“Why isn’t every single partner of a law firm that’s attending this conference in this room right now, when there are this many in-house lawyers in here?” asked Christine Jones, who retired from the website-hosting company in May 2012 after a decade of service. Co-panelists at the ABA Section of Litigation program were Paula Boggs, a 10-year veteran as general counsel of Starbucks until she retired in April 2012; Kim Rivera, general counsel of healthcare provider DaVita Inc.; and Valeria Bailey, general counsel of longtime mapmaker Rand McNally, which has expanded its business to corporate navigation and transportation-planning services.

A Staffing Balancing Act

A challenge for the general counsel when they began their jobs was to determine the optimal balance of staffing between in-house and outside counsel. During Boggs’ first two years at the coffee company, she decided it would be cost-effective to hire more lawyers in-house to handle the company’s considerable commercial matters, while continuing to retain local law firms for its real estate work involving store locations. During her tenure, Boggs tripled the number of in-house lawyers.

When GoDaddy.com hired Jones, it was a startup with no in-house legal team. “When you’re the whole law department, you become an expert on everything,” she said, recalling that she even drafted and filed a software patent application early on.  “It took me exactly one patent application to figure out I needed to hire a patent lawyer in-house,” Jones said.

Although the 156-year-old Rand McNally may be seen as the cultural opposite of GoDaddy.com, it, too, had no legal department when Bailey came aboard in 2011. Instead, the company had many firms on retainer. As Bailey reviewed each one to determine whether the firm deserved to keep the company’s business, she found that few were responsive or demonstrated an understanding of the company’s needs.

Rivera drove the lesson home: “When there’s a change of general counsel at a company, you can be sure that the first thing they’re going to do is review the entire panel of law firms that are providing services. They’re going to figure out who’s providing value and who isn’t, who they want to work with, and who’s good for the organization and who isn’t.”

Get to the Point

That means law firm partners would be wise to build contacts early on with prospective and existing in-house clients and maintain their relationships.

“Tell me why I should hire you. Help me help you,” Jones advised. She said that a lawyer who wants a company’s business should give simple yet specific reasons why the firm can bring value to the client.

“Don’t write me a 10-page memo,” Jones said. “Send me two lines.”

The panelists offered cautions about long-winded, impractical legal analyses and other hallmarks of traditional law firm culture, which can clash with more aggressive and fast-paced attitudes in the top echelon of a corporation. “I don’t have time for 10-page memos,” Bailey said. “I don’t have time for the lawyer not making a judgment call. I need practical answers.”

Understanding Your Business

“What you’re looking for in your external counsel are people who get it, who get your business, who get what you’re trying to accomplish and know how to build a partnership with you,” Rivera said.

For example, Boggs suggested that many corporate legal departments would find it helpful for their outside law firms to offer on-site CLE sessions on current legal topics. This “gives an opportunity to show you get it, that you can add value to the company,” she said.

“Walk the walk, show that you get it,” Boggs advised. By gaining insight into the client’s issues in this manner, “not only do you learn about the business, but you also cement your relationship with the in-house counsel,” she said.

Billing Practices

Panelists noted that relationships between outside and in-house counsel often come to a head when it’s time to review the bills. Bailey said that bills lacking in detail are especially frustrating.

“Work on file — what file?” Bailey exclaimed, noting that she has little time to follow up with the outside lawyer but nevertheless needs to. Bailey added that law firms need to send out their bills as quickly as possible, since late bills interfere with timely corporate financial reporting.

A lawyer’s ability to connect with people in the corporate world — what several panelists called “empathy” — is crucial for his or her success, panelists said.

“Lawyers who have that, do better,” Rivera said. They do better at in-house practice, they do better in law firms because, fundamentally, people want to work with people who they like and enjoy.”

Among the aspects of diversity the speakers addressed were flexibility, inclusiveness and diversity of thought.  Diversity can come in many shapes and sizes, depending on the country.  Joseph West, previously with Wal-Mart and now president and CEO at the Minority Corporate Counsel Association, noted that diversity resonation in nations such as Canada and the United Kingdom is similar to the United States, but it may mean very different things in Latin America and other regions, where being diverse may not only indicate ethnic diversity but also class diversity, for example.

Laura Stein, senior vice president and general counsel with the Clorox Co., said that corporations that value diversity can help shape and encourage diversity efforts in other nations through leading by example — for instance, by showcasing the expertise of female managers within their companies.

The chief client officer with Fraser Milner Casgrain LLP in Toronto, John Rider, said that most requests about diversity practices still come from the United States, and he talked about some of the challenges in responding to questions posed in requests for proposals.  For example, in Canada, there are no African-Americans.  And “we don’t count” the number of diverse lawyers and can’t ask about diversity in many cases, unless it relates to job tasks, Rider said.  Thus, in making determinations about diversity abroad, a U.S.-based company needs to take a flexible approach.

Rider explained that his firm’s diversity efforts now include the presence of a resource group for lesbian, gay, bisexual and transgender individuals — a diversity effort that has support within the firm and that responds to client needs.  Stein added that Clorox also has employee resource groups for women, ethnic groups and the LGBT population.  The groups inspire product innovations and deepen understanding of a multicultural marketplace.

DuPont’s efforts, as Ernest Tuckett — general counsel at DuPont Canada — explained, center around not just metrics but also a real commitment to diversity as it relates to law firms, corporations and the profession as a whole.  DuPont Legal’s efforts — many of which are the brainchild of Thomas L. Sager, senior vice president and general counsel — serve as a model for the legal profession and industry, and raised the bar, along with Allstate Corp., for other companies.

During the discussion, the in-house counsel panelists responded to a question about how they work with outside counsel.  Tuckett said that DuPont issues an annual questionnaire to the law firms with which they work that includes a diversity section.  Stein explained that her company expects partners to reflect Clorox’s values, in terms not only of diversity but also pro bono efforts.  RFPs are issued for work of more than $50,000, Stein continued about her company’s practices, where value is an important consideration, but for which a host of factors are considered, including those of diversity and volunteerism.

Diversity of thought is also important, Rider explained, and West offered the example of a mock jury trial in which there was lock-step groupthink emanating from jurors with a common background.  West suggested that a firm or corporation might recruit by looking beyond traditional factors of grades and law review participation to, for example, blue-collar background and empathy guided by firsthand experience.

In order to retain a diverse representation in a firm or corporation, West said that law firms need to recognize and act on the fact that attrition is expensive.  To help maintain minority lawyers, “include, invest and intercede,” West said.  Spend political capital on behalf of minority lawyers, sponsor them, and make sure they get origination credit when it’s due. Be purposeful in retention efforts, Tuckett added.

Gretchen Bellamy, director of International Public Interest Programs with the University of Miami School of Law, moderated the Section of International Law-sponsored program.

Dolores Dorsainvil

Dolores Dorsainvil, senior staff attorney at the District of Columbia Office of Bar Counsel and adjunct professor at American University Washington College of Law and the University of Maryland University College, received the Rosner & Rosner Young Lawyers Professionalism Award during the 2012 ABA Annual Meeting in Chicago.

The award, administered by the ABA Center for Professional Responsibility, recognizes and encourages young lawyers who are dedicated to lawyer professionalism. The award is supported by the Rosner and Rosner Justice Fund and administered by the Center for Professional Responsibility.

A graduate of Boston University, Dorsainvil received her J.D. from American University Washington College of Law. Her service to the legal community has included active participation in numerous programs and projects of the ABA Young Lawyers Division, including vice chair and co-chair of its ethics and professionalism committee. At the Maryland State Bar Association she serves on both its professionalism and ethics committees and is also active in its Young Lawyers Section.

Dorsainvil published numerous national articles on ethical considerations for the District of Columbia and Maryland Bar, and she has her own ethics blog, “The Gavel.“  She also spearheaded the Bar Mentor Project, which recruits volunteer lawyers to help students of color pass the Maryland state bar exam.

The Great Recession has not halted the trend toward globalization, Steiger said. Further, roughly half of the U.S. companies able to export for the first time or increase exports to new markets in 2011 were small- and medium-sized enterprises. As more and more clients need global legal advice, they increasingly demand business models that deliver better value.

What will better value mean in the future? According to J. Stephen Poor’s May 7 New York Times article — as Steiger described — lawyers should be thinking outside the box. The article states, “Lawyers today should be asking themselves nontraditional questions: how to apply resources more effectively, to shorten cycle time and lower the cost of their work product and other deliverables, while raising the level of service. In the end, your client will reward you by giving you more work across more areas, and your relationship will deepen.”

In order to be effective with a global practice, Steiger explained that lawyers need to recognize a client’s needs and limitations by adopting an individualized approach; lawyers need to know what they themselves don’t know; and lawyers need to know how to get the necessary answers. Lawyers can serve as both quarterbacks for and counselors to their clients, Steiger continued. Having a general industry knowledge as well as understanding specific business risk factors are aspects of the quarterback role, he said.

Among the components of serving as counselor, according to Steiger:

• Questioning the basis for decisions reached to ensure potential risks are addressed;
• Appreciating the value in telling a client that what he wants to do doesn’t make sense, and following up with what does make sense;
• Ensuring that clients know their ultimate goals at the onset;
• Advising on the necessity of full management and stakeholder buy-in; and
• Helping a client get out of the local or even national mindset in a global environment.

Careful planning before closing a deal and continued due diligence is critical, Steiger emphasized.  Diligence on location is an aspect of this planning and implementing.

China and India are not the only games in town, said the speaker; virtually every country is a possible target for business.  Some of the factors to be considered in determining where to work, listed Steiger, are prevailing labor costs, culture, business environment, infrastructure, time zone displacement, communications and the ecosystem.

Additional tips and advice that Steiger provided before wrapping up include reviewing vendor competencies, longevity and conflicts; securing the right players for the cross-border team; and understanding that the timing and pace of a negotiation may be beyond one’s control.

The program was sponsored by the General Practice, Solo & Small Firm Division (renamed the Solo, Small Firm and General Practice Division later in the Annual Meeting). Steiger is author of The Globalized Lawyer: Secrets to Managing Outsourcing, Joint Ventures and Other Cross-Border Transactions.

“The stereotype [is] of the ambulance chaser, someone who is greedy and wants to make money at someone else’s expense, arrogant, obnoxious, knows it all.  These are really embarrassing stereotypes for all of us, for which we all should feel responsible,” said Diane I. Smason, a supervisory trial attorney with the U.S. Equal Employment Opportunity Commission in Chicago.  “I do.  When I meet people who are not lawyers and they ask me what I do, I often feel the need to say, ‘I’m a lawyer, but you know, I’m one of the nice ones, one of the good ones.’”

Smason said it is time to develop new impressions of lawyers.  She said, “We can and do have respect for the justice system and for all people we come across in our work.”

William A. Widmer III, a principal at Carmell Charone Widmer Moss & Barr in Chicago, said it is important for new associates to learn early on that clients are not interested in their toughness, but their successful track record.  “You are successful by conducting yourself in a manner that advances the clients’ interests,” Widmer said.  “I don’t see how you advance the clients’ interests by being a jerk. You have to be very careful in picking your shots.”

Donald L. Sapir, a partner at Sapir & Frumkin LLP in White Plains, N.Y., said experience is a good teacher of professionalism and civility.  “I very much wish I could take back some of the things I did 30 years ago that I would have handled differently had those things arisen today,” Sapir said.

Sapir agreed with an audience member who said litigation is a hard way to make a living, but added that if you conduct yourself in a way “to be proud of,” it will be an easier living.  “To a large extent, professionalism and civility is an extension of the golden rule,” added Sapir, who is also president of the College of Labor and Employment Lawyers, an organization for labor and employment lawyers who “exemplify, by their conduct, the highest level of civility and professionalism.”

Kathlyn E. Noecker, a partner at Faegre Baker Daniels LLP in Minneapolis, said establishing a culture of civility in the workplace should be methodical.  She gave five key steps in establishing such an environment:

1. Set a tone at the top in which employees know that they can talk about tough situations.
2. Communicate frequently.  The use of newsletters can be helpful.
3. Ensure that employees know what is expected of them.  Initiate a training program, if you don’t have one already.
4. Perform evaluations, assessing how employees interact both internally and externally.
5. Establish consequences for poor behavior.  Enforce the rules to the point of financial hardship (sometimes to the point of asking someone to leave).

Panelists also provided various tips to encourage civility inside the workplace and when dealing with opposing counsel.

Being professional at work:

• Set the tone of professionalism and civility in the office.  Everyone, for example, should be entitled to his or her own opinion without being attacked.
• Have open discussions with lawyers and support staff about professionalism and civility.
• Be a role model for less-experienced lawyers by exemplifying good behavior in the office and in the courtroom.

Dealing with opposing counsel civilly:

• If you are concerned that the opposing counsel will misrepresent what you say, have a second person in on the conversation.
• Reinforce your verbal conversations with opposing counsel in writing.  Email has made this easier.
• Be direct with the other side.
• Do not respond to opposing counsel with the same negative actions.  Try to rise above their actions and remain civil.
• Use courts as a last resort.  Make an effort to resolve the case through arbitration or mediation.
• Agree to schedule extensions, because you never know when you will have an emergency and may need one.
• Do not take shots at the other lawyer in a brief.  Provide the facts and the law.

The panel was sponsored by the Section of Labor and Employment Law.  Max G. Brittain Jr., a partner at Schiff Hardin LLP in Chicago, moderated the session.

A panel of experts lead a discussion at the Annual Meeting session “New Voter Registration Laws: Fighting Voter Fraud of Supressing the Vote”

A vigorous debate sprung from a panel discussion on new voter registration laws at the ABA Annual Meeting on Aug. 5. The panel highlighted disagreements about the challenges voters may face at the polls this fall as a result of laws adopted in some states requiring voter identification and eliminating early voting, among other changes. Panelists also discussed whether the new laws are necessary to protect the electoral process.

The panel was moderated by Ashley Taylor, a partner at Troutman Sanders in Richmond, Va., and included South Carolina Attorney General Alan Wilson; Gerald Reynolds, general counsel for a utility in Louisville, Ky.; Clarissa Martinez-De-Castro, director of immigration and national campaigns for the National Council of La Raza in Washington, D.C.; Barbara Arnwine, president and executive director of the Lawyers’ Committee for Civil Rights Under Law; and Benjamin Griffith, partner at Griffith & Griffith in Cleveland, Miss., and editor of the first and second editions of America Votes!, on election law.

One of the primary issues in the debate is the voter-identification requirement that is now enacted in more than 30 states, Griffith said. “The biggest concern is that [the laws] are a barrier,” he said, noting the well-known case of Viviette Applewhite, who has voted in every election for the past 50 years but says she won’t be able to cast a ballot this fall because of the ID law in Pennsylvania. “She doesn’t have a copy of her birth certificate because she was adopted, and she doesn’t have a driver’s license,” Griffith said, because she doesn’t drive. Applewhite is the plaintiff in a suit filed by the American Civil Liberties Union against Pennsylvania.

In most states that have passed this law, the preferred ID is one issued by the Department of Motor Vehicles, Arnwine said. But more than 20 million people have no ID issued by the DMV, she said. Often, people don’t have the required birth certificate or Social Security card, for example, needed to acquire a license or government-issued ID from the DMV. “Everyone is affected,” Arnwine said, “and women are disproportionately affected” because of name changes due to marriage or divorce. Women may not have updated identification or may struggle to obtain new identification after these life changes, she said.

Some legal experts are concerned that the new voter laws will lead to suppression of the minority vote. Restrictions on early voting, particularly cutting back the Sunday before the election, Arnwine said, affects blacks because churches often appealed to congregants to vote on that day.

Proponents of these laws, however, argue that they protect voters from deceptive practices, such as “robo calls” giving people incorrect information about the election date or telling them that they need not vote, because the election has already been decided. “Politicians will go out of their way to trick folks,” Reynolds said, noting that the stakes are high. “In very close presidential and local elections, some races are determined by hundreds or thousands of votes, and fraud could alter the outcome.”

In South Carolina, Wilson said voter ID requirements were adopted to help inspire confidence in the electoral system. “Every time someone commits fraud, it dilutes the other votes,” he said. He pointed out that ID’s are required for check cashing, to get on an airplane, even to get Sudafed, and that the vote has much greater weight than these activities. He also said that in his state, voters won’t be turned away if they come to the poll without an ID. “If they show up the day of the election, they can still vote by sworn affidavit,” Wilson said.

The panel discussed one solution to the problem that some individuals have with getting an ID. Everyone could receive a government-issued ID card that would be good from state to state. “We’ve never had a debate on what could displace what is on the state level,” Arnwine said.

No matter what side of the debate panelists were on, all agreed that no one should have to fight for the right to vote. “The integrity of the voting system should be a nonpartisan endeavor,” Martinez-De-Castro said. “If voter fraud is a real problem, we need to figure out ways to deal with that, and the magnitude of the response should match the magnitude of the problem.

“New Voter Registration Laws: Fighting Voter Fraud of Supressing the Vote” was co-sponsored by the Criminal Justice Section and Section of State and Local Government Law.

A panel of experts leads the discussion at the Annual Meeting session “Immigration, Race and Incarceration in the United States”

A panel at the ABA Annual Meeting discussed the link between race and incarceration in light of a U.S. Sentencing Commission report that found that Hispanics, the fast-growing minority group in the nation, account for more than 35 percent of all individuals sentenced.

Margaret Stock, moderator of the panel titled “Immigration, Race and Incarceration in the United States,” explained that the rising levels of incarceration of Hispanics are mainly due to an increase in immigration enforcement. She cited figures from the Sentencing Commission report showing that 94.6 percent of non-citizens were imprisoned for immigration violations.

During the session, investigative journalist Maria Hinojosa presented clips from her documentary Lost in Detention, in which she revealed how the Obama administration’s immigration policy has contributed not only to higher levels of imprisonment, but also to the deportation of non-criminal immigrants and hidden abuse in detention centers.

Sara Elizabeth Dill, both an immigration and criminal law practitioner, shared her experience in representing immigrants and noted that the discrepancies between the immigration and criminal justice systems expose the flaws of a broken judicial system, because immigrants don’t have access to appropriate counsel. “The system is completely broken. We need to look at this and say, why are we treating just one group like this? Why are we creating a system where there is no help for these individuals?” Dill said.

When asked about what specific immigration policy changes would reduce the number of immigration detainees, Lisa Marquardt, Maryland office of the public defender, called for the restoration of judicial recommendations against deportation. JRAD was part of the Immigration Nationality Act on 1952 that allowed a judge in a criminal case the discretionary authority to prevent deportation of a non-citizen. Marquardt said this procedure would lessen the burden to our overcriminalized judicial system and minimize the risk of unjust deportation.

This panel was sponsored by the ABA Commission on Immigration.

The audience failed miserably in answering that the perpetrator in the video was not in the lineup at all.  But this was only after a segment of the audience was told they had named the suspect.  Attendees who were told they had correctly identified the guilty party — even though they hadn’t — expressed a greater certainty and confidence in their identification.

The legal framework of eyewitness identification is flawed, and training for administrators is extremely limited, said panelists Karen Newirth, eyewitness litigation fellow with the Innocence Project; Thomas Sullivan, former U.S. attorney, Northern District of Illinois and partner in Jenner & Block in Chicago; and Sgt. Paul Carroll (retired from the Chicago Police Department), during the ABA’s Individual Rights & Responsibilities-sponsored program.

The Innocence Project has helped exonerate 289 people to date, with eyewitness misidentification being a contributing cause of wrongful convictions in 72 percent of the cases.  Of the eyewitness identification exonerations, 141 of 161 — 80 percent — showed evidence of suggestion or unreliability in witness identification in the trial record.

The Manson balancing test, used to determine the admissibility of eyewitness identification evidence, studies whether procedures are impermissibly suggestive, and if so, balances the effects of suggestion against “reliability.”  Reliability factors include an opportunity to view, degree of attention of the eyewitness, certainty/confidence in the identification, and the time between the crime and confrontation, among others.

Indeed, identification requires a fragile, three-stage process of memory, storage and recall, Carroll said.  A general proposition is that it declines gradually and steadily, but, in fact, memory declines steeply after a very brief time, he continued.

Newirth suggested a new legal architecture, one that eliminates the balancing test; provides juries with proper guidance and a “context” so they can evaluate evidence appropriately; treats memory as trace evidence and shifts the burden of proof to the proponent of the evidence; and uses pretrial admissibility hearings to determine the witness’s reliability by hearing from him or her.

Sullivan called for giving instructions to eyewitnesses before the identification process; implementing double-blind methods in which neither the witness nor the administrator knows the suspect to eliminate the power of suggestion; and using sequential, rather than simultaneous comparisons, so the eyewitness must answer a “yes” or “no” with each member of the lineup rather than making a comparison between all the members of the lineup.

Carroll explained that police administering eyewitness identification tests aren’t properly trained and that police departments don’t have policies regarding the implementation of such tests.

Seth Miller, executive director of the Innocence Project of Florida, moderated the program.

An ABA Labor and Employment Law-sponsored program at the Annual Meeting, “Can My Employer Really Require Me to Friend It? The Latest Word in Social Media, What It Is and What Are the Lawful Uses of this Information,” highlighted some of those court cases and directives, and covered some recent legislative action in social media, and what is and is not allowed by law.

W.V. Bernie Siebert, with Sherman & Howard LLC in Denver, prefaced the discussion with a short primer about Section 7 of the National Relations Labor Act, the “bible for labor and employment lawyers,” which has historically covered union organizing, collective bargaining and other mutual aid activities.  The provision covers employees’ rights vis-à-vis concerted and protected activity in relation to repercussions from their employer.

Tweeting and posting to Facebook open up a number of new questions as to the nuances of “concerted” and “protected” activities.  Is “liking” someone’s Facebook post an indication of concerted activity?  Is an employee protected if she posts that her supervisor is a “scumbag”?

As panelist Angie Cowan Hamada, of Allison, Slutsky & Kennedy PC in Chicago, explained, NLRB’s Division of Advice guidance in a Wal-Mart matter in which a co-worker replied “hang in there” to another’s Facebook post was that there was sympathy, but no group action meeting the concerted activity requirement.  However, in an American Medical Response of Connecticut case, the 2011 directive stated that a response post of “chin up” was a concerted activity.

Given these nuances, how should lawyers advise their clients on social media usage questions?  Hamada, whose work is on the side of employees and unions, suggests that a lawyer try to show that an online communication points to a continuation of an earlier or subsequent conversation to show concerted action; meet the concerted threshold by using such language as “we” and “us” versus “I” or “me;” avoid showing simply sympathetic responses (as in “hang in there”); and highlight conditions of employment such as wages and benefits, to meet the “protected activity” bar.

Amy Jo Zdravecky, of Franczek Radelet PC in Chicago, represents employers.  Zdravecky echoed Hamada’s comments about the inconsistency in guidelines that have been handed down to date.  She addressed employer policy vis-à-vis social media.  It is unlawful for an employer to restrict a protected concerted activity, or to have policies that can be reasonably construed to chill such activity.

While there is also some inconsistency as to the lawfulness of certain policy language, Zdravecky said that employers can — through their policy — prohibit harassment and discriminatory and unlawful practices.  It is lawful for an employer to prohibit an employee from speaking “on behalf” of the company, and to direct employees to be “honest and accurate” in their communications.  However, it is unlawful for an employer’s policy to prohibit “completely accurate and not misleading” practices, because employees don’t necessarily have access to the complete scope of a circumstance.

A number of non-NLRB cases were outlined by Mark D. Risk of Mark Risk PC in New York, including ones addressing employer access to password-protected websites: Pietrylo v. Hillstone Restaurant Group; Konop v. Hawaiian Airlines Inc.; and City of Ontario, California, et al v. Quon.  Maryland and Illinois have passed legislation outlawing the practice of employers seeking access to a job applicant’s Facebook pages.  And Sens. Charles Schumer and Richard Blumenthal are seeking an investigation by the Department of Justice and Equal Employment Opportunity Commission about the practice of employers requesting social media information.

During an Annual Meeting session sponsored by the ABA Health Law Section,panelists discuss the Supreme Court's ruling in National Federation of Independent Businesses v. Sebelius that upheld the Affordable Care Act.

When President Eisenhower nominated Earl Warren for chief justice of the United States, he praised the jurist’s integrity and courage. Years later, Eisenhower changed his tone when he reportedly characterized Warren’s appointment as the “biggest damn fool mistake I ever made.”

Since the Supreme Court’s landmark ruling in National Federation of Independent Businesses v. Sebelius that upheld the Affordable Care Act, many conservative critics have had a similar change of heart about the court’s key swing vote — Chief Justice John Roberts.

Lawyers and law professors convened at the American Bar Association Annual Meeting in Chicago to discuss the limits of congressional power in light of the split decision that kept the Obama administration’s signature accomplishment largely intact.

Lawyer Carter Phillips said that “as a lawyer who is above 40, I grew up with a Congress that could do anything,” but following the Supreme Court health care ruling, he added, that Congress may be a thing of the past. Although the court upheld the health care mandate component of the law, a side provision that would have cost states their Medicaid funding if they did not expand coverage to more of their citizens was struck down.

Video: Litigator Discusses Supreme Court’s Commerce Clause Ruling in Healthcare Reform Case

Phillips was “surprised as anybody” the way the court ruled, but recognizing that “health care takes up about one-sixth or one-fifth of the economy” was grounds for a Commerce Clause defense. Article I, Section 8, Clause 3 states that “The Congress shall have the Power … to regulate Commerce … among the several States.” That broad language has been used across the centuries to sustain expansive legislation that vaguely touches on issues of trade between states. Many court watchers expected the court to rule per the clause, but Chief Justice Roberts dispensed with that argument, saying it would be an unprecedented expansion of the clause. The chief justice instead declared the ACA constitutional according to Article I, Section 8 that gives Congress the power to tax.

Columbia Law School Vice Dean Gillian Metzger explained that taxes were a primary concern for the framers of the Constitution. After the Articles of Confederation failed, the framers recognized that any new government needed a steady flow of revenue, and taxing individuals directly was specifically added. “It’s been a broad power,” said Metzger, adding that the chief justice’s reliance on that power is interesting because the word “tax” is not used anywhere in the ACA. “[Justice Roberts] is very uncomfortable with the court invalidating the mandate just because Congress used the wrong label.”

Video: Columbia Law School Vice Dean Explains the Tax Power Used to Uphold Health Care Reform

Washington, D.C., lawyer Jonathan Franklin also considers NFIB v. Sebelius to be “one of the more surprising decisions.” What is most surprising for Franklin, however, is the failure of the Medicaid provision. “No one could have conceivably thought that could have happened.”

Video: Expert Surprised by Court’s Rejection of Healthcare Reform’s Medicaid Expansion

Looking ahead, the panelists are torn as to how the reasoning of the case will be applied in the future. There was general agreement, however, that the Medicaid decision will have political and legal consequences. Phillips sees the litigation risks arising from this ruling as “extraordinarily high.” Franklin does not know how the decision will be interpreted for future cases, but he believes that the Medicaid component will be a headache for hospitals that are less likely to recoup the cost of the care they give to indigent and homeless patients. Texas Governor Rick Perry has already refused to expand Medicaid coverage, thus denying his state $164 billion in additional federal aid, although existing funding is now safe. Texas has 17 million uninsured residents, the highest of any state. “Very few of the people who are going to be cut out of Medicaid are going to vote for him anyway,” said Franklin.

This panel was sponsored by the ABA’s Health Law Section and co-sponsored by the Government and Public Sector Lawyers Division, Senior Lawyers Division, Young Lawyers Division, Section of Litigation, Tort Trial and Insurance Practice Section, Section of Taxation, Standing Committee on Medical Professional Liability and the Special Committee on Bioethics and the Law.