Values in Organizations

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					Business Law I

Instructor: Dean R. Poirier
Mount Olive College
        Course Objective

• To provide students with a general
  knowledge of the legal system, of the
  criminal & civil liability of business
  entities and of individuals doing
  business, and of contract law and sales

Law , Legal
Reasoning, and the
Legal Profession
Blackstone’s Definition of Law

 “A rule of civil
 conduct prescribed
 by the supreme
 power in a state,
 commanding what is
 right, and prohibiting
 what is wrong.”
      Definition of Law

But as Professor Harold Berman
asserts “Law is not only a body of
rules; it is people legislating,
adjudicating, administering, negotiating
– it is a living process of allocating
rights and duties and thereby resolving
conflicts and creating channels of
 Common Legal Values?
Professor Berman also asserts that there 4 common
legal values or “legal emotions” that any human
society shares. These are:

1) a sense of rights and duties
2) a right to an impartial hearing
3) an aversion to an inconsistent application of the
rules and a desire for equal treatment
4) fidelity to the law and abhorrence of illegality

Do you agree?
           The Rule of Law
The Rule of Law (Objective Standard) vs. The
  Rule of Men (Subjective Standard)

Under the concept of the Rule of Law, the law:

  1. represents the “will of the people”

  2. is generally & equally applicable to all (i.e.
  No one is “above the law”)
        The Rule of Law
Rule of law "means that a government in all its
actions is bound by rules fixed and
announced beforehand -- rules which make it
possible to foresee with fair certainty how the
authority will use its coercive powers in given
circumstances, and to plan one's individual
affairs on the basis of this knowledge" -
Hayek, Friedrich Hayek, in The Road to
Serfdom, Chicago: University of Chicago
Press, 1994, p.80.
            The Rule of Law
• In ancient Athens, Solon is
  said to have given the
  people "equal laws for the
  noble and the base" and
  thereby "not so much
  control of public policy as
  the certainty of being
  governed legally in
  accordance with known
  rules.” (Friedrich A. Hayek,
  Origins of the Rule of
           The Rule of Law
• Aristotle said “"it is more
  proper that the law should
  govern than any of the
  citizens," that the persons
  holding supreme power
  "should be appointed only
  guardians and servants of the
  law," and that "he who would
  place supreme power in mind,
  would place it in God and the
  laws (Friedrich A. Hayek,
  Origins of the Rule of Law)
           The Rule of Law
• In 390, Bishop
  Ambrose, of Milan,
  forced Emperor
  Theodosius to repent
  from his vindictive
  massacre of 7,000
  people based on the
  idea that under the
  influence of Christianity,
  nobody, not even the
  Roman emperor, was
  above the law.
      The Rule of Law

Henry de Bracton (d.1268),
broadly regarded as "the father
of the common law", once
stated that "the law makes the
king. For there is no king where
will rules rather than the law".
               The Rule of Law
The English Petition of Grievances of 1610, provoked by
new regulations issued by the king for building in London
and prohibiting the making of starch from wheat, states
that, among all the traditional rights of British subjects,
"there is none which they have accounted more dear and
precious than this, to be guided and governed by the
certain rule of law, which giveth to the head and the
members that which of right belongeth to them, and not
by any uncertain and arbitrary form of government …Out
of this root has grown the indubitable right of the people
of this kingdom, not to be made subject to any
punishment that shall extend to their lives, lands, bodies,
or goods, other than such as are ordained by the
common laws of this land, or the statutes made by their
common consent in parliament”. (Friedrich A. Hayek,
Origins of the Rule of Law)
             The Rule of Law
“In the government of this
commonwealth, the legislative
department shall never exercise
the executive and judicial powers
or either of them: the executive
shall never exercise the legislative
and judicial powers, or either of
them: the judicial shall never
exercise the legislative and
executive powers, or either of
them: to the end it may be a
government of laws and not of
men.” – Constitution of the
Commonwealth of Massachusetts
as drafted by John Adams in 1780
          The Rule of Law
“No man is above the
law and no man is
below it; nor do we
ask any man’s
permission when we
ask him to obey it.” -
President Theodore
         The Rule of Law
"No person is above
the law, and that
means the president
and that means the
Supreme Court." -
Supreme Court Justice
Samuel A. Alito, Jr.
(said during his
confirmation hearings)
          The Rule of Men

“When the
President does it,
that means it is not
illegal” - President
Richard Nixon
               The Rule of Men
Note that the word “tyranny”,
associated with cruel, oppressive
and unjust rule, comes from the
Greek term for "secular rule“
(κοσμικός κανόνας), which means
rule by men instead of the rule of

‘‘history has informed us that bodies
of men as well as individuals are
susceptible of the spirit of tyranny.’’
– Thomas Jefferson, A Summary
View of the Rights of British America

Jefferson had also proposed that the
motto of the United States should be
“Rebellion against tyrants is
obedience to God.”
 The Legal System
• Functions of the Law
  – Keeping the
    Order/Dispute Resolution
     • (e.g. Criminal & Traffic
     • Police Power
     • Prison System
The Legal System
• Functions of the
  – Protecting the Public
     • (e.g. Anti-
       Smoking, Seat
       Belts, FDA)
The Legal System
• Functions of the Law
   Maintaining Standards of Conduct

   Whose standards?


       Separation of Church & State?
The Legal System

• Functions of the Law
   – Facilitating Planning
       • (e.g. Contract Law,
         assigning risks, etc.)
The Legal System

• Functions of the Law
   – Promoting Social Justice
      • (e.g. Civil Rights Law.)
      • Equality?
          The Legal System
• Equality?
  – “We hold these truths to
    be self-evident, that all
    men are created equal
      • Do Americans truly
        believe in equality?
         –If so, in what
Functions of the Law
• Equality?
• “was there, or will there
  ever be a nation whose
  individuals were all
  equal, in natural and
  acquired qualities, in
  virtues, talents, and
  riches? The answer in
  all mankind must be the
  negative.” - John
         The Legal System
• Equality?

• “That they are endowed by their Creator with
  certain inalienable rights and that among
  those rights are life, liberty and the pursuit
  of happiness.”

• Koslowski’s proposition: American’s will
  tolerate economic inequality as long as they
  believe that each American has an equal
  opportunity to become wealthy.
         The Legal System
• Equality of Opportunity?
  – “Those scenes (devastation after Hurricane
    Katrina) confirmed the inescapable conclusion of
    recent series in The New York Times, The Wall
    Street Journal, and the Los Angeles Times: Class,
    defined by economic and social status and often
    linked with race, largely determines how one fares
    in modern America. This nation may be based on
    egalitarian principles enshrined in the Declaration
    of Independence, but an individual’s access to
    educational opportunities, health care,
    transportation, decent housing, and even disaster
    relief services depends on income and class.” -
    Laura D’Andrea Tyson, Dean of London Business
    School, in Ideas Viewpoint: Land of Unequal
    Opportunity, Business Week, September 26, 2005,
    p. 146)
The Legal System
• Functions of the Law

   – Protection of Individual Rights &
       • Bill of Rights.
            – Protection from what/who?
 The Legal System
• Functions of the Law

   – Promotion of Economic Prosperity
      • (e.g. Adjusting for Market Failures, Anti-Trust, etc.)

   – Protection of the Environment
      • (e.g. Clean Water Act.)
The Legal System

• Do you see any conflicts between the
  various functions?
  – Keeping the Peace vs. Protection of
    Individual Freedom
    • (e.g. The Patriot Act, Text:
    • 3rd Party Records, Intelligence Searches, “Sneak and Peek”,
      “Trap & Trace”
    • ACLU Commentary
         The Legal System
– Maintaining
  Standards of Conduct
  vs. Protection of
  Individual Freedom
   • (e.g. Adult entertainment
     industry, Lottery)
   • Look at Lawrence v.
     Texas, p.17
       – Moral Standards v.
       – “Private conduct”
   • Look at Strip Club Case,
     p. 3
       – Letter of the law v.
         Spirit/Intent of the law
The Legal System

• Protecting the Public Health/Welfare vs.
  Promotion of Economic Prosperity
  – (e.g. In NC we have had anti-smoking
    regulations and tobacco subsidies at the
    same time)
Functions of the Law
• Protecting the Public Health Welfare
  vs. Protection of Individual Freedom
   – Do you believe that you, as an adult
     should be required to wear a seat
     belt or a bicycle helmet?
Functions of the Law
Protecting the Public
Health Welfare vs.
Protection of
Individual Freedom
– Do you believe that
  children should be
  required to wear a
  seat belt or a bicycle
          The Legal System
• Promotion of Economic Prosperity vs.
  Protection of the Environment
  – Is there necessarily a conflict here?
           Categories of Law
• Substantive Law - defines rights, privileges & duties
   – (e.g freedom of speech, right to vote, qualifications
     for social security benefits)

• Procedural Law - establishes procedure/rules of
  enforcement of substantive laws
   – (e.g. jurisdiction, trial court procedure, appeals
     rules, etc.)
Categories of Law
• Procedural Law - jurisdiction (Yahoo v. La Ligue Contre
  Le Racisme et L’Antisemitisme, p.6)
   – Issues: Can a foreign nation regulate speech by an
     American made within the U.S. that can be accessed by
     citizens in that foreign nation?Selling Nazi related goods
     over the internet protected by free speech?
   – Basis for Holding: It is preferable to permit nonviolent
     offense speech than to impose viewpoint-based
     government regulation upon speech (Do you agree?)
   – Declaratory judgement precluding enforcement of French
     court order
   – Note that the 9th Circuit dismissed this case because it
     believed the district court had no personal jurisdiction over
     La Ligue. However, we have left the district court ruling in
     the chapter because we believe it still accurately illustrates
     the conflict between public policy and the enforcement of
     foreign judgments. For instance, rather than Yahoo!
     seeking a declaratory judgment, if La Ligue had sued in
     the U.S. to enforce the French judgment, the district court
     ruling likely would have been upheld.
          Categories of Law
• Civil
   – relates to private duties between persons
     (including corporations) (Plaintiff v. Defendant)
   – remedies: damages, injunction, recission, etc.
• Criminal
   – relates to breach of duty to society
   – enforcement by prosecution (Prosecutor v.
   – punishment v. rehabilitation
• Administrative
   – promulgated by government agencies
Constitutional Foundations
• Checks and Balances
  – Between Federal Government & States
  – Between Legislative, Executive, Judicial
• Constitutional Powers
  – e.g. to regulate interstate commerce, foreign
    trade and Indian affairs, impose taxes, etc.
• Constitutional Limitations
  – (e.g. Bill of Rights)
Sources of Law
• Constitutions
   – U.S. & State
• Treaties
• Statutes (Federal/State)/Ordinances
• Administrative Rules/Decisions
• Executive Orders
   – w/i authority granted by statute
Sources of Law
• Court Decisions- Case/Common Law
  – Interpretation
      • Plain and Ordinary Meaning (see In re
        Blanchflower, p. 15)
      • Legislative History
      • Purpose
      • Public Policy
      • In Re Real Networks
           – The court is asked to determine if an
             electronic License Agreement is a
             “writing” that satisfies the conditions of
             the Federal Arbitration Act. The court,
             looking at the plain meaning of the
             words, the legislative intent, and public
             policy required it find the electronic
             document to satisfy the statute.
Sources of Law
Statutory Interpretation
    Question #8 on page 27
      The court will begin by looking at the plain
      meaning of the word “common carrier” to see if
      AOL clearly falls within its purview. If there is no
      ambiguity, the inquiry will end at this stage.
      However, if the plain (dictionary meaning and
      common usage) do not conclusively decide the
      case, the court will look into the legislative
      history in order to determine the intent of
      Congress when it enacted the statute. Because
      the Communications Act is administered by the
      FCC, the court will pay special deference to any
      interpretation made by that agency in any of the
      regulations that it has promulgated. Ultimately,
      the court may turn to public policy for guidance
      on whether it would be wise to consider AOL or
      other Internet service providers as common
      carriers to be regulated by the Communications
      Act. In this particular case, the court held that
      AOL was not a common carrier and, therefore,
      could not be found to have violated the
      Communications Act. Howard v. America
      Online, 208 F.3d 741 (9th Cir. 2000).
Sources of Law
• Court Decisions - Case/Common Law
  – Findings
  – Review
     • Constitutional Interpretation
         – See Coalition for Economic Equity v. Wilson
             » Federal circuit court upheld a CA
               constitutional provision that prohibited
               reverse discrimination in public
               employment, education, or contracting.
               Held that the severe limits on affirmative
               action programs did not violate the U.S.
Sources of Law
• Private Law
   – e.g. contracts between parties = law unto those

• Restatements
   – Typically written by legal experts

• International/Foreign Law?
   – In some recent decisions (e.g. Lawrence v.
     Texas, 539 U.S. 558 (2003), Grutter v. Bollinger,
     539 U.S. 306 (2003) & Roper v. Simmons, 538
     U.S. 11 (2005)) some justices of the U.S.
     Supreme Court have referenced
     International/Foreign Law. Should they do so?
Procedural Safeguards
  Publishing of bills

  Notice, Review & Comment Periods for Regulations

  No Ex post facto laws - A new statute only applies to
  actions taken after it becomes effective

  Habeas Corpus - A person who is arrested has the
  right to be told what crimes he or she is accused of,
  and to request his or her custody be reviewed by
  judicial authority. Persons unlawfully imprisoned have
  to be freed.
  Stare Decisis (Precedent)
“To stand by the decisions”
   Courts should apply rules developed in prior cases in their
   own or a superior court, unless they have a compelling
   reason to do otherwise

   As Blackstone wrote in his Commentaries on the Laws of
   England, “it is an established rule to abide by former
   precedents” that the scales of justice be kept steady and not
   be “liable to waiver with every judge’s opinion.”

   Note: Only Majority Decisions create precedents

   Chief Purpose: Predictability

      Find earlier case or cases in same jurisdiction with
      similar facts
      Derive rule(s) of law
      Apply rule(s) of law
          Stare Decisis
• To Change, Courts may:
  – Choose from among various related
  – Choose which facts to stress
  – Broadly/Narrowly interpret law
  – Distinguish the case
  – Overrule a case or cases (e.g. Brown
    v. Board of Education or Lawrence v.
    Texas, p. 17)
• Legislature may override by statute
                  Stare Decisis
• In cases where there is no binding precedent, known
  as a case of first impression, the court may refer to
  positive law (e.g. statutes and constitutions), public
  policy, and widely held social values in order to craft
  the best new precedent.
• For example, in a recent case, a girl sued her school
  for allowing repeated sexual harassment.
   – The plaintiff girl’s lawyer talked about sexual harassment
   – The defendant school’s lawyer talked about precedents in
     which courts decided not to interfere in schools’ decisions.
   – The girl won when the U.S. Supreme Court followed her
     precedent cases.
               Stare Decisis
•   Sherbrooke Turf v. Minnesota
    Department of Transportation
    –   The court upholds the constitutionality of a
        state program that, pursuant to federal
        regulations, establishes a race-conscious
        preference program for government
    –   Note how the court examines past cases
        dealing with such race-conscious programs.
        The court is following some past decisions
        and distinguishing others.
                    Stare Decisis
•   Question 9. No. Clearly, the federal statute protects whites as well as
    blacks from racial discrimination in employment. However, an argument that
    the law prohibits all race-conscious affirmative action plans rests upon a
    literal reading interpretation of the statute. This strict literal reading of the
    statute overlooks the fact that Kaiser plan is an affirmative action plan
    voluntarily adopted by private parties to eliminate traditional patterns of
    racial segregation. If the statute is read too strictly, without considering the
    legislative history of the law and the historical context from which the act
    arose, it would effectively forbid all race-conscious affirmative action plans
    and, thereby, bring about an end completely at variance with the purpose of
    the statute. The purposes of the plan mirror those of the statute. Both were
    designed to break down old patterns of racial segregation and to open
    employment opportunities to blacks in occupations which were traditionally
    closed to them. At the same time the plan does not unnecessarily trammel
    the interests of white employees. Nor does it create an absolute bar to the
    advancement of white employees. Moreover, it is a temporary measure.
    United Steel Workers v. Weber, 443 U.S. 193 (U.S. Sup.Ct. 1979).

•   Question 10. The Court is referring to a manner of statutory interpretation.
    Rather than confine itself to the literal meaning of the words (which would
    make the affirmative action plan illegal), the Court is looking at the purpose,
    or perhaps the public policy, behind the law. In this way, it ruled that Kaiser
    could discriminate against whites if it promoted integration of the work force.
  Schools of Jurisprudence: Natural law
            (Lex Naturalis)
The view that law is essentially a moral instrument that
should embody moral principles inherent in nature which
are discernable through the use of intelligence.
 • Oldest and most enduring school of jurisprudence
 • Origins among classical Greek and Roman philosophers (Plato,
   Aristotle, Cicero)
 • Dominant in Europe’s philosophy in the Middle Ages (St.
   Augustine, St. Thomas Aquinas, Summa Theologica)
 • Popular in “Age of Enlightenment” (Blackstone, Locke, Hobbes)
 • Popular with the vast majority of the “Founding Fathers” of
   American Law (e.g. as expressed in the Declaration of
   Independence were certain truths were found to be “self-evident”)
 • This view provides a rational basis for courts to invalidate the
   “positive law” enacted by legislatures.
 • It also places a high value on individual rights & freedom and on
   substantive due process
  Schools of Jurisprudence: Natural law
            (Lex Naturalis)

The Roman statesman
Cicero stated: “True law is
right reason in agreement
with nature; it is of universal
application, unchanging and
everlasting; it summons to
duty by its commands, and
averts from wrongdoing by
its prohibitions.”
 Schools of Jurisprudence: Natural law
           (Lex Naturalis)
In the 13th-century, Franciscan nominalists were the first to elaborate
legal theories of God-given rights, as individual rights derived from a
natural order sustained by God's immutable laws of "right reason".

St. Augustine wrote that an unjust law is a contradiction in terms. For
him, human laws cannot be out of harmony with God's higher laws, and
rulers who enact unjust laws are wicked and unlawful authorities. In The
City of God, St Augustine explains that a civil authority that has no
regard for justice cannot be distinguished from a band of robbers. “ Thus,
lex ini usta non est lex “an unjust law is no law at all.”

St. Thomas Aquinas stated that no one should have to obey an unjust
("crooked”) law. To St Aquinas, since God's justice is the basic
foundation for the rule-of-law system, a "law" that permits murder or
perjury is not really law and people have the moral right to disobey unjust
commands. Rulers who enact unjust "law" cease to be authorities in the
rightful sense and become tyrants.
   Schools of Jurisprudence: Natural law
             (Lex Naturalis)
John Locke (1634-1704),
whose legal and political
ideas provided legal
justification to the 1688
"Glorious Revolution" in
Britain, argued that
lawmakers put themselves
into a "state of war" against
the society whenever they
endeavor to destroy our God-
given "natural" rights to life,
liberty and property.
   Schools of Jurisprudence: Natural law
             (Lex Naturalis)
As Baron Montesquieu
(1689-1755) once stated,
“God is related to the
universe, as Creator and
Preserver; the laws by
which He created all things
are those by which He
preserves them.”
(Montesquieu, The Spirit
of Laws)
            Schools of Jurisprudence: Natural law
                      (Lex Naturalis)
•   “Man, considered as a creature, must necessarily be subject
    to the laws of his Creator,for he is entirely a dependent being.
    . . . And consequently, as man depends absolutely upon his
    Maker for every thing, it is necessary that he should in all
    points conform to his Maker’s will. This will of his Maker is
    called the law of nature. . . . This law of nature, being coeval
    [coexistent] with mankind and dictated by God himself, is of
    course superior in obligation to any other. It is binding over
    all the globe, in all countries, and at all times: no human laws
    are of any validity, if contrary to this; and such of them as are
    valid derive all their force, and all their authority, mediately or
    immediately, from this original. . . . The doctrines thus
    delivered we call the revealed or divine law and they are to be
    found only in the Holy Scriptures. These precepts, when
    revealed, are found upon comparison to be really a part of the
    original law of nature. . . . Upon these two foundations the
    law of nature and the law of revelation, depend all human
    laws; that is to say, no human laws should be suffered to
    contradict these.” - Sir William Blackstone, (1723-1780),
    Attorney, Jurist, Professor of Common Law at Oxford
    University and political philosopher; Author of Commentaries
    on the Laws of England (1766)
        Schools of Jurisprudence: Natural law
                  (Lex Naturalis)
•   As James Wilson, former Supreme Court
    Justice and a signer of the Declaration of
    Independence and the Constitution stated:
     – “That law, which God has made for man in his
       present state; that law, which is communicated
       to us by reason and conscience, the divine
       monitors within us, and by the sacred oracles,
       the divine monitors without us … As
       promulgated by reason and moral sense it has
       been called natural, as promulgated by the holy
       scriptures, it has been called revealed law. As
       addressed to men, it has been denominated the
       law of nature; as addressed to political
       societies, it had been denominated the law of
       nations. But it should always be remembered,
       that this law, natural or revealed, made for men
       or for nations, flows from the same divine
       source; it is the law of God. Human law must
       rest its authority ultimately upon the authority of
       that law which is divine. . . Far from being rivals
       or enemies, religion and law are twin sisters,
       friends, and mutual assistants. Indeed, these
       two sciences run into each other.”
   Historical Jurisprudence
– The view that judges find the law in the history,
  culture and customs of their people
   • e.g. Some assert that the intentions of the framers of the
     U.S. Constitution can be discovered through historical
     research and it is important for judges to ascertain these
     intentions when adjudicating constitutional questions.
   • It’s first explicit expression is attributed to Friedrich Karl
     von Savigny who wrote that law is "developed first by
     custom and belief of the people, then by legal science—
     everywhere, therefore, by internal, silently operating
     powers, not by the arbitrary will of the legislator."
   • Associated with Sir Henry Maine, Sir Edward Coke, Sir
     John Selden, and Sir Matthew Hale in England
   • Considered a key factor in the development of case
     method legal instruction at Harvard Law School, which
     was later carried forward to most other American law
       Schools of Jurisprudence:
   Legal Positivism (Command School)
• Says that the only significant law is the set of rules
  created by a government.
       • Legal positivists essentially regard the law as a product of human will.
       • [This view grew in 17th Century England. After the king was executed and
         Lord Protector Cromwell minimized the role of Parliament, natural law
         arguments were unwelcome.]
       • Treats the legal and the moral as separate realms.
       • The citizen's duty to obey the law is linked with the legitimacy of the source of
         the command rather than a moral evaluation of the command.
       • This view fits well with totalitarian forms of government (e.g. Nazi Germany)
       • This view has been championed by John Austin, Christopher Columbus
         Langell, Justice Cardozo, Justice Oliver Wendell Holmes, Justice Llewellyn,
         Justice Frankfurter, Justice Brennan and Justice Thurgood Marshall.
       • As Justice Benjamin Cardozo once wrote, “if there is any law which is back of
         the sovereignty of the state, and superior thereto, it is not law in such a sense
         as to concern the judge or lawyer, however much it concerns the statesman
         or moralist.”
       • In this same context Justice Oliver Wendell Holmes once defined the law as
         simply “beliefs that have triumphed” and truth as “the majority vote of that
         nation that could lick all others.”
       • see Carafano v., p. 19
      Schools of Jurisprudence:
  Legal Positivism (Command School)
• According to Legal Positivism:
    • (1) There are no objective, God-given standards of
      law, or if there is, they are irrelevant to the modern
      legal system.
    • (2) The law is the law simply because the highest
      human authority says it is and is able to back it up
      by force.
    • (3) The law must evolve along with society
    • (4) Judges, through their decisions, can and do
      guide the evolution of the law
    • (5) The best way to understand the law is to review
      judicial decisions (i.e. to follow the case law
    Schools of Jurisprudence:
Legal Positivism (Command School)
• For examples of Supreme Court
  decisions that cited “evolving
  standards”, see Trop v. Dulles, 356
  U.S. 86 (1958), Furman v. Georgia, 408
  U.S. 238 (1972), Justice Marshall’s
  dissent in Gregg v. Georgia, 428 U.S.
  153 (1976) and Roper v. Simmons, 543
  US 551 (2005).
Schools of Jurisprudence:
Sociological Jurisprudence
• Says that each case must be viewed in
  the context of its potential influence on
      • Looks at law in relation to its social
        reality and allows for social
        engineering through law.
      • Consequentialist in nature
      • A form of judicial activism
      • Championed by Dean Roscoe Pound
        of Harvard Law School
      • Related concept: Utilitarianism: Evaluates law
        according to that which is of greatest benefit to
        the greatest number (Associated with Bentham
        & Mill)
Schools of Jurisprudence:
Sociological Jurisprudence
However, Justice Louis D.
Brandeis (1856-1941) warned:
“Experience should teach us to
be most on our guard to
protect liberty when the
government's purposes are
beneficent. Men born to
freedom are naturally alert to
repel invasion of their liberty
by evil-minded rulers. The
greatest dangers to liberty lurk
in insidious encroachment by
men of zeal, well-meaning but
without understanding."
Schools of Jurisprudence:
    Legal Realism
• The view that the law is not simply a
  logical result of the written law, but is
  influenced by the social, economic, and
  other views and prejudices of the judges
  who decide disputes.
     • Challenges the traditional view that judges simply
       identify what the law is by "finding" what has been
       recognized as the law (ius dicere: to find law)
     • Asserts that judges make new law when they render
       their opinions (ius facere: to make law)
     • A form of judicial activism
     • Championed by Justice William O. Douglas
     Schools of Jurisprudence:
          Legal Realism
• As Professor Alexander Bickel purports: “
  The function of Justices … is to immerse
  themselves in the tradition of our society and
  of kindred societies that have gone before, in
  history … in the thought and the vision of the
  philosophers and poets. The Justices will
  then be fit to extract “fundamental
  presuppositions” from their deepest selves,
  but in fact from the evolving morality of our
  tradition.” (Bickel, The Least Dangerous
  Branch, p.236)
       Schools of Jurisprudence:
            Legal Realism
• As Professor Thomas Franck
  characterizes it, law has become a
  form of “existential relativism” an
  “undisguisedly … pragmatic human
  process. …made by men, and it lays
  no claim to divine origin or eternal
  validity. … no judicial decision is ever
  “final””. Hence if a decision is later
  overruled, it does not make it “wrong”,
  but simply out of step with the times.
  Schools of Jurisprudence:
       Legal Realism
This view asserts that people obey
the law only out of fear of the
punishment that may result if they
are caught and held accountable?
But is this true? Or is there a
“deeper” perhaps even a “spiritual”
reason for obeying the law?
    Schools of Jurisprudence:
         Legal Realism
A noted legal realist, Yale Law Professor
Thurmond Arnold once told a class that
judges decide cases solely according to
their prejudices. But when a student asked
him if he had done the same when he was
on the bench Arnold replied “Well, we can
sit here in the classroom and dissect the
conduct of judges, but when you put on
those black robes and you sit on a raised
platform, and you are addressed as “Your
Honor”, you have to believe that you are
acting according to some objective
standard.” (account given by his former
student Harold Berman)
  “Sacred” Character of Law
Professor Berman asserts that the “sacred”
character of law is derived from such things
as its:
1) Ritual (as demonstrated in certain
procedures an symbols, like the black robes)
2) Tradition (languages and practices past
down over time)
3) Authority (reliance on “binding” decisions
4) Universality (connection to certain
common legal values mentioned earlier)

This “sacred” character of law is viewed as essential
to impress judges, participants in the legal process
and society at large with the seriousness and the
legitimacy of the legal process.
   Schools of Jurisprudence:
        Legal Realism
Do you feel that legal realism’s
“modern” relativistic view makes the
law seem somewhat less “sacred” and
thus makes the law and legal decisions
somehow less worthy of respect?
Could the acceptance of this view be a
factor in why the law, lawmakers,
lawyers, judges, and legal institutions
are held is such low regard today as
compared to in the past?
   Schools of Jurisprudence:
       Legal Realism
• Critical of legal realism,
  Chief Justice William
  Rehnquist, in an address
  to Suffolk Law School
  remarked, "Somewhere
  'out there', beyond the
  walls of the courthouse,
  run currents, and tides of
  public opinion which lap at
  the courtroom door.“
     Some Forms of Contemporary
           Legal Realism

•   Law and Economics
•   Feminist
•   Critical Race Theory
•   Critical Legal Studies
      Law & Economics
• Says that legislatures and judges create rules
  to provide economic incentives for socially
  beneficial behavior, and disincentives for
  socially detrimental behavior
    – Stresses economic efficiency and wealth
      over "abstract" individual rights.
    – Started in the 1960s
    – According to a panel of business law
      professors at Baltimore in 2000, Legal
      scholars now are in a “second generation”
      of Law & Economics. Psychology now
      has more input.
    – People do not always act as rationally as
      economists have always assumed.
Considers existing American law too patriarchal
and insists that the female perspective should be
considered to a greater extent
 • Started in the 1970s.
 • e.g. “Battered woman syndrome”
    – a wider form of self-defense, [for a woman who kills
      her male lover without herself being in immediate
      danger of death from him.]
    – For additional information on this see:
      olence/filename/criminallaw_1_126 and
“Reasonable woman standard”: [i.e., a
woman perceives risks and benefits of
actions differently than a man does; so a
work supervisor can be illegally abusive
even if a male worker would not have
thought so.]
      Critical Race Theory

Minority perspective should be considered
  • Considers most existing American law as racist
  • Recommends integrating particular concerns and
    views of people of color into the law.
  • Started in the 1980s.
Critical Legal Studies
 Says that at the end of the day, all
 "law is politics” and any one opinion
 is as true as another. Therefore, any
 group in power may impose its
 views on the rest of society
             Judicial Restraint
• States that judges have no popular mandate to
  act as policy makers; rather, judges should
  defer to the elected branches of the Federal
  and state governments with respect to policy
  so long as they stay within the confines of their
  powers as defined by the U.S. Constitution
  and state constitutions.
• Judicial restraint is generally popular among
• Contrast: Judicial Activism (As former Chief
  Justice Charles Evans Hughes once said “We
  are under a Constitution, but the Constitution
  is what the judges say it is.”
• States that the U.S. Constitution means
  essentially the same thing today as it did
  when it was drafted and its meaning can
  only be altered by amending the
  Constitution itself. (Justice Antonin
  Scalia considers himself to be an
• States that the words in used in the
  Constitution should be taken and interpreted
  at face value without attempting to discern the
  drafter’s intent.
Schools of Jurisprudence:
Analytical School
– This view emphasizes the influence of
  scholars who
  • analyze the laws of various states; AND
  • compare the components of those laws, and
    their results; AND
  • Draft model laws combining the best features
    of various state laws on the subject, AND
  • Persuade state legislatures to enact those
    model laws in their states.
  • E.g., the Uniform Commercial Code
Types of Legal Reasoning
• Deductive Reasoning
  – Makes use of syllogism, a type of logical
    relationship involving a major premise and a
    minor premise. [Useful when a general rule
    (major premise) is widely accepted in society]
• Linear Reasoning
  – Proceeds from point to point, with the final point
    being the conclusion. [This ensures that facts
    sufficiently match the elements of the rule.]
• Reasoning by Analogy
  – Analysis that compares the facts of the case
    under consideration with the facts of similar
    cases that have been decided earlier
Common Law Systems Rely
     Heavily On…
•   the judiciary as a source of law, and

•   the adversary system for settling disputes

•   The adversary system is based on the belief that the truth is
    most likely to emerge when the opposing sides conduct
    their own investigations and formulate and zealously
    present their own arguments, because they are each highly
    motivated to find ALL the facts that support their case. A
    neutral judge and jury can then choose to ignore facts
    which they feel are not relevant and reach a fair and
    impartial verdict and judgment.

•   There are ethical limits on the “zealous representation” (see
    Rico v. Mitsubshi Motors, p. 22)
In Civil Law Systems
• The role of the judiciary is
  to narrowly interpret and
  apply comprehensive
  legislative enactments
  called “codes”
• The inquisitorial system is
Common Law Systems
  The United States (excluding
  Canada (except Quebec)
  New Zealand
  Hong Kong
 Civil Law Systems
Continental Europe
Louisiana (something of a hybrid)
Mexico and Latin America
Parts of Africa and Asia
Attorney-Client Privilege
•    What is the attorney-client
    – Client has the privilege not to testify, to
      prevent their attorney from testifying, to
      prevent the attorney’s staff from
      testifying, as to confidential
      communications made by the client to
      the attorney when seeking legal advice.
      This privilege covers initial consultations,
      even if the attorney ends up not
      representing the client.
Attorney-Client Privilege
 •   What are the possible consequences
     to an attorney who violates the
     – If break privilege without legitimate
       excuse may = malpractice or be a
       cause for a disciplinary action by the
       state bar.
Attorney-Client Privilege
 •   How long does this privilege last?
     – This is an indefinite privilege, even after
       the death of the client (though it has
       often been challenged when a client
       dies, including a very controversial case
       in NC recently, involving one of NC’s
       best criminal defense attorneys, Rick
       Gammon, see:
Attorney-Client Privilege
 •       Two points from the Gammon case:
     –    The U.S. Supreme Court has recognized a testamentary
          exception and has assumed that, based upon this
          exception, the attorney-client privilege continues after a
          client's death. The rationale for permitting disclosure
          under these circumstances is that it furthers the client's

     –    Many jurisdictions have enacted provisions empowering
          a personal representative to claim and exercise (and by
          necessary inference also waive) the decedent's
          attorney-client privilege
Attorney-Client Privilege
 •   What are some common exception
     scenarios to this privilege?
     – Malpractice suit or Disciplinary Action
       Brought v. the attorney
     – The client may waive this privilege.
     – Joint representation that later divides.
     – Knowledge of future crime or fraud
     – Court Order. May be after in camera
       session (i.e. typically in the judge’s
Attorney-Client Privilege
•       Any other limitations on the
    –    This privilege applies to legal advice, but not other advice,
         such as personal or business advice.
    –    This privilege only applies to communications made in a
         “confidential setting”.
    –    This privilege generally does not apply to the identity of the
    –    This privilege generally does not apply to the whereabouts
         of the client. (So, in all those cases where Perry Mason had
         clients hidden away in motels out of town, he would have
         been required to disclose their location if the court inquired!)
    –    This privilege generally does not apply to physical evidence.
         (So when Lt. Tragg asks Perry Mason if he has the
         suspect’s gun, and he indeed does have it in his drawer, he
         has to pull it out and turn it over.)
Attorney-Client Privilege
• In Brett v. Berkowitz, 706 A.2d 509 (Sup.Ct.
  Del. 1998), a former client sued her attorney
  for sexual harassment. During discovery she
  sought the names of other clients with whom
  the lawyer may have had sexual contact. The
  Delaware Supreme Court denied her request,
  claiming that revelation of their names would
  violate the attorney/client privilege by
  disclosing the fact that they had consulted a
  lawyer on domestic relations matters.
Attorney-Client Privilege
•   In Kobluk v. University of Minnesota, 574 N.W.2d 436 (Sup.Ct. Minn.
    1998), a professor was challenging his denial of tenure. As a part of
    discovery, he sought copies of two preliminary drafts of the letter he
    received notifying him of university’s decision to deny him tenure. The
    original copy was written by the university provost, who then sent it to
    the university counsel for revision. The second copy was written by the
    counsel after a discussion with the provost. The provost then drafted a
    final letter which was sent to the professor. The court was forced to
    decide if the drafts constituted communications relating to the purpose
    of seeking or rendering legal assistance and if they were made in
    confidence. The court viewed the drafts as a request for, and the
    offering of, legal advice. Further, it noted that the drafts were marked,
    “CONFIDENTIAL DRAFT.” Accordingly, the court upheld the
    confidentiality of the drafts and denied the professor’s discovery
    request. It stated that the test of confidentiality was “whether the client
    intended to keep the specific draft confidential and whether the client
    and the attorney took all steps reasonably necessary to prevent
Attorney-Client Privilege
• United States v. Stewart
  – Martha Stewart, under indictment for securities
    law violations, sent an e-mail to her attorney
    explaining her actions. She also forwarded a copy
    of the e-mail to her daughter. The U.S. attorney
    prosecuting her case sought access to the e-mail.
    The court concluded that Stewart waived the
    attorney-client privilege by sharing the e-mail with
    her daughter. However, it refused to compel
    disclosure of the e-mail’s contents because it was
    protected by the work product privilege.
Work Product Doctrine
•       What is the work product doctrine?
    –    Work done by the attorney in anticipation of trial is protected
         from discovery.
    –    It also requires that firms exercise reasonable care to
         prevent disclosures by staff.
    –    (Opposing counsel will sometimes seek to garner such
         information from staff with seemingly innocent inquires).
    –    Based on Hickman v. Taylor (1947)
    –    Incorporated into the Federal Rules of Civil Procedure and
         most State Rules.
    –    Reason for: So that attorneys can prepare their cases fully
         and confidentially.
    –    ABA Model Code goes beyond this to all “confidences and
    –    ABA Model Rules covers all “information relating to
Work Product Doctrine
•   What are the two kinds of trial
    preparation materials covered under
    the work product doctrine and how
    do they differ?

    – Includes mental impressions (unqualified
    – or informational material (qualified
Preventive Law
• Objectives
  – Arrange business plans and methods to
    maximize profits through:
     • Avoiding losses through fines and damages
     • Reaching business goals through enforceable
       contracts while avoiding government prohibitions
• Roles
  – Lawyer Consulting
  – Client Communication

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