right here in California.

See coverage of today's developments from major news outlets including Reuters, Los Angeles Times, San Francisco Chronicle, and the Associated Press, among others.

March 13, 2015

California Supreme Court to Rule on Bar Admission of Hong Yen Chang

Cross-posted from Immigration Prof Blog.

Last spring, ImmigrationProf reported on the efforts of UC Davis law students to seek the posthumous admission of Hong Yen Chang to the California State Bar. More than a century ago,  Chang was denied the opportunity to practice law in California because of his race.

Students in the UC Davis School of Law Asian Pacific American Law Students Association (APALSA) asked the California Supreme Court to admit Hong Yen Chang to the bar. Professor Jack Chin, a leading civil rights law professor, has been working on the case with the APALSA students and the law firm of Munger Tolles & Olson LLP.

The California Supreme Court announced today that it would file an opinion in the case next Monday.  Stay tuned!