A daily look at legal news and the business of law:
How Much Can Schools Consider Race in Admissions?
In 2003, the U.S. Supreme Court held in Grutter v. Bollinger that race could be a "plus factor" considered in school admissions. On Tuesday, the 5th Circuit Court of Appeals will hear arguments in the first case to ask precisely what that means. Two white students denied admission to the University of Texas have sued, arguing that UT's consideration of race as one of seven special factors when admitting students who did not automatically earn acceptance by graduating in the top 10% of their Texas high school class was too large an emphasis on race.
As the Austin-American Statesman explains, the issue of race in UT admissions has a long and contentious history. In 1950, a black man was denied admission to the University of Texas law school solely because he was black. Above the Law notes that in 1955, weeks after the Brown v. Board of Education decision, the University of Texas Law School named a dorm after a former KKK leader (Last moth, it made the decision to rename the dorm). Later, the university instituted an affirmative action policy that was ultimately banned in a 5th Circuit case called Hopwood. It began its current policy with the class it admitted in 2005. It'll be interesting to see how the 5th Circuit comes down in this case, but a decision is several months away.
Should Posthumously Conceived Kids Get Social Security Survivor Benefits?
The Social Security survivor benefit is a payment designed to help families cope with the unexpected loss of a parent. Given that rationale, it's hard to understand the reasoning behind giving the benefit to a child conceived by a woman using her dead husband's stored sperm. But as The Wall Street Journal reports, that's what happens in several states in the country. The question of whether such children should receive those benefits has led to an increasing amount of litigation, and the Journal profiles one case that has reached the Utah Supreme Court, a case that shows the profound unfairness of the murky status of benefits for these children.
Around a year after her husband died of cancer, Gayle Burns conceived her son, Ian, using her husband's sperm. Social Security paid Ian survivor benefits that eventually totaled $35,000, before abruptly deciding that the benefit was not owed and suing to be repaid. Ms. Burns was forced to declare bankruptcy as a result. Ms. Burns is now suing the Social Security Administration because it cut off the benefits based on the claim that Ian wasn't her husband's son. While I agree that paying a child Social Security survivor benefits is inappropriate in cases like this, I find it horrible to both yank them away and demand repayment, and to do so by attempting to deny the child's parentage. Memo to the states: Get busy clarifying your laws so cases like this one stop happening.
BP Faces Insider Trading Investigation
Reuters reports that the feds are looking at BP (BP) so thoroughly in the wake of the Gulf of Mexico oil spill that they've now opened an insider trading probe focusing on BP employees. As the Gulf oil spill events unfolded, so much material information kept developing and changing that I'm not surprised some insider trading may have happened.
HP Settles with Department of Justice Over Kickbacks
The Wall Street Journal reports that HP has agreed to pay approximately $50 million to settle claims it paid $3 million to get favorable treatment on government contracts from 2001-2006. Hewlett-Packard (HPQ) neither admits nor denies wrongdoing.
Introduction to Preferred Shares
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