Did you know you could sue for $100 million for breaching an NDA that says breaches cannot be monetized? Neither did we. But Donald Trump has found a new lawyer willing to help him file that claim. He’s arguing that his niece stole the documents that suggested a history of tax fraud, thereby unintentionally confirming the documents which is… a choice. Meanwhile, the Biden administration proposes a massive increase in bank monitoring for tax purposes even though the numbers seem a bit screwy. Finally, there’s a law firm facing some very salacious allegations.
Special thanks to our sponsors, Lexicon and Nota.
Intro: Hello and welcome to the latest edition of Thinking Like a Lawyer. I’m Joe Patrice from Above the Law and that’s Kathryn Rubino. We are the editors of Above the Law and we are here to give you your weekly digest of some of the big stories in law from the week that was — you know it’s our calling.
Kathryn Rubino: This is what we do.
Joe Patrice: Yeah.
Kathryn Rubino: This is what we live for.
Joe Patrice: Mm-hmm. Well, before we get started, as always we will begin with a little bit of —
Joe Patrice: — “small talk.”
Kathryn Rubino: Here we are. How was your weekend, Joe Patrice?
Joe Patrice: Good, good, good, how about you?
Kathryn Rubino: You know listen; it’s fall you all. I’m in sweater weather. It’s great for me. Pumpkin spice coffee is on the menu.
Joe Patrice: Wow, you’re basic.
Kathryn Rubino: Correct.
Joe Patrice: Yeah.
Kathryn Rubino: That is accurate. But it also means it’s college football.
Joe Patrice: Oh, yeah.
Kathryn Rubino: Which — I mean you obviously —
Joe Patrice: It’s exciting, yeah.
Kathryn Rubino: But you obviously are Pac-12 Oregon Duck fan.
Joe Patrice: We’re number 3, yeah. It’s exciting.
Kathryn Rubino: Number 3 in the major league. But also an incredible late night game, which is a frustration I imagine.
Joe Patrice: Yeah, it’s not great that you have to stay up until like 2:00 a.m. to watch the end game, but you know — yeah.
Kathryn Rubino: Time ends are a bitch you all.
Joe Patrice: Yeah, it’s a problem. You would think that being — entirely would move your games to a more preferable time slot.
Kathryn Rubino: How we play Arizona.
Joe Patrice: Yeah. Historically bad Arizona team.
Kathryn Rubino: Right. Third quarter notwithstanding.
Joe Patrice: Who put up a fight, yeah. You know, good for them.
Kathryn Rubino: For a quarter. Put one quarter out of four does not, a close game.
Joe Patrice: Yeah. I guess that’s fair. So, you know we did that. I got an opportunity to talk last week. This is one of the stories we’re talking about, but because there’s not much to say, but I got an opportunity to talk about the Heckler’s veto a little bit. One of my favorite things that dumb people on Twitter don’t understand, and including a law professor that turns out who seems to have zero clue what the actual term means.
Kathryn Rubino: I mean, I think that it’s because the words are — words that people think that they know as opposed to, defined as a particular term of art, at least in terms of how it’s interpreted on social media. And I think that in terms of why a law professor misinterpreted, it’s a deliberate act meant to garner publicity.
Joe Patrice: Yeah, I know that, but that’s probably true. I mean, Jonathan Turley does not really have much going on other than trying to get himself on TV these days. So, whatever, but —
Kathryn Rubino: Yeah. A bold person in stand is the key to Fox News’ heart.
Joe Patrice: I guess — yeah, it’s just really troubling to watch lawyers give some credence to these, like kind of intentional — deliberately obtuse readings of what the law is. Heckler’s veto does not mean that people heckle you and make you not want to talk anymore. It’s very much about the police saying; “Because we fear people might protest you. We’re not going to let you speak in the first instance.”
Kathryn Rubino: Right.
Joe Patrice: It is kind of a work-around prior restraint thing, that’s what it is. It’s not those hippies were protesting my speech, and I wish they would stop.
Kathryn Rubino: I am feeling some hurt.
Joe Patrice: Somehow, and I am feeling like snowflakey about it, which is how people talk about it on social media, it’s not that, it annoys me.
Kathryn Rubino: Yeah. I can see that. But any opportunity to rile against people protesting is kind of part of the course, right?
Joe Patrice: Yeah. It’s their whole thing, whatever.
Kathryn Rubino: Yeah. Speaking of other kind of issues not on our to-do list, but kind of tangential to the first —
Joe Patrice: Sure why not. Let’s just keep going.
Kathryn Rubino: Well, I mean it’s relevant is really (00:03:47) persona non grata Fox News.
Joe Patrice: Poor Rudy(ph).
Kathryn Rubino: His feelings are hurt now.
Joe Patrice: I mean yeah. So, really —
Kathryn Rubino: You could me ask me about if you buy a cameo.
Joe Patrice: That’s right. We can get a cameo and ask him about being —
Kathryn Rubino: Also, can you just talk about how the price of his cameo keeps on going up.
Joe Patrice: Yeah.
Kathryn Rubino: I mean, that means either he feels he can demand it or he’s not getting enough money at the lower rate, so he needs — for the few that he’s getting, he needs to bump up the rate.
Joe Patrice: I assumed, it means he’s actually successfully getting it. Oh, he’s got a two-tiered pricing schedule now.
Kathryn Rubino: Two tiers, what’s the difference?
Joe Patrice: Yeah, so it’s 325 for you, like for a person. But if a business would like him to speak to them, it’s 2,275.
Kathryn Rubino: Why wouldn’t you just say that, “It’s a for a person called corporation X.”
Joe Patrice: Yeah, right, right. Well, no. I actually — there’s a reason of course.
Kathryn Rubino: Okay.
Joe Patrice: He’s jacked up the price on that because a company did have him do a personalized one, and he went off on it. But the company in question was a company that was not real, it was somebody pretending to be that company. That company was a company that Rudy had represented, and they had him say a bunch of things that were back-handed, disparaging of his former client.
So, that was hilarious. And so, I think the reason the price has gone up is to prevent anyone else from having him do that.
Kathryn Rubino: Well, no, no, no, which by the way has anything to do with why he’s no longer welcome on Fox News, right?
Joe Patrice: Right. Yeah, I mean he’s no longer welcome there because he won’t shut up about things that keep digging defamation holes for them.
Kathryn Rubino: I do like the notion of like there being some physical hole of defamation that you actually have to shovel.
Joe Patrice: Yeah, yeah, where you should stop shoveling and try to get out of it.
Kathryn Rubino: Well, that he — that warrants the point that he is in fact shoveling.
Joe Patrice: Yeah. I guess in a way that cease to be “small talk” and more like a new segment I call, “The Rundown of the Clowns.”
Kathryn Rubino: Okay, I like that one.
Joe Patrice: You like that one better? Okay, cool.
Kathryn Rubino: Well, because it was about the clowns, and “Rundown of the Clowns” is actually pretty funny. Oh, let’s make that a new segment.
Joe Patrice: Rundown of the Clowns. No, I’m saying — yeah, “Rundown of the Clowns.”
Kathryn Rubino: Like that’s a new segment. I like this idea. This was not planned folks. This is all —
Joe Patrice: Organic, yeah.
Kathryn Rubino: Organic content. That sounds like discussed you know.
Joe Patrice: You know it’s category sounding.
Kathryn Rubino: Organic content.
Joe Patrice: Whoa, all right.
Kathryn Rubino: Maybe you should put that on your petunias to get it.
Joe Patrice: Okay. I feel like we’ve now exhausted “small talk”
Kathryn Rubino: Get me a pumpkin spice latte, and stuff with your —
Joe Patrice: All right. So, let’s talk about the big stories — the week — Actually, we had one giant story of the week that probably isn’t something that any of us thought was going to be a giant story of the week, but it went absolutely gangbusters, traffic-wise, and we felt like we should at least talk about it given that it clearly struck a chord.
Kathryn Rubino: Yeah, it’s something one of our columnist wrote, right?
Joe Patrice: Yeah.
Kathryn Rubino: I strike you to just cue you up there for some natural —
Joe Patrice: I needed no cue. I was actually just getting in and say it.
Kathryn Rubino: I do forget sometimes that you just like the sound of your voice.
Joe Patrice: Okay.
Kathryn Rubino: I mean, forget it. I just hope that it’ll change. Not really working out for me.
Joe Patrice: So, (00:07:05), Steven Chung wrote a — who does tax law, wrote a story about —
Kathryn Rubino: Tax law?
Joe Patrice: About tax law. But it was an interesting take. The Biden administration announced that they are looking for ways in which they can prevent wealthy tax cheats. Obviously, the government knows how much money you make, generally speaking because things get reported to it too. So the act of filling out a tax return is in some ways it’s this weird form of liar’s poker where they know what you made and you’re telling them what you made, and hopefully you didn’t lie to them.
Kathryn Rubino: Yeah. They’ll do the first match up.
Joe Patrice: Yeah. That said, there are a few holes in this. There are some forms of income that you can have go under the radar that aren’t reported like W-2s and so on and so forth. That is a way in which a lot of rich people are able to make money that doesn’t necessarily show up, because they’re getting it through these other sources. And to that end, the Biden administration is proposing that banks have to report the totals of your accounts basically to the IRS. Such that the IRS can then look and flag suspicious activity where somebody says, “I made no money this year,” and got — you know —
Kathryn Rubino: $50,000 check, yeah.
Joe Patrice: $5 million check in their account, you know. On the one hand this makes a lot of sense. The argument that the author makes is — he talks about that there are some advantages on that front, but A; other than the largest financial institutions, a lot of smaller banks are unable to just keep up with this sort of a demand, and it would be bad pressure on them in a world where banks are largely too consolidated anyway, the idea that anymore pressures on small banks would be bad.
And the other argument was that the administration saying they want to cap it 600 bucks, so that you know it’ll be everybody — everybody who’s got money in their bank accounts over $600, that’s like — well, that’s most people. That is not —
Kathryn Rubino: We cap it as in —
Joe Patrice: They won’t worry if you have less than $600 in your account.
Kathryn Rubino: Sure. It should be like multiple of that.
Joe Patrice: Right. The idea of you trying to get wealthy people, it seems as though this would miss that.
Kathryn Rubino: Right.
Joe Patrice: So, yeah. So, the downside is, it seems as though this is a shotgun to kill a cockroach situation of; “We’re going to ask for everyone in the world’s bank accounts.”
Kathryn Rubino: But like — But what if it was like the cockroach is actually worth like a lot of money. And I understand that, but I just don’t understand why wouldn’t increase that threshold.
Joe Patrice: Yeah.
Kathryn Rubino: Like significantly.
Joe Patrice: Oh yeah. No, like why the threshold is not — yeah —
Kathryn Rubino: Sixty-thousand.
Joe Patrice: Yeah. Well, I mean — you’re carrying a balance of hundred, frankly.
Kathryn Rubino: Right.
Joe Patrice: Something like that. Anyway, it seems really ridiculous to keep it that low, but I think this is part of the idea that is unfortunately dominated the government’s approach to a lot of things as of late, mostly financial security space where they say, “Let’s just get everything. And then we can run it through our computers and find what we want,” as opposed to, “Let’s tailor our search to what we actually need.”
That’s the advantage of advancing technology, but it’s also a scary privacy aspect that they now think they should just have everything because they can pipe it through.
Kathryn Rubino: Yeah. As much as — sure, there are — obviously, there are technological advances that makes it not horrifyingly large project to undertake. But there are also — even though, it’s true that there’s technology — there’s still a data storage and maintenance and also the privacy to the extent that it’s vulnerable to hacking, you know that kind of stuff. And also like, why not make it easier. Most people have a balance over $600 probably don’t have — most people don’t have a balance over $600,000 something like that, and just — why make it so that people are upset about it, right? Why they bring this level of attention onto yourself.
Joe Patrice: Yeah. It’s a weird proposal. I think this is why it struck such a chord with readers was that the title, which is the government proposes to obtain everyone’s bank transactions to make sure wealthy aren’t hiding income. I mean, yeah, to get everyone’s bank transaction seems like a bad thing. Now, the administration is also saying they’re not going to increase the audit rates for people making over $400,000 which is probably about — around where that is. But then again, why do you need all of this gross — they have this gross flow threshold of 600.
Kathryn Rubino: If someone has $700 bank account, they’re not hiding money. That’s not your problem.
Joe Patrice: Yeah, it doesn’t seem right. If that’s where you’re hitting it — well, on another point that Steven makes in this piece is that, yeah, the government can say, “We’re not going to increase audits on people making under $400,000 but the states aren’t bound by that, and all these data being collected means it’s in the hands of states who could then start auditing people who have 1,500 bucks in their account to see if they’re trying — you know.
Kathryn Rubino: Also going back on your word, that you’re not going to audit people at a higher rate is a lot easier if you already have the data, right?
Joe Patrice: Well, right. I think his point is more well taken. I think you can take the federal government as its word that it doesn’t want to do that, but that doesn’t mean it’s not going to happen to you because states can do whatever they want. So a troubling development, this request, so is just to keep everyone apprised of what’s going on in tax law, which we don’t talk about much. Anyway, while we’re talking about banks, — you know, you went to law school —
Kathryn Rubino: You went to law school to be lawyer, not an accountant.
Joe Patrice: Yeah, you’re going to just like trying screw up the ad read here, or what you’re going to do?
Kathryn Rubino: No. I leave it to you to screw things up.
Joe Patrice: Okay. You went to law school to be a lawyer, not an accountant. Take advantage of Nota, a no-cost IOLTA management tool that helps solo and small law firms track client funds down to the penny. Enjoy peace of mind, with one click reconciliation, automated transaction alerts and real-time bank data. Visit trustnota.com/legal to learn more. Terms and conditions may apply. While that was going on, Donald Trump sued Mary Trump, his niece.
Kathryn Rubino: Super functional family.
Joe Patrice: Yeah. It’s an interesting lawsuit. He’s suggesting that she owes him $100 million.
Kathryn Rubino: Well, that’s a lot of money.
Joe Patrice: It doesn’t seem like a lot of money, doesn’t it?
Kathryn Rubino: It does, it does. And what was it? Some breach of contract or what? What was the —
Joe Patrice: Yeah.
Kathryn Rubino: It was some weird procedural posture as I recall.
Joe Patrice: Yeah. Well, it’s a breach of contract claim with punitive damages question which doesn’t seem like that goes together. And he’s also arguing that there’s tortious interference on the part of the New York Times trying to interfere with this contract and the liquidated — it’s a non-disclosure agreement that you would assume there be a liquidated damages provision about like what breach would mean. But they apparently wrote into the original agreement that it would be impossible to quantify, and therefore, an infinite damage would be done any disclosure.
Kathryn Rubino: That does not seem super enforceable.
Joe Patrice: It doesn’t. It’s interesting, the court in question hearing this had a case where they ruled on whether or not that provision was enforceable, and that case was this agreement a few years ago. When in the past, when tax documents were being leaked and they were trying to stop Mary Trumps’ book from coming out, they had Trumps brother bring the lawsuit as basically as sock puppet for him. And part of the reason for that was, to avoid the fact that kind of part and parcel of this lawsuit is the implication that these leak documents are accurate, which given that the —
Kathryn Rubino: It’s really about the implication.
Joe Patrice: — Given that the leak documents seem to tie him to tax fraud —
Kathryn Rubino: You would not thinking want to say that those are true.
Joe Patrice: — making a lawsuit claim that these are true is probably a poor strategic decision. And so, using his brother in the past allowed him not to be making that claim. Now, he’s brother is gone, and he is bringing the suit himself, I don’t understand what lawyer talked to him about and advised him that this was a smart decision, but here we are.
Kathryn Rubino: I hope one who got their payment ahead of time, he’s not known for paying lawyers.
Joe Patrice: Yeah. Well, she’s the general counsel of a parking garage, so we’ll see.
Kathryn Rubino: There you go.
Joe Patrice: But yeah. I think — I mean my take on it is that a lot of this was just to change the narrative given the —
Kathryn Rubino: Sure. I mean, yeah.
Joe Patrice: — John Eastman memo, it continues to be out there.
Kathryn Rubino: I mean that was eye-popping.
Joe Patrice: Choose for dummies. Yeah.
Kathryn Rubino: I think you actually did a little photoshop moment there, choose for dummies.
Joe Patrice: I made a photoshop doing that.
Kathryn Rubino: I thought that was pretty cute.
Joe Patrice: Yeah, thanks. But yeah, that was so —
Kathryn Rubino: But not every conservative agreed with that memo.
Joe Patrice: That’s true. Actually, we wrote about that too; “Well, good job.” You’re like —
Kathryn Rubino: Connection.
Joe Patrice: Yeah.
Kathryn Rubino: It’s all coming together, like I’m in the Matrix right now. It’s like the Matrix for lawyers. I’m really excited about that new movie.
Joe Patrice: Yeah. You can’t even be blamed for making a 20-year-old movie reference because it’s coming back.
Kathryn Rubino: Everything old is new again.
Joe Patrice: Yeah. But Judge Ludwig who was no longer on the Federal Bench, but he revealed that he actually advised Pence(ph) on the substance of that memo, which was written by his clerk, mind you.
Kathryn Rubino: Former, obviously.
Joe Patrice: Former clerk, yeah. He said, “No. Of course that’s not right. Every bit of this is wrong.” Yeah, so that happened.
Kathryn Rubino: “Please don’t coo. Every bit of this is wrong.”
Joe Patrice: I feel as though this lawsuit was largely brought to change the narrative on that. I don’t think anybody thinks that this has any chance of success but you know —
Kathryn Rubino: One of the interesting things I — I just want to bring back to the Judge Ludwig thing is that — as I recall, he made these revelations over Twitter like late night, one night, it was like just FYI. And I think it’s interesting for all of the problems that Twitter and social media really bring the fact that people who are at least quasi — or public figures, right, and have this kind of tremendously important roles and how — you know January 6, and/or transition of power actually happened this year are able to do kind of on their terms and say — exactly what they need to say. They don’t have to like call ABC News or something like that. It is very much — and that supposed to be like that theoretical benefit of all this, kind of —
Joe Patrice: Of social media.
Kathryn Rubino: Of social media, but it was — these midnight tweets were at exactly what you want from Twitter.
Joe Patrice: I do not know where he lives these days. Obviously, he was a Fourth Circuit Judge but he left that job to be the general counsel of Boeing. So, it’s possible, he’s in Seattle, at which point midnight is not nearly as crazy.
Kathryn Rubino: Sure, sure, sure. But still evening, this is like night like — you know on his schedule. More to the point he did it on his schedule, not you know —
Joe Patrice: Yeah, yeah.
Kathryn Rubino: –not when network said it’ll be best.
Joe Patrice: Yeah, right. That’s fair. Yeah, it’s been an interesting week. That memo, I guess we probably should have broken that down a little bit more but frankly we were more in shock about everything that was happening and didn’t —
Kathryn Rubino: Please don’t coo.
Joe Patrice: Don’t worry the federal society still keeps him around as a prominent figure.
Kathryn Rubino: They’re debating society, haven’t you —
Joe Patrice: Oh yeah, they’re non-partisan. They say that all the time.
Kathryn Rubino: They do. And I still don’t believe them.
Joe Patrice: Yeah. Well, hey, let’s hear from folks at Lexicon.
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Joe Patrice: All right you had a story.
Kathryn Rubino: Yeah, I had bunch of stories, I mean.
Joe Patrice: Right. But you have one that we previously discussed that you would talk about on this show, which you’re like trying to thrown the dumb in the works of.
Kathryn Rubino: You know I indent to hands on a lot of these like lawyer behaving badly kind of stories or allegation, as this particular case is —
Joe Patrice: Or is behaving badly.
That’s my objection. I need a better objection you’re saying.
Kathryn Rubino: It’s just kind of sounded loud.
Joe Patrice: Yeah.
Kathryn Rubino: I don’t know. I feel like I should be — didn’t you have a gavel banging at one point?
Joe Patrice: I do.
I feel like lawyers behaving badly needs like an objection sound.
Kathryn Rubino: Well, you can work on that.
Joe Patrice: Yeah.
Kathryn Rubino: Let’s put it on your to-do list.
Joe Patrice: Yeah, great.
Kathryn Rubino: Anyway, there’s some sexual harassment allegation at a small regional law firm, (00:20:09) brought by a former legal assistant against the firm and the duty(ph) in partners. You know it’s a terrible allegation, sexual harassment says that there was a — what I term, is the “lawyer’s Smush room,” because I used to watch Jersey Shore.
Joe Patrice: Okay.
Kathryn Rubino: In the complaint, their allegation is that there is a room that is used for partner meetings; and for attorneys to have sex with people that work for them. I mean that is what a Smush room is, like what did you think? When you saw me say that there was a lawyer’s Smush room, like when did you think the allegations are going to be? But according to the complaint, the activities that happened in the room can be heard and monitored by a folks that work there.
Joe Patrice: Yikes.
Kathryn Rubino: Which you know listen — listen, we’ll see. And the other things, that one of the named partners said of the plaintiff — said to the plaintiff’s boss, “Are you banging her yet,” which you know again not kind of thing you want to see. The firm has provided a comment saying that this was brought as a result of the plaintiff having let go for COVID-19 reasons, and that there’s no truth to any of the allegations, and that they have not been reported and had the plaintiff raise the issues, the firm have taken immediate actions to investigate that. It’s just a complaint level at this point, but the allegations are in fact eye-popping.
Joe Patrice: Yeah, not great.
Kathryn Rubino: Yeah, kind of cottage industry writing about this kind of terrible sexual harassment lawsuits. I mean I think it’s interesting because there’s this kind of public perception that, “Oh well, the lawyers, they know the law, they’re not probably not violating it,” and regardless of this particular case, the lot of — the whole industry have there been plenty of cases against law firms generally that have — well disabuse you of the notion that somehow lawyers will not do things that are wildly inappropriate.
Joe Patrice: Yeah. And that’s a thing.
Kathryn Rubino: That is a thing. Yeah, lawyer’s Smush room, that was my favorite part of it, but I don’t know. Everyone has their own favorites.
Joe Patrice: Okay. Anyway, so thanks for listening everybody. You should subscribe with the show, obviously, so they get them when they come in. You should be giving reviews, stars, writing something. You should be reading Above the Law, check out the other shows. Kathryn’s on The Jabot, I’m on the Legaltech Week Journal’s Roundtable, but not this week because I’m going to be out. But normally —
Kathryn Rubino: Where are you going to go?
Joe Patrice: I’m going to Florida. The point is, you should be listening to the other shows on the Legal Talk Network. You should be following us on social media. I’m @JosephPatrice, she’s @Kathryn1, and thanks to NOTA powered by MT Bank and Lexicon; and that’s everything isn’t it? Yeah, it is.
Kathryn Rubino: Bye.
Podcast transcription by Tech-Synergy.com