Saturday, March 25, 2006
Gregory Germain (Syracuse)
- J.D. 1985, Hastings
- LL.M. (Tax) 2001, Florida
I enrolled in law school intending to become a tax lawyer. I don’t know why I wanted to be a tax lawyer. I had no experience with the subject. I think it was because I liked money, and thought that tax law had something to do with it. As with many law students, however, circumstances took me in an entirely different direction.
I got a summer job after my first year of law school at the largest bankruptcy law firm in San Francisco. It was 1983, and the bankruptcy system was in a state of shambles. The Supreme Court had recently ruled the entire bankruptcy system unconstitutional because it vested bankruptcy judges, who did not have the Article III guarantees of life tenure or undiminishable salaries, with broad subject matter jurisdiction over matters only related to bankruptcy. Because of the enormous volume of bankruptcy cases (more bankruptcy cases are filed each year than all other federal court cases combined), the Supreme Court took the extraordinary step of staying its ruling several times, allowing the unconstitutional system to continue in the hope that Congress would soon fix the jurisdictional problem. Finally, after Congress repeatedly failed to act, the Supreme Court pulled the plug on the entire system. An emergency rule was slapped together to keep the bankruptcy courts open while more permanent measures could be worked out. It was a very interesting time to be involved in bankruptcy, and I was hooked. I took every commercial law course offered by my law school, and spent part of my third law school year as a judicial extern for the Chief Bankruptcy Judge in San Francisco, Judge Lloyd King, who later became the sole bankruptcy judge in Hawaii. I ended up taking only one tax class in law school, Tax I, from a young professor named Stephen Lind.
Following graduation, I worked for one year as a bankruptcy litigation associate at a large Los Angeles law firm, Latham & Watkins. My arrival at the firm coincided with the firm’s annual retreat held at the Ritz Carlton in Laguna Niguel. I attended the retreat knowing almost no one. At dinner the first night I saw an elderly gentlemen sitting by himself at the back of the room, and decided to introduce myself and join him. It was the managing partner of the law firm, who proceeded to question me about my background and qualifications for the next hour and a half. No wonder he dined alone. The dinner left me with an important lesson, however. The managing partner asked me why I decided to work at Latham & Watkins. The truth was that I took the job for some combination of money and prestige – those were the only two characteristics separating law firms that I was able to decipher at that point in my life – but rather than admit the truth, I muttered something about the firm’s reputation for quality work. I then asked him what he would look for in a law firm if he were a young associate. He told me that he would look for a firm with a democratic structure that would allow him to have a say in the future direction of the firm.
I don’t remember too much about my year at Latham & Watkins, except that I did little more than work and sleep, and that I was not regularly consulted for my opinion about the firm’s future course
A close law school friend was working at a mid-size San Francisco firm called Landels, Ripley & Diamond. The firm was known for its unusual democratic structure and balanced approach to work. They happened to be looking for a bankruptcy associate, and I fit the bill. Latham’s managing partner’s advice played a major role in my decision to leave the firm and join Landels. It was the best decision I ever made. I worked at Landels as a bankruptcy litigator for the next 14 years, and greatly enjoyed it. The work was challenging and ever changing, and my colleagues remain some of my closest friends.
The seeds for a mid-life crisis were planted in 1998, when I received a telephone call from a large mortgage servicing company client asking me to take over a case that was set for trial in 60 days. The case involved a routine foreclosure of a $100,000 home mortgage. The foreclosure process began after the borrower refused to pay for federally mandated flood insurance. After a nine month exchange of letters, and further monetary defaults, the servicing company foreclosed, the property was sold to a third-party bidder, and the homeowner was evicted from the premises. Prior to the eviction, the homeowner had sued to forestall foreclosure, and had demanded discovery. The homeowner’s suit failed to forestall foreclosure, but when the discovery came due shortly after the foreclosure, my client learned that a mistake had been made – the flood insurance policy that formed the initial basis for the foreclosure had, through a clerical error, never been purchased. Oops. The judge at the mandatory settlement conference held shortly after the error was discovered awarded the homeowners $8 million in punitive damages. I was asked to take over the case shortly after the entry of the award. Although I had little experience defending tort cases, and no experience handling jury trials, I took the case. After all, I thought, how different could a jury trial be from litigating before a bankruptcy judge?
For the next year and a half, I worked on this case almost full-time, obtaining numerous trial extensions, the appointment of a discovery referee, and several awards of discovery sanctions. I took eight full weeks of videotaped depositions, and filed summary judgment motions with thousands of pages of exhibits (which were denied, I think, without having been read). At a final settlement conference before trial, my client franticly bid against itself in an effort to settle the case, offering to pay (in addition to repurchasing the house and restoring the borrower’s tenancy) a $1 million windfall. The plaintiff (despite the best efforts of her lawyer and the settlement conference judge) refused to settle, believing or hoping, as she told the jury on the first day of trial, that “even one, two or three hundred million” would not compensate her for the distress she suffered as a result of the foreclosure.
The two months following the failed settlement conference were certainly the busiest of my life. We hired a jury consultant and conducted several mock trials behind one-way glass to develop our legal strategy. I put together the video snippets from the depositions to be used in cross-examination (a very time consuming task). The case took four weeks to try before a San Jose jury. While the result was a complete victory for the client (and a fully paid legal bill for my firm), the process left me exhausted. I returned from the trial to my neglected bankruptcy practice, which would remain slow for several months due to a booming economy that was in the last throes of the technology bubble.
It seemed to me at the time that a heavier dose of transactional work might nicely supplement my bankruptcy practice by making it less dependent on the business cycle. I decided learn tax law, and approached my former tax professor, Stephen Lind (who I had not seen in nearly 20 years), for advice about where to take part-time tax courses in San Francisco. Professor Lind suggested I instead take a year off and get an LLM degree from the University of Florida. That sounded good to me. My family was willing to go on a one year adventure (well, at least my then one year old daughter didn’t interpose any objections), so I took a leave of absence from my law firm, we sold our house in California, packed up our belongings, and headed for Gainesville, Florida. I intended to return to practice after tax school, and hoped (for selfish reasons) that the housing bubble would finally burst during my absence. So much for my timing – the “housing bubble” continued its growth unabated, although I understand that it now (six years later) finally shows some signs of slowing.
Several weeks before we were scheduled to leave for Florida, a group of seven key partners decided to leave my law firm, causing a panic for the door. As I was departing for Florida, my law firm ceased to exist as an operating entity. During my last weeks in California, I was appointed to the partnership’s committee to help steer my law firm through bankruptcy and liquidation. I am happy to say that through careful planning, hard work, and a bit of good fortune, my old firm was able to pay all its creditors in full, with interest, and helped spawn a successful successor firm.
The first person I met at the University of Florida was Professor Marty McMahon, who kindly offered me a job as his research assistant. I turned down the job because I was busy working on the wind-down of my law firm, but I would be greatly influenced as a student by Marty McMahon’s love of tax and teaching. He was both a great example and mentor to me, and helped point me in the direction of academics. Marty McMahon is a model of what a great teacher and scholar should be. I also met Gregg Polsky, who, as the visiting assistant professor, was in the process of interviewing for teaching jobs. Gregg was generous in sharing with me his experience through the bewildering AALS recruitment process, and the even more bewildering world of academics. Following in Marty McMahon’s footsteps, Gregg is well on his way to becoming a respected tax scholar, teacher and mentor. I spent a very enjoyable year in Gainesville, Florida, learning the language of tax law.
I applied for Tax Court judicial clerkships during my first semester at Florida. I decided however to withdraw from the process because I did not wish to devote two years to a Tax Court clerkship. Instead, I decided to return to practice and to go through the AALS recruitment process the following year. I called each of the judge’s secretaries to withdraw from the interviewing process, but Judge Renato Beghe’s secretary called me back to say that he would be willing to consider me for a one year clerkship, and that I should send a writing sample if interested. Because Judge Beghe had recently written an important opinion on equitable recoupment in tax law, I decided to send him a brief I had written several years earlier concerning equitable recoupment in bankruptcy. I learned later that he liked both my brief and the bit of extra thought that went into the selection.
I arrived at Judge Beghe’s chambers for an 8:30 a.m. interview, before the secretaries and clerks. I was greeted by a man in his 60’s who said “you must be Greg, come on in.” He did not introduce himself, but I initially assumed it was Judge Beghe. However, I was quickly confused when the man repeatedly referred to “Judge Beghe’s recent opinion” on one topic or another. Who was I speaking to? Was this his clerk? I somehow managed to maintain my composure during the interview, and was fortunately not called upon to speak much. When I was let out of the interview, I said to the secretaries “Who was that?” They all laughed when I explained that I had been confused by Judge Beghe’s penchant for referring to himself in the third person. Fortunately, the interview went fine (despite my confusion), and I was offered and accepted the job over lunch.
I spent nine months following graduation learning the unusual procedures of the Tax Court, writing draft options, and discussing the law with Judge Beghe and my fellow clerks. Judge Beghe is a true intellectual, as interested in discussing Dante and Aristotle as he is in discussing the definition of income. He has a near photographic memory. I found it very intimidating when, during a discussion of some tax issue, he would jump up, grab a 20 year old volume from the tax reporters, and open the book to the precise page of an obscure Tax Court case containing a discussion of the issue we were considering. He was a practicing lawyer on Wall Street at the age of 21, a partner in two major New York firms, and was a leader of the New York tax bar before being appointed to the Tax Court. Now in his mid-sixties, he still has a child-like twinkle in his eyes, an open and inquisitive mind, and enjoys a good debate. He is a great judge, and I am glad to call him a friend.
Following the AALS recruitment conference, I accepted a wonderful opportunity to teach at the Syracuse University College of Law. The school has allowed me to teach a wide variety of upper-division business law classes, including Tax I (Personal), Tax II (corporate and partnership), Business Bankruptcy, Corporations/Business Associations and Commercial Transactions. As a native Californian, I was apprehensive about living in the snowiest city in the United States. I didn’t even own a heavy coat. But the adjustment has been easier than I expected. I enjoy the distinct seasons. As I look out from my window at the four feet of snow on the ground, I recall the line for Lawrence of Arabia, who loved the desert because “it’s clean.” Well, at least until the snow starts melting. I cannot believe that it has been six years since I left behind my law practice in California. It’s been a great adventure.
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