Law School and Mental Health Issues

Prof. Andrew McClurg is the author of an excellent guide to the first year of law school.  Below are short excerpts relating to mental health issues that can affect law students.


Law school is the undisputed champion of causing talented people, people who have achieved at a high level their entire lives, to almost instantly begin questioning their self-worth.  As one student put it, “It seems that law school is designed to make the student feel unsure of himself and inadequate.”

“Cognitive distortion” is a psychological term used to describe a condition that occurs when a person internalizes neutral or mildly negative external stimuli as signs of severe personal failure.  Law school establishes optimal conditions for this to occur.

Everything a student does is judged and it never seems good enough.  Every word uttered in law school classes is critically scrutinized.  Professors often critique student classroom comments even when they wholeheartedly agree with them.  It’s the nature of the Socratic beast.  Some students shrug it off, but many take it personally and let it diminish their self-image.


Law students also suffer disproportionately higher rates of depression than the general population and other graduate students.  On depression scales, 17-40 percent of law students in the second University of Arizona study mentioned above were found to suffer from much higher rates than exist among the general population.

A 2000 study of University of Michigan law students found that more than half of law students showed symptoms suggestive of clinical depression by the end of their first year and that these high levels remained throughout their law school careers.

Comparing the law students’ scores on the Center for Epidemiologic Studies Depression Scale to scores for other groups subject to extreme stress yielded somewhat startling results.

The 50 percent of law students who scored above the depression cutoff compared to rates of:

●    30-45 percent for unemployed people
●    30-45 percent for people testing HIV-positive two weeks after they received notice
●    50 percent for people experiencing the death of a spouse or marital separation in the past year
●    50-60 percent for persons being treated for substance abuse, and
●    50-70 percent for homeless people.

This isn’t to suggest, of course, that being a law student is as bad as the listed traumatic events, but law school can strongly push the brain’s depression buttons.


As with anxiety, the gloominess pattern continues after graduation.  A Johns Hopkins University study found that lawyers ranked fifth in the overall prevalence of depression out of 105 occupations.  When the data were adjusted to focus on the association between depression and the particular occupation by taking into account non-occupational factors contributing to depression, lawyers moved into first place.

The study of Arizona and Washington lawyers mentioned above found that 21 percent of male lawyers and 16 percent of female lawyers exceeded the clinical cut-off measure for depression, significantly higher than depression rates found in the general population.

1L of a Ride: A Well-Traveled Professor’s Roadmap to Success in the First Year of Law School (2nd Ed.) by Andrew McClurg

Stress Factors for First Year Law Students (1L)

Many smart people think about attending law school.  The stress factor is not always considered by prospective students.

Prof. Carroll Seron at the UC Irvine School of Law candidly acknowledges this issue. “It is a rite of professional passage that the first year of law school is highly stressful and, indeed, is designed to be so.  Five interrelated factors contribute to this stress.

“First, students are called on to learn a new, often arcane body of knowledge; this is stressful in itself.

“Second, [ ] there is, as a general matter, relatively limited feedback to students about the quality of their work, which tends to create great uncertainty and anxiety among students about how they are doing by way of mastering these new materials.

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“Third, though the Socratic method is not the only pedagogical style used by law faculty these days, it remains nonetheless popular with many.  As a result, students find themselves in a situation where they confront the daily possibility of exposure and embarrassment for not knowing how to answer a question.

“Fourth, all students admitted to a highly selective law school have known academic success; in law school, they are confronted with equally successful counterparts and must become accustomed to being below average.

“Finally, there is the competitive aspect of law school as students seek to impress their peers and their teachers … In a word, first-year law students are simply worried about getting through the hurdle.”

Carroll Seron, A Law School for the 21st Century: A Portrait of the Inaugural Class at the University of California, Irvine School of Law, 1 U.C. Irvine L. Rev. 49, 55-56  (2011).

The UCC Remains Relevant

The Uniform Commercial Code covers a wide scope of commercial transactions, from the sale of goods to warehouse receipts to secured transactions.  Article 3 deals with promissory notes, sometimes referred to as negotiable instruments.

In his 2012 book,  The End of Negotiable Instruments, James Steven Rogers argued that most of the law contained in Article 3 of the Uniform Commercial Code lost real-world relevance long ago.

Rogers echoed Grant Gilmore, who famously described Article 3 as “museum of antiquities – a treasure house crammed full of ancient artifacts whose use and function have long since been forgotten.”  Grant Gilmore, Formalism and the Law of Negotiable Instruments, 13 Creighton L. Rev. 441, 461 (1979).

Gilmore had a brilliant mind, and glib turn of phrase.  His quote is often-repeated:  “Codification … preserve[d] the past like a fly in amber.”

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Not so fast.  Article 3 continues to provide useful guidance, right through the mortgage crisis.  One of the pre-eminent scholars of commercial law is Alvin C. Harrell, a Professor of Law at Oklahoma City University School of Law.  Prof. Harrell is the Executive Director of the Conference on Consumer Finance Law; a member of the American Law Institute (ALI); and a member of the American College of Commercial Finance Lawyers.

Heed carefully Prof. Harrell’s following comments on the Uniform Commercial Code.

“These cases reinforce the observation that the UCC is the most carefully-drafted statute in history.  It can be noted that UCC Articles 3 and 4 are written in relatively clear and simple terms and yet answer most of the legal questions that arise within their scope.  It is rare for a modern statute to do this, but the UCC does so on a regular, even continual basis.

“The result is exceptional legal clarity as to important yet routine transactions.  Those of us who conduct these transactions should not fail to appreciate the benefits of this legal environment.  It is surely a key factor in the continuing prosperity that we often take for granted.

“Obviously, and as noted by others, it is easier to disrupt such a structure than to create or preserve it.  The UCC was one of the great achievements of the Twentieth Century.  Keeping it may be one of the great challenges of the Twenty-first.”

Alvin C. Harrell, “2014 UCC Articles 3 and 4 Update,” in Consumer Finance Law Quarterly, Vol. 68, No. 3 (2014)

Tribeca Companies v. First American – Escrowholder Not Liable for $1 Million Claim

The recent decision in Tribeca Companies, LLC v. First American Title Insurance Company (Aug. 26, 2015) ___ Cal.App.4th ___ reaches an unsurprising result – an escrowholder is not liable for damages when it delivers money to the owner of the funds.

If you continue to the end of the decision, however, you’ll find a peculiar analysis of the “fiduciary” obligations of an escrowholder, a relationship that is better defined by reference to the obligations of a bailee.

The facts were as follows.  “Tribeca is a California limited liability company formed in October 2005 by William Faidi, its sole shareholder. It is a San Francisco-based private equity investment firm that makes investments in ‘distressed’ real estate by purchasing and foreclosing on defaulted mortgage loans.”

An escrow was opened at First American.  Explained the court, “Tribeca and First American engaged in extensive negotiations regarding the form and content of the [escrow] instructions.  The negotiations continued for more than a month.”

Memo to litigants – If the contract you helped write is unclear, don’t expect the court to reform it in your favor.

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The transaction fell through and First American returned the funds on hand to the person who deposited them.  A lawsuit followed.  “Tribeca’s claim of damages was based entirely on its contention that First American’s failure to transfer the escrow funds pursuant to its instructions, and to instead refund the money to Grishin, caused Faidi to lose the $1 million in liquidated damages.”

After reviewing the liquidated damages, the court turned to the escrowholder’s duties.  The key to the decision was a finding that “damages would not have been recoverable from the First American escrow account because, again, Grishin maintained ownership over those funds.”

More to the point, “the deposit of moneys in the escrow does not alter or change the ownership thereof.  First American held Grishin’s money in trust for his benefit, and no other party had any claim to his funds because he never designated another party as the beneficiary.

“Because Grishin retained ownership, he was entitled to withdraw the money regardless of whether another party contended he was liable in damages for failure to consummate a transaction.  It is established law that on failure of escrow the funds deposited with the escrow holder are returnable to the respective depositors.”

Query:  Why is this escrow described as being “fiduciary” in nature?  It more resembles a bailment than a fiduciary relationship.

Further straining its analysis, the court stated that “The breach of fiduciary duty can be based upon either negligence or fraud, depending on the circumstances.”  That’s a peculiar analysis of breach of fiduciary duty – to require the injured party to show negligence or fraud.

Tribeca Companies, LLC v. First American Title Insurance Company (Aug. 26, 2015) ___ Cal.App.4th ___

Study Says Number of Farm Workers Increased in California

A recent study published by the U. C. Giannini Foundation of Agricultural Economics reports an increase in the number of agricultural employees in California.  Using data from the Employment Development Department, the authors conclude “since 1990, average employment in [California] agriculture rose 10%.”

To support their conclusion, the authors “extracted all SSNs reported by agricultural employers to EDD in 2007 and 2012, and tabulated their farm and nonfarm jobs in California.”

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The report states:

●    “Hired workers do most of the work in labor-intensive FVH agriculture.  According to the National Agricultural Workers Survey, over 85% of the state’s farm workers were born in Mexico.”

●    “Since 2010, average employment by crop support establishments has been rising by 10,000 a year.”

●    “Over 60% of crop workers employed on the state’s crop farms have been unauthorized for the past decade – 10 percentage points higher than the U.S. average of 50%.”

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Here’s the part that reminds you why we have persistent poverty in communities with an agricultural-based economy, such as Fresno County:

●    “Four counties – Kern, Fresno, Monterey, and Tulare – had over 40% of all primary farm workers”

●    “Average earnings for all workers with at least one farm employer were $18,000 in 2012,

●    “while average earnings for primary farm workers, defined as those who had their maximum earnings in agriculture, were $15,000.”

Brandon Hooker, Philip Martin, and Andy Wong, “California Farm Labor: Jobs and Workers,” in Agricultural and Resource Economics Update, July 2015 (U. C. Giannini Foundation of Agricultural Economics)

Double Bogey, LP v. Enea – Alter Ego Status Under State Law Does Not Equate with Fiduciary Status Under Bankruptcy Law

The federal courts continue to narrow the circumstances in which a person can be denied relief in bankruptcy court based on breach of fiduciary duties.  In Double Bogey, LP v. Enea, ___ F.3d ___ (9th Cir. July 22, 2015), an unpaid creditor sought to invoke nondischargeability on the grounds that the debtor, as the alter ego of his corporation, owed fiduciary obligations to the unpaid creditor.

The Ninth Circuit disagreed, holding that “the mere fact that state law places two parties in a relationship that may have some of the characteristics of a fiduciary relationship does not necessarily mean that the relationship is a fiduciary relationship under 11 U.S.C. § 523(a)(4).”

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Explained the court, “partnership law clearly and expressly imposes trust-like obligations on partners, explicitly outlining partner’s fiduciaries duties and identifying the assets of the partnership as the trust res over which partners are fiduciaries.”

There is a different result with respect to corporations.  “California’s alter ego doctrine does not explicitly create a trust relationship, either by raising existing legal duties or otherwise … Instead of creating, enforcing, or expounding on substantive duties, California’s alter ego doctrine merely acts as a procedural mechanism by which an individual can be held jointly liable for the wrongdoing of his or her corporate alter ego.”

Thus, “A doctrine which merely supplies an additional judgment defendant after liability exists does not clearly and expressly impose trust-like obligations prior to the creation of that same liability.  Therefore, we cannot conclude, as a matter of federal law, that California’s alter ego doctrine establishes that a corporate debtor’s alter ego is a trustee in that strict and narrow sense required by the Code.”

As a result, the individual, despite a finding of alter ego liability under state law, was not denied his discharge in bankruptcy. “Common-law doctrines – like California’s alter ego doctrine – rarely impose the trust-like obligations sufficient to create a fiduciary relationship under Section 523(a)(4).  Indeed the kinds of trusts typically created by operation of law – constructive, resulting, or implied trusts – never satisfy Section 523(a)(4)’s rigorous requirements.”

Double Bogey, LP v. Enea, ___ F.3d ___ (9th Cir. July 22, 2015)

Bos v. Board of Trustees – 9th Circuit Narrows Fiduciary Non-Dischargeability in Bankruptcy

Several categories of debt are excluded from relief under the Bankruptcy Code, meaning that a debtor cannot obtain a discharge for these debts.

In Bos v. Board of Trustees, ___ F.3d ___ (9th Cir. 2015), the Ninth Circuit considered whether an employer’s contractual requirement to contribute to an employee benefits fund made the employer a fiduciary of unpaid contributions.  The court held that there was no such relationship for purposes of bankruptcy law.

The case involved claims by the Carpenters’ Union against Gregory Bos and his corporation.  Mr. Bos agreed that his corporation would be bound by the Carpenters’ Master Agreement.  The employer was required to make monthly payments to the union’s trust fund based on hours of work.

Fresno attorneyThe essential facts were undisputed.  Mr. Bos had full control over the finances of his corporation.  Mr. Bos had the authority to determine whether payments were made to the union or to other creditors.  Even more, Mr. Bos signed a promissory note for the amount owed to the union.

Section 523(a)(4) of the Bankruptcy Code provides a debtor may not discharge debts due to “fraud or defalcation while acting in a fiduciary capacity, embezzlement, or larceny.”  Held the Ninth Circuit, “we have consistently held unpaid contributions by employers to employee benefit funds are not plan assets.”

Continuing with its “limited approach … in recognizing fiduciary status,” the Ninth Circuit held that unpaid contributions owed to the union were contractual obligations, not obligations arising from a fiduciary relationship involving control over property belonging to a third person.

The obligation to make payments “is in fact more appropriately classified as a contractual right to bring a claim against the employer for delinquent payments… Even if the language in the trust agreements in the promissory note sufficed to turn unpaid contributions into some form of plan assets, neither [the the corporation] nor [the individual debtor] had control over such asset prior to nonpayment.”

Therefore, the court held that the debtor did not act as a fiduciary under 11 U.S.C. section 523(a)(4).

Bos v. Board of Trustees, ___ F.3d ___ (9th Cir. 2015)

Knowledge of the law is like a deep well

Sir Edward Coke was born in 1552.  He was regarded as a great lawyer.  He was twice married, his domestic life being full of quarrels.  Coke was one of the most truculent of English lawyers, and an arch-rival of Francis Bacon.  “He was a potent element in Francis Bacon’s ruin,” says Dean Church.

Fresno lawyerOn the study of law, Coke said the following, true now for many centuries:

“Our student shall observe, that the knowledge of the law is like a deepe well, out of which each man draweth according to the strength of his understanding.  He that reacheth deepest, he seeth the amiable and admirable secrets of the law, wherein I assure you the sages of the law in former times (whereof sir William Herle was a principal one) have had the deepest reach.

“And as the bucket in the depth is easily drawn to the uppermost part of the water, (for nullum elementum in suo propio loco est grave) but take it from the water, it cannot be drawne up but with great difficultie; so albeit beginnings of this study seem difficult, yet when the professor of the law can dive into the depth, it is delightfull easie and without any heavy burthen so long as he keepe himselfe in his own proper element.”

Concealed Weapons in the Central Valley

It seems that we’re not afraid to be packin’ down on the ranch.

Concealed weapons2



Wong v. Stoler – Delay Does Not Benefit Defendants

Here’s a thorny problem.  The trial court found that the seller of a house lied to the buyer.  The buyer sought the remedy of rescission.  The trial court denied relief, in part because of events that occurred with the passage of time.

The court of appeal disagreed in Wong v. Stoler (June 23, 2015) __ Cal.App.4th ___, saying that equity favored the buyers.  The case will embolden aggressive plaintiffs’ attorneys.  Read on.

Let’s start with the facts.  The buyers purchased a 4,400 square foot house in May 2008 for $2.35 million.  The house was located at 2 Sudan Lane, San Carlos.  The sellers misrepresented the sewer hookup, and did not disclose that it was not a city connection.  The buyers first learned of the private sewer system in November 2008.

Here’s an important fact.  “By this time, much of the home was down to the studs as a result of the demolition work.”  By the time of trial, “the court reasoned that the [sellers] had purchased a new home over four years ago and had spent $100,000 in improving it, and the [buyers] had spent $300,000 improving the property and had removed a significant amount of the original landscaping.”

Fresno lawyerThe court found that the sellers acted with reckless disregard in negligently misrepresenting the material facts about the true nature of the sewer system. “The court further found that the misrepresentations affected the property’s value and that the [buyers] would not have bought the property if they had known about the private sewer system.”

Nonetheless, the trial court determined that, given the “burden that rescission would place on the [sellers],” rescission was neither a fair nor appropriate remedy.

The court of appeal saw no reason not to handle the sellers with rough hands.  Explained the court,”Under California law, negligent misrepresentation is a species of actual fraud and a form of deceit … Thus, a single misstatement as to a material fact, knowingly made with intent to induce another into entering the contract, will, if believed and relied on by that other, afford a complete ground for rescission.”

Now comes the hammer. “Where defendant has been guilty of fraudulent acts or conduct which have induced the agreement between him and the plaintiff, courts of equity are not so much concerned with decreeing that defendant receive back [ ] identical property [ ] as they are in declaring that his nefarious practices shall result in no damage to the plaintiff.”

“Persons who attempt to secure profits by deceitful means may not confidently expect to receive special consideration from courts of equity … If his fraudulent acts have resulted in disastrous financial consequences to himself, it is no one’s fault but his own, and he must sustain the necessary inconveniences thereby entailed.”

Ouch.  “We recognize that changes have been made to the property and years have transpired.  But the changes in the property were commenced before the [buyers] learned of the [sellers’] misrepresentations, and much of the time that has elapsed has been due to the [sellers] contesting the rescission … While untangling the deal may not be easy, we are unaware of any insurmountable obstacles.”

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“Thus, we remand the case to the trial court to effectuate the Wongs’ rescission … The trial court’s goal [ ] in fashioning this remedy must be, to the extent possible, to restore the Wongs to their status quo ante.”

Is this practical?  The transaction occurred in May 2008.  The trial court judgment was entered in early 2013, and the decision of the court of appeal was entered in June 2015.  How is the trial court going to be able to unwind seven years?  How are the parties going to unwind seven years?  Should we simply refer to the property as “Bleak House”?