5.17.11 Complex Litigation

Midterms handed back. Average 79.2%
Problems- Failure to outline, failure to proofread, lack of analysis.

6 Free Speech Exceptions
1. Clear and present danger (of inciting imminent lawless action)
2. Fighting words
3. Obscenity
4. Defamation
5. False advertising
6. Compelling government interest

6 Free Speech Concepts
1. Void for vagueness- law must be specific. "Offends passersby" struck down. If you are to curtail speech by law, you must be specific.
2. Void for overbreadth- "No nudity on tv until after 9pm" struck down, (diaper commercials, breast cancer psa).
3. Prior restraint- "A rule of ordinance restricting speech before it is uttered." Prior restraints are presumptively unconstitutional.
a) Injunction (court) -
b) Permit (government body) (Cantwell case) -
c) Licensing (tv/radio) - control of content through licensing
d) Censorship (FCC) -
4. Symbolic Speech - Conduct protected as speech. EX Boston Tea Party.
a) Pure speech - Literal talk, gets most amount of protection.
b) Speech plus (verbal and conduct) - Marching/rally/parade while delivering spoken message, gets less protection. "Freedom of Expression"
c) Symbolic speech (conduct) - EX Stromberg case, still protected, but less than other two.
5. Traditional forums - Areas that are known traditionally for free speech- town squares, public parks, city hall, city streets, etc. get more protection than other locations.
6. Police powers (time/place/manner) - Health, safety, welfare of citizens. State says- where, when, how, NOT if.

Speech Cases
New York Time v. U.S. (1971) - Prior restraint/Injunction- Pentagon Papers- leaked to NYT, injunction to stop publishing of papers. (Exception on clear and present danger- not granted, papers published.)
National Socialist Party v. Skoke (1977) - Prior restraint/Permit- Nazi March in Skoke IL- (Exception on clear and present danger- not granted.)
Stromberg v. California (1931) - Symbolic Speech- Summer camp red flag for communism- "Illegal to display any emblem of opposition to organized government."
Texas v. Johnson (1989) - Symbolic Speech- Burning American flag, protected. (Rehnquist dissent- An inarticulate grunt or roar.) (88% of American's believe it should be illegal.)
U.S. v. Haggerty (1990) - WA flag burning case
Edwards v. South Carolina (1963) - Protest march against discrimination while singing Star Spangled Banner- Symbolic speech. This case tests all 6 free speech concepts.
NOT required to know any of these cases for final.


Bankruptcy

"Capitalism without bankruptcy is like Christianity without hell."

Helps Everybody
Debtor- Fresh Start
Creditor- Process may allow creditor to step in and run company, etc. to benefit creditor
Society- rehabilitate to become successful tax paying citizen

Constitution allows bankruptcy
Relatively unique to US.
Refuge for the financially irresponsible, but also natural disaster, divorce, and severe economic dislocation (getting fired), illness = #1 cause, 62% of bankruptcies.

Every state has financial law to help debtors. Garnishment, foreclosure, receiverships.
Bankruptcy- Federal law only- Title 11
Chapter 7 - Liquidations - "no asset 7"- call it quits, ends business.
Chapter 9 - Municipalities - City goes bankrupt
Chapter 11 - Corporate reorganizations - buys time to restructure and emerge healthy, does not end business.
Chapter 12 - Family Farms - Designed for specific needs of farmers
Chapter 13 - Regular income reorganization - (previously "wage earner") extends time for repayment, usually at less than full amount owed. (doesn't need to be a job)
Chapter 15 - Foreign corporations (very limited)
7, 11, 13- most common


11 USC § 362 Automatic Stay ("362 Motion")
When a debtor files bankruptcy the second they file the automatic stay goes into effect to and protects debtor from any effort to collect a debt. (garnishment, foreclosure, lawsuits, collection notices, etc.) Anything done to collect a debt is VOID, after bankruptcy is filed.

Adequate Protection Hearing- 362(d)
Judge gives Debtor choice- lift stay or give adequate protection to creditors, assure them that they will not take the loss.
3 Forms
1. Cash - Stream of payments, may be less than amount owed.
2. Replacement Lien - Lien on another property, etc.
3. Equity in property - If sufficient equity in property to protect creditor, then stay will not be lifted.
Doesn't stop paternity actions, alimony, and criminal actions.

Before you can file you must go through professional debt counseling.

Debt forgiveness is TAXABLE. Debts discharged through bankruptcy are NOT taxable.

Chapter 7
Anybody can file. (Except cities, savings and loans, and banks, railroads.)

Involuntary Chapter 7 - Creditor can force Debtor
11 or fewer creditors, if one creditor is owed at least $10,775 and is not paying in reasonable course. (only one creditor must agree)
12 or more creditors, 3 must agree to put you into bankruptcy, one must be owed at least $10,775.
Trustee appointed- Marshall assets
Gather, liquidate, distribute to creditors.
If no assets, report no assets.
11 USC § 522- Exempt property- Fresh start, must allow enough to manage.
State also has exempt list- RCW 6.13-6.15
Must decide between State or Federal (no pick and choose, State usually more generous.)
Texas, Florida, Nevada- cannot take primary residence to satisfy debt, regardless of equity.
Tax Evasion (illegal) vs. Tax Avoidance (Legal)

Exempt property- It is NOT illegal to use non-exempt assets to purchase exempt property, exemptions exist to be taken advantage of.
Tools of the trade $2025 (stuff you need to make a living.)
Personal/Household goods ($475/$9850)
Health aids (100%)
Car ($3225)
Furniture ($525/$10,775)
Athletic/sporting equipment - In re Griffin
IRA
Prepaid mortgage/rent
Car repair
Life insurance
Down payment on house
Jewelry ($1350)

Liens- exemption is impaired
Trustee has power to set aside liens, provided the creditor has placed the liens. (Not by the bank, as a loan to you. If so you lose the lien exemption.)

Preference - § 547
Can you pay one creditor over the other? (Pay back your uncle, etc.)
If one creditor gets paid and the other does not, the Trustee can go to that creditor and DISGORGE the amount paid. If one creditor gets more than they are entitled to, the Trustee can get it back. Trustee goes back 90 days from filing of bankruptcy. If creditor is an "insider" (friends, family, etc.) Trustee can go back a year to examine who was paid.

Fraudulent Transfer § 548
Anybody that the Debtor gives property to for less than reasonable value. (Doesn't need to be market value, obviously a distressed sale.) Can be DISGORGED for a year. If you do not still have it, you are responsible for the value of it (NOT the price you paid).