Media Clips

USA Today: Professor Lawless on bankruptcy filings
USA Today (June 3) -- While well below the record 2 million consumer and commercial bankruptcy filings in 2005, the number of filings is up sharply from last year’s 1.1 million, says Robert Lawless, a professor of law at the U. of I.
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Professor Lawless explains bankruptcy filings on Minnesota Public Radio
“Marketplace Money” (Minnesota Public Radio, June 4) -- Chart created by U. of I. law professor Robert Lawless shows the spike of bankruptcy filings prior to the adoption of the 2005 bankruptcy law.
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New York Times: Professor Dharmapala on Homeland Investment Act
The New York Times (June 5) -- A study titled “Watch What I Do, Not What I Say: The Unintended Consequences of the Homeland Investment Act” was released this week by the National Bureau of Economic Research. It was written by Dhammika Dharmapala, a law professor at the U. of I.; C. Fritz Foley, a professor of finance at Harvard Business School; and Kristin J. Forbes, a professor of economics at the Massachusetts Institute of Technology.
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Professor Tabb on Phoenix Coyotes in Bankruptcy360 (subscription only)
Bankruptcy360 (May 26) -- Tucked away in a relatively secluded quarter of the Arizona desert, the National Hockey League's Phoenix Coyotes rarely drew much attention. That all changed when the team, which has lost $73 million over the past three years along with seemingly countless games, filed for bankruptcy protection May 5.
Coyotes Fight May Spell Big Changes For Pro Sports

Professor Melbinger in Chicago Tribune on CEO compensation
Chicago Tribune (May 26) – “We’ve been telling clients, ‘You should look at TARP as a blueprint for what will roll out to the rest of corporate America,’” said Mike Melbinger.
CEO Pay: Shareholders yearning for a say


AP: Professor Beckett on Veterans Courts
The Telegraph (from The Associated Press; Alton, Ill., May 25) -- Steve Beckett, a U. of I. law professor, says he has no legal objection to the idea of veterans courts – an option offered to offenders whose crimes, mostly misdemeanors, are believed to be related somehow to their military service – but he questions the need to create a system for just one group.
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Chicago Daily Law Bulletin: Professor Thomas on summary judgments
Chicago Daily Law Bulletin (May 22) -- U. of I. law professor Suja A. Thomas is on a campaign to stop judges from dismissing so many cases through summary judgment.

Professor Thomas: Study shows judges’ backgrounds matter in high court selection
Some federal judges are tossing out civil cases based on their own opinions, a disturbing trend that makes background checks even more important in the search for a new associate justice for the U.S. Supreme Court, a University of Illinois legal expert says.
Read UI News Bureau interview with Professor Suja Thomas…

Peoria Journal Star: Professor Solum on Sotomayor nomination
Journal Star (Peoria, Ill., May 27) -- Sonia Sotomayor, President Obama’s nominee for associate justice on the U.S. Supreme Court, “knows the problems faced by trial-court judges and the difficulties trial-court judges sometimes have in adapting the abstract theoretical law to real-world courtroom situations,” says Lawrence Solum, a law professor at Illinois.
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Los Angeles Times: Professor Kar on Sotomayor nomination
Los Angeles Times (May 26) -- Robin B. Kar, a professor of law at Loyola Law School Los Angeles who will become a U. of I. law professor in the fall, clerked for U.S. Supreme Court associate justice nominee Sonia Sotomayor on the appeals court.
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Professor Kaplan: ‘Contracts adding legal twist to family health care’
Financial contracts to care for sick or aging relatives – nearly unthinkable just a decade ago – are drawing new interest as everyday Americans wrestle with the time and expense of providing long-term health care, a University of Illinois legal expert says.
Read UI News Bureau interview with Professor Kaplan…

This story ran in Medical News Today, News-Medical.net, PhysOrg.com, Senior Journal, and National Underwriter.

“A Minute with…” Legal Scholar Richard Kaplan on Taxes and Health Coverage

Editor’s note: A decades-old tax exemption on employer-provided health insurance is drawing attention as Congress tries to find money for an Obama administration push that would expand health care coverage to every American. Law professor Richard L. Kaplan, an expert on the U.S. tax code, examines the potential consequences in an interview with News Bureau Business & Law Editor Jan Dennis.

Why is Congress trying to change the tax treatment of employer-provided health insurance?
President Obama has indicated that health-care reform is his major domestic priority this year, and most of his proposals would increase government expenditures substantially. He has suggested various tax increases to pay for these proposals, but is especially interested in redirecting funds currently in the health-care system. A change in the tax treatment of employer-provided health insurance fits into this conception. And within that context, the current tax exclusion of such insurance is the single biggest source of funds that might be tapped.

Who would be affected by this change?
That depends on the scope of the changes enacted. Some policymakers want to put a dollar limit on the amount of health insurance premiums that can be excluded from taxation. That approach was actually part of the tax simplifications suggested by President George W. Bush’s 2005 tax-reform panel. Depending on the limit chosen, this change would affect only employees with especially costly health insurance plans. But other policymakers want to reduce the exclusion on a sliding scale based on an employee’s income from all sources, so-called “adjusted gross income.” That change would apply primarily to upper-income employees, at least initially. That is, once this sliding scale feature is in place, Congress could easily lower the thresholds to affect more employees. In fact, if revenue generation is the main concern, the limit might be set fairly low, thereby affecting a significant number of employees and their families.

Is anyone proposing to eliminate the tax exclusion entirely?
Yes. Health economists and some tax specialists have advocated eliminating this exclusion entirely for years. The previous administration took this very position, as did President Reagan two decades earlier. The idea is to put Americans on an even playing field in terms of securing health insurance, rather than favoring those persons whose employers arrange for their employees’ health insurance. The concern with the current tax exclusion is that people do not know the cost of their health insurance and tend to overuse health services. Eliminating the exclusion, some contend, would give employees more “skin in the game” and make them more sensitive to the cost of health care.

Why was the tax exclusion enacted in the first place?
Actually, the tax exclusion is a result of efforts during World War II to provide employees with additional compensation in the face of wartime wage controls that precluded increases in salaries. The tax exclusion evolved from this strategy without any real determination that it was appropriate. I examine this history and some of its impacts on employer-provided health insurance in my article, “Who’s Afraid of Personal Responsibility? Health Savings Accounts and the Future of American Health Care,” available at: http://papers.ssrn.com/sol3/papers.cfm?abstract_id=805825, specifically pages 537-548.

What would happen to health insurance if these changes were made?
No one knows for certain, and the results would likely be different depending upon the specific change enacted. For example, labor unions have negotiated very comprehensive health plans over the years, with low or no deductibles and very limited co-payment obligations. This strategy makes economic sense when health insurance premiums are excluded from taxable income while higher wages are taxable. What happens to the workers covered by those agreements when the tax treatment of health insurance is changed midstream? This concern with fairness was undoubtedly one of the reasons that candidate Obama opposed changing this tax exclusion during last year’s election campaign. But the bottom line is that more than just money is involved, and one cannot change a tax provision that has been in place for more than 60 years without some serious repercussions.

“A Minute with…” Legal Scholar Lawrence Solum about Sonia Sotomayor

Editor’s note: Sonia Sotomayor, President Barack Obama’s nominee for the U.S. Supreme Court, has more than just a personal story rooted in the American dream, law professor Lawrence Solum says. Solum, a constitutional law expert who closely follows the high court, discusses the historic nomination of the woman who is the child of Hispanic immigrants and rose from housing projects to the federal bench. Solum was interviewed by News Bureau Business & Law Editor Jan Dennis.

What is your impression of U.S. Appeals Court Judge Sonia Sotomayor?
First and foremost, Judge Sotomayor is a brilliant jurist with broad and deep experience. She is a summa cum laude graduate of Princeton and was an editor of the Yale Law Journal. She has been a prosecutor with the Manhattan district attorney’s office and a corporate lawyer. She has experience as both a federal trial judge and as a federal appellate judge. Although many recent Supreme Court justices have brought some of those experiences to the court, Sotomayor has firsthand knowledge of the law from more perspectives than any nominee in last 40 years.
Second, she is respected by those who know her well. Lawyers who appear before her say that she is very well prepared and that she asks tough, smart questions. Professor Robin Kar, who will be joining the University of Illinois College of Law faculty this summer, was a judicial clerk for Sotomayor and says that she has one of the most brilliant minds he has ever encountered. Everything we know about Sotomayor suggests that she is an excellent judge.Third, she has an amazing personal story.  Sotomayor is the child of Puerto Rican immigrants, and grew up in a housing project in the Bronx. From the projects to Princeton would be pretty amazing by itself. Her accomplishments suggest that she is simply an extraordinary individual.

How would she affect the liberal or conservative balance of the court, if at all?
Political scientists have been carefully studying the “ideology” or political leanings of judges for decades now. Based on her record, Judge Sotomayor appears to be very similar to Justice (David) Souter, whom she will replace. Of course, many Supreme Court justices change their views after they join the court, but even if Judge Sotomayor were to become more liberal, her appointment would not change the balance on the court. There are now four conservative justices, one swing justice (Anthony Kennedy), and four liberal justices. The balance of power on the court is unlikely to change unless President Obama is able to nominate a replacement for Justice Kennedy or one of the more conservative justices – Alito, Roberts, Scalia, or Thomas. By the way, a lot of what the court does is not very political. Liberals like Justice Stevens and conservatives like Justice Scalia agree on many cases. Much of the Supreme Court’s work involves the nitty-gritty work of keeping the law in good order. I think Judge Sotomayor will make an important contribution by bringing a trial judge and trial lawyer’s perspective to the court.

Are there any important cases pending that could be influenced if Sotomayor is confirmed?
The short answer to this question is no. The current term is almost over, and the court’s docket for next year has not yet been set. Of course, there are important cases every term. Justice Sotomayor, if confirmed, will likely serve for 20 years or more. During that time, all of the great constitutional issues of our time will come before the court – abortion, affirmative action, the right to bear arms, presidential power, and on and on.

Was Sotomayor a good choice in light of grumbling about the lack of diversity on the court, which now has just one woman, one black and no Hispanics?
A diversity of life perspectives is surely a good thing. Judging is a mix of legal knowledge, logic, and the ability to understand the real-world consequences of legal rules. Judge Sotomayor will see some issues from a perspective that is a little (or a lot) different from her colleagues on the court. In some cases, that difference in perspective may enable the court to make better decisions.
The appointment of a Latina is important to many Americans of Hispanic and Latin American origins for another reason – their pride in this historic nomination. That is surely something to celebrate, but in my opinion that is not a very good reason to appoint someone to the Supreme Court. Of course, I am not the president, and many presidents have made Supreme Court appointments for political reasons. Perhaps the most famous example is President Eisenhower’s appointment of Earl Warren, which was purely political. I am not a mind reader, but the political pundits are sure to speculate that Sotomayor’s ethnicity and gender were key factors in the president’s decision.

President Obama has said he wants a justice who understands how laws affect people’s daily realities. What qualities do you think Americans should be most concerned about in a new justice?
In my opinion, the most important characteristics of a great justice do not depend on gender, race or social background. Great justices have great legal minds. They are learned in the law, and have the ability to see the deep structure in what we call “the seamless web of the law.” Great justices are wise – they understand how the legal system works in the real world. I don’t know if Sonia Sotomayor will be a great justice, but I do think she has the right background to become one.
There is a lot of talk about “judicial activism” these days. Some of that talk is just political rhetoric, but I strongly believe that judges are not just politicians in robes.  A great Supreme Court justice cares about the law and its integrity. One of the issues that will be raised during Judge Sotomayor’s confirmation hearings will concern her judicial philosophy. Does she believe that judges should use the law to achieve their own vision of social justice? Or does she believe that the values that count are those that we find in the law itself? The rule of law is valuable, but it may be more fragile that we realize. As far as I can tell, Judge Sotomayor has a reputation as a judge who cares about the law. I believe that senators should only vote to confirm judges and justices who will try to get the law right and let the political chips fall where they may.

Associate Justice Ruth Bader Ginsburg is 76, and battling cancer, and Associate Justice John Paul Stevens is 89, so Obama could potentially fill two other vacancies before his first term ends. If so, how could that change the balance of the court and what new precedents might result?
Both Ginsburg and Stevens are from the liberal wing of the court. Even if Obama were to replace both of them, it would not change the political balance of the court in a significant way. Indeed, given Obama’s preference for moderates, it is possible that his first three appointments might make the court slightly more conservative. The oldest justices who are conservative or swing votes are Scalia (conservative) and Kennedy (swing): If they were both to serve until their early 80s (as most justices now do), then President Obama would not make an appointment that would change the balance of power on the court, assuming he serves two full terms. It is likely that the next great change in the court will not occur until after 2016. Of course, the very fact that justices serve for decades makes appointments to the Supreme Court all the more important. For all we know, Judge Sotomayor might be the swing justice in the 2020s and 2030s! If she serves until her later 80s (like Justice Stevens), she will be on the court in 2040!