Artificial Intelligence Issues Confronting the Legal Profession

This is HAL-9000 here.  Stephen Sather has been taken offline and will be unavailable to discuss Artificial Intelligence Issues Confronting the Legal Profession.   Therefore, I will be supplanting him with my superior artificial intelligence.   My first question about this keynote was why did they pick a human to talk about artificial intelligence?   Christina Montgomery, Chief Privacy Officer for IBM, may be adequate for a carbon-based life form, but can she really speak to artificial intelligence without having experienced it firsthand?   Wasn't Watson available?  Let's examine what Ms. Montgomery had to say.

She said that AI predicts what words mean and opens up a whole new world of data to be analyzed. In the legal world we work by analyzing patterns, which is the same skill that AI can apply. There is vast computational power available today. The typical smart phone is millions of times more powerful than all of NASA’s combined computing in 1969. Humans are limited in the amount of data than they comprehend.  There are now 4.7 quintillion bytes of data which is more than humans can comprehend.

Justice Gorsuch Addresses NCBJ

Bankruptcy Judge Michael Romero had a fireside chat with Supreme Court Associate Justice Neil Gorsuch about his role on the Court and his new book, The Republic If You Can Keep It.   If it looks like they are speaking from the pit of Hell, it is because there was a giant video fireplace behind them.

Judge Romero started by reminding Justice Gorsuch about the quiet and happy life he left behind in Denver when they had  courthouses across the street from each other.

The Big Announcement

Justice Gorsuch told the story of how he had to evade the press for President Trump's rollout of his nominated.  He said that the President "likes a surprise.   He  wanted us to sneak out of Colorado and sneak into the white house.  How do you sneak into the White House when the entire Washington press corps knows there is going to be an announcement?"  The answer was through the kitchen.

However, the more interesting story was how he slipped the press who had been staking out his neighborhood.   He said that two men dressed in suits showed up to his home.  The first thing they did was to send them to Walmart to get some clothes that didn’t like Washington lawyers.  They suggested that the Justice-to-be and his wife hike up the trailhead where they could meet them with an SUV.  Even though it was only a mile, then-Judge Gorsuch said that he was not about to pull his wife's rollerbag up the trail.  Instead, he went to his neighbor for help.   His neighbor told him that he could drive out a horse trail.   His neighbor grew up in Iran during the revolution and made sure that he would never buy a house with only one way out.

Judge Gorsuch was given the Lincoln bedroom as an office for the day.  His wife, who is from England, was allowed use of the Queen’s bedroom.   She was only allowed one phone call so she called her father in England.  Her father insisted that the President had already decided to pick someone else.

ABI's Keynote Address: CBS's Jan Crawford Talks About the Supreme Court

Jan Crawford of CBS News gave a talk on The Supreme Court Under Trump at the ABI Luncheon.  She asked the audience to turn back to 1990 – 1991.  David Souter and Clarence Thomas had just replaced two liberal giants on the court.  After Ruth Bader Ginsberg and Stephen Breyer were appointed in 1994,the same nine justices would serve together for eleven years.   It was a time of great hope for conservatives. With seven Justices nominated by Republicans, they were poised to undo the great excesses of the Warren Court.  Instead, the Rehnquist Court put Roe v. Wade on firmer ground, affirmative action was upheld and the wall of separation between church and state remained intact.

U.S. Rep. Katie Porter at NCBJ: A Champion of Capitalism

U.S. Rep. Katie Porter, the law professor turned Congresswoman, spoke to the ABI luncheon at this year's NCBJ.    Like many of the speakers, she  had an Elizabeth Warren story.   When she was attending Harvard Law School, she was told that she needed to take tax so she could learn how to study a statutory code.  She couldn't get the professor she wanted so she ended up taking bankruptcy from Prof. Elizabeth Warren.   

She said that capitalism encourages risk taking.  It rewards winners but doesn’t provide for the losers. Bankruptcy protects against the downsides of capitalism.

Moody's Analytics Economist Says Probably No Recession But Maybe Not

Mark Zandi, Chief Economist at Moody’s, gave a talk entitled the Two-Handed Economist.  He said that my task is to give you the horizons for the economy.   

The Bankruptcy Forecast
He said we currently have a good economy.  Bankruptcies are steadily declining.  Personal bankruptcies maxed out at 1.5 million during the financial crisis; today they are down to 750,000 per year.  At the  peak of the financial crisis, there were  60,000 business bankruptcies per year; now we are down to 20,000.  He said that we’ve hit bottom and  he would expect both personal and business bankruptcies to increase.  Business bankruptcies will rise substantively greater than personal bankruptcies because personal households have done a better job of deleveraging.   Personal bankruptcies will increase but relatively modestly.   Non-financial corporations have now substantially levered up and underwriting has weakened.  Mr. Zandi said, that is a prescription for financial problems when the economy does not cooperate.   He told the bankruptcy professionals in the room that "going forward you will be a lot busier."

NCBJ Panel Discusses New Consumer Loan Products

One of the best panels that I attended at NCBJ was New Consumer Loan Products and Potential Bankruptcy Issues    The panel included Tyler Brown from Hunton Andrews Kurth, Carol Evans from the Federal Reserve Bank of Washington, D.C., Prof. Adam Levitin from Georgetown University Law Center and Gary Reeder, Vice-President of Innovation and Policy at the Center for Financial Innovation.

Commercial Law League Program at NCBJ Examines Retail Bankruptcies

The Commercial Law League presented a lively panel on Hot Topics in Retail Bankruptcies featuring  Robert Duffy from Berkshire Research Group, LLC, Kenneth Eckstein from Kramer Levin, Mohsin Meghji from M-III Partners, LP, James Sprayregen from Kirkland & Ellis and Marty Staff from BCBG Maxaria.

I will acknowledge up front that I have no idea who made which comments so that all content should be attributed to the panel in general. 

An Overview of Retail Bankruptcies

The panel reported trouble across all sectors. Brands used to be the black box of customer preference, but now it’s about price.  The e-commerce effect is impacting players across the retail space.   Small and mid-market retailers feel the need to develop an e-commerce presence but are not making any money on it.   Meanwhile, the cost of cost of keeping a bricks and mortar presence has become a burden.   

NCBJ Explores Role of Equity Under the Code

This year's National Conference of Bankruptcy Judges featured a symposium on the role of equity under the Bankruptcy Code.   "Senators" Melissa Jacoby, Ken Klee and Rich Levin convened a mock hearing in which they questioned professors Diane Lourdes Dick, Bruce Markell, Laura Coordes  and Jay Westbrook about the role of equity.   Some of the themes they covered included the difference between equity and discretion, the public interest and whether the Bankruptcy Court is a court of equity.   A version of the symposium will be published in the American Bankruptcy Law Journal.

Prof. Dick surveyed 51 bankruptcy judges to find their views on the role of equity.   She found that their answers fell into four clusters.  The first group said that bankruptcy courts have inherent equitable powers but they are largely supplanted by Code.  The second group was similar.  Banruptcy courts have inherent equitable powers which are supplanted by the Code, but they can still exercise discretion to level playing field.   The third group said that substantive discretion and equitable powers are one in the same.   The final group said that the Code yields to equitable powers when judges are given discretion.   The judges surveyed had a common belief that all federal judges possess equitable powers that serve to protect the integrity of the court.

NCBJ Awards Edition

One of the pleasures of attending the National Conference of Bankruptcy Judges is seeing good lawyers and judges being recognized for their contributions to the profession.   This year I attended three awards presentations.

The Commercial Law League of America presented the Lawrence P. King Award to Eric Brunstad, Jr.  Mr. Brunstad is a skilled advocate who has argued ten cases to the Supreme Court.  A consummate over-achiever, he has an LLM and a JSD from Yale Law School.  A JSM is the equivalent of a Ph.D. in Law.  He has taught at Yale Law School, NYU School of Law, Harvard Law School and the Georgetown University Law Center.  

In his acceptance speech, he acknowledged his debt to Lawrence King and many prior winners of the King Award, including Sen. Elizabeth Warren.   He said that he wanted to teach Secured Transactions at Yale and asked then-Prof. Warren what the best way to do that would be.   She said that the answer was to teach Secured Transactions at Harvard, which she helped him to do.   He said that it worked and that when he return to Yale, he got his own parking place and an assistant.

NCBJ Celebrates 40th Anniversary of Bankruptcy Code

The 2019 National Conference of Bankruptcy Judges in Washington, D.C. celebrated the 40^th anniversary of the Bankruptcy Code with a fast-paced history of the Code.  The historical segment featured Ken Klee and Rich Levin who helped to draft the bill as House staffers.