Monthly Archives: August 2012

Daredevil #17

Today’s post covers the latest issue of Daredevil, “Divide by Hero.”  Mark Waid’s run continues to be terrific, and this issue was particularly good.  Most of it is a flashback, so it’s a good issue to check out even if you haven’t been following the series (which you really should be).  A couple of legal issues stood out in this issue, including one involving my personal area of practice, patent law, which doesn’t come up terribly often in comics.  Minor spoilers ahead.

I. Invention Promotion Companies and Other Scams

Part of the flashback story involves a scientist, Elliot Pasko, who had been taken in by a company called Fortknight, which Foggy Nelson describes as “a predator corporation posing as a no-strings endowment fund.  They stake promising young inventors…then bury them with bogus ownership claims, patent infringement allegations, and worse whenever their ‘beneficiaries’ strike gold.”  As it turns out, there are quite a few scams aimed at inventors, though they usually don’t take this form.  Nonetheless, what Foggy describes could work.

The most common form of scam is the ‘invention promotion company.’  The United States Patent and Trademark Office has a useful page that details the common elements of these scams.  Basically they lure inventors with unwarranted promises of success at the Patent Office and easy money, when in reality they either deliver nothing or, at most, an often useless design patent that protects only the non-functional design of a thing.  The kinds of companies are a real problem, particularly for individual inventors, but Fortknight seems to be operating a different kind of scam.

I suspect that the way Fortknight’s scam would work is that the company would promise research funding, but hidden in the agreement would be an assignment of patent rights from the inventor to Fortknight.  Then, as soon as the research was far enough along to apply for a patent, Fortknight would pull the rug out from under the inventor, obtain a patent, and sue the inventor if he or she tried to continue their research elsewhere.  If an inventor assigns their rights, then they can be prevented from making, using, or selling their own invention just like anyone else.

As a side note (and as discussed in our review of Daredevil: Yellow), there’s no reason that Nelson & Murdock couldn’t take this case, since it involves patent litigation rather than practice before the United States Patent & Trademark Office.

II. Profit Sharing and Legal Ethics

Foggy took Pasko’s case under curious terms: “all the pro bono he required in exchange for ten percent of future profits.”  Now, pro bono doesn’t necessarily mean free; it can also mean working at a substantially reduced rate, but this isn’t pro bono work.  This is for-profit work (literally) that is effectively a kind of contingent fee, since if Pasko loses then there definitely won’t be any profits.  But is this kind of thing ethical?  The answer is a highly qualified yes.

In New York, “A lawyer may accept an equity interest in a client if the lawyer complies with the Rule of Professional Conduct governing business transactions with clients and the acceptance does not otherwise create a conflict for the lawyer or result in an excessive fee.”  NYSBA Opinion 913.  Entering into a business transaction with a client in this way brings with it several requirements, including that the transaction be fair, reasonable, and communicated in writing.  The client must also be advised of and be given a reasonable opportunity to seek independent legal advice regarding the transaction.  And the client must communicate his or her informed consent in writing.  Contingent fee arrangements likewise have their own rules, mostly to do with carefully explaining the nature of the fee agreement in writing.  See NY Rule 1.5(c).

Other jurisdictions have taken a similar approach.  See, e.g., LA County Bar Assoc. Formal Opinion No. 507; DC Bar Opinion 300.

I’ll admit that I was a bit surprised by this result.  I knew that lawyers could, under some circumstances, enter into business transactions with clients, and that lawyers could take contingent fees.  But I did not expect that the two could be ethically combined.  I would have thought that combining the risks involved would simply be too much and that ethics committees would opt for a bright line rule prohibiting the practice.

III. Conclusion

Daredevil doesn’t always get the law right, but it’s better than most comics on that score.  And despite my initial skepticism, it looks like it was right this time around as well.  Kudos to Mark Waid for combining accuracy and excellent storytelling.

Under the Dome

Under the Dome is Stephen King’s 2009 novel about a small Maine town—Chester’s Mill, Maine, located approximately here—which is shut off from the outside world after an invisible, semi-permeable barrier slams down around it one October morning. It’s an extended (1,100 pages certainly counts as that) look at what happens to human society when it is completely isolated. If this is sounding a little like the setup for Lord of the Flies, there’s a reason for that. Turns out the how and why of the Dome aren’t really the point so much as what happens to the characters as a result.

There are two things we’re going to look at here. One has to do with martial law, the other with municipal government. There are some spoilers here. Continue reading

Dodging Missiles, Attracting Liability?

Our latest monthly column at Subculture for the Cultured is up. It was inspired by this question from Promethee:

I’m watching Ironman 2 (I know, I’m late) but something that seems to happen quite a lot (and come to think of it happens in like every other superhero movie) is the scene where the hero is being chased by some sort of tracking missiles. At that point, the hero flies at some sort of building and when really close, takes a tight turn. The missiles can’t turn that tightly, so they fly into the building destroying it and killing a bunch of people. Of course, whoever fired the missiles has plenty of liability coming at them. But what about the hero who performs the maneuver?

Check it out!

Daredevil: Born Again

Today we have a quick legal ethics note from the classic 1986 Frank Miller Daredevil storyline, Born Again (which is available collected in trade paperback).  At the outset of the story, Wilson Fisk (aka the Kingpin) sets out to destroy Matt Murdock’s life.  One of the first steps is to get him disbarred.  To do this, Fisk frames him for bribing a witness to perjure himself (aka subornation of perjury).  A brilliant defense by Foggy Nelson keeps him out of prison, but Murdock nonetheless loses his license to practice law.  But how does that work?  Can a lawyer be ‘sentenced’ to losing their license?

The answer is ‘sort of, at least in New York.’  First, let’s take a closer look at the facts.

I. Bribery and Perjury

In New York, bribing a witness is a class D felony. N.Y. Penal Law § 215.00.  Subornation of perjury is not a separate offense, but rather the person doing the suborning is guilty of perjury by accomplice liability.  See Staff Comments of the Commission on Revision of the Penal Law. Revised Penal Law. 292-93 (1965).  First degree perjury (i.e. swearing falsely and making a material false statement as part of one’s testimony) is also a class D felony.  N.Y. Penal Law § 210.15.  Class D felonies are punishable by up to 7 years imprisonment with a mandatory minimum of at least one year, unless:

the court, having regard to the nature and circumstances of the crime and to the history and character of the defendant, is of the opinion that a sentence of imprisonment is necessary but that it would be unduly harsh to impose an indeterminate or determinate sentence, the court may impose a definite sentence of imprisonment and fix a term of one year or less.

However, it is not clear to me whether there was any mandatory minimum provision at all in 1986, and the court may have had discretion to sentence Murdock to probation only.  So that could explain why Murdock didn’t end up in prison despite what happens next.

II. Disbarment

As Fisk narrates, “Even as he hears the much-tempered verdict of the court that he will not face a prison sentence, as I had planned—that all he will lose is his license to practice law…whatever reactions he has are hidden—even, I suspect, from himself.”  So Murdock doesn’t receive a prison sentence, but he does lose his license.  But how could a criminal court do that?

This is a fair question.  Disbarment is not a criminal punishment per se.  In New York, for example, attorney discipline is ordinarily handled by the Appellate Division (i.e. the intermediate courts of appeal).  However, in New York, a felony conviction results in an automatic disbarment.  N.Y. Judiciary Law § 90(4)(a).  We discussed this  last year with regard to She-Hulk’s disbarment.  So while the trial court wouldn’t technically sentence Murdock to losing his license, a conviction on either felony count would result in immediate, automatic disbarment with no action from the Appellate Division necessary.  Since the court undoubtedly knew this would happen, it could take that into account when deciding not to sentence Murdock to prison.

III. Conclusion

The circumstances of Matt’s disbarment are a little odd, but it actually hangs together pretty well due to New York’s unusual felony disbarment rule.  Since Murdock loses his license right off the bat, there’s not a lot of legal issues in the rest of Born Again, but it’s a great story in its own right.

However, we will quibble with the fact that Matt is summoned to a grand jury hearing “and not as a witness” (i.e. as the defendant).  Lots of comic books get this wrong, so we’ll say it again in the hope that comic book authors won’t keep making the same mistake: grand jury hearings are secret.  There’s no judge, no public gallery, and the defendant (technically only a suspect at that point) is not present or represented by an attorney.  There’s just the prosecutor, a court reporter, the grand jury, and one witness at a time.  We know that means grand jury scenes sometimes have to be depicted without the main character present, but on the other hand “a grand jury would ‘indict a ham sandwich,’ if that’s what you wanted,” so we recommend not bothering.  Just assume that the grand jury handed down an indictment and move on to the actual trial.

Manos: The Hands of Fate

No, really. We’re going to talk about Manos: The Hands of Fate, one of the worst movies ever made, with a rare 0% on Rotten Tomatoes. Even the title (“Hands: The Hands of Fate”) is terrible. The movie isn’t just bad, it’s downright incompetent. It might not even be possible to make a movie this bad anymore; two guys with an iPhone would have infinitely better production values.

The immediate reason for talking about this is that the guys from Rifftrax, i.e., the ones responsible for the absolutely classic MST3K episode featuring the movie, just did a live riffing of the movie on August 16, 2012. You should have been there. They’re doing Birdemic in October, just in time for Halloween. The way it works is that the three of them show up live in a theater—this time it was in Nashville—and the show is broadcast live to theaters around the country. It’s an enormously good time.

Anyway, believe it nor not, there is a very, very important legal issue to be discussed here. A legitimate one, one which has been the subject of some of the most significant U.S. Supreme Court decisions in the last fifty years. Remember the two teenagers making out in the convertible that kept getting busted by the movie’s Barney Fife equivalent? They represent a perfect opportunity to discuss loitering and its enforcement. There aren’t any spoilers here to speak of—it’s not like it’s possible to spoil this movie anyway—so here we go. Continue reading

Marriage and the Multiverse

Today’s question comes from Marcus, who pointed me to this question from James Nicoll: “Under current US law, can djinn marry humans?”  This was apparently inspired by the show I Dream of Jeannie, in which a human marries a genie.  The broader issue of inter-species marriage comes up frequently in comics, however.  For example, Clark Kent, a non-human Kryptonian, has married Lois Lane, a human.  In both cases the true nature of the participants was not public, so the issue didn’t come up directly.  But if Clark Kent had been ‘out’ as Superman or if Jeannie had been ‘out’ as a genie, would the marriage have been legally recognized?

Alas, probably not.  First, we can consider states that have laws prohibiting same-sex marriage, as they have narrowly defined marriage laws.  But even states that allow same-sex marriage do not go so far as to recognize Kryptonian/human or genie/human marriage.

Many US states prohibit same-sex marriage, either by statute or constitutional provision.  The exact language varies, but typically some variation of “one man and one woman” is used.  Precise definitions of “man” and “woman” are typically not found in state statutes, but the plain meaning of the terms is a male human and a female human, respectively.  This can be seen by reference to animal cruelty laws, which delineate humans as separate from other kinds of animals.  See, e.g., Code S.C. § 47-1-10(1) (“‘Animal’ means a living vertebrate creature except a homo sapien.”); R.S.Mo. 578.405(2)(1) (“‘Animal’ [means] every living creature, domestic or wild, but not including Homo sapiens”).

At the federal level, 1 U.S.C. § 8 defines “person” to include “every infant member of the species homo sapiens who is born alive at any stage of development.”  This is an inclusive rather than exclusive definition (and it’s not specifically about marriage), but it underscores the point that only humans are people.  The federal Defense of Marriage Act provides (for now) that “the word ‘marriage’ means only a legal union between one man and one woman as husband and wife, and the word ‘spouse’ refers only to a person of the opposite sex who is a husband or a wife.”  Combined with 1 U.S.C. § 8 and the plain meaning of the words, federal law also appears to only contemplate marriage between humans.

While Congress may have the power to grant legal personhood to non-human animals (see Cetacean Community v. Bush, 386 F.3d 1169 (9th Cir. 2004)), it has not done so yet.  If non-human animals do not have standing to bring suit in court, then marriage would seem to be right out.

And non-humans could be granted legal personhood without necessarily granting them the right to marry humans.  If cetaceans or primates are ever granted personhood, for example, it is incredibly unlikely that a human could marry a dolphin or a chimpanzee.  Thus, the fact that an ‘out’ Clark Kent was allowed to become president does not necessarily mean he could legally marry Lois Lane.  The Constitution merely requires that the president be “a natural born citizen,” but there are many citizens that are prohibited from marrying who could nonetheless theoretically be elected president (e.g. someone who was mentally incapable of consenting to marriage).  It’s about as unlikely as an alien being elected president, but it’s legally possible.

A growing number of states recognize same-sex marriage, but their laws are still framed in terms of humans.  For example, Vermont’s law defines marriage as “the legally recognized union of two people.” 15 V.S.A. § 8.  Vermont further defines ”person” as “any natural person” plus various kinds of legal entities such as corporations. 1 V.S.A. § 128.  So once again we can fall back on the fact that non-human animals are not (presently) persons.  See, e.g., Cetacean Community, 386 F.3d at 1175-79.

So what does this mean for Jeannie and Tony, Lois and Clark, and other cross-species couples?  For starters, their marriages are likely void, and there may also be criminal liability (e.g. fraud).  It is possible that the courts could come to the rescue here and recognize genies, Kryptonians, Tamaraneans, etc, as legal persons who have the right (perhaps under Equal Protection) to marry humans.  But given the slow progress of marriage equality between humans (Loving v. Virginia was decided in 1967; same-sex marriage is still widely prohibited), this seems like a bit of a stretch.

Hancock

Hancock is the 2008 superhero movie starring Will Smith and Charlize Theron about the interesting intersection of the superhero and the… homeless?

Or something like that. The movie is actually way more interesting than it has any right to be, not only for the obvious premise, i.e., a superhero who has to deal with property damage and people not being thrilled to see him, and the more mythological premise, which is a surprisingly creative take on the superhero concept. It also has the rather unusual benefit of not being an origin story. We first see Hancock passed out on a public bench, apparently mid-way through a multi-day drunk. We eventually learn his background, but it’s not the point of the movie.

But this being the blog that it is, we’re more interested in the former than the latter. Mythology is great and all, but we’re interested in the nitty, gritty, legal logistics. We’ll try to keep this mostly spoiler-free, but you have been warned.

I. Hancock Goes to Jail

There are an unknown impliedly large number of outstanding warrants for his arrest, only no one’s figured out how to do that, or to serve him with one of the hundreds of subpoenas he faces. As a plot point, Hancock voluntarily surrenders himself to the police. This is supposed to be a first step towards rehabilitating his image. And it’s probably what would need to happen for a superhero who has been acting outside the law before he could become “legit”.

The process is a bit abbreviated, as we basically just see Hancock go from a press statement at his surrender straight to jail. There are a few steps missing here, but with one exception, the process could go about as quickly as it seems to.

First, turning yourself into the police, even if you have an outstanding warrant, is not a ticket straight to jail. It is, at best, a ticket straight to a holding cell. In the United States, there’s a difference between “prison” and “jail”. “Prison”, which is where Hancock goes, is typically where you go after you’ve been convicted (or pled guilty to) a crime, and generally a felony. You need to be serving a sentence of at least a year. So the fact that Hancock ends up here before he’s even sentenced—he has a conversation about what his sentence is going to be after he’s in prison—is a mistake. He’d probably go to “jail” first, which is where you sit if you’re waiting to be tried or you’re serving a sentence of less than a year, often a misdemeanor conviction. Even people who are going to plead guilty to a felony don’t go to prison before that happens.

But it can happen pretty quickly. The movie doesn’t discuss exactly what charges Hancock is facing—nor does it deal with the civil side of things at all—but the DA has presumably got charges all drawn up. If, as in Hancock’s case, the defendant doesn’t intend to contest the charges, even a little, one can go from indictment to prison pretty quickly.

Still, it may well take a few days, even if everyone’s trying to speed things along. The issue of bail would then come up. Hancock would seem to be the very definition of a “flight risk”. But his lawyer, whom we don’t meet, could point out that if Hancock decided he wanted to leave, all the king’s horses and all the king’s men couldn’t do jack about it. He’s there because he wants to be. Bail is specifically and solely intended to create an incentive for defendants not to flee before trial. Hancock doesn’t have any money, so it’s not like it’s going to matter to him. And the fact that the cops couldn’t really arrest him even if they wanted to might be good reasons to just let him out on his own recognizance. Then again, because Hancock is cooperating, he may just have waived any request for bail, which would get him into jail immediately.

So other than the fact that Hancock seems to start serving a sentence before he even pleads guilty to anything, the process seems more-or-less okay. Most of the legal stuff happens off camera, but the results are mostly plausible.

II. Necessity

The other thing the movie does really well is show the limitations of the “necessity defense.” We discussed this in the context of Superman stealing a bunch of iron bars to shore up a burning chemical plant in March.  Necessity is often described as a “lesser of two evils” defense.  The basic idea is that there are many actions which are tortious or even criminal which can be “justified” by the circumstances.

But however conceived, necessity isn’t going to work for Hancock in most of the property damage claims that have been leveled against him. Why? Because he didn’t really have to cause the vast majority of the damage he causes. He doesn’t need to shatter the pavement when he takes off or lands. He doesn’t need to crash into and through buildings when he flies around. And when he saves Ray from the train? He totally didn’t need to smash his car onto three others or cause a train wreck because he was too lazy to get out of the way.

This is something that more superheroes should probably take into account. Hancock is an obvious example because he’s a jerk about it, but even characters like Superman and the X-Men would be well-advised to take note. Just because you’re “fighting crime” or whatever does not automatically justify property damage. Nor is the fact that lives are in danger. It can serve as a justification, but there has to be some proportionality and connection with the underlying crime-fighting. At root, property damage has to be reasonably necessary to preclude liability. So if there is any less-destructive way of accomplishing the goal, a superhero could potentially be liable for any damage he causes, particularly if the damage is out of proportion to the threat. The movie really picks up on that, and the writers deserve credit for it.

III. Other Issues

The movie also raises several other issues which we’ve talked about previously. For example, Hancock is apparently immortal. We’ve done several posts on the subject. We’ve also done quite a few posts on insurance for superhero-related property damage. This seems like a situation where there probably would be coverage because Hancock’s activities would be really hard to characterize as war, civil unrest, nuclear-related, terrorist, or any of the other common exclusions found in property insurance policies. We’ve even got one on superhero spouses, which is not entirely unrelated.

IV. Conclusion

If you didn’t catch the movie the first time around, you really should. It’s one of the more under-rated superhero movies out there, and one of the very few that isn’t connected to either Marvel or DC. Its take on the relationship of superheroes to society is refreshing, and its mythology is compelling. It’s not a perfect movie, and the tone shifts rather abruptly in places, but in a genre that’s given us Green Lantern and Electra, it more than holds its own.

2012 ABA Journal Blawg 100 Nominations

Last year we were honored to be named one of the ABA Journal’s top 100 legal blogs.  The Journal is now accepting nominations for this year’s awards.  If you are a lawyer, law professor, or a law student, we invite you to consider nominating Law and the Multiverse.

Total Recall

Earlier this month, Total Recall hit theaters. This isn’t exactly a remake of the 1990 Arnold Schwarzenegger movie, but instead more of a parallel adaptation of “We Can Remember it For You Wholesale,” a 1966 Philip K. Dick short story. It’s a bad movie on multiple levels. For one thing, somebody needs to revoke the lens flare privileges of whoever thought sticking the effect in 50% of the shots in the movie was anything remotely like a good idea. Also, if you’re going to cast two actresses who look somewhat alike, in the same movie, and have them get in a fight, at least have the decency to have one of them dye her hair or something so the audience can tell who the devil is winning.

The premise is basically ridiculous. Both movies and the short story have two primary settings. The story and first movie have those settings be Earth and Mars. But this movie? England and Australia, connected by “The Fall,” a patently impossible tunnel through the center of the earth which is used as a daily commute between the “United Federation of Britain” and “The Colony.” It apparently takes seventeen minutes to travel approximately 8,450 km, about 30,000 km/hour. Surprisingly enough, this is only about twice as fast as physics suggests should be the case, but really, having a human colony on Mars seems a lot more plausible. Compared to moving hundreds of megatons of rock and dealing with the immense pressures near the Earth’s core, going to Mars seems downright trivial.

The other major feature of the movie is common to all three works, i.e., “Rekall,” pronounced “recall.” It’s a company that’s perfected the process of both reading and writing memories into the human brain. They bill themselves as a vacation or adventure company. Don’t have the money to do whatever? Want to do something squicky? For a modest fee, you can get those memories in a matter of minutes. The technology also extends to erasing and replacing existing memories. This raises two issues, both of which we’ve talked about before: amnesia and mind reading.

I. Amnesia

We actually looked at this in the abstract last year, when we concluded that in most cases, amnesia is not a bar to prosecution. The argument is that a person who has no memories of the charged offense can’t offer assistance to his lawyer. Unfortunately, the courts have pretty much roundly rejected this idea (with the possible exception of the D.C. Circuit). Amnesia can be considered in competency hearings, but it’s rarely dispositive and does not act as an automatic bar to prosecution.

The justification for the rule is largely practical. If the head trauma is really bad, the defendant will probably be incompetent for other reasons, independent of amnesia. If you’re catatonic, a lack of memories is the least of your problems. Further, most of the time when this comes up in real cases, the defendant is strongly suspected to be faking and/or on drugs. Amnesia isn’t actually all that common absent head trauma or drugs. The former is pretty obvious to spot, and the courts strongly disapprove of letting voluntary use of drugs or alcohol keep someone from justice. And even if a person has no specific memories of the crime in question, odds are really good that they will still be able to assist their lawyer. They’ll know who their family and friends are, so they can probably get a pretty good idea of where they’ve been. They’ll still be able to weigh the objective evidence, e.g., forensic and surveillance evidence. Etc.

But what about if one’s memories aren’t just missing, but have been completely replaced? What if Douglas Quaid, apparently a factory worker, is actually an intercontinental (or interplanetary) intelligence operative? That might be a different situation. Here, the accused probably would have no way of reconstructing their whereabouts. They’d simply have no idea what was going on. And in the presence of technology which makes that kind of thing plausible, a court might take that into account. Still, the court also takes into account the strength of the government’s case. If they’ve got the defendant dead to rights, an amnesiac but otherwise mentally competent defendant would probably be found competent (and guilty).

II. Mind Reading

The technology also apparently permits fairly accurate mind reading, to the point that messages can be planted in someone’s brain to be delivered to someone who reads said brain later on. This is Johnny Mnemonic territory. But what about the use of this technology in the case of a defendant that’s pleading amnesia? Might a court be able to order the use of the technology to determine if the defendant is telling the truth?

This is a closer call. On one hand, the Fifth Amendment does create a right against self-incrimination. We’ve discussed this previously and came to the conclusion that telepathy and mind-reading technology can’t be used to get evidence from a criminal defendant’s mind against their will at trial. But on the other hand, a court can order the psychiatric evaluation of a criminal defendant. Indeed, a defendant found incompetent can be held indefinitely and subjected to involuntary psychiatric treatment, including forcible medication. That’s exactly what happened to Jared Lougnher, the shooter in the 2011 Tucson shooting.

So could a court order the use of mind-reading technology for the limited purpose of determining competency? Probably. But statements given during a psychiatric evaluation to determine competency may not be used for any other purpose unless the defendant consents (i.e. is properly warned first) or the defense brings it up at the trial.  Estelle v. Smith, 451 U.S. 454 (1981).  As the Eighth Circuit explained in Wise v. Bowersox, 136 F.3d 1197, 1205 (1998):

No violation of the privilege against self-incrimination arises from a trial court’s ordering a defendant to undergo a psychological examination if the information gained in that examination is used solely to determine whether the defendant is competent to stand trial and not to show that the defendant is guilty or that he deserves a particular sentence.

Even without mind-reading technology, this is something to keep in mind. If a defendant wishes to assert any kind of psychiatric problem as a defense or delaying tactic, the courts and prosecution have pretty broad-ranging powers to investigate that assertion. And, as also explained in Wise, refusal to cooperate may result in an adverse inference (i.e. an assumption that the defendant must be faking it), so there’s not a lot of point to it.

III. Conclusion

Really, there’s not much to be said in favor of the movie. The movie itself doesn’t really involve any particularly interesting legal concepts. Its take on mind-reading technologies has interesting implications, but none of them are really worked out on screen. Given the complete implausibility of the rest of the movie (A society that can build a tunnel through the Earth’s core can’t figure out how to clean up the landscape after a chemical weapons release? Really?), this one’s best skipped.

Nelson & Murdock Becomes Just Nelson

Today’s post is about the latest issue of Daredevil.  (If you aren’t following Mark Waid’s run on Daredevil, you should be.  If you want to catch up, the first six issues and issues 7-10.1 are available in trade paperback.)  After an unannounced nine day leave of absence from the firm on Daredevil business, Matt Murdock returns to find his law partner Foggy Nelson kicking him to the curb, at least for the time being.  So how does a law firm dissolve, and what are the consequences for Nelson and Murdock as newly independent attorneys?

I. Dissolving a Partnership

Since the sign on the door just says (or rather said) Nelson & Murdock, it’s likely that the firm is organized as an ordinary partnership, as opposed to a limited liability partnership or a professional corporation.  Typically those kinds of businesses are legally required to indicate their status (e.g. “Nelson & Murdock, LLP” or “Nelson & Murdock, P.C.”).  It is possible that Nelson & Murdock is an LLP or PC that registered “Nelson & Murdock” as a fictitious name (called an assumed name in New York), but that’s needlessly complicated.

In any case, there are a couple of different ways that the partnership could be dissolved.  If the partnership was a “partnership at will” (i.e. a partnership that was established for no specific purpose and no particular duration), then any partner can dissolve it at any time.  See, e.g., Dunay v. Ladenburg, Thalmann & Co, Inc., 170 A.D.2d 335 (1991).  If that were the case here, then Foggy could certainly take his ball and go home, so to speak.  All that is required is that Foggy’s actions “must manifest an unequivocal election to dissolve the partnership.”  In this case, Foggy says “You need to leave. … I’ve delegated your workload, I’m taking your name off the door, and I’m demanding a break. … We’re through.”  That seems pretty unequivocal to me.

However, it seems unlikely that two competent attorneys would form a partnership without a partnership agreement.  And if the firm were actually an LLP or PC then there would definitely be a partnership agreement or corporate charter.

A partnership agreement can specify, among many other things, how, why, and when the partnership can be dissolved.  In this case, Matt had been completely out of communication for nine days, unannounced, and there was evidence that he had unresolved issues with depression.  Being unresponsive to clients is both unethical (see New York Rules 1.3 and 1.4) and can be the basis for a malpractice action.  If mental health issues interfere with a lawyer’s ability to perform his or her job competently, then that’s also a problem.  New York Rule 1.1.  It’s highly likely that this would meet the standard for dissolving the partnership under the partnership agreement.  Since Matt was the one ‘in the wrong,’ it’s not surprising that Foggy would keep the office and (apparently) the clients.

Once the partnership was dissolved, it would technically remain in existence long enough to wind up its affairs.  N.Y. Partnership Law § 61.  This would give the firm time to, for example, disburse the partnership assets to the partners, transfer clients to Nelson’s new firm, etc.

II. Consequences

Foggy appears to be keeping the firm’s clients, either by the terms of the partnership agreement or by default, since Matt is in no state to represent them at the moment.  But after Matt gets cleaned up, could he approach his former clients?

As a general rule, non-competition and non-solicitation agreements either cannot be enforced against attorneys or can be enforced only very narrowly.  New York Rule 5.6; Graubard Mollen v. Moskovitz, 149 Misc.2d 481 (Sup. Ct. 1990).  In fact, it would be unethical for Murdock or Nelson to offer or accept an agreement that restricted their right to practice after terminating the partnership.  This is very different in other fields, where noncompetes are common.  The courts have decided that choosing a lawyer is special in that regard.  So Murdock would likely be free to set up his own firm and even to attempt to solicit his former clients to come over to the new firm.

III. Conclusion

It will be interesting to see where Waid takes this.  Is this the end of Nelson & Murdock?  Will we see the two on opposite sides of the courtroom in the future?  Exciting stuff!